SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
PRELIMINARY PROXY STATEMENT
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[] Preliminary Proxy Statement
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BIOCONTROL TECHNOLOGY, INC.
(Name of Registrant as Specified in its Charter)
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BIOCONTROL TECHNOLOGY, INC.
2275 SWALLOW HILL ROAD
PITTSBURGH, PA 15220
January 5, 2000
Dear Shareholder:
You are invited to attend a Special Meeting of Shareholders
to be held on February 7, 2000 at the Holiday Inn, Washington,
PA.
The accompanying Notice of Special Meeting and Proxy
Statement provide information about the matter to be acted upon
by the shareholders.
The Board of Directors appreciates your continued support
and urges you to vote FOR the item presented.
Sincerely,
Fred E. Cooper
CEO
BIOCONTROL TECHNOLOGY, INC.
2275 Swallow Hill Road
Pittsburgh, PA 15220
Telephone 412-349-1811
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 7, 2000
The Special Meeting (the "Special Meeting") of the stockholders
of Biocontrol Technology, Inc., a Pennsylvania Corporation (the
"Company") will be held at the Holiday Inn, Washington,
Pennsylvania, on February 7, 2000 at 9:00 a.m., local time, for
the following purpose:
1. To amend the Company's Articles of Incorporation, as
amended; to increase the number of authorized shares of common
stock to 1,700,000,000, as set forth in the Proxy Statement.
By Order of the Board of Directors
___________________________________
David E. Staudenmaier, Secretary
Date: January 5, 2000
PLEASE NOTE: ONLY BONA FIDE STOCKHOLDERS WILL BE ADMITTED TO THE
SPECIAL SHAREHOLDERS MEETING; PHOTO IDENTIFICATION AND PROOF OF
OWNERSHIP AS OF THE RECORD DATE WILL BE REQUIRED FOR ADMITTANCE.
Those stockholders who are unable to attend the Special Meeting
in person are respectfully urged to indicate their choices,
execute and return the enclosed proxy card at their earliest
convenience to Proxy Tabulation Dept., Chase Mellon Shareholder
Services, 450 West 33rd Street, 15th Floor, New York, New York
10001. Promptness in returning the enclosed proxy card will be
appreciated. Proxies must be returned no later than February 4,
2000. Any Proxy may be revoked by the Stockholder before it is
voted at the Special Meeting by either: written notice to the
Secretary, by submission of a Proxy bearing a later date, or by
attending the Special Meeting and voting in person.
Biocontrol Technology, Inc.
The Bourse, Building 2500, Second Floor
2275 Swallow Hill Road | Pittsburgh, PA 15220
(412) 429-0673 FAX (412) 279-1367
BIOCONTROL TECHNOLOGY, INC.
The approximate mailing date of this Proxy Statement is January 5, 2000
PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
February 7, 2000
The accompanying proxy is furnished by Biocontrol Technology,
Inc. in connection with the solicitation of proxies by the Board
of Directors on all matters and may be revoked by the Shareholder
at any time before it is voted by giving written notice to the
Secretary of the Company or by executing and delivering a proxy
with a later date. The expense of this solicitation is to be
borne by the Company, and the Company will reimburse persons
holding stock in their name or in the names of their nominees for
the expenses incurred in sending proxies and proxy materials to
their principals.
The Company had outstanding 956,108,496 shares of common
stock, par value $.10 per share, as of December 10, 1999 the
date for determining the security holders of record entitled to
vote at the meeting (the "Record Date"). Each share of common
stock is entitled to one vote in all matters brought before the
Shareholders, without cumulative voting.
SOLICITATION OF PROXIES AND VOTING PROCEDURES
The enclosed Proxy is solicited on behalf of the Board of
Directors. The expenses of solicitation, including the cost of
preparing, handling, printing and mailing the Notice of Special
Meeting, Proxy and Proxy Statement, the aggregate of which is
estimated to be approximately $80,000, has been or will be
paid by the Company. The Company will pay Chase Mellon
Shareholder Services, its Registrar and Transfer Agent, for
its assistance in the solicitation of proxies and will reimburse
brokers and other persons holding shares in their names or those
of their nominees for their expenses for sending Proxy materials
to principals and obtaining their proxies.
Shareholders are urged to specify their choice, date, and sign
and return the enclosed proxy in the enclosed envelope. Prompt
response is helpful and your cooperation will be appreciated.
Each share of common stock outstanding as of the Record Date is
entitled to one vote on each matter submitted to the stockholders
for a vote at the Meeting. The matters submitted to a vote at
the meeting will be decided by the vote of a majority of all
votes cast in person or by proxy at the meeting. Abstentions
will be treated as shares present and entitled to vote for
purposes of determining the presence of a quorum, but will not be
considered as votes cast in determining whether a matter has been
approved by the stockholders. If a broker or other record holder
or nominee indicates on a proxy that it does not have authority
as to certain shares to vote on a particular matter (commonly
referred to as "broker non-votes"), those shares will not be
considered as present and entitled to vote with respect to that
matter.
