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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/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, 1999.
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
COMMISSION FILE NO. 1-14416
BIGMAR, INC.
(Name of Small Business Issuer in its Charter)
DELAWARE 31-1445779
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9711 SPORTSMAN CLUB ROAD
JOHNSTOWN, OHIO 43031
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (740) 966-5800
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE ACT:
None.
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE ACT:
Common Stock, par value $.001 per share
(Title of class)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B, and no disclosure will 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.
Yes X No
Issuer's revenues for its most recent fiscal year were $7,725,362.
The aggregate market value of Common Stock held by non-affiliates is $3,853,000
based on a closing sale price of $3.00 per share on March 23, 2000, as reported
on the Nasdaq SmallCap Market. As of March 23, 2000, 8,993,973 shares of $.001
par value Common Stock were issued and outstanding.
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The names of the directors and certain executive officers of the Company, and
certain information about them, are set forth below.
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Director Age Recent History
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<S> <C> <C>
Bernard Kramer 46 Mr. Kramer has served as Vice President - Marketing and a director of the
Company since April 1996. From January 1988 until April 1996, Mr. Kramer worked
at Bioren SA, a wholly-owned subsidiary of the Company, where he was a manager,
responsible for quality control and business development of pharmaceutical
products.
Cynthia R. May 48 Ms. May has served as a member of the Board of Directors since June 1999. Ms.
May has been employed by Saginaw Control & Engineering Corp., a private
manufacturing company, since 1981, most recently as vice president. Ms. May has
been treasurer of Marathon Investments, L.L.C. since 1994, vice president and
treasurer of GRQ, L.L.C. since 1995 and the managing member of Jericho II,
L.L.C. since September 1997, each a privately-owned entity involved in
investment and financing. Jericho II, L.L.C. is a principal shareholder of the
Company. Ms. May also serves as president of Graminex L.L.C. See "Certain
Relationships and Related Transactions."
Massimo Pedrani 45 Mr. Pedrani was elected to the Board of Directors in June 1998. Since January
1997, Mr. Pedrani has been Managing Director of Emmepi-Pharma, a pharmaceutical
consulting company involved in chemical, pharmaceutical development and
regulatory affairs. From September 1992 to August 1996, Mr. Pedrani was Managing
Director of Applied Analytical Industries Italy s.r.l., a subsidiary of Applied
Analytical Industries, Inc. Mr. Pedrani is a member of the American Association
of Pharmaceutical Scientists.
Philippe J. H. Rohrer 43 Mr. Rohrer was appointed to the Board of Directors in June 1998. In January
1999, he was appointed as Treasurer of the Company. He is Chief Financial
Officer of Bigmar, Inc., Bioren SA and Bigmar Pharmaceuticals SA, both
wholly-owned Swiss subsidiaries of Bigmar. He joined Bioren SA in August 1990 as
Finance and Administration manager with responsibility for finance,
computerization and administration of Bioren.
John G. Tramontana 54 Mr. Tramontanahas has served as Chairman of the Board, President and Chief Executive
Officer of the Company since its inception in September 1995. From November 1989
to March 1996, Mr. Tramontana was the chief operating officer and a director of
Chemholding, a holding company for five pharmaceutical companies involved in the
development, manufacture, and commercialization of active pharmaceutical
ingredients and finished pharmaceutical products. In May 1997, Mr. Tramontana
purchased from Chemholding, which was a principal stockholder in Bigmar. From
before 1995 and until his resignation in March 1996, Mr. Tramontana was the
chief operating officer and a director of Cerbios-Pharma, chairman of the
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<S> <C> <C>
board of AB Cernelle and the president and a director of Cernitin America, Inc.
("Cernitin"), a cosmetic and health products distributor. In September 1996,
following the sale of AB Cernelle to an unrelated third-party, Mr. Tramontana
rejoined the board of directors of AB Cernelle, a position he still holds.
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COMPLIANCE WITH SECTION 16 REPORTING REQUIREMENTS
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than 10% of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the SEC.
