10-K/A 1 ramend10k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A Amendment No. 1 [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________________ Commission file number 0-20680 CONCEPTS DIRECT, INC. _________________________________________________________________ (Exact name of registrant as specified in its charter) Delaware 52-1781893 _______________________________ ___________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2950 Colorful Avenue, Longmont, Colorado 80504 ________________________________________ ____________ (Address of Principal Executive Offices) (ZIP Code) Registrant's telephone number, including area code: (303) 772-9171 ______________ ______________________________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered None N/A ________________ ______________________________ Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.10 Par Value __________________________________________________________ (Title of Class) 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 (229.405 of this chapter) 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 an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ___ No X State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter (June 30, 2002): $1,765,453. The number of shares beneficially owned by executive officers and directors of the registrant as a group and by persons known to the registrant to be beneficial owners of more than 5% of the outstanding common stock of the registrant as of June 30, 2002 was subtracted from the total number of shares outstanding to calculate the number of shares held by non-affiliates. The foregoing calculation should not be deemed an admission that any of the officers and directors of the registrant or any holder of more than 5% of the outstanding common stock is an "affiliate." The number of shares outstanding of the registrant's Common Stock as of March 24, 2003 was 5,237,426. DOCUMENTS INCORPORATED BY REFERENCE None. EXPLANATORY NOTE This Form 10-K/A is being filed as Amendment No. 1 to the Form 10-K of Concepts Direct, Inc. to include the information required under Part III of the report on Form 10-K for the year ended December 31, 2002. Part III Item 10. Directors and Executive Officers of Registrant Directors Name, Age, Principal Occupation Director and other information Since _______________________________ _________ PHILLIP A. WILAND (56) 1992 Chairman of the Company since 1992. Chief Executive Officer of the Company from 2001 to present and 1992 to 2000. President and Chief Executive Officer of Wiland Services, Inc. from 1971 to 1992. KENNETH M. GASSMAN, JR. (57) 2001 Private investor and retail consultant. Retailing Securities Analyst, Davenport & Co. LLC from 1991 to 2001. Director, Reeds Jewelers, Inc. Information concerning our executive officers is set forth under the heading "Executive Officers of the Registrant" at the end of Part I of this Report. SECTION 16(a) COMPLIANCE Section 16(a) of the Securities Exchange Act requires the Company's officers and directors, and persons who own more than 10 percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission. Officers, directors and greater than 10 percent stockholders are required by regulation to furnish the Company with copies of all Forms 3, 4 and 5 which they file. Based solely on the Company's review of the copies of such forms it has received and written representations from certain reporting persons that they were not required to file a Form 5 for specified fiscal years, the Company believes that all of its officers, directors and greater than 10 percent beneficial owners complied with all filing requirements applicable to them with respect to transactions during fiscal 2002. Item 11. Executive Compensation Compensation of Directors The Company pays to each director who is not a Company employee an annual retainer of $10,000 or an option to purchase stock of the Company, the number of shares being determined by multiplying 10,000 by 2, and dividing by the fair market value of the stock on the date of grant, rounding to the nearest 500 shares. These shares are granted under the 2001 Incentive Compensation Plan (the "2001 Plan") which was approved at the May 10, 2001 Annual Stockholders meeting. All directors are reimbursed for travel expenses incurred as a result of service on the Board of Directors. Directors who are not employees of the Company previously received awards under the 1992 Non-Employee Directors Stock Option Plan (the "1992 Plan"), which expired on May 1, 1998, and the 1998 Non-Employee Directors Stock Option Plan (the "1998 Plan"). Stock option grants under the 1992 Plan were automatic. Each eligible director of the Company on the effective date of the 1992 Plan, December 18, 1992, automatically received an option to purchase 6,000 shares of Common Stock. Each eligible director newly elected by the Company's stockholders on and after the effective date of the 1992 Plan automatically received options for 6,000 shares on the date the director was elected by the stockholders. In addition, on the second anniversary of the date on which an eligible director received his or her initial grant of an option, and biannually thereafter, each then eligible director automatically received an option to acquire an additional 4,000 shares of Common Stock. Option grants under the 1992 Plan are exercisable in annual increments of 33.3% commencing one year following the date of grant. Under the 1998 Plan, the Board made grants of options to directors at the times and in the amounts that it deemed appropriate. The Company will not make any further awards of options under the 1992 Plan or the 1998 Plan. Summary Compensation Table The following table sets forth, for the years ended December 31, 2000, December 31, 2001, and December 31, 2002, certain compensation awarded to, earned by, or paid to the Company's Chief Executive Officer. The Company's Chief Executive Officer was the only executive officer whose annual compensation exceeded $100,000 for the year ended December 31, 2002.

