<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC, 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1998
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ______________________
Commission File Number 1-10285
BIOMAGNETIC TECHNOLOGIES, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-2647755
- -------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
9727 Pacific Heights Boulevard, San Diego, California 92121-3719
- -------------------------------------------------------------------------------
(Address of principal executive office (zip code)
Registrant's telephone number, including area code (619) 453-6300
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, NO
PAR VALUE PER SHARE
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. / x / Yes / / No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
The aggregate market value of the voting stock (which consists solely of
shares of Common Stock) held by non-affiliates of the registrant as of
January 26, 1999 was $5,337,000, based on the closing price on that date on
the Nasdaq Over the Counter Bulletin Board. Shares of Common Stock held by
each officer, director, and holder of 10% or more of the outstanding Common
Stock have been excluded in that such persons may be deemed to be affiliates.
This determination of affiliate status is not necessarily a conclusive
determination for other purposes.
The number of shares outstanding of the registrant's Common Stock, no par
value, as of January 26, 1999 was 83,367,112 shares.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
<TABLE>
<CAPTION>
NAME POSITION AGE
- ------------------------------- -------------------------------------- -----
<S> <C> <C>
D. Scott Buchanan(3)(4)........ Director, President and Chief 40
Executive Officer of Biomagnetic
Technologies, Inc.
Martin P. Egli(1)(2)(3)........ Director 46
Enrique Maso(1)(2)(3).......... Chairman of the Board 73
Galleon Graetz................. Director 44
Rodolfo Llinas................. Director 63
Herman Bergman................. Director 72
Eugene C. Hirschkoff........... Vice-President Engineering of 57
Biomagnetic Technologies, Inc.
Kenneth C. Squires............. Vice-President Marketing of 55
Biomagnetic Technologies, Inc.
Aron P. Stern.................. Vice-President Finance, Chief 45
Financial Officer & Secretary of
Biomagnetic Technologies, Inc.
</TABLE>
- ---------------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Member of Administrative Committee of the Employee Stock Purchase Plan.
(4) Dr. Buchanan also serves as a non-voting advisor to the Compensation
Committee.
2
<PAGE>
BUSINESS EXPERIENCE OF DIRECTORS & EXECUTIVE OFFICERS
DR. BUCHANAN joined the Company in 1986, served as Vice President, Product
Operations from February 1992 through December 1996 and has served as
President since December 1996. Dr. Buchanan has been involved with product
and applications development since joining the Company as a staff physicist.
Dr. Buchanan received a B.S. in Physics from Lehigh University in
Pennsylvania and an M.S. and Ph.D. in Physics from the University of
Illinois. Dr. Buchanan was elected to the Board of Directors of Biomagnetic
Technologies in 1997.
MR. EGLI has served since 1993 as a partner and principal of Swisspartners
S.P. Investment Network LTD. ("Swisspartners"), a company which provides
investment management, corporate finance and trust services, and which owns
100% of the capital stock of Dassesta International S.A. ("Dassesta"). From
1988 to 1992 Mr. Egli served as Chief Executive Officer of BiL Holding Ltd.,
a banking and investment management company owned by the Bank in
Liechtenstein Group. Mr. Egli is a director of several privately held
companies and was elected to the Board of Directors of Biomagnetic
Technologies in 1995.
DR. GRAETZ. From 1990 to 1997 Dr. Graetz served as clinical consultant and
co-director of the internal medicine division of the Swiss Hospital School of
Nursing. Dr. Graetz is currently a senior partner of Care Net AG, a health
consulting company and currently involved as part of the management team at
Medizinisches Zentrum Romerhof, a unique health care provider located in
Zurich. Dr. Graetz was educated in internal medicine and radiology in
Switzerland and Israel. Dr. Graetz was elected to the Board of Directors of
Biomagnetic Technologies in 1998.
DR. MASO, a private investor, is a former large industrialist in Europe and
the former Mayor of Barcelona. He is currently the Chairman of the Board of
Electronic Data Systems in Spain, a position he has held since 1983. He
received a Masters of Industrial Engineering Management from New York
University and a doctorate in Engineering from the Politechnic College of
Barcelona. Dr. Maso was elected to the Board of Directors of Biomagnetic
Technologies in 1995.
PROFESSOR RODOLFO LLINAS, M.D., PH.D. is the Thomas and Suzanne Murphy
Professor of Neuroscience and Chair of the Department of Physiology and
Neuroscience at New York University School of Medicine, a position he has
held since 1976. He is a Member of the National Academy of Sciences (USA),
the Academy of Arts and Sciences and the American Philosophical Society.