Proxies may be revoked prior to voting by either: written notice
to the Secretary; submission of a proxy bearing a later date; or
by attending the Meeting and voting in person.
Transfer Agent
ChaseMellon Shareholder Services in New York, New York acts as
the Company's Registrar and Transfer Agent for its common and
preferred stock. The Company acts as its own warrant registrar
transfer agent.
DESCRIPTION OF SECURITIES
BICO's authorized capital currently consists of 975,000,000
shares of common stock, par value $.10 per share and 500,000
shares of cumulative preferred stock, par value $10.00 per
share. As of December 10, 1999, there were 956,108,496
shares of common stock and zero shares of preferred stock outstanding.
Preferred Stock
The Articles of Incorporation of BICO authorize the issuance of a
maximum of 500,000 shares of non-voting cumulative convertible
preferred stock, and authorize the Board of Directors of BICO to
divide such class of preferred stock into series and to fix and
determine the relative rights and preferences of the shares.
As of December 10, 1999 the Company had zero outstanding shares
of preferred stock.
Common Stock
Holders of common stock are entitled to one vote per share on all
matters submitted to a vote of shareholders, but are not entitled
to cumulate their votes in the election of directors.
Accordingly, for example, the holders of over 50% of the
outstanding common stock voting for the election of directors
could elect the entire slate of the Board of Directors of BICO,
and the holders of the remaining common stock would not be able
to elect any member to the Board of Directors. As of December
10, 1999, there were 956,108,496 shares of common stock
outstanding.
In the event of liquidation or dissolution of BICO, holders of
the common stock are entitled to receive on a pro rata basis all
assets of BICO remaining after satisfaction of all liabilities
including liquidation preferences granted to holders of the
preferred stock of BICO.
Dividends
The Company has not paid cash dividends on its common stock or
preferred stock (with the exception of a cash dividend on its
preferred stock in 1983, and a common stock dividend on its
preferred stock in 1988) since its inception, and cash dividends
are not presently contemplated at any time in the foreseeable
future. The Company anticipates that any excess funds generated
from operations in the foreseeable future will be used for working
capital and for investment in research and new product development,
rather than to pay dividends.
In accordance with the Company's Articles of Incorporation, cash
dividends are restricted under certain circumstances. Holders
of common stock are entitled to cash dividends only when and if
declared by the Board of Directors out of funds legally available
for payment thereof. Any such dividends are subject to the prior
right of holders of the Company's preferred stock to receive any
accrued but unpaid dividends. Further, common stock dividends
may be paid only to the extent the net assets of BICO exceed the
liquidation preference of any outstanding preferred stock.
Employment Agreement Provisions Related to Changes in Control
BICO has entered into agreements (the "Agreements") with Fred E.
Cooper, David L. Purdy, Anthony J. Feola, Glenn Keeling, and two
non- executive officer employees. The Agreements provide that in
the event of a "change of control" of BICO, BICO is required to
issue to Mr. Cooper and Mr. Purdy shares of common stock equal to
five percent (5%), to issue to Mr. Feola four percent (4%), to
issue Mr. Keeling three percent (3%), and to issue the two non-
executive officer employees two percent (2%) each of the
outstanding shares of common stock of the Company immediately
after the change in control. In general, a "change of control"
is deemed to occur for purposes of the Agreement: (I) when 20% or
more of BICO's outstanding voting stock is acquired by any
person, (ii) when one-third (1/3) or more of BICO's directors are
not Continuing Directors (as defined in the Agreements), or
(iii) when a controlling influence over the management or
policies of BICO is exercised by any person or by persons acting
as a group within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Warrants
As of December 10, 1999, there were outstanding warrants to
purchase 16,179,462 shares of the Company's common stock at
exercise prices of between $0.06 and $4.03 per share. These
warrants are held by members of the Company's Scientific Advisory
Board, certain employees, officers, directors, loan guarantors,
lenders and consultants.
The holders of warrants are not entitled to vote, to receive
dividends or to exercise any of the rights of the holders of
shares of common stock for any purpose until such warrants have
been duly exercised and payment of the exercise price has been
made.
MARKET PRICE FOR COMMON STOCK
The Company's common stock is traded on the electronic bulletin
board under the symbol "BICO". On December 10, 1999, the closing
bid price for the common stock, was $.066. The following table
sets forth the high and low closing prices for the Company's common
stock during the calendar periods indicated,through September 30, 1999.
