SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by Registrant [X]
Filed by a Party other than a Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14-12
Steritek, Inc.
(Name of Registrant as Specified In Its Charter)
Board of Directors of Steritek, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
STERITEK, INC.
121 Moonachie Avenue
Moonachie, New Jersey 07074
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
on
February 5, 1997
Notice is hereby given that the Annual Meeting of Shareholders of
Steritek, Inc., a New Jersey corporation (the "Company"), will be held at
the offices of Steritek, Inc., 121 Moonachie Avenue, Moonachie, New Jersey
07074 on Wednesday, February 5, 1997 at 10:00 a.m., local time, for the
following purposes:
1. To elect four directors to serve until the next annual meeting of
shareholders; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on December 16,
1996 are entitled to notice of, and to vote at, the meeting or any
adjournment thereof.
A copy of the Annual Report of Steritek, Inc. for the fiscal year ending
June 30, 1996 is enclosed with this Notice, the attached Proxy Statement and
accompanying proxy card.
All shareholders are urged to attend the meeting in person or by proxy.
By Order of the Board of Directors,
Albert J. Wozniak
President
December 19, 1996
Moonachie, New Jersey
KINDLY MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE IF YOU CANNOT ATTEND IN PERSON.
<PAGE>
STERITEK, INC.
121 Moonachie Avenue
Moonachie, New Jersey 07074
____________________
PROXY STATEMENT
____________________
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Steritek, Inc., a New Jersey
corporation (the "Company"), for use at the Annual Meeting of Shareholders
of the Company (the "Annual Meeting") which will be held at 10:00 A.M.,
local time, on Wednesday, February 5, 1997, at the offices of Steritek,
Inc., 121 Moonachie Avenue, Moonachie, New Jersey 07074, and at any
adjournment of that meeting, for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. This Proxy Statement, the
accompanying proxy card, and the Company's Annual Report to Shareholders are
being sent to shareholders on or about December 19, 1996. The Company's
principal executive offices are located at 121 Moonachie Avenue, Moonachie,
New Jersey 07074.
Shares of common stock represented by properly executed proxy cards
received by the Company at or prior to the meeting will be voted in
accordance with the instructions indicated on the proxy card. Unless
contrary instructions are given, the persons named on the proxy card intend
to vote the shares so represented FOR the election as a director of each
nominee named in this Proxy Statement. As to other business which may
properly come before the meeting, the persons named on the proxy card will
vote according to their best judgment.
A proxy may be revoked at any time before it is voted at the Annual
Meeting (1) by a duly executed proxy bearing a later date, (2) by a written
revocation addressed to the Secretary of the Company at the address above,
or (3) by voting by ballot at the Annual Meeting.
The cost of preparing, assembling and mailing this proxy soliciting
material and Notice of Annual Meeting of Shareholders will be borne by the
Company. Additional solicitation by mail, telephone, telecopier or by
personal solicitation may be done by directors, officers and regular
employees of the Company, for which they will receive no additional
compensation. Brokerage houses and other nominees, fiduciaries and
custodians nominally holding shares of the Company's common stock as of the
record date will be requested to forward proxy soliciting material to the
beneficial owners of such shares, and will be reimbursed by the Company for
their reasonable expenses.
<PAGE>
VOTING SECURITIES
At the close of business on December 16, 1996, the record date for the
determination of shareholders entitled to notice of, and to vote at, the
meeting, the Company had outstanding 3,586,285 shares of common stock,
without par value ("Common Stock"). The Company has no other class of stock
outstanding.
Each share is entitled to one vote on all matters presented at the
Annual Meeting. The nominees for directors who receive a plurality of the
votes cast by the holders of the Common Stock entitled to vote at the
meeting will be elected. The adoption of other proposals, if any, will
require the affirmative vote of the holders of a majority of the Common
Stock voted on such proposal. The presence in person or by proxy of the
holders of a majority of the shares of Common Stock of the Company issued
and outstanding and entitled to vote at the Annual Meeting constitutes a
quorum. Abstentions will be treated as shares that are present and entitled
to vote for the purposes of determining the presence of a quorum but as
unvoted for purposes of determining the approval of any matter submitted to
the shareholders for a vote. Broker non-votes of shares will not be
considered as present and entitled to vote with respect to that matter.
ELECTION OF DIRECTORS
Four directors are to be elected at the Annual Meeting, each to serve
until the next annual meeting and until his successor shall have been
elected and qualified. Each of the nominees named below is presently a
member of the Board. There are, as of the date hereof, two vacancies on the
Board of Directors. The Company has not yet identified nominees to fill
these vacancies. Proxies cannot be voted for a greater number of persons
than the number of nominees named. The nominees for directors who receive
a plurality of the votes cast by the holders of the Common Stock entitled to
vote at the meeting will be elected.
Votes pursuant to the accompanying proxy will be cast, unless otherwise
indicated on the proxy card, for the re-election of each of Albert J.
Wozniak, Charles A. Pergola, Herbert W. Marache, Jr., and James K. Wozniak.
In case any of the nominees should become unavailable for election for any
reason not presently known or contemplated, the persons named on the proxy
card will have discretionary authority to vote pursuant to the proxy for a
substitute.
Set forth below is the name, principal occupation and age of each
nominee for election as director, as well as certain information relating to
other positions held by them with the Company and other companies. Except
as otherwise indicated, the information set forth below as to principal
occupation is for at least the last five years. The family relationships
among the directors and officers of the Company are described below.
<PAGE>
Nominee for Re-Election As A Director
Name Age Experience
Albert J. Wozniak 58 Chairman of the Board, Chief Executive
Officer and President of the Company.
Albert J. Wozniak is the father of
James K. Wozniak.
Herbert W. Marache, Jr. 68 Director of the Company since June 1992
and Senior Vice President of Janney
Montgomery Scott, Inc. Mr. Marache is
currently a director of Biosearch Medical
Products, Inc., a surgical device
manufacturer; of American Centurion Life
Insurance Company, a wholly owned
subsidiary of American Express Company;
and of The Peak Technologies Group, Inc.,
a distributor of bar code based data
collection equipment and systems and
engaged in designing, assembling and
distributing mini-printers.
Charles A. Pergola 64 Director of the Company since December
1992, President of the Beauty Care Group
of Revlon from July 1990 to December
1991, President of SmithKline Beecham
Consumer Brands from September 1989 to
June 1990, President of Beecham Products
USA from September 1988 to September
1989, and President of Norcliff Thayer,
Beecham Group from 1986 to 1988. Prior
to 1986, Mr. Pergola held various
executive positions at Revlon and
Norcliff Laboratories. Mr. Pergola is
also a director of W.F. Young Co. and
AFPE Foundation.
James K. Wozniak 34 Director of the Company since 1991, Vice
President of the Company since December
1991, and Secretary since July 1992.
James K. Wozniak is the son of Albert J.
Wozniak.
Albert J. Wozniak is also an executive officer of the Company.
Executive officers are elected by, and serve at the discretion of, the Board.
Recommendation of the Board
The Board of Directors recommends that shareholders vote in favor of the
re-election of each of Albert J. Wozniak, Charles A. Pergola, Herbert W.
Marache, Jr., and James K. Wozniak as a director.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 1, 1996,
certain information with respect to the beneficial ownership of
the Common Stock of the Company as to each director and nominee
of the Company, each person known by the Company to own
beneficially more than 5% of its Common Stock, each executive
officer, and all directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Name and Address Owned(1) Owned
- ---------------- ------------- ------
<S> <C> <C>
Albert J. Wozniak................... 2,230,650(2) 58.46%
Steritek,Inc.
121 Moonachie Ave.
Moonachie, NJ 07074
Gerlach & Co....................... 356,639 9.94%
c/o Citibank N.A.
111 Wall Street
New York, NY 10043
Herbert W. Marache, Jr.............. 78,600(3) 1.62%
Allan B. Levin, M.D................. 129,350(3) 3.01%
Charles A. Pergola.................. 40,000(3) *
James K. Wozniak.................... 67,000(3) 1.30%
All directors and officers
as a group (5 persons)............ 2,545,600(4) 63.50%
</TABLE>
- ---------------------------
* - Represents less than 1%.
(1) Unless otherwise indicated, each named holder has, to the best
knowledge of the Company, sole voting and investment power with
respect to the shares.
(2) Includes 215,000 shares of Common Stock of the Company that
may be acquired within 60 days upon the exercise of options.
(3) Includes 65,000 shares (except as to Mr. Pergola and Mr.
Marache, in which case such amount includes 40,000 shares) of
Common Stock of the Company that may be acquired within 60 days
upon the exercise of options.
(4) Includes 425,000 shares of Common Stock of the Company that
may be acquired by directors and officers within 60 days upon the
exercise of options.