Specific due dates for these reports have been established and the Company is
required to disclose any failure to file by these dates. Based solely upon its
review of reports received by it, or upon written representation from certain
reporting persons that no reports were required, the Company believes that
during fiscal 1999 all filing requirements were timely met.
ITEM 10. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid
by the Company for the last three fiscal years to its Chief Executive Officer
and the other most highly compensated executive officers whose annual
compensation exceeded $100,000 for the year ended December 31, 1999:
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<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM
COMPENSATION
AWARDS
- --------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OTHER ANNUAL SECURITIES ALL OTHER
COMPENSATION UNDERLYING COMPENSATION
($) OPTIONS/SARS ($)(1)
(#)(2)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John G. Tramontana 1999 200,000 -0- -0- -0- 7,093
Chairman of the Board of 1998 200,000 -0- -0- -0- 6,000
Directors, President, and 1997 200,000 50,000 -0- 125,000 6,000
Chief Executive Officer 125,000
- --------------------------------------------------------------------------------------------------------------------
Peter P. Stoelzle (3) 1999 140,000 -0- -0- -0- 3,000
Executive Vice President 1998 140,000 -0- -0- -0- 3,000
1997 140,000 -0- -0- 10,000 3,000
75,000
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(1) Amounts relate to annual auto allowance.
(2) Shares of common stock underlying options issued pursuant to the
1997 Stock Option Plan.
(3) Mr. Stoelzle's employment with the Company was terminated in December
1999.
OPTION GRANTS IN LAST FISCAL YEAR
No options or stock appreciation rights were granted during the fiscal
year ended December 31, 1999.
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FISCAL 1999 OPTION EXERCISES AND FISCAL YEAR END OPTION VALUES
No options were exercised during the fiscal year ended December 31,
1999. The Company has no outstanding stock appreciation rights. The following
table lists the value of unexercised options and stock appreciation rights for
the named executive officers as of December 31, 1999.
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NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
UNEXERCISED OPTIONSAT FY-END (#) OPTIONS AT FY-END ($)
------------------------------------------- -----------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- -------------------- ------------------- --------------- ---------------------
<S> <C> <C> <C> <C>
John G. Tramontana 250,000(1) 0 0 0
Peter P. Stoelzle(3) 85,000(2) 0 0 0
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(1) Includes 125,000 stock options originally granted under the 1996 Stock
Option Plan repriced under the 1997 Stock Option Plan and 125,000 new
stock options granted under the 1997 Stock Option Plan.
(2) Includes 75,000 stock options originally granted under the 1996 Stock
Option Plan repriced under the 1997 Stock Option Plan and 10,000 new
stock options granted under the 1997 Stock Option Plan.
(3) Mr. Stoelzle's employment with the Company was terminated in December
1999.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive $500 per meeting
attended as a director. Committee members receive $500 per committee meeting
attended. In addition, all directors are reimbursed for their reasonable
out-of-pocket expenses in connection with attending meetings of the Board or any
committee thereof. The Board of Directors met six times in 1999. Each Director
attended at least 75% of the meetings. The directors waived their fees and
out-of-pocket expense reimbursements for the meetings held in fiscal 1999.
EMPLOYMENT AGREEMENTS
In April 1996, the Company entered into an employment agreement with
Mr. Tramontana to serve as the Company's President and Chief Executive Officer.
The employment agreement is for a five-year term commencing June 19, 1996 and is
subject to automatic annual renewal unless earlier terminated. Pursuant to the
terms of this employment agreement, Mr. Tramontana is required to devote his
full business time and attention to fulfill his duties and responsibilities to
the Company. Mr. Tramontana's initial base salary was $200,000 subject to annual
cost of living increases at the discretion of the Company's Board of Directors.