Calendar Year High Low
and Quarter
1997 First Quarter $1.500 $ .625
Second Quarter $1.000 $ .3125
Third Quarter $ .719 $ .3125
Fourth Quarter $. 406 $ .0937
1998 First Quarter $ .250 $ .0937
Second Quarter $ .1875 $ .0313
Third Quarter $ .359 $ .0313
Fourth Quarter $ .126 $ .049
1999 First Quarter $ .084 $ .049
Second Quarter $ .340 $ .048
Third Quarter $ .125 $ .070
As of December 10, 1999, the Company had approximately
80,000 holders, including those who hold in street name,
for its common stock, and zero holders for its preferred stock.
SELECTED FINANCIAL DATA
FOR NINE MONTHS ENDED SEPTEMBER 30th
1999 1998
Total Assets $25,474,473 $16,746,625
Long-Term
Obligations $ 1,333,629 $ 3,822,847
Working
Capital
(Deficit) $ 5,103,943 ($ 3,835,755)
Preferred Stock $ 0 $ 0
Net Sales $ 86,936 $ 1,019,520
TOTAL REVENUES $ 305,357 $ 1,112,580
Warrant Extensions $ 0 $ 1,870,000
Benefit (Provision)
for Income Taxes $ 0 $ 0
Net Loss ($30,478,621) ($17,996,197)
Net Loss Per
Common Share ($.05) ($.07)
Cash Dividends Per Share
Preferred $ 0 $ 0
Common $ 0 $ 0
<TABLE>
FOR YEARS ENDED DECEMBER 31st
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Total Assets $ 9,835,569 $12,981,300 $14,543,991 $ 9,074,669 $ 6,375,778
Long-Term
Obligations $ 1,412,880 $ 2,697,099 $ 2,669,727 $ 175,330 $ 163,201
Working Capital
(Deficit) ($ 9,899,008) $ 888,082 $ 1,785,576 $ 3,188,246 $ 2,612,884
Preferred Stock $ 0 $ 0 $ 0 $ 37,900 $ 54,900
Net Sales $ 1,145,968 $ 1,155,907 $ 597,592 $ 461,257 $ 184,507
TOTAL REVENUES $ 1,378,213 $ 1,426,134 $ 776,727 $ 755,991 $ 481,453
Warrant Extensions $ 0 $ 4,046,875 $ 9,175,375 $12,523,220 $ 0
Benefit(Provision)for
Income Taxes $ 0 $ 0 $ 0 $ 0 $ 0
Net Loss ($22,402,644) ($30,433,177)($24,045,702)($29,420,345)($11,672,123)
Net Loss Per
Common Share ($.08) ($.43) ($.57) ($.84) ($.43)
Cash Dividends Per Share:
Preferred $0 $0 $0 $0 $0
Common $0 $0 $0 $0 $0
</TABLE>
For more detailed information, please refer to the Company's Form
10-K for the year ended December 31, 1998, as well as the
Company's Form 10-Qs for the quarters ended March 31, 1999; June
30, 1999 and September 30, 1999, all of which are available from
the Company as set forth on the last page of this Proxy.
INCREASE IN NUMBER OF AUTHORIZED SHARES
The Company's Articles of Incorporation, as amended, authorize
the issuance of 975,000,000 shares of common stock, par value
$.10 per share. As of December 10, 1999 there were
956,108,496 shares outstanding, and currently exercisable
warrants to purchase 16,179,462 shares of common stock.
All the shares of common stock will be equal to each other with
respect to liquidation rights and dividend rights and there are
no preemptive rights to purchase any additional shares of common
stock.
In the event of liquidation, dissolution or winding up of the
Company, holders of the common stock are entitled to receive on a
pro rata basis all assets remaining after satisfaction of all
liabilities including liquidation preferences granted to holders
of the preferred stock of the Company.
Holders of common stock are entitled to cash dividends only when
and if declared by the Board of Directors out of funds legally
available for payment thereof, and subject to the prior right of
holders of the Company's preferred stock to receive any accrued
but unpaid dividends. Further, common stock dividends may be paid
only to the extent the net assets exceed the liquidation
preference of any outstanding preferred stock. The Company has
not paid any cash dividends on its common stock since its
inception and no cash dividends on the common stock are
ontemplated at any time in the foreseeable future.
The Board of Directors of the Company unanimously approved a
resolution to propose that the shareholders increase the number
of authorized shares of common stock to 1,700,000,000 by amending
the Company's Articles of Incorporation.
Although the Company currently has no specific plans to issue
additional shares, if such an increase is approved, the Board of
Directors may, without additional shareholder approval, authorize
the sale of such additional shares in order to raise additional
capital to fund the Company's operations and research and
development projects, as well as to invest in other companies
which already generate revenues, or have short-term revenue-
generating potential, in order to support the capital needs of
the Company's current projects. The Board will authorize
management to use any such funds raised to fund existing or new
research and development projects, or other investments, as
management determines is in the best interest of the Company.