<PAGE>
Compliance With Section 16(a) of the
Securities Exchange Act of 1934
The Federal securities laws require the Company's directors and
executive officers, and persons who own more than 10% of a registered class
of the Company's equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership
of any equity securities of the Company.
To the Company's knowledge, based solely on the review of the copies of
such reports furnished to the Company and written representations from
reporting persons with respect to fiscal year ending June 30, 1996, the
Company believes that during such fiscal year all persons subject to these
reporting requirements filed the required reports on a timely basis.
Board Meetings and Committees
The Board of Directors met two times during the fiscal year ended June
30, 1996. Each of the Company's current directors attended all of the
meetings of the Board. There were no meetings held by committees of the
Board during the fiscal year ended June 30, 1996.
The Board of Directors has two standing Committees: the Audit Committee
and the Compensation Committee.
The Audit Committee consists of Messrs. Marache and Levin. The \
principal functions of the Audit Committee are to periodically meet with the
Company's independent public accountants to discuss certain accounting and
internal control and other matters deemed important by it, and such other
duties and powers as the Board may delegate.
The Compensation Committee, consisting of Messrs. Albert J. Wozniak,
Marache and Levin, is responsible for recommending to the Board the
compensation of the officers of the Company, determination of bonuses to
employees, and the award of stock options and the administration of the stock
option plan, and such other duties and powers as the Board may delegate.
<PAGE>
EXECUTIVE COMPENSATION
Set forth below is disclosure of all plan and non-plan
compensation awarded to, earned by, or paid to the named
executive officer by any person for all services rendered in all
capacities to the Company and its subsidiaries, unless otherwise
specified.
<TABLE>
Summary Compensation Table
The table below sets forth information concerning
compensation paid to the named executive officer during the last
fiscal year.
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------------ --------
Other
Name and Annual Restrct All
Principal Fiscal Salary Bonus Comp. Stock Options LTIP Other
Position Year ($) ($) ($) Awrds (#) Payout Comp.
- --------- ------ ------ ----- ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Albert J. 1996 200,000 - - - 20,000 - -
Wozniak 1995 238,000 - - - - - -
Chairman, 1994 262,000 - - - 160,000 - -
CEO and
President
</TABLE>
<PAGE>
<TABLE>
Aggregate Options Exercised in Last Fiscal Year
and Fiscal Year-End Option Values
The table below sets forth information concerning exercises
of stock options by the named executive officers during the last
fiscal year and the fiscal year-end value of the named executive
officer's unexercised options.
<CAPTION>
Number of Value of
Unexercised Unexercised
Options at In-the-Money
FY-End Options at
Shares Value (#) FY-End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
---- ------------ --------- ------------- -------------
<S> <C> <C> <C> <C>
Albert J. - - 215,000/-0- $0/0
Wozniak
</TABLE>
Compensation of Directors
Directors are awarded options to purchase Common Stock of the Company
pursuant to the Stock Option Plan for their services as a director. For the
fiscal year ended June 30, 1994, each director was awarded options to
purchase 10,000 shares of Common Stock at the fair market value on the date
of grant for services as a director. During the fiscal year ended June 30,
1995, no director was awarded options to purchase shares of Common Stock.
For the fiscal year ending June 30, 1996, each of the five directors have
been awarded options to purchase 20,000 shares of Common Stock, at an
exercise price of $0.25 per share, which price the Board has determined to be
fair market value on the date of the grant. No options have been awarded
since then. Under the terms of the Stock Option Plan, the maximum amount of
options awarded to a director in a year, for his or her services as such,
cannot exceed options to purchase 35,000 shares of Common Stock.
Employment Contracts
No executive officer of the Company is a party to an
employment agreement, termination of employment or change in
control arrangement, or any other compensatory plan or
arrangement.
<PAGE>
Stock Option Plan
The Steritek, Inc. Stock Option Plan (the "Plan"), authorizes
the granting of either Incentive Stock Options or Nonqualified
Stock Options to acquire in the aggregate up to 550,000 shares of
the Company's Common Stock. The shares available for issuance
will be increased or decreased according to any reclassification,
recapitalization, stock split, stock dividend or other such
subdivision or combination of the Company's Common Stock. The
following description of certain provisions of the Plan is
qualified in its entirety by reference to the Plan which is
available from the Company upon request.
Eligibility. Any person, including officers and directors,
employed by the Company or any parent or subsidiary of the
Company shall be eligible to receive Incentive Stock Options
under the Plan. Approximately 143 persons are eligible to
receive Incentive Stock Options as of September 1, 1996. Any
employee who owns ten percent or more of the total combined
voting power of all classes of the Company's voting stock shall
be eligible to receive Incentive Stock Options only under certain
limited circumstances. Additionally, the Plan permits
Nonqualified Stock Options to be granted to directors,
consultants, independent contractors and agents as well as
employees. An indeterminate number of persons, including three
nonemployee directors, are eligible to receive Nonqualified Stock
Options as of September 1, 1996. Each director shall not,
however, be eligible to receive stock options to purchase more
than 35,000 shares of Common Stock per year, subject to such
further terms and conditions as are contained in the Plan. It is
the present intent of the Company to satisfy the regulations
promulgated under Rule 16(b) of the Securities Exchange Act of
1934, as amended, insofar as such rules relate to participation
in the Plan by directors who are disinterested administrators, as
such term is defined therein. In connection therewith, the
Company may request a No-Action Letter from the Division of
Corporate Finance of the Securities and Exchange Commission and,
consequently, may modify the terms under which directors
participate in the Plan. The Board of Directors of the Company
will determine who should be granted stock options under the
Plan.
<PAGE>
Exercise Price of Options. Options granted pursuant to the
Plan must have an exercise price equal to the fair market value
of the Company's Common Stock at the time the option is granted,
except that in the case of an Incentive Stock Option the price
shall be at least 110 percent of the fair market value where the
option is granted to an employee who owns more than ten percent
of the total combined voting power of all classes of the
Company's voting stock. On September 1, 1996, the average bid
and asked prices of the Company's Common Stock, as reported by
the National Quotation Service, Inc., was approximately $.25 and
$.625, respectively. Under the terms of the Plan, the aggregate
fair market value of the stock with respect to which Incentive
Stock Options are exercisable for the first time by an individual
during any calendar year shall not exceed $100,000.
Terms. All options available to be granted under the Plan
must be granted by January 1, 2002. The Board of Directors will
determine the actual term of the options but no option will be
able to be exercised after the expiration of ten years from the
date of its grant. No Incentive Stock Option granted to an
employee who owns more than ten percent of the combined voting
power of all the outstanding classes of stock in the Company may
be exercised after five years from the date of grant.
The options granted pursuant to the Plan shall not be
transferable except by will or by the laws of descent and
distribution.
Exercise of Options. Incentive Stock Options granted to
employees under the Plan may be exercised only by the employee
during his employment with the Company or for a period not
exceeding three months after voluntary termination, or for a
period not exceeding one year if the employee ceased employment
because of permanent and total disability within the meaning of
Section 105(d)(4) of the Internal Revenue Code of 1986, as
amended, but such options may be exercised by the employee's
estate, or by any person who acquired the right to exercise such
option by bequest or inheritance from the employee for a period
of twelve months from the date of the employee's death. If such
option shall by its terms sooner expire, such options shall not
be extended as a result of the employee's death. All options
granted pursuant to the Plan must be exercised within ten years
from the date of the grant. Incentive Stock Options granted to
an employee who is the beneficial owner of ten percent or more of
the total combined voting power of all classes of the Company's
stock, or of any parent or subsidiary, must exercise such options
within five years from the date such option is granted. Options
granted under the Plan need not be exercised in the order in
which they are granted. If employment is terminated for cause or
without consent of the employee, the options granted pursuant to
the Plan shall immediately terminate.
<PAGE>
Tax Consequences Of Stock Options
Incentive Stock Options
Certain options granted under the Plan are intended to
qualify as incentive stock options ("Incentive Stock Option")
within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended ("Code"). Set forth below is a general summary
of certain of the principal Federal income tax consequences to
participants and the Company of Incentive Stock Options granted
under the Plan.
An employee to whom an Incentive Stock Option is granted
pursuant to the Plan will not recognize any compensation income
(for regular tax purposes), and the Company will not be entitled
to a compensation deduction, at the time an Incentive Stock
Option is granted or at the time an Incentive Stock Option is
exercised. However, in the year of exercise the amount by which
the fair market value of the Common Stock at the time of exercise
exceeds the option price will generally be included in the
optionee's computation of alternative minimum taxable income.
The amount included in income will be added to the optionee's
basis in the shares received for minimum tax computation
purposes. If the employee incurs the alternative minimum tax,
however, he or she should qualify for the credit for prior year
minimum tax liability in the first future year he or she has
regular tax liability.