Mr. Tramontana's based salary for fiscal 2000 has been set at $200,000. In
addition to his base salary, Mr. Tramontana is entitled to receive an annual
bonus, at the discretion of the Board of Directors, provided such bonus is equal
to at least 25% of his base salary. For 1998 and 1999, Mr. Tramontana agreed to
waive the minimum bonus of 25% of his base salary.
Mr. Tramontana's employment agreement provides that the Company is
required to provide Mr. Tramontana with an automobile allowance of $6,000 per
annum and the Company is required to obtain life insurance coverage on the life
and for the benefit of Mr. Tramontana in an amount equal to $500,000, assuming
he is insurable. Mr. Tramontana also has the right to participate in all benefit
plans afforded or which may be afforded
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to other executive officers during the term of the agreement including, without
limitation, group insurance, health, hospital, dental, major medical, life and
disability insurance, stock option plans and other similar fringe benefits. If
Mr. Tramontana dies or is unable to perform his duties on account of illness or
other incapacity and the agreement is terminated, he or his legal representative
shall receive from the Company the base salary which would otherwise be due to
the end of the month during which the termination of employment occurred plus
three additional months of base salary in the event of death and six additional
months of base salary in the event of illness or other incapacity.
The agreement further provides that if the Company terminates Mr.
Tramontana's employment for cause or if Mr. Tramontana voluntarily leaves the
employment of the Company, Mr. Tramontana shall receive his salary through the
end of the month in which the termination occurred. If Mr. Tramontana's
employment is terminated by the Company without cause, Mr. Tramontana shall
receive from the Company the base salary which would otherwise be due to the end
of the month during which the termination of employment occurred plus four
additional months. Mr. Tramontana's employment agreement contains certain
confidentiality and non-competition provisions. The Company has obtained
$2,000,000 of key-person life insurance for the benefit of the Company on the
life of Mr. Tramontana.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock at April 24, 2000 with respect to (i)
each person known to the Company to own beneficially more than five percent of
the outstanding shares of the Company's Common Stock, (ii) each director of the
Company, (iii) each of the named executive officers and (iv) all directors and
executive officers of the Company as a group.
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SHARES BENEFICIALLY
OWNED (1)
-----------------------------------
IDENTITY OF STOCKHOLDER OR GROUP NUMBER PERCENT
- --------------------------------------------------------------- ----------------- --------------
<S> <C> <C>
Bernard Kramer (2) 35,000 *
Cynthia R. May (3) 6,607,805 73.5
Massimo Pedrani 0 0
Philippe Rohrer (4) 35,000 *
Peter P. Stoelzle (5) 85,000 *
John G. Tramontana (6) 1,285,800 14.3
Jericho II, LLC (7)
13260 Spence Road
Hemlock, Michigan 48626 6,607,805 73.5
All directors and executive
officers as a group (6 persons) (8) 8,048,605 89.5
- -------------------------------
* Less than 1%
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(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC") and generally includes
voting or investment power with respect to securities. In accordance
with SEC rules, shares which may be acquired upon exercise of stock
options which are currently exercisable or which become
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exercisable within 60 days of the date of the table are deemed
beneficially owned by the optionee. Except as indicated by footnote,
and subject to community property laws where applicable, the persons or
entities named in the table above have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned
by them.
(2) Includes 35,000 shares subject to options.
(3) Includes 6,423,539 shares of Common Stock held by Jericho II, LLC (of
which 1,500,000 shares issuable upon exercise of warrants) and 184,266
shares of Common Stock held by GRQ, LLC.
(4) Includes 35,000 shares subject to options.
(5) Includes 85,000 shares subject to options.
(6) Includes 250,000 shares subject to options.
(7) Includes 1,500,000 shares issuable upon exercise of warrants and
184,266 shares of Common Stock held by GRQ, LLC.
(8) Includes 1,905,000 shares directors and executive officers have a right
to acquire upon exercise of stock options.