(1) These amounts were paid by the Company as matching contributions under the Company's Retirement Savings Plan. (2) The Chief Executive Officer did not receive perquisites in excess of the lesser of $50,000 or 10% of combined salary and bonus for fiscal 2000, 2001 or 2002. Options/SAR Exercises and Year-End Value Table The following table sets forth information concerning each exercise of stock options and SARs during the fiscal year ended December 31, 2002 for the executive officer named in the Summary Compensation Table and the fiscal year-end value of unexercised options and SARs. Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

(1) The value realized calculation is based on the fair market value of the underlying stock on the date of exercise, minus the exercise price. (2) The value calculation is based on the fair market value of the underlying stock at year-end, minus the exercise price. Compensation Committee Interlocks and Insider Participation Robert L. Burrus, Jr., a former director of the Company and, during 2002, a member of the Compensation and Nominations Committee, is Chairman and partner of the law firm of McGuire Woods LLP, which was retained as general counsel by the Company during the fiscal year ended December 31, 2002. Item 12. Security Ownership of Certain Beneficial Owners and Management The table below sets forth information regarding beneficial ownership as of April 21, 2003 of Common Stock by the Company's directors individually, the executive officer named in the Summary Compensation Table individually, the Company's directors and executive officers as a group, and persons known to the Company to be beneficial owners of more than 5% of the Common Stock. Name and Address of Amount and Nature of Percent Beneficial Owner Beneficial Ownership(1) of Class ____________________ ______________________ ________ Executive Officers and Directors ________________________________ Phillip A. Wiland 2950 Colorful Avenue Longmont, CO 80504 3,846,725(2) 73.06 Kenneth M. Gassman 15281 Westfork Drive Glen Allen, VA 23059 23,160 * All Directors and Executive Officers as a Group (2 Persons) 3,869,885 73.18 5% Owners _________ None ___________ * Does not exceed 1% of the outstanding shares of the Company (1) Except as described in footnote (2) below, each individual has sole voting power and sole investment power with respect to the Common Stock set forth opposite his name. Includes, as to Mr. Wiland, 27,500 shares and as to Mr. Gassman, 23,000 shares of Common Stock, which could be acquired through exercise of stock options within 60 days. (2) Includes 3,805,325 shares owned in joint tenancy by Mr. Wiland and his wife, who share voting and investment power as to the shares, and 13,900 shares held by Mr. Wiland as custodian for his minor children under the Uniform Gifts to Minors Act and for which Mr. Wiland has sole voting and investment power. Item 13. Certain Relationships and Related Transactions On April 26, 2002, we closed on a $4 million financing (the "Financing") with St. Cloud Capital Partners, LP ("St. Cloud") and Phillip A. and Linda S. Wiland (the "Wilands"). The Financing entailed two 10% Senior Secured Promissory Notes (the "Notes") in the aggregate principal amount of $4,000,000 and two Common Stock Purchase Warrants, representing the right to acquire in the aggregate 550,000 shares of common stock. A portion of the Financing was ascribed to the value of the warrants, with the remaining amount recorded as notes payable. We are accreting the notes payable up to their full face amount over the terms of the Notes. The Notes are secured by undeveloped land that we owned and by assets of the Colorful Images brand pursuant to a security agreement (the "Security Agreement"). The Note and Warrant that we issued to the Wilands detailed above replaced an existing note and warrant with the Wilands which was entered into on March 28, 2002. That note provided that if we obtained additional financing on or before April 30, 2002, the Wilands would receive substantially similar terms and conditions of the prospective investor(s). Marshall S. Geller is the co-founder and senior manager of St. Cloud, has an interest in St. Cloud, and was one of our directors. Phillip A. Wiland is our Chairman, Chief Executive Officer and President. Linda S. Wiland is Mr. Wiland's spouse. The Wilands are significant stockholders of Concepts Direct, Inc. During the first quarter of 2002, at the request of our Board of Directors, we sought financing from numerous sources including credit facilities from banks and mezzanine funding. However, we were not successful in finding financing on terms equal to or better than the terms offered by the Wilands and St. Cloud. Therefore, our Board of Directors set up a special committee of Board members consisting of Virginia B. Bayless and Kenneth M. Gassman, Jr. to review the negotiations of the Financing. The Financing was approved by the Board's special committee. In addition, the Board