In order to obtain Incentive Stock Option treatment for
Federal income tax purposes upon the subsequent sale (or other
disposition) by the optionee of the shares of Common Stock
received upon exercise of the option, the sale (or other
disposition) must not occur with two years from the date the
option was granted nor within one year after the transfer of such
shares upon exercise of the option (the "ISO holding period
requirement"). If the ISO holding period requirements are
satisfied, on the subsequent sale (or other disposition) by the
optionee of the shares of Common Stock received upon the exercise
of an option, the optionee generally will recognize income from
the sale of a capital asset equal to the difference, if any,
between the proceeds realized from the sale (or other
disposition) and the amount paid as the exercise price of the
option. On the other hand, if the ISO holding period
requirements are not satisfied, on the subsequent sale (or other
disposition) by the optionee of the shares of Common Stock
received upon the exercise of the option ("Disqualifying
Disposition"), the optionee generally will recognize income
taxable as compensation, and the Company will be entitled to a
compensation deduction (provided certain withholding requirements
<PAGE>
are met), in an amount equal to the lesser of (a) the difference,
if any, between the fair market value of the shares on the date
of exercise and the amount paid as the exercise price of the
option, or (b) the difference, if any, between the proceeds
realized from the sale or other disposition and the amount paid
as the exercise price of the option. Any additional gain
realized on a Disqualifying Disposition (in addition to the
compensation income referred to above) would generally give rise
to income from the sale of a capital asset and taxed accordingly.
The tax basis of the shares of Common Stock received by the
optionee will be equal to the amount paid as the exercise price
plus the amount, if any, includable in his or her gross income as
compensation in the event of a Disqualifying Disposition. The
holding period for the shares will commence on the date of
exercise of the Incentive Stock Option.
Nonqualified Stock Options
Certain options to purchase Common Stock issued under the
Plan may not be intended to qualify as Incentive Stock Options
within the meaning of Section 422 of the Code. As such, the
options are generally referred to as Nonqualified Stock Options.
Set forth below is a general summary of certain of the principal
Federal income tax consequences to participants and the Company
of Nonqualified Stock Options.
An individual to whom a Nonqualified Stock Option is granted
will generally not recognize any compensation income, and the
Company will not be entitled to a compensation deduction, at the
time the Nonqualified Stock Option is granted (even if the option
price is less than the fair market value of the Common Stock at
the time of the grant). In the year of exercise or, if later,
the year in which the six month period prescribed by Section
16(b) of the Securities Exchange Act of 1934 ("Section 16(b)"),
if applicable, expires, the optionee generally will recognize
income taxable as compensation and, provided the Company meets
the applicable withholding requirements, the Company will be
entitled to a compensation deduction, in an amount equal to the
difference (if any) between the fair market value of the shares
on the date of exercise (or, if applicable, the date any Section
16(b) restrictions expire) and the amount paid as the exercise
price of the option.
<PAGE>
An optionee who is a director or officer of the Company
within the meaning of Section 16(b), or who is otherwise subject
to Section 16(b), will be required to defer the recognition of
income on the purchase of shares pursuant to Nonqualified Stock
Options until the Section 16(b) restrictions expire. He or she
may consider electing to disregard the Section 16(b) restrictions
for tax purposes pursuant to Section 83(b) of the Code. Under
this election, the amount will be included in income in the year
of exercise (which may not be the year the Section 16(b)
restrictions lapse) and will be measured by the difference
between the option price and fair market value when the Section
16(b) restrictions lapse.
The tax basis of the shares of Common Stock received by the
optionee upon exercise will be equal to the amount paid as the
exercise price plus the amount, if any, includable in his or her
gross income as compensation. The holding period for the shares
will commence just after the exercise of the Nonqualified Stock
Option or, if applicable, just after the date the Section 16(b)
restrictions expire.
On the subsequent sale (or other disposition) by the optionee
of the shares of Common Stock received upon the exercise of the
option, any gain or loss realized on such sale or disposition
will generally give rise to gain or loss from the sale of a
capital asset and taxed accordingly.
<PAGE>
<TABLE>
Stock Options Issued by the Company
The following table sets forth, as to certain executive
officers of the Company and as to all executive officers of the
Company as a group, the total number of options granted between
June 20, 1992, the date of adoption of the plan, and June 30,
1996 and the average exercise price of such options. No options
granted by the Company have been exercised as of September 1,
1996. Options to purchase 45,000 shares have been cancelled.
<CAPTION>
Options granted during period
----------------------------------
Name of individual Per share
or number in group Number of shares Exercise Price
- ------------------ ---------------- --------------
<S> <C> <C>
Albert J. Wozniak (1).......... 35,000 $ .50
Chairman, CEO and President 160,000 $1.50
20,000 $ .25
James K. Wozniak (2)........... 35,000 $ .50
Director, VP and Secretary 10,000 $1.50
20,000 $ .25
Non-Executive Director Group... 45,000 $ .50
10,000 $1.00
30,000 $1.50
60,000 $ .25
Employee Group................. 70,000 $ .50
20,000 $1.50
</TABLE>
- -----------------------
(1) Albert J. Wozniak is the only Executive Officer.
(2) James K. Wozniak is the only Non-Executive Officer.
<PAGE>
INDEPENDENT AUDITORS
The Board of Directors has not selected an independent accountant for
the Company's fiscal year ending June 30, 1997. M.R. Weiser & Co. was the
independent accountant who audited the accounts of the Company for the fiscal
June 30, 1996. A representative of M.R. Weiser & Co. is not expected to be
present at the Annual Meeting of Shareholders.
MISCELLANEOUS
The Company does not know of any business other than that described
above to be presented for actions to the stockholders at the meeting, but it
is intended that the proxies will be exercised upon any other matters and
proposals that may legally come before the meeting and any adjournments
thereof in accordance with the discretion of the persons named therein.
The Annual Report of the Company for the fiscal year ending June 30,
1996, including audited financial statements, has been furnished to all
persons who were shareholders of the Company on the record date for the
Annual Meeting of Shareholders.
PROPOSALS OF SECURITY HOLDERS
A proposal of a security holder intended to be presented at the next
annual meeting of shareholders and to be included in the proxy statement and
form of proxy relating to that meeting must be received at the Company's
principal executive offices at 121 Moonachie Avenue, Moonachie, New Jersey
07074, on or before August 21, 1997.
<PAGE>
STERITEK, INC.
PROXY
The undersigned hereby appoints Albert J. Wozniak and James K. Wozniak, and
each of them, with full power of substitution as proxies for the undersigned,
to attend the Annual Meeting of Shareholders of Steritek, Inc. ("Company") to
be held at the offices of the Company at 121 Moonachie Avenue, Moonachie, New
Jersey 07074 on Wednesday, February 5, 1997 at 10:00 a.m. local time, and at
any adjournments thereof, and to vote the number of shares of Common Stock
of the Company that the undersigned would be entitled to vote, and with all
the power the undersigned would possess, if personally present, as follows:
1. The election of five nominees as directors to serve until the next annual
meeting of shareholders:
Vote Nominee
[ ] For [ ] Against [ ] Withhold Authority Albert J. Wozniak
[ ] For [ ] Against [ ] Withhold Authority Herbert W. Marache, Jr.
[ ] For [ ] Against [ ] Withhold Authority Charles A. Pergola
[ ] For [ ] Against [ ] Withhold Authority James K. Wozniak
2. In their discretion, on such other business as may properly come before
the meeting or any adjournment thereof.
[ ] For [ ] Against [ ] Abstain
(Continued on the other side)
<PAGE>
(Continued from other side)
THE PROXIES WILL VOTE AS SPECIFIED ABOVE, OR IF A CHOICE IS NOT SPECIFIED,
THEY WILL VOTE FOR THE ELECTION OF ALL THE NOMINEES AS DIRECTORS AND FOR THE
PROPOSAL LISTED IN ITEM 2.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
Receipt of Notice of Annual Meeting
of Shareholders and Proxy Statement
dated December 19, 1996 is hereby
acknowledged:
Dated: , 199
Signature(s)
(Please sign exactly as your name or names
appear hereon, indicating where proper,
official position or representative capacity.)
STERITEK, INC.
ANNUAL REPORT
Steritek, Inc. (the "Company") is a New Jersey corporation with its
principal place of business at 121 Moonachie Avenue, Moonachie, New Jersey
07074. The principal business of the Company is providing contract packaging
services and promotional materials assembly for manufacturers of products in
the pharmaceutical, medical, personal health and beauty industries
(collectively, "health care"). The Company, through its Physicians Fax
Network, also provides certain health care companies and others with a means
of communicating with physicians via electronic facsimile transmission.
Until October 1995, the Company, through its BioMedical Services Business,
was engaged in the distribution of its proprietary intracranial pressure
monitors and manufacturing and supplying products and accessories for
electron microscope laboratories. As of October 6, 1995, the Company sold
these two businesses. The Company's strategy is to continue to enhance its
core business of contract packaging while developing its Physicians Fax
Network.