Management does not believe that, until full-scale manufacturing
of the Noninvasive Glucose Sensor begins, or the sale of the
Company's other products generates meaningful revenues, the
Company presently has alternative means to raise additional
funds. Because the market price for the stock has remained low
it has been necessary to sell more shares than originally
anticipated in order to raise sufficient capital; therefore, the
authorization of additional shares is necessary. The proposal
to increase the number of authorized shares is part of
management's long-term plan to continue funding the Company's
existing and future research and development projects, and to
fund manufacturing start-up of the Noninvasive Glucose Sensor.
Any future sale of additional shares, whether in a public or
private offering, will dilute the holdings of existing
shareholders. The Company has no current specific plans for any
proceeds received from the future sale of the additional shares,
but may use any such proceeds to continue funding existing
research and development projects, manufacturing, and other
unrelated projects which are deemed by management to be in the
best interest of the Company. Such projects are subject to
risks, and there can be no assurances that any current or future
project will be successful or result in commercially viable
products.
The additional shares of common stock that would become available
for issuance if the proposal were adopted could also be used by
the Company to oppose or delay a hostile takeover attempt or
delay or prevent changes in control or management of the Company.
For example, without further stockholder approval, the Board
could strategically sell shares of common stock in a private
transaction to purchasers who would oppose a takeover. Although
this proposal to increase the authorized common stock has been
prompted by business and financial considerations and not by the
threat of any hostile takeover attempt (nor is the Board
currently aware of any such attempts directed at the Company),
nevertheless, stockholders should be aware that approval of
proposal could facilitate future efforts by the Company to deter
or prevent changes in control of the Company, including
transactions in which the stockholders might otherwise receive a
premium for their shares over then current market prices.
Although shareholders approved a reverse stock split of up to one
for twenty in June 1998, the Company has no current plans to
conduct a reverse stock split.
The Company's common stock now trades on the Electronic Bulletin
Board, since its delisting from the small-cap market. Although
the trading volume of the Company's common stock has not
declined, the price of the common stock has declined since the
move to the Bulletin Board, and the risk exists that, both the
Company's common stock trading volume and price will decrease.
The Board of Directors recommends shareholder approval of the
proposal to amend the Company's Articles of Incorporation to
increase the number of authorized shares of common stock to
1,700,000,000. The affirmative vote of the holders of a
majority of the common stock entitled to vote at the Special
Meeting is necessary to approve the amendment. If not otherwise
specified, properly executed proxies will be voted in favor of
the amendment.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
DIRECTORS AND EXECUTIVE OFFICERS
Director Age Since Position
David L. Purdy 71 1972 President, Chairman of the
Board, Director
Fred E. Cooper 53 1989 Chief Executive Officer,
Executive Vice President, Director
Anthony J. Feola 51 1990 Senior Vice President, Director
Glenn Keeling 48 1991 Vice President, Director
Stan Cottrell 56 1998 Director
Paul W. Stagg 52 1998 Director
_____________________________
DAVID L. PURDY, 71 is President, Chairman of the Board, Treasurer
and a director of the Company. Mr. Purdy has been a director and
Chairman of the Board since its organization in 1972 and is
considered the organizer and founder of the Company; he devotes
60% of his time to the business of the Company, and 40% of his
time to Diasensor.com. He has also served as President of the
Company from 1972 through December 1990, with the exception of
five months in 1980, when he served as Chairman and full-time
Program Director of the Company's implantable medicine dispensing
device program with St. Jude Medical, Inc., and from October 1,
1987 through July 15, 1988, when he served as Chairman and
Director of Research and Development for the Company. Prior to
Founding the Company, he was employed by various companies in the
medical technology field, including Arco Medical, Inc. Mr. Purdy
is also an officer and director of Diasensor.com and Coraflex.
FRED E. COOPER, 53, is the Chief Executive Officer, Executive
Vice President and a director of the Company; he devotes
approximately 60% of his time to the business of the Company, and
40% to Diasensor.com. Prior to joining the Company, Mr. Cooper
co-founded Equitable Financial Management, Inc. of Pittsburgh,
PA, a company in which he served as Executive Vice President
until his resignation and divestiture of ownership in August
1990. In 1972, Mr. Cooper founded Cooper Leasing Corp.,
Pittsburgh, Pennsylvania, a company specializing in equipment and
venture financing. Mr. Cooper was appointed Chief Executive
Officer in January 1990. He is also an officer and director of
Diasensor.com and Barnacle Ban, and a director of Petrol Rem and
Coraflex.
ANTHONY J. FEOLA, 51, rejoined the Company as its Senior Vice
President in April 1994, after serving as Diasensor.com's Vice
President of Marketing and Sales from January 1992 until April
1994. Prior to January 1992, he was the Company's Vice President
of Marketing and Sales. Prior to joining the Company in
November 1989, Mr. Feola was Vice President and Chief Operating
Officer with Gateway Broadcasting in Pittsburgh in 1989, and
National Sales Manager for Westinghouse Corporation, also in
Pittsburgh, from 1980 until 1989. He was elected
a director of the Company in February 1990, and also serves as a
director of Diasensor.com, Coraflex, Petrol Rem and Barnacle Ban.