of Directors unanimously agreed to the terms of the Financing on April 25, 2002. St. Cloud and the Wilands exercised their Warrants on August 7, 2002. The exercise price for the Warrants was $.10, of which St. Cloud and the Wilands had already paid $.09. St. Cloud and the Wilands exercised the Warrants using the cashless exercise procedure detailed in the Warrant Agreements and were each issued 272,369 shares of our common stock. On November 12, 2002, we sold the remaining undeveloped land for $1,050,000 and used the funds to reduce the balance of the Notes. The original maturity date for the Notes was May 1, 2007. However, due to the additional principal payment on November 12, 2002, the Notes are scheduled to be paid in full on December 1, 2005. Based on the Schedule 13D filed on April 2, 2003 by the Wilands, the Company learned that the Wilands entered into two Stock Purchase Agreements and a Securities Purchase Agreement on March 31, 2003 pursuant to which the Wilands acquired 1,240,306 shares of Common Stock of the Registrant, for $0.54 per share, for a total of $669,765.24. The Wilands acquired all of these shares with personal funds. The Company understands that the Wilands purchased 272,369 Company shares from St. Cloud Capital Partners, 25,000 Company shares from Marshall Geller, and 942,937 Company shares from Lance Laifer, Laifer Capital Management and Hilltop Partners. The Company also understands that the Wilands purchased the note of the Company owned by St. Cloud Capital Partners which as of March 31, 2003 had a balance of $1,158,214.76. Item 14. Controls and Procedures Our principal executive officer and principal financial officer have evaluated the effectiveness of the Company's "disclosure controls and procedures," as such term is defined in Rule 13a-14(c) of the Securities Exchange Act of 1934, as amended, within 90 days of the filing date of this Annual Report on Form 10-K. Based upon their evaluation, the principal executive officer and principal financial officer concluded that, to the best of their knowledge, our disclosure controls and procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls, since the date such controls were evaluated. Item 15. Principal Accountant Fees and Services Audit Fees. Ernst & Young LLP was our principal accountant for the year ended 2002. The aggregate fees billed by Ernst & Young LLP for professional services to audit our annual financial statements for 2002, and its reviews of the financial statements included in our Forms 10-Q for that year, were $106,000. Ernst & Young billed us $95,000 for such services performed for 2001. Audit-Related Fees. The aggregate fees billed by Ernst & Young LLP for services related to employee benefit plan audits for 2002 were $12,000. Ernst & Young billed us $13,000 for audit-related services performed for 2001. Tax Fees. The aggregate fees billed by Ernst & Young LLP for professional services related to tax compliance, tax advice and tax planning for 2002 were $6,000 to date. Ernst & Young billed us $23,000 for such services for the year ended 2001. All Other Fees. We did not pay Ernst & Young LLP for any other services for 2002 or 2001. The Audit Committee of the Company considered whether, and determined that, the auditor's provision of non-audit services was compatible with maintaining the auditor's independence. Item 16. Exhibits, Financial Statement Schedules, and Reports on Forms 8-K Item 15 of our previously filed Form 10-K is hereby redesignated as Item 16 in accordance with SEC Release No. 33-8183. 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. CONCEPTS DIRECT, INC. Date: April 30, 2003 By: /s/ Phillip A. Wiland __________________________ Phillip A. Wiland, Chairman of the Board of Directors, Chief Executive Officer, and President 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 dates indicated. Date: April 30, 2003 /s/ Phillip A. Wiland __________________________ Phillip A. Wiland, Chairman of the Board of Directors, Chief Executive Officer, and President Date: April 30, 2003 /s/ Kenneth M. Gassman, Jr. ___________________________ Kenneth M. Gassman, Jr., Director Date: April 30, 2003 /s/ Zaid H. Haddad ___________________________ Zaid H. Haddad, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Certifications I, Phillip A. Wiland, certify that: 1. I have reviewed this amended annual report on Form 10-K/A of Concepts Direct, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and (c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: April 30, 2003 /s/ Phillip A. Wiland _______________________ Phillip A. Wiland Chairman, Chief Executive Officer and President I, Zaid H. Haddad, certify that: 1. I have reviewed this amended annual report on Form 10-K/A of Concepts Direct, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and (c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: April 30, 2003 /s/ Zaid H. Haddad ____________________ Zaid H. Haddad Chief Financial Officer

CONCEPTS DIRECT INC 10-K/A