Description of the Business
The Contract Packaging Business
The Company's contract packaging services are its principal business
activity. The Company believes that the packaging of a health care product
is an integral part of its efficacy, safety and consumer acceptance.
Although many manufacturers of health care products include packaging as part
of the manufacturing process, many of these same manufacturers utilize the
services of independent packaging companies in certain circumstances. For
example, sample distributions, special promotions and less established
products are typically characterized by lower production volumes and special
packaging needs. In addition, new product introductions and times of peak
demand may require special packaging needs and/or additional packaging
capacity. Also, certain manufacturers may not have the necessary packaging
equipment or expertise to package certain of their products and may be
unwilling to devote the capital resources necessary to undertake packaging
them. In these circumstances, independent packagers often offer an
efficient, flexible and economical alternative to in-house packaging.
<PAGE>
The Company provides a range of packaging services to its health care
customers. The Company packages health care products supplied to it in bulk
quantities by its customers in the form of finished products such as feminine
hygiene products, tablets, capsules, powders, patches, ointments, lotions and
liquids. The Company's packaging services include pouch filling/sealing,
blister and strip packaging, form fill and seal, production of display units,
shrink wrapping, over wrapping, heat sealing, die cutting/laminating, tamper
evident packaging, ink jet labeling and bar coding. The Company's major
customers currently include Ciba-Geigy Corporation and Johnson & Johnson, and
it has regularly performed contract packaging services for SmithKline
Beecham, Carter Wallace and Conair.
The Physicians Fax Network
The Company, through its Physicians Fax Network, facilitates the
communication between certain health care companies, regulatory agencies, and
others, with physicians. Historically, this communication has been
accomplished by time consuming and costly mailings. The Company, however,
now offers such persons the ability to send communications to physicians, at
their offices during off-peak hours, via electronic facsimile transmission
("fax"), instead of the mail. This procedure provides immediate and cost
effective communication to physicians, and also provides the sender with
documentation that the communication was sent and received. The Physicians
Fax Network is able to broadcast documents to hundreds of thousands of
locations overnight. The Company believes that this service is particularly
useful for drug manufacturers to send new drug, recall and other priority
medical communications, as well as to facilitate other agencies, such as the
American Medical Association ("AMA"), communication with physicians.
The BioMedical Services Business
On October 6, 1995, the Company sold its BioMedical Services businesses
to John Arnott, formerly an employee and a director of the Company. The
Company's BioMedical Services business was comprised of two principal
activities, (i) the distribution of its proprietary intracranial pressure
monitors (since 1984); and (ii) the manufacture and supplying of products and
accessories for electron microscope laboratories (which commenced in
September 1992).
<PAGE>
Selected Financial Data
The following table presents summary historical financial
data as of the dates and for the periods indicated. The information
in the summary has been derived in part from, and should be read in
conjunction with, the consolidated financial statements, related
notes and other financial information included elsewhere in this report.
<PAGE>
<TABLE>
============================================================================
STERITEK, INC. & SUBSIDIARIES
SELECTED FINANCIAL DATA
============================================================================
<CAPTION>
=============================================================================
For the For the For the For the For the
Year Ended Year Ended Year Ended Year Ended Year Ended
June 30, June 30, June 30, June 30, June 30,
1996(1) 1995 1994 1993 1992
=============================================================================
OPERATING DATA:
<S> <C> <C> <C> <C> <C>
Sales $4,714,542 $5,095,103 $3,443,986 $5,618,649 $5,988,859
Costs of Sales 2,731,128 2,654,980 2,161,694 2,936,406 3,070,855
Selling, general
and
administrative
expenses 2,392,864 1,975,165 2,095,596 1,984,263 1,659,860
Operating Income
(loss) (409,450) 464,958 (813,304) 697,980 1,258,144
Income (loss)
from
continuing
operations (523,882) 212,112 (1,037,968) 312,573 1,970,530
Income (loss)
from
discontinued
operations 45,344 (66,738) (2,169) 115,955 (75,150)
Net Income
(loss)(2) (478,538) 145,374 (1,040,137) 428,528 1,895,380
Net Income
(loss)
per share (.13) .04 (.29) .12 .53
BALANCE SHEET DATA:
Assets $2,309,256 $2,977,254 $2,940,774 $3,960,287 $3,367,408
Assets
transferred
under
contractual
agreement 68,660 75,700 110,565 144,942 157,160
Net assets of
discontinued
operations 0 241,178 287,057 410,723 43,785
Current
Liabilities 666,964 862,899 1,097,977 835,685 1,162,834
Long-term debt
and capital
lease
obligations,
excluding
current
maturities 432,658 426,183 300,000 571,667 86,667
Shareholders'
Equity 1,209,634 1,688,172 1,542,798 2,552,935 2,117,907
Working Capital 405,324 435,939 327,135 1,000,603 1,121,674
- -----------------------------
</TABLE>
(1) On October 6, 1995, the Company sold all of the assets
used directly and exclusively in its intracranial pressure
monitor ("ICP") business and all of its assets, subject to
certain of its liabilities, in its electron microscope supply
("EMS") business (collectively, the BioMedical Services
business). Operating results of the Biomedical Services
business for the period July 1, 1995 to October 6, 1995 are
shown separately in the income statement. The income statement
for the years ended June 30, 1995, 1994, 1993 and 1992 have
been restated and operating results of the discontinued
operations are also shown separately. See Note 1 of the
Notes to Consolidated Financial Statements.
(2) In July 1991, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income
Taxes." The effect of this change increased net income by
$862,000 ($.24 per share) for the fiscal year ended June 30,
1992. For the fiscal year ended June 30, 1994, the Company
adjusted the deferred tax asset, resulting in an increase in
net loss by $214,500 (($.06) per share). For the fiscal year
ended June 30, 1996, the Company adjusted the deferred tax
asset, resulting in an increase in net loss by $100,000
(($.03) per share). See Notes 9 and 11 of the Notes to
Consolidated Financial Statements.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
<PAGE>
Year Ended June 30, 1996 as Compared to the Year Ended June 30,
1995
Revenues for the year ended June 30, 1996 decreased to
$4,714,542 from $5,095,103 for the same period in 1995. Revenues
for the year ended June 30, 1996 include $4,145,242 from contract
packaging and $569,300 from the Physicians Fax Network. Revenues
for the year ended June 30, 1995 included $4,851,403 from contract
packaging and $243,700 from the Physicians Fax Network. The
decrease in contract packaging revenues is principally due to a
lower level of contract packaging activity. The Company has continued
to aggressively market its contract packaging business and its
Physicians Fax Network.
The Company's cost of sales represented 57.9% of sales
(or $2,731,128) for the year ended June 30, 1996, as compared to
52.1% of sales (or $2,654,980) for the year ended June 30, 1995. The
increase in cost of sales, as a percent of sales, is a result of the
change in the mix of the products packaged by the Company during the
respective periods.
Selling, general and administrative expenses ("SG&A")
for the year ended June 30, 1996 was $2,392,864 (or 50.7% of sales), as
compared to $1,975,165 (or 38.8% of sales) for the year ended June
30, 1995. The increase in SG&A is principally a result of the addition
of staff and increased sales efforts to market and sell the Company's
contract packaging services and Physicians Fax Network.
Operating loss for the year ended June 30, 1996 was $409,450
as compared to income of $464,958 (9% of sales) for the year ended
June 30, 1995. The decrease in operating income is principally
attributable to the increase in SG&A and the lower gross profit
margins in the contract packaging business.
On or about October 6, 1995, Sterimed, Inc. ("Sterimed"), a
wholly-owned subsidiary of the Company, entered into an Asset
Sale/Purchase Agreement with RAJ Communications, Ltd. ("RAJ"), John
Arnott and Rita Arnott. Pursuant to that agreement, Sterimed sold
to RAJ all of its assets, subject to certain of its liabilities, which
comprised the EMS business. The purchase price was $300,000, paid
in cash at closing. The gain on the disposal of Sterimed's business
was $39,998. See Note 1 of the Notes to Consolidated Financial
Statements.
<PAGE>
On or about October 6, 1995, the Company also entered
into a separate Asset Sale/Purchase Agreement with RAJ, John
Arnott and Rita Arnott. Pursuant to that agreement, the Company sold
to RAJ all of its assets used directly and exclusively in its ICP
business. The purchase price was $300,000, and is to be paid in
consecutive monthly installments (without interest) commencing
October 15, 1995, each in the amount of 10% of the gross receipts of
the RAJ ICP business until paid in full. The sole source of payment
of such purchase price is the gross receipts from the ICP business.
A note receivable has not
been recorded due to the uncertainty of its collectibility. The
Company has received only $5,000 in payments against such purchase
price as of June 30, 1996. See Note 1 of the Notes to Consolidated
Financial Statements.