GLENN KEELING, 48, joined the Board of Directors in April 1991.
Mr. Keeling currently is a full-time employee of BICO in the
position of Vice President of Marketing; his primary
responsibilities beginning in 1994 have been the management
and operation of IDT's Whole-Body Extracorporeal Hyperthermia
project. From 1976 through 1991, he was a Vice President in
charge of new business development at Equitable Financial Management,
Inc., a regional equipment lessor. His responsibilities included
initial contacts with banks and investment firms to open new lines
of business referrals in connection with financing large equipment
transactions. He is also President and a director of IDT.
STAN COTTRELL, 56, was appointed to the Board of Directors in
1998. Mr. Cottrell is the Chairman and Founder of Cottrell
Associates International, Inc., which provides international
business development, brokerage, specialty marketing and
promotional services. He is a former director of marketing for
Inhalation Therapy Services and was employed by Boehringer
Ingelheim, Ltd. as a national product manager. Mr. Cottrell is a
world ultra-distance runner, who recently completed a run across
the Commonwealth of Pennsylvania to raise awareness regarding
Diabetes, and he is the author of several books.
PAUL W. STAGG, 52, was appointed to the Board of Directors in
1998. Mr. Stagg is the marketing manager for the Wholesale
Division of First Financial Resources, Inc., where he is
responsible for marketing, underwriting, sorting and coordination
various types of financing for institutional investors. Prior
to his current position, he was District Distributor of Marketing
for Ginger Mae, a division of United Companies of Baton Rouge,
LA.
Pursuant to the disclosure requirements of Item 405 of Regulation
S-K regarding timely filings required by Section 16(a) of the
Securities and Exchange Act, the Company represents the
following. Based solely on its review of copies of forms
received and written representations from certain reporting
persons, the Company believes that all of its officers, directors
and greater than ten percent beneficial owners complied with
applicable filing requirements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Employment Relationships
The Board of Directors of the Company approved employment
agreements on November 1, 1994 for its officers, David L. Purdy,
Fred E. Cooper, Anthony J. Feola and Glenn Keeling (See
"Employment Agreements").
David L. Purdy, President, Treasurer and a director of the
Company, is a director of Diasensor.com and Coraflex. He is also
the chairman and Chief Scientist of Diasensor.com, and the
President and Treasurer of Coraflex. Mr. Purdy devotes 60% of
his time to BICO, and 40% to Diasensor.com. Fred E. Cooper,
Chief Executive Officer, Executive Vice President and a director
of the Company, is a director of Diasensor.com, Coraflex, Petrol
Rem, and Barnacle Ban. He is also the President of Diasensor.com,
and Barnacle Ban. Mr. Cooper devotes approximately 60% of his time
to BICO and 40% to Diasensor.com. Anthony J. Feola, Senior Vice
President and a director of the Company, is also a director of
Diasensor.com, Coraflex, Petrol Rem, and Barnacle Ban. Glenn Keeling,
Vice President and a director of the Company, was employed on January
1, 1992 as BICO's manager of product development. Mr. Keeling is also the
President and a director of IDT. Gary Keeling, the brother of
Glenn keeling, resigned as an officer and director of Diasensor.com in
August 1997.
Property
Three of the Company's current executive officers and/or
directors and two former directors of the Company are members of
the nine-member 300 Indian Springs Road Real Estate Partnership
(the "Partnership") which in July 1990, purchased the Company's
real estate in Indiana, Pennsylvania, and each has personally
guaranteed the payment of lease obligations to the bank providing
the funding. The five members of the Partnership who are also current
or former officers and/or directors of the Company, include David L. Purdy,
Fred E. Cooper, Glenn Keeling, Jack H. Onorato and C. Terry
Adkins, each received warrants on June 29, 1990 to purchase
100,000 shares of the Company's common stock at an exercise price
of $.33 per share until June 29, 1995 (those warrants still
outstanding as of the original expiration date were extended
until June 29, 2001). Mr. Adkins, who was a director at the time
of the transaction, resigned from the Board of Directors on March
30, 1992. Mr. Keeling, who was not a director at the time of the
transaction, joined the Board of Directors on May 3, 1991; Mr.
Onorato, who was not a director at the time of the transaction,
was a BICO director from September 1992 until April 1994.
In all instances where warrants were issued in connection with
the transactions set forth above, the exercise price of the
warrants was equal to or above the current quoted market price of
the Company's common stock on the date of issuance.