CHANGES IN CONTROL
In May 1998, in consideration of a guarantee of an increased line of
credit from a commercial institution, the Company delivered to Jericho II, LLC
("Jericho") warrants to purchase 1,000,000 shares of convertible preferred stock
(the "Preferred Stock") at a price per share equal to $2.5625 and having a term
of 10 years (the "Warrants"). The Preferred Stock is convertible to Common Stock
on a one-to-one basis, subject to adjustment to reflect dilutive issuances of
equity securities by the Company and stock splits, dividends, combinations and
similar events. The Preferred Stock is entitled to five votes per share and
votes together with the Common Stock in addition to having certain special
approval rights. The Preferred Stock has a liquidation preference equal to the
purchase price per share. The Warrants include a net exercise clause (to permit
the conversion of the Warrants into shares having a fair market value equal to
the spread between the exercise price and the then fair market value) and the
shares issuable on exercise shall be entitled to piggyback registration rights,
subject to certain restrictions.
Jericho holds other warrants to purchase up to 500,000 shares of the
Company's Common Stock.
In October 1998, Jericho acquired 3,692,308 shares of newly issued
Common Stock for a purchase price of $6,000,000.
In January 1999, pursuant to a Debt Repayment Agreement, 1,231,231
shares of Common Stock were transferred to Jericho from John G. Tramontana in
satisfaction of debt incurred by a third party holder of the Company's Common
Stock. Mr. Tramontana, Chairman of the Board, President and Chief Executive
Officer of the Company, has a 50% ownership interest in Jericho. Cynthia R. May,
a director of the Company, is the managing member of Jericho and as such, has
sole voting and investment power over shares of the Company's Common Stock owned
by Jericho.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1998 the Company effected several transactions with Jericho II,
L.L.C. ("Jericho") involving securities of the Company. See "Changes in
Control." John G. Tramontana owns a 50% interest in Jericho, and Cynthia R. May
has sole voting and investment power over shares of the Company's Common Stock
owned by Jericho.
In December 1998, pursuant to promissory notes the Company borrowed the
aggregate amount of $185,000 from Jericho. The principal sum, together with
interest at the prime rate, was repaid in full in February 1999. Also, in
December 1998, the Company borrowed $100,000 from GRQ. L.L.C., an affiliate of
Cynthia R. May, which sum together with interest at the prime rate was repaid in
full in March 1999.
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In December 1996, the Company entered into a lease agreement with Jtech
Laboratories, Inc. ("JTech"). The lease commenced on the completion of
construction of an approximately 8,600 square foot office and laboratory
facility. The lease is at a rental of approximately $120,000 per annum. Mr.
Tramontana is the President and a director of JTech.
Pursuant to the terms of the $4.0 million Note Purchase, Paying and
Conversion Agency Agreement ("NPPCAA") with Banca del Gottardo (the "Bank"), the
Bank, at its option, may appoint two members of its choice to the Company's
Board of Directors. As of April 24, 2000 the Bank has not exercised its option
to appoint board members.
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SIGNATURES
Pursuant to the requirements of Section 13 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: May 1, 2000 BIGMAR, INC.
By: /s/ JOHN G. TRAMONTANA
-----------------------------------------
John G. Tramontana
CHAIRMAN OF THE BOARD OF DIRECTORS AND
CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
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.
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SIGNATURE CAPACITY DATE
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<S> <C> <C>
Chairman of the Board of
/s/ JOHN G. TRAMONTANA Director and Chief
- -------------------------------------- Executive Officer May 1, 2000
John G. Tramontana (Principal Executive Officer)
/s/ CYNTHIA R. MAY Vice President-Administration
- -------------------------------------- and Director May 1, 2000
Cynthia R. May
/s/ PHILIPPE J. H. ROHRER
- -------------------------------------- Treasurer, Secretary, and May 1, 2000
Philippe Rohrer Director (Principal Financial Officer)
/s/ BERNARD KRAMER
- -------------------------------------- Director May 1, 2000
Bernard Kramer
/s/ MASSIMO PEDRANI
- -------------------------------------- Director May 1, 2000
Massimo Pedrani
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