In July 1991, the Company adopted Statement of Financial
Accounting Standards No. 109 ("FAS 109"), "Accounting for Income
Taxes." The adoption of FAS 109 changed the Company's method of
accounting for income taxes from the deferred method (Accounting
Principles Board Opinion 11) to an asset and liability approach.
In the fourth quarter of the fiscal year ended June 30, 1996, the
Company revised its estimate of the valuation allowance for income
taxes and recognized an adjustment amounting to $100,000 (($.03)
per share) to reduce the previously reported deferred tax asset.
See Notes 9 and 11 to the Notes to Consolidated Financial Statements.
There were no other material changes in the results of
operations in the Company's business.
Health care packaging services are typically provided
by the Company to its customers on an "as-needed" (purchase
order-by-purchase order) basis, and not pursuant to a long-term
contract. Because of the nature of the contract packaging business,
the Company's operating results can vary significantly from period
to period.
Year Ended June 30, 1995 as Compared to the Year Ended June 30,
1994
Revenues for the year ended June 30, 1995 increased to
$5,095,103 from $3,443,986 for the same period in 1994. Revenues
for the year ended June 30, 1995 included $4,851,403 from contract
packaging and $243,700 from the Physicians Fax Network. The
Company had no revenues from the Physicians Fax Network for the
fiscal year ended June 30, 1994. The increase in contract packaging
revenues is principally due to a higher level of contract packaging
activity.
The Company's cost of sales represented 52.1% of sales
(or $2,654,980) for the year ended June 30, 1995, as compared to 62.8%
of sales (or $2,161,694) for the year ended June 30, 1994. The
decrease in cost of sales, as a percent of sales, is a result of
<PAGE>
the change in the mix of the products packaged by the Company during
the respective periods.
Selling, general and administrative expenses ("SG&A")
for the year ended June 30, 1995 was $1,975,165 (or 38.8% of sales),
as compared to $2,095,596 (or 60.8% of sales) for the year ended June
30, 1994. The decrease in SG&A as a percentage of sales is principally
due to the increase in sales revenues for the year ended June 30,
1995.
Operating income for the year ended June 30, 1995 was
$464,958 (or 9% of sales) as compared to a loss of $813,304 for
the year ended June 30, 1994. The increase in operating income is
principally attributable to the increase in the contract packaging
business and relative decrease in other costs and expenditures.
In July 1991, the Company adopted Statement of Financial
Accounting Standards No. 109 ("FAS 109"), "Accounting for Income
Taxes." The adoption of FAS 109 changed the Company's method of
accounting for income taxes from the deferred method (Accounting
Principles Board Opinion 11) to an asset and liability approach.
In the fourth quarter of the fiscal year ended June 30, 1994, the
Company revised its estimate of the valuation allowance for income
taxes and recognized an adjustment amounting to $214,500 ($.06 per
share) to reduce the previously reported deferred tax asset. See
Note 9 to the Notes to Consolidated Financial Statements.
Year Ended June 30, 1994 as Compared to the Year Ended June 30,
1993
Sales for the year ended June 30, 1994 decreased to
$3,443,986 from $5,618,649 for the same period in 1993. Revenues
for the year ended June 30, 1993 included approximately $3,400,000
from the packaging of Ciba-Geigy's smoking deterrent patch and
approximately $2,218,649 from other sources. For the year ended
June 30, 1994, the Company derived no revenues from packaging the
smoking deterrent patch, but increased its revenues from other sources
from $2,218,649 to $3,443,986.
The Company's cost of sales represented 62.8% of sales
(or $2,161,694) for the year ended June 30, 1994, as compared to 52.3%
of sales (or $2,936,406) for the year ended June 30, 1993. The
increase in cost of sales as a percentage of sales is due to a change
in the product mix, including a substantial reduction in the packaging
of the smoking deterrent patches.
Selling, general and administrative expenses ("SG&A")
for the year ended June 30, 1994 was 60.8% of sales (or $2,095,596), as
compared to 35.3% of sales (or $1,984,263) for the year ended June
30, 1993. The increase in SG&A in the amount of $111,333 is
principally attributable to the continued marketing and development
expenses associated with the Company's new marketing communication system
utilizing electronic facsimile transmission (the Physicians Fax
<PAGE>
Network) and the continued marketing of the Healthy Care Pak.
Operating loss for the year ended June 30, 1994 was $813,304
as compared to operating income of $697,980 (12.4% of sales) for
the year ended June 30, 1993. The decrease in operating income is
principally attributable to the loss of Ciba-Geigy sales relating
to the smoking deterrent patch as well as the continued level of
expenditures in marketing and developing the Physician's Fax
Network and Healthy Care Pak without related sales revenues.
Liquidity and Capital Resources
The Company's working capital on June 30, 1996 was
$405,324. The Company's working capital on June 30, 1995, was
approximately $435,939. The principal changes in the components of
working capital are the reduction in the Company's accounts
receivable as a result of lower sales volume and the refinancing of
the current portion of long term debt as of June 30, 1995.
As of March 31, 1994, the Company executed its 7%
Subordinated Promissory Note, due March 31, 1996, in the amount of
$300,000. The Company paid this note in full on March 31, 1996,
with the proceeds of a loan from The Bank of New York (NJ). The Bank
of New York note bears interest at the bank's prime rate plus .5%
per year, and is payable in monthly increments of $5,000. Any unpaid
balance due is payable April 1, 2001.
On June 30, 1993, the Company borrowed $700,000 from a bank,
payable monthly until July 1, 1998, at prime plus 1/2%. This Note
is collateralized by substantially all of the assets of the Company
and is personally guaranteed by the president of the Company. At
June 30, 1994, the Company was not in compliance with certain covenants
pertaining to minimum working capital, net worth, quick ratio,
current ratio and debt service. These covenants were waived by the
bank as of June 30, 1995, for the remaining term of the loan. The
Company has continued to make its monthly payments to the bank in a
timely fashion.
The Company believes that funding for anticipated operations
and capital needs will come from existing working capital and
anticipated future operations.
<PAGE>
STERITEK, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1996, 1995 AND 1994
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Steritek, Inc.
We have audited the consolidated balance sheets of Steritek, Inc.
and subsidiary as of June 30, 1996 and 1995, and the related
consolidated statements of operations, shareholders' equity and
cash flows for the years ended June 30, 1996, 1995 and 1994.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Steritek, Inc. and subsidiary as of June 30, 1996
and 1995, and the results of their operations and their cash
flows for the years ended June 30, 1996, 1995 and 1994 in
conformity with generally accepted accounting principles.