Loans
On October 1, 1990, the Board of Directors approved a $75,000
loan from the Company to Fred E. Cooper. Mr. Cooper signed a
Promissory Note promising to pay the principal amount plus twelve
percent (12%) simple interest. Mr. Cooper repaid $66,500 of the
$75,000 principal balance during 1991. During 1991, the Company
granted loans to Fred E. Cooper in the aggregate amount of
$57,400. Mr. Cooper signed Promissory Notes promising to pay the
principal amounts upon demand plus ten percent (10%) simple
interest. In January 1992, the Company granted a loan to Fred E.
Cooper in the amount of $25,000. Mr. Cooper signed a Promissory
Note promising to pay the principal amount upon demand plus ten
percent (10%) simple interest. In 1997, the Companies granted
loans to Fred E. Cooper aggregating $ 158,000; Mr. Cooper signed
promissory notes promising to pay the principal amounts upon
demand plus 8.25% simple interest. In 1998, the Company granted
loans to Fred E. Cooper aggregating $275,000; Mr. Cooper signed a
promissory note promising to pay the principal amount upon demand
plus 8.25% simple interest. In 1999, all of Mr. Cooper's
outstanding loans, including accrued interest, were consolidated
to one loan in the amount of $777,399.80. Mr. Cooper began
repaying the loans in May of 1999. The loan balance as of
November 30, 1999 was $751,504. In addition, Mr. Cooper owns 66%
of a corporation called B-A-Champ.com. During 1999, the
Company loaned B-A-Champ.com an aggregate of $150,000; as of
November 30, 1999, approximately $100,000 had been repaid. In
return, the Company received a 6.5% equity interest in that
company, and will be repaid within one year.
In November 1997, the Companies granted a loan to Anthony J.
Feola in the amount of $50,000. Mr. Feola signed a promissory
note promising to pay the principal amount upon demand plus 8.25%
simple interest. In February 1998, the Company granted a loan
to Anthony J. Feola in the amount of $185,000. Mr. Feola signed
a promissory note promising to pay the principal upon demand plus
8.25% simple interest. In 1999, all of Mr. Feola's outstanding
loans, including accrued interest, were consolidated into one
loan in the amount of $259,476.82. Mr. Feola began repaying the
loans in May of 1999. The loan balance as of November 30, 1999
was $247,606.
In December 1991, the Company granted a loan to Glenn Keeling in
the amount of $5,000. Mr. Keeling signed a Promissory Note
promising to pay the principal amount upon demand plus ten
percent (10%) simple interest. In December 1996, the Company
granted a loan to Glenn Keeling in the amount of $50,000. Mr.
Keeling signed a promissory note promising to pay the principal
amounts upon demand plus 8.25% simple interest. In November
1997, the Company granted a loan to Glenn Keeling in the amount
of $20,000. Mr. Keeling signed a promissory note promising to
pay the principal upon demand plus 8.25% simple interest. In
February 1998, the Company granted a loan to Glenn Keeling in the
amount of $190,000. Mr. Keeling signed a promissory note
promising to pay the principal upon demand plus 8.25% simple
interest. In 1999, all of Mr. Keeling's outstanding loans,
including accrued interest, were consolidated into one loan in
the amount of $296,358.07. Mr. Keeling began repaying the loans
in May of 1999. The loan balance as of November 30, 1999 was
$280,543.
In September 1995, the Company granted a loan in the amount of
$250,000 to Allegheny Food Services in the form of a one-year
renewable note bearing interest at prime rate as reported by the
Wall Street Journal plus one percent (1%). Interest and
principal payments have been made on the note, and as of November
30, 1999, the balance was $175,547. Joseph Kondisko, a former
director of Diasensor.com is a principal owner of Allegheny Food
Services.
Each of the loans made to officers or directors and their
affiliates was made for a bona fide business purpose. All future
loans to officers, directors and their affiliates will be made
for bona fide business purposes only.
Warrants
During 1999, the Company issued the following warrants to
purchase common stock to its executive officers and directors:
On April 28, 1999, warrants to purchase common stock at $.129 per
shares until April 28, 2004 were granted in the following
amounts: 4,000,000 to Fred E. Cooper, the CEO and a director;
2,000,000 to Anthony J. Feola, the Senior Vice President and a
director; 2,000,000 to Glenn Keeling, a Vice President and a
director; 4,000,000 to David L. Purdy, the Chairman and a
director; 250,000 to Stan Cottrell, a director; and 250,000 to
Paul Stagg, a director. The exercise price of $.129 per share
was equal to the market price on April 28, 1999.
Compare 5-Year Cumulative Total Return
Among Biocontrol Technology ("BICO"),
Market Index and SIC Code Index
EDGAR Support has advised that the graph will not transmit, the following
information is sufficient.