/s/ M. R. Weiser & Co. LLP
__________________________________
CERTIFIED PUBLIC ACCOUNTANTS
Iselin, NJ
August 22, 1996
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
A S S E T S
(Substantially All Assets Pledged - Note 4)
<CAPTION>
June 30,
---------------------------
1996 1995
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 296,429 $ 263,662
Trade accounts receivable, less allowance
for doubtful accounts of $4,895 in
1996 and 1995 478,504 614,844
Inventories (Note 2) 107,108 134,377
Prepaid expenses and other assets 121,647 117,355
Deferred tax asset (Note 9) 68,600 168,600
---------- ----------
Total current assets 1,072,288 1,298,838
---------- ----------
Machinery and equipment (Note 3) 2,762,017 2,525,300
Less accumulated depreciation and
amortization 1,693,868 1,364,078
---------- ----------
1,068,149 1,161,222
---------- ----------
Physicians fax database, net (Note 1) 100,159 200,316
---------- ----------
Assets transferred under contractual
arrangement (Note 1) 68,660 75,700
---------- ----------
Net assets from discontinued segment (Note 1) 241,178
---------- ----------
Total assets $2,309,256 $2,977,254
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 276,522 $ 252,261
Accrued expenses 91,328 67,437
Current maturities of long-term debt
(Note 4) 200,000 440,000
Current maturities of capital lease
obligations (Note 5) 99,114 103,201
---------- ----------
Total current liabilities 666,964 862,899
---------- ----------
Long-term debt, less current maturities
(Note 4) 381,667 291,667
---------- ----------
Capital lease obligations, less current
maturities (Note 5) 50,991 134,516
---------- ----------
Commitments (Note 6)
Shareholders' equity:
Preferred stock, no par value, authorized
2,000,000 shares; none issued
Common stock, no par value, authorized
5,000,000 shares; issued and outstanding
3,586,285 shares at June 30, 1996 and 1995 640,844 640,844
Retained earnings 568,790 1,047,328
---------- ----------
Total shareholders' equity 1,209,634 1,688,172
---------- ----------
Total liabilities and shareholders'
equity $2,309,256 $2,977,254
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Years Ended June 30,
-----------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Sales $4,714,542 $5,095,103 $3,443,986
Cost of sales 2,731,128 2,654,980 2,161,694
---------- ---------- ----------
Gross profit 1,983,414 2,440,123 1,282,292
Selling, general and administrative
expenses 2,392,864 1,975,165 2,095,596
---------- ---------- ----------
Operating (loss) income (409,450) 464,958 (813,304)
Other income 42,089 9,852 52,332
Interest expense (56,521) (77,798) (62,496)
---------- ---------- ---------
(Loss) income from continuing
operations before provision for
income taxes (423,882) 397,012 (823,468)
---------- ---------- ---------
Provision for income taxes (Note 9):
Adjustment of deferred tax asset
due to change in the valuation
allowance 100,000 214,500
Provision for federal income taxes
- deferred 146,200
Provision for state income taxes
- deferred 38,700
---------- ---------- ----------
100,000 184,900 214,500
---------- ---------- ----------
(Loss) income from continuing
operations (523,882) 212,112 (1,037,968)
---------- ---------- ----------
Discontinued operations (Note 1):
Income (loss) from operations of
BioMedical Services
Segment disposed of on
October 6, 1995 5,346 (66,738) (2,169)
Gain on sale of Sterimed
on October 6, 1995 39,998
__________ __________ __________
45,344 (66,738) (2,169)
---------- ---------- ----------
Net (loss) income $(478,538) $145,374 (1,040,137)
========== ========== ==========
Weighted-average number of
common and common equivalent
shares outstanding 3,586,285 3,976,285 3,563,785
========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
<TABLE>
STERITEK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)
<CAPTION>
Years Ended June 30,
-----------------------------
1996 1995 1994
------- ------- ------
<S> <C> <C> <C>
(Loss) earnings per share:
(Loss) income from continuing operations $(.14) $.05 $(.29)
Discontinued operations .01 (.01)
----- ---- -----
Net (loss) income per common and common
equivalent share $(.13) $.04 $(.29)
===== ==== =====
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
Common Stock Retained
No Par Value Earnings
--------------------
Shares Amount (Deficit) Total
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Balance, June 30, 1993 3,556,285 $610,844 $1,942,091 $2,552,935
Shares issued in connection
with note payable (10,500
shares issued to a director) 30,000 30,000 30,000
Net loss for the year ended
June 30, 1994 (1,040,137) (1,040,137)
---------- -------- ---------- ----------
Balance, June 30, 1994 3,586,285 640,844 901,954 1,542,798
Net income for the year
ended June 30, 1995 145,374 145,374
---------- -------- ---------- ----------
Balance, June 30, 1995 3,586,285 640,844 1,047,328 1,688,172
Net loss for the year
ended June 30, 1996 (478,538) (478,538)
---------- -------- ---------- ----------
Balance, June 30, 1996 3,586,285 $640,844 $ 568,790 $1,209,634
========== ======== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Years Ended June 30,
----------------------------------------
1996 1995 1994
------------ ----------- -----------
<S> <C> <C> <C>
Cash flows from operating
activities:
Net (loss) income $ (478,538) $ 145,374 $(1,040,137)
Adjustments to reconcile net
(loss) income to net cash
provided by (used in)
operating activities:
Gain on sale of Sterimed (39,998)
Adjustment of deferred tax
asset due to change in
the valuation allowance 100,000 214,500
Deferred taxes 184,900
Depreciation and
amortization of machinery
and equipment 326,715 268,343 244,186
Amortization of patents
and excess of cost over
net assets of business
acquired 1,029 4,116 4,115
Amortization of physicians
fax database 100,158 100,159
Bad debt expense 19,511
Common shares issued in
exchange for professional
services rendered 30,000
Changes in operating assets
and liabilities:
Decrease (increase) in
trade accounts receivable 116,829 (210,243) (62,098)
Decrease (increase) in
inventories 27,269 31,734 (36,217)
Decrease in assets
transferred under
contractual arrangement 7,100 34,865 34,377
(Increase) decrease in
net assets of
discontinued segment (25,795) 32,263 100,008
(Increase) decrease in
prepaid expenses and
other assets (4,292) (18,797) 1,380
Increase (decrease) in
accounts payable and
accrued expenses 48,152 93,390 (251,860)
---------- ---------- ----------
<PAGE>
Net cash provided by (used in)
operating activities 198,140 666,104 (761,746)
---------- ---------- ----------
Cash flows from investing
activities:
Payments received on loan
receivable 3,784
Expenditures for purchase
of machinery and equipment (231,545) (602,501) (236,532)
Proceeds from sale of
discontinued business 300,000
---------- ---------- ---------
Net cash provided by
(used in) investing
activities 72,239 (602,501) (236,532)
---------- ---------- ---------
</TABLE>
(Continued)
<PAGE>
<TABLE>
STERITEK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Concluded)
<CAPTION>
Years Ended June 30,
--------------------------------------
1996 1995 1994
--------- ---------- ---------
<S> <C> <C> <C>
Cash flows from financing
activities:
Principal payments on long-term
debt (450,000) (140,000) (128,333)
Principal payments on line of
credit (300,000)
Borrowings of long-term debt 300,000 300,000
Borrowings on line of credit 300,000
Borrowings on capital lease
obligations 283,150
Principal payments on capital
lease obligations (87,612) (45,433)
--------- --------- ---------
Net cash (used in) provided by
financing activities (237,612) (202,283) 471,667
--------- --------- --------
Net increase (decrease) in
cash and cash equivalents 32,767 (138,680) (526,611)
Cash and cash equivalents at
beginning of year 263,662 402,342 928,953
--------- --------- ----------
Cash and cash equivalents at
end of year $296,429 $ 263,662 $ 402,342
======== ========= =========
Supplemental disclosures of
cash flow information:
Interest paid $56,521 $ 79,578 $ 52,049
======= ========= =========
Income taxes paid $ 14,013
=========
<PAGE>
Supplemental schedule of
noncash investing and
financing activities:
Common shares issued in
exchange for professional
services $30,000
=======
Write-off of physicians
fax database $226,525
========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
STERITEK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation:
The consolidated financial statements include the accounts of
Steritek, Inc. and its wholly-owned subsidiary, Sterimed (the
"Company"). All material intercompany balances and transactions
have been eliminated in consolidation.
Business Description:
Master-Pak, a division of Steritek, provides contract packaging
services and promotional materials assembly and distribution for
the pharmaceutical, medical, health and beauty industries.
Steritek, Inc. also engages in the research, development and sale
of biomedical devices for therapeutic, diagnostic and other
cardiovascular applications. Sterimed is a high tech manufacturer
and supplier of products and accessories for electron microscope
laboratories. Steritek, Inc. and Sterimed collectively comprise the
Biomedical Services Segment. The ICP business of Steritek, Inc. and
Sterimed were discontinued during October 1995.
Discontinued Segment:
On October 6, 1995, the Company sold to a director and employee
all of the assets used directly and exclusively in its Intracranial
Pressure Monitor (ICP) business and all of the assets, subject
to certain of the liabilities of Sterimed's electron microscope
business, collectively the BioMedical Services Segment. The
aggregate purchase price was $600,000, including $300,000 for
Sterimed's electron microscope business which was paid in cash
and $300,000 for the ICP business which was paid by a note
receivable. (See below.)
The gain on the sale of Sterimed's electron microscope
business was $39,998.
In connection with its disposal of the ICP business on
October 6, 1995, the Company received a non-interest
bearing note in the amount of $300,000. The note is to be
paid in consecutive monthly installments, in the amount of
10% of the future gross receipts of the ICP business, until
paid in full. A note receivable has not been recorded by the
Company due to the uncertainty of its collectibility, and
accordingly, the transaction has not been considered a sale for
accounting purposes and the gain on disposal of the ICP business
was not recognized. Further, the assets subject to the trans-
<PAGE>
action have been segregated in the balance sheets under the
caption "assets transferred under contractual arrangement".
Operating results of the BioMedical Services Segment for the
period July 1, 1995 to October 6, 1995 are shown separately in
the accompanying statement of operations. The statements of
operations for the years ended June 30, 1995 and 1994 have been
restated and operating results of the discontinued operations
are also shown separately.
Estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents:
For purposes of the statement of cash flows, the Company
considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.
Financial instruments that potentially subject the Company
to concentrations of credit risk consist principally of cash
and cash equivalent accounts in financial institutions, which
from time to time, exceed the Federal depository insurance
coverage limit. Cash and cash equivalents exceeding federally
insured limits totaled $199,104 at June 30, 1996.
Inventories:
Inventories are valued at the lower of cost, determined by
the first-in, first-out method, or market.
Machinery and Equipment:
Machinery and equipment are carried at cost. Depreciation,
except for leasehold improvements, is computed using the
declining balance method until depreciation computed using
such method is less than depreciation computed using the
straight-line method. At such time, the straight-line method
is used for the remaining lives of the assets. Leasehold
improvements are amortized using the straight-line method
over the shorter of the life of the asset or the lease term.