<TABLE>
FISCAL YEAR ENDING
COMPANY/INDEX/MARKET
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 11/30/99
<S> <C> <C> <C> <C> <C> <C>
Biocontrol Technology, Inc. 100.00 212.98 55.57 11.11 3.91 3.85
SIC Code Index 100.00 170.61 185.81 215.53 294.27 272.60
NASDAQ Market Index 100.00 129.71 161.18 197.16 278.08 412.63
</TABLE>
Table indicates value of investment at each year-end, asuming $100 invested on
January 1, 1993.
Assumes Dividend Reinvested.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the indicated information as of
September 30, 1999 with respect to each person who is known by
the Company to be the beneficial owner of more than five percent
(5%) of the outstanding common stock, each director of the
Company, and all directors and executive officers of the Company
as a group. The table excludes disclosure of entities such as
Cede & Co. and other companies, which would reflect the ownership
of entities who hold stock on behalf of shareholders.
As of September 30, 1999, there were 884,970,214 shares of the
Company's common stock outstanding. The table below sets forth
the common stock currently owned by each person or group,
including common stock underlying warrants, all of which are
currently exercisable, as of September 30, 1999. The left-hand
column sets forth the percentage of the total number of shares of
common stock outstanding as of September 30, 1999, which would be
owned by each named person or group upon the exercise of all of
the warrants held by such person or group together with common
stock currently owned. Except as otherwise indicated, each
person has the sole power to vote and dispose of each of the
shares listed in the columns opposite his name.
Name and Amount and Percent of Beneficial
Address of Nature of Ownership of
Beneficial Beneficial Total Outstanding
Owner Ownership (1) Common Stock (2)
David L. Purdy (3) 5,167,340 (4) *
625 Kolter Drive
Indiana, PA 15701
Fred E. Cooper 5,076,200 (5) *
2275 Swallow Hill Road
Bldg. 2500, 2nd Floor
Pittsburgh, PA 15220
Stan Cottrell 250,000 (6) *
4619 Westhampton Drive
Tucker, GA 30084
Anthony J. Feola 2,904,000 (7) *
2275 Swallow Hill Road
Bldg. 2500, 2nd Floor
Pittsburgh, PA 15220
Glenn Keeling 2,238,500 (8) *
2275 Swallow Hill Road
Building 2500, 2nd Floor
Pittsburgh, PA 15220
Paul Stagg 270,000 (9) *
168 LaLanne Road
Madisonville, LA 70447
All directors and executive 15,906,040(10) 1.7
Officers as a group (4)
*Less than one percent
____________________
(1) Includes ownership of all shares of common stock which each
named person or group has the right to acquire, through the
exercise of warrants, within sixty (60) days, together with the
common stock currently owned.
(2) Represents total number of shares of common stock owned by
each person, as set forth in the third column, which each named
person or group has the right to acquire, through the exercise of
warrants within sixty (60) days, together with common stock
currently owned, as a percentage of the total number of shares of
common stock outstanding as of September 30, 1999. For
computation purposes, the total number of shares of common stock
outstanding as of September 30, 1999 has been increased by the
number of additional shares which would be outstanding if the
person or group exercised all outstanding warrants.
(3) Does not include shares held by Mr. Purdy's adult children.
Mr. Purdy disclaims any beneficial interest to shares held by
members of his family.
(4) Includes currently exercisable warrants to purchase
the following: 187,200 shares of common stock at $.25 per share
until April 24, 2001; 80,000 shares of common stock at $.33 per
share until June 29, 2003; 500,000 shares of common stock at
$.25 per share until May 1, 2001 pursuant to Mr. Purdy's previous
employment agreement; and 4,000,000 shares of common stock at
$.129 per share until April 28, 2004. In addition, Mr. Purdy is
entitled to certain shares of common stock upon a change of
control of BICO as defined in his employment agreement (See,
"Employment Agreements").
(5) Includes currently exercisable warrants to purchase
the following: 300,000 shares of common stock at $.25 per share
until May 1, 2001 pursuant to Mr. Cooper's previous employment
agreement; and 4,000,000 shares of common stock at $.129 per
share until April 28, 2004. In addition, Mr. Cooper is entitled
to certain shares of common stock upon a change of control of
BICO as defined in his employment agreement (See, "Employment
Agreements").
(6) Includes currently exercisable warrants to purchase 250,000
shares of common stock at $.129 per share until April 28, 2004.
(7) Includes currently exercisable warrants to purchase
the following: 100,000 shares of common stock at $.25 per share
until November 26, 2003; 100,000 shares of common stock at $.25
per share until May 1, 2001 pursuant to Mr. Feola's previous
employment agreement; 350,000 shares of common stock at $.50 per
share until October 11, 2002; and 2,000,000 shares of common
stock at $.129 per share until April 28, 2004. In addition, Mr.
Feola is entitled to certain shares of common stock upon a change
of control of BICO as defined in his employment agreement (See,
"Employment Agreements").
(8) Includes currently exercisable warrants to purchase 100,000
shares of common stock at $1.48 per share until August 26, 2001;
and 2,000,000 shares of common stock at $.129 per share until
April 28, 2004. In addition, Mr. Keeling is entitled to certain
shares of common stock upon a change of control of BICO as
defined in his employment agreement (See, "Employment
Agreements").
(9) Includes currently exercisable warrants to purchase 20,000
shares of common stock at $.06 per share until April 27, 2003;
and 250,000 shares of common stock at $.129 per share until April
28, 2004.
(10) Includes shares of common stock, including stock currently
owned, available under currently exercisable warrants as set
forth above.
SHAREHOLDER PROPOSALS
All shareholder proposals to be presented at the next Annual
Meeting of the Company must be received by the Company at its
principal executive offices by January 30, 2000 for inclusion in
the proxy materials relating to the next Annual Meeting.
OTHER MATTERS
The management of the Company does not know of any other matters
that are to be presented for action at the meeting. Should any
other matter come before the meeting, however, the person named
in the enclosed Proxy shall have discretionary authority to vote
all shares represented by valid proxies with respect to such
matter in accordance with his judgment.
INCORPORATION BY REFERENCE
The latest financial statements of the Company, as well as other
information regarding the Company may be found in other documents
the Company has filed or will file with the SEC. The following
documents are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998;
(2) The Company=s Form 10-Qs for the quarter ended March
31, 1999; June 30, 1999; and September 30, 1999.
The Company undertakes to provide without charge to each person
to whom these Proxy Materials are delivered, upon written or oral
request of such person, a copy of any and all information that
has been incorporated by reference. Such requests should be made
to: Investor Relations Department, Biocontrol Technology, Inc.,
2275 Swallow Hill Road, Building 2500, 2nd Floor, Pittsburgh, PA
15220; by telephone at (412) 429-0673 or by fax at (412) 279-
1367.
FINANCIAL AND OTHER INFORMATION
For additional information, including Financial Information,
Financial Statements and corresponding notes, and Management's
Discussion and Analysis of Financial Condition and Results of
Operations, please review the Company's Form Annual Report on
Form 10-K, the Company's Form S-1 Registration Statement, as well
as the Company's Quarterly Reports on Form 10-Q, all of which are
available at no charge from the Company or on-line from the SEC's
EDGAR system at www.sec.gov. Information about the Company is
also available on its website at www.bico.com. For information,
please contact Diane McQuaide, the Company's Investor Relations
Representative at:
2275 Swallow Hill Road
Bldg. 2500, 2nd Floor
Pittsburgh, PA 15220
(412) 429-0673
By Order of the Board of Directors
______________________________
David E. Staudenmaier, Secretary
PROXY CARD
BIOCONTROL TECHNOLOGY, INC. PROXY
2275 Swallow Hill Road THIS PROXY IS SOLICITED ON
Pittsburgh, PA 15220 BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having received the Notice of the Special
Meeting of Shareholders and the Biocontrol Technology, Inc. Proxy Statement,
hereby appoint(s) David E. Staudenmaier proxy of the undersigned (with
full power of substitution) to attend the above Special Meeting and all
adjournments thereof (the "Special Meeting") and there vote all
shares of Common Stock of Biocontrol Technology, Inc. (The
"Company") that the undersigned would be entitled to vote, if
personally present with regard to all matters which may come
before the Special Meeting, including the items set forth below.
To cast a vote in connection with the following items, please
check the box next to the appropriate response.
1. Approval of an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of
common stock to 1,700,000,000.
| | FOR | | AGAINST | | ABSTAIN
2. In his discretion upon the transaction of other business as
may properly come before the Special Meeting.
| | FOR | | AGAINST | | ABSTAIN
The undersigned hereby revokes all previous proxies for the
Special Meeting, acknowledges receipt of the Notice of the Special
Meeting and Proxy Statement furnished therewith and ratifies all that
the said proxies may do by virtue hereof.
This proxy when properly executed will be voted in the
manner specified herein. If no specification is made, this proxy
will be voted in favor of Item 1 and the authority provided by
Item 2 will be deemed granted.
Please sign exactly as name appears below. Joint owners
should each sign personally. If signing in any fiduciary or
representative capacity, give full title as such. For shares
held by a corporation, please affix corporate seal.
Date:____________________________________
____________________________________
Signature
_____________________________________
Sign, date and return this proxy
Immediately in the enclosed envelope
To Chase-Mellon Shareholder Services
NOTE: ONLY BONA FIDE SHAREHOLDERS WILL BE ADMITTED TO THE SPECIAL
SHAREHOLDERS MEETING; PHOTO IDENTIFICATION AND PROOF OF OWNERSHIP AS
OF THE RECORD DATE WILL BE REQUIRED FOR ADMITTANCE.