When assets are retired or otherwise disposed of, the cost
and related accumulated depreciation are removed from the
accounts, and any resulting gain or loss is reflected in
income for the period. The cost of maintenance and repairs
<PAGE>
is charged to income as incurred; significant renewals and
betterments are capitalized.
Accrued Vacation:
The Company's policy is to accrue vacation pay as earned.
Generally, vacation pay is vested and is payable as vacation
days are taken in the year subsequent to that in which it was
earned.
Physicians Fax Database:
The physicians fax database, a marketing communication
system utilizing electronic facsimile transmission, was
acquired effective June 30, 1993 at a cost of $527,000.
During the year ended June 30, 1994, the asset was reduced
by $226,525 due to poor performance in the delivery of the
originally agreed upon database. Amortization was not recorded
for the year ended June 30, 1994, as the database was not
operational, and accordingly, not placed in service as of
that date. During the year ended June 30, 1995, the database
was placed in service and $100,159 of amortization was
charged to operations. The useful life of the database is
three years. During the year ended June 30, 1996, $100,157
of amortization was charged to operations.
Income Taxes:
The Company uses the asset and liability method to calculate
deferred tax assets and liabilities. Deferred taxes are
recognized based on the differences between financial
reporting and income tax bases of assets and liabilities
using enacted tax rates.
Net Income (Loss) Per Share:
Net income per common and common equivalent share was
computed by dividing net income by the weighted-average number
of common shares and equivalents (stock options) outstanding
during the year ended June 30, 1995. Net loss per common and
common equivalent share was computed by dividing net loss by
the weighted average number of common shares outstanding during
the years ended June 30, 1996 and 1994.
Stock Based Compensation:
In October 1995, the FASB issued SFAS No. 123, "Accounting
for Stock-Based Compensation", which requires adoption of
the disclosure provisions no later than fiscal years beginning
after December 15, 1995 and adoption of the measurement and
recognition provisions for non-employee transactions no later
than after December 15, 1995. The new standard defines a
<PAGE>
fair value method of accounting for the issuance of stock
options and other equity instruments. Under the fair value
method, compensation cost is measured at the grant date
based on the fair value of the award and is recognized over
the service period, which is usually the vesting period.
Pursuant to SFAS No. 123, the Company is not required to
adopt the fair value method of accounting for employee
stock-based transactions. The Company is permitted to
continue to account for such transactions under Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for
Stock Issued to Employees", but commencing during the first
quarter of fiscal 1997 will be required to disclose in a
note to the financial statements pro forma net income, and
per share amounts as if the Company had applied the new
method of accounting. The adoption of this new standard
is not expected to have a significant effect on the Company's
financial statements.
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of:
In 1995, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". SFAS No. 121 establishes new accounting standards for
measuring the impairment of long-lived assets. The adoption
of this new standard is not expected to have a significant
effect on the Company's financial statements.
2. INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30,
----------------------------
1996 1995
--------- ------------
<S> <C> <C>
Finished goods $103,054 $127,227
Work in process 41,265
Raw materials 4,054 134,377
-------- --------
107,108 302,869
Less discontinued segment 168,492
-------- --------
$107,108 $134,377
======== ========
</TABLE>
<PAGE>
3. MACHINERY AND EQUIPMENT:
<TABLE>
Machinery and equipment consist of the following:
<CAPTION>
June 30,
----------------------- Estimated
1996 1995 Useful Lives
---------- --------- -------------
<S> <C> <C> <C>
Machinery and equipment $2,371,252 $2,305,358 3 to 10 years
(includes $283,150 under
capital leases for 1996
and 1995)
Furniture and fixtures 87,701 73,615 5 years
Leasehold improvements 303,064 294,896 Lease Term
---------- ----------
2,762,017 2,673,869
Less discontinued segment 148,569
---------- ----------
$2,762,017 $2,525,300
========== ==========
</TABLE>
Depreciation and amortization of machinery and equipment
charged to operations was $326,715, $268,343 and $244,186
during the years ended June 30, 1996, 1995, and 1994,
respectively. Depreciation expense related to assets
under capital leases amounted to $42,916 and $19,301 for
the years ended June 30, 1996 and 1995, respectively.
4. LONG-TERM DEBT:
Long-term debt consists of the following:
<TABLE>
<CAPTION>
June 30,
--------------------
1996 1995
--------- --------
<S> <C> <C>
Subordinated note to a company dated
March 31, 1994 payable March 31, 1996
at 7% (2) $300,000
Note to a bank dated June 30, 1993
payable monthly until July 1, 1998 at
prime plus 1/2% (1) $291,667 431,667
Note to a bank dated March 29, 1996
payable monthly until April 1, 2001 at
prime plus 1/2%(3) 290,000
--------------------
<PAGE>
Total long-term debt 581,667 731,667
Less current maturities 200,000 440,000
-------- --------
$381,667 $291,667
======== ========
</TABLE>
(1) The note to the bank is collateralized by substantially
all of the assets of the Company and is personally
guaranteed by the president of the Company. The bank has
agreed to waive covenants for the balance of the term loan.
(2) The subordinated note was collateralized by certain equipment
of the Company.
(3) The note to the Bank is collateralized by substantially all
of the assets of the Company, personally guaranteed by the
president of the Company and contains no covenants.
Maturities of long-term debt at June 30, 1996 are as follows:
<TABLE>
<S> <C>
1997 $200,000
1998 200,000
1999 71,667
2000 60,000
2001 50,000
--------
$581,667
========
</TABLE>
5. CAPITAL LEASE OBLIGATIONS:
Capital lease obligations consist of the following at June
30, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
-------- ----------
<S> <C> <C>
Obligation under capital lease for machinery,
payable in monthly installments of $6,661,
non-interest bearing, until December 1997. $133,234 $199,844
Obligation under capital lease for machinery,
payable in monthly installments of $2,400,
including interest at 41.3%, until April 1996. 2,000 20,000
Obligation under capital lease for equipment,
payable in monthly installments of $402,
including interest at 9.903%, until January
2000. 14,871 17,873
-------------------
150,105 237,717
Less current maturities 99,114 103,201
-------------------
$ 50,991 $134,516
======== ========
</TABLE>
<PAGE>
Maturities of capital lease obligations at June 30, 1996 are
as follows:
<TABLE>
<S> <C>
1997 $99,114
1998 43,928
1999 4,339
2000 2,724
-------
$150,105
========
</TABLE>
6. LEASES:
The Company leases its operating and corporate facilities
under operating leases which expire in 1997 and 2004. In
addition, in October 1992, the Company began leasing a
warehouse facility on a month-to-month basis. Rent expense
amounted to $356,973, $314,553 and $333,778 for the years
ended June 30, 1996, 1995 and 1994, respectively. The rent
expense for discontinued operations was not material.
The future minimum rental commitments under these leases are
as follows:
<TABLE>
<CAPTION>
Years Ending
June 30, Amount
------------ ------
<S> <C>
1997 $ 336,471
1998 260,986
1999 267,224
2000 273,463
2001 279,701
Thereafter 882,776
----------
$2,300,621
==========
</TABLE>
7. SEGMENT INFORMATION:
The Company's operations are divided into two business
segments: research, development, manufacture and sale of
biomedical devices (including the manufacture and supply
of products and accessories for electron microscope
laboratories) and contract packaging. (See Note 1 for
disposal of Bio Medical Services Segment.)
A summary of information about the Company's operations by
business segments are as follows:
<PAGE>
<TABLE>
<CAPTION>
For the Year Ended
June 30, 1996
-----------------------------------------
BioMedical
Services -
Discontinued Contract
October 6, 1995 Packaging Total
--------------- ---------- -----------
<S> <C> <C> <C>
Sales $193,797 $4,714,542 $4,908,339
Operating (loss) income 5,346 (409,450) (404,104)
Depreciation and amortization 1,029 326,715 327,744
Aggregate carrying amount of
identifiable assets 2,309,256 2,309,256
Additions to machinery and
equipment 231,545 231,545
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended
June 30, 1995
-----------------------------------------
BioMedical
Services -
Discontinued Contract
October 6, 1995 Packaging Total
--------------- ---------- ----------
<S> <C> <C> <C>
Sales $849,281 $5,095,103 $5,944,384
Operating (loss) income (66,738) 464,958 398,220
Depreciation and amortization 13,615 258,844 272,459
Aggregate carrying amount of
identifiable assets 316,878 2,660,376 2,977,254
Additions to machinery and
equipment 602,501 602,501
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended
June 30, 1994
----------------------------------------
BioMedical
Services -
Discontinued Contract
October 6, 1995 Packaging Total
--------------- ---------- ----------
<S> <C> <C> <C>
Sales $ 787,109 $3,443,986 $4,231,095
Operating loss (2,169) (813,304) (815,473)
Depreciation and amortization 21,001 227,300 248,301
Aggregate carrying amount of
identifiable assets 397,622 2,543,152 2,940,774
<PAGE>
Additions to machinery and
equipment 236,532 236,532
</TABLE>
Sales to the Company's major customers were as follows:
<TABLE>
<CAPTION>
Years Ended June 30,
-------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Company A $1,963,146 $2,487,063 $1,266,998
Company B 1,194,589 1,597,847 1,451,808
</TABLE>
8. STOCK OPTIONS:
On June 24, 1992, the Company adopted a stock option plan
which authorizes the granting of either incentive or
nonqualified stock options to purchase up to 400,000 shares
of the Company's common stock to certain persons who perform
services for the Company. On November 9, 1993, the
authorized number of shares of common stock that may be
issued pursuant to the Company's stock option plan was
increased to 550,000 shares. On June 24, 1992, nonqualified
options to purchase 150,000 shares were issued to the
directors of the Company to compensate them for their
services. The nonqualified options had an exercise price of
$.50 per share, which is the Company's estimate of the
market value at that date. The options became exercisable on
December 24, 1992 and expire on June 24, 2002.
On December 16, 1992, nonqualified options to purchase
10,000 shares were issued to a director of the Company to
compensate him for his services. The nonqualified options
had an exercise price of $1.00 per share, which is the
Company's estimate of the market value at that date. The
options became exercisable on June 16, 1993 and expire on
December 16, 2002.
On August 19, 1993, nonqualified options to purchase 210,000
shares were issued to the directors of the Company to compensate
them for their services. The nonqualified options had an
exercise price of $1.50 per share, which is the Company's
estimate of the market value at that date. The options
became exercisable on February 19, 1994 and expire on
August 19, 2003.
On August 29, 1993, nonqualified options to purchase 20,000
shares were issued to an employee of the Company. The
nonqualified options had an exercise price of $1.50 per
share, which is the Company's estimate of the market value
at that date. The options became exercisable on February 29,
1994 and expire on August 29, 2003.
On October 26, 1995, nonqualified options to purchase 100,000
shares were issued to the directors of the Company to compensate
them for their services. The nonqualified options had an
exercise price of $.25 per share, which is the Company's
estimate of market value at that date. The options became
exercisable on April 26, 1995 and expire on October 26, 2005.
<PAGE>
Summarized information relating to the stock option plan:
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Options outstanding
at beginning of year 390,000 390,000 160,000
Options granted 100,000 -0- 230,000
Options canceled 45,000 -0- -0-
------- ------- -------
Options outstanding at
end of year 445,000 390,000 390,000
======= ======= =======
Options exercisable at
end of year 445,000 390,000 390,000
======= ======= =======
Option prices per share:
Granted $.25 $1.50
==== =====
Canceled $1.00-$1.50
===========
Exercise price of
options outstanding
at end of year $.25-$1.50 $.50-$1.50 $.50-$1.50
========== ========== ==========
</TABLE>
9. INCOME TAXES:
The deferred tax asset was $353,500 at June 30, 1994 and was
comprised of the following components:
<TABLE>
<CAPTION>
Deferred Tax
Temporary Asset
Difference Tax Rate (Liability)
---------- -------- -----------
<S> <C> <C> <C>
Inventory $ (100,000) 43% $ (43,000)
Allowance for doubtful accounts 5,000 43% 2,150
Accumulated depreciation (13,000) 43% (5,590)
Benefit of remaining operating
loss carryforward 2,848,000 1,224,640
Less valuation allowance (1,918,000) 43% (824,700)
---------- -----------
$ 822,000 $ 353,500
========== ===========
</TABLE>
During the year ended June 30, 1994, the beginning-of-the-
year balance of the valuation allowance had been adjusted by
$214,500 due substantially to a change in circumstances
causing a change in judgment about the realizability of the
related deferred tax asset in future years. The tax rate of
43% at June 30, 1994 includes a 9% state income tax rate
because of the merger in 1994 of Steritek, Inc. and Master-
Pak Laboratories, Inc. for tax purposes.
The deferred tax asset is $168,600 at June 30, 1995 and is
comprised of the following components:
<TABLE>
<CAPTION>
Deferred Tax
Temporary Asset
Difference Tax Rate (Liability)
----------- -------- ------------
<S> <C> <C> <C>
Inventory $ (95,000) 43% $(40,850)
Allowance for doubtful accounts 5,000 43% 2,150
Accumulated depreciation (106,000) 43% (45,580)
Benefit of remaining operating
loss carryforward 2,235,070 43% 961,080
Less valuation allowance (1,646,070) 43% (708,200)
----------- ---------
$ 393,000 $ 168,600
=========== =========
</TABLE>
The deferred tax asset has been reduced by $184,900 and
corresponding Federal and State tax provisions have been
recorded for the year ended June 30, 1995.
The deferred tax asset is $68,600 at June 30, 1996, and is
comprised of the following components:
<TABLE>
<CAPTION>
Deferred Tax
Temporary Asset
Difference Tax Rate (Liability)
---------- -------- ------------
<S> <C> <C> <C>
Allowance for doubtful accounts $ 5,000 43% $ 2,150
Accumulated depreciation (201,000) 43% (86,430)
Benefit of remaining operating
loss carryforward 2,515,000 43% 1,081,450
Less valuation allowance (2,159,000) 43% (928,570)
----------- ----------
$ 160,000 $ 68,600
=========== ==========
</TABLE>
<PAGE>
During the year ended June 30, 1996, the beginning-of-the-
year balance of the valuation allowance had been adjusted by
$100,000 due substantially to a change in circumstances
causing a change in judgment about the realizability of the
related deferred tax asset in future years.
At June 30, 1996, the Company has available net operating
loss (NOL) carryforwards of approximately $2,515,000. These
NOL's expire at various dates from 1996 through 2006. At
June 30, 1996, the Company has investment tax credit
carryforwards of approximately $35,700 and research and
development (R & D) credits of approximately $85,500 which
are available in future years and expire from 1996 through
2001. The Tax Reform Act of 1986 (the Act) reduced the
amount of utilization of Investment Tax Credit carryforwards
allowed to 65% in 1988 and thereafter. R & D credit
carryforwards are unaffected by the Act.
10. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The amounts included in the balance sheet at June 30, 1996
for cash and cash equivalents, trade accounts receivable,
accounts payable - trade and accrued expenses approximate
fair value because of the short-term nature of these
instruments. The carrying amount of long-term debt and
capital lease obligations approximate the estimated fair
value because they are at interest rates comparable to
instruments currently available to the Company for notes with
similar terms and remaining maturities.
11. FOURTH QUARTER ADJUSTMENTS (UNAUDITED):
In the fourth quarter of 1996, the Company revised its
accounting for the disposition of its Intracranial Pressure
Monitor (ICP) business and accordingly, an adjustment in the
amount of $236,099 ($.07 per share) was recognized to reduce
the previously reported gain on disposal.
The Company also revised its estimate of the valuation
allowance for income taxes and recognized an adjustment
amounting to $100,000 ($.03 per share) to reduce the
previously reported deferred tax asset.
Market for Registrant's Common Equity and
Related Stockholder Matters
The Company's Common Stock is traded in the "pink sheets" in the
over-the-counter market. The market for the Company's Common Stock
during the periods presented has been represented by low volume and
limited or sporadic quotes. Accordingly, a table presenting the high and
low bid and asked prices for the Company's Common Stock (published by
the National Quotation Service, Inc.) has not been included.
There were 138 holders of record of the Company's Common Stock as
of September 1, 1996, which total does not include individual participants
in security listings.
The Company has not previously declared or paid any cash dividends
on its Common Stock. The Company currently anticipates retaining
any earnings for use in the operation and expansion of its business.
Therefore, it is unlikely that dividends will be declared in the
foreseeable future.
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
There were no disagreements with accountants on accounting
and financial disclosure within the Company's two most recent
fiscal years and all subsequent interim periods.
Directors Officers
Albert J. Wozniak, Albert J. Wozniak,
Chairman of the Board, Chief Executive Officer
Chief Executive Officer and and President
President
James K. Wozniak James K. Wozniak.
Vice President and Vice President and
Secretary Secretary
Allan B. Levin, M.D.,
Retired, formerly Neurosurgeon,
Professor of Neurological
Surgery at the University of Wisconsin
School of Medicine
Charles A. Pergola
Herbert W. Marache, Jr.,
Senior Vice President of Janney
Montgomery Scott, Inc.
Auditors
M.R. Weiser & Co., New York, New York
Transfer Agent
First City Transfer Company, 111 Wood Avenue South, Iselin, New
Jersey 08830.
Form 10-K
Copies of the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996, including financial statements and schedules
thereto, filed with the Securities and Exchange Commission, are available
to shareholders without charge upon written request to:
Steritek, Inc., 121 Moonachie Avenue, Moonachie, NJ 07074