Since 1991, Professor Llinas has served as Advisor to the NASA Neurolab
Project, is a Member of the Advisory Council of the National Deafness and
Other Communication Disorder of the National Institute of Health and served
on the Board of Trustees of the Marine Biological Laboratory. Professor
Llinas has contributed over 500 publications to brain research, has been
awarded five honorary degrees and is the recipient of numerous honors. Dr.
Llinas was elected to the Board of Directors of Biomagnetic Technologies in
1998.
MR. BERGMAN served the Company as a financial consultant in 1994 and was
appointed acting Chief Financial Officer in May 1995 and acting Secretary in
December 1995. He served as Vice President Finance, Chief Financial Officer
and Secretary of the Company from May 1996 through December 1998. Previously
Mr. Bergman served as a financial consultant during 1994 and from 1992 to
1993 was Vice President of Finance of Atari Corporation, a public company.
From 1991 to 1992 he served as Vice President of Finance and Operations of
Proxim Inc., a public company and served as Treasurer and Finance Manager of
the Military Business Division of Siliconix, Inc. a public company from
1988-1991. Mr. Bergman received his B.S. in Mathematics at Antioch College in
Ohio and did his graduate work in Industrial Organization and Management at
Ohio State University. Mr. Bergman was elected to the Board of Directors of
Biomagnetic Technologies in 1998.
DR. SQUIRES joined the Company in September 1988. Since that time he has held
various positions as Director of Clinical Applications and Director of
Neuroscience Applications--Marketing and was appointed Vice President of
Marketing in December 1996. Dr. Squires received his B.S. and M.S. degrees in
Aeronautical Engineering at the University of Minnesota and his Ph.D. in
Experimental Psychology from the University of California, San Diego.
DR. HIRSCHKOFF joined the Company in 1971, and has served in many capacities
in engineering, technology development and manufacturing. From 1990 through
1996, he served as Director of Clinical Applications, managing the Company's
research and development programs with its collaboration partners at the
Scripps Clinic and Research Foundation and the University of California at
San Francisco among others. Dr. Hirschkoff is responsible for the Company's
FDA compliance programs. In December 1997 he was appointed Vice President,
Engineering. Dr. Hirschkoff received his B.A. in Physics and Mathematics at
Reed College in Oregon; M.A. in Physics at Harvard University; Ph.D. in
Physics from the University of California, San Diego; MBA from the State
University of California, San Diego and his J.D. from the University of San
Diego.
3
<PAGE>
MR. STERN joined the Company in January 1999. Since 1989 Mr. Stern has
been employed at biomedical companies: from 1989 to 1992 as Director, Finance
and Administration at Isis Pharmaceuticals, Inc., and from 1992 to 1998 as
Vice President Finance & Administration and Chief Financial Officer at
Protein Polymer Technologies, Inc. Previous to these positions, Mr. Stern
held accounting and financial positions at a variety of high technology
companies including Apple Computer, Inc. Mr. Stern received a Masters of
Business Administration from University of California, Berkeley.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the SEC and the Nasdaq. Officers, directors and
greater than 10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to the Company,
or written representations that no Form 5's were required, the Company
believes that, during the period from October 1, 1997 through September 30,
1998, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were met, with the exception
of Mr. Egli who did not file on a timely basis with respect to his interest
in Swisspartners' and Dassesta's August 5, 1998 purchase of shares of the
Company's common stock. However, Mr. Egli did file a Form 4 for Dassesta on a
timely basis with respect to the same transaction. Since Dassesta is the only
entity of the purchasing entities with a 10% or greater interest in the
Company, it was the only entity required to file in connection with such
transaction.
4
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation earned by the Named Executive Officers (determined as of the end
of the last fiscal year) for services rendered in all capacities to the
Company for the fiscal years ended September 30, 1998, 1997 and 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ----------------
AWARDS
NAME AND OTHER ANNUAL ---------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION OPTIONS/SARS (#) COMPENSATION
- ---------------------------- ---- --------- --------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
D. Scott Buchanan............ 1998 $175,000 $ -0- $ -0- 825,000 $ -0-
President, Chief 1997 $163,273 $ -0- $ -0- 150,000 $ -0-
Executive Officer 1996 $127,368 $ -0- $ -0- 200,000 $ -0-
Herman Bergman............... 1998 $125,000 $ -0- $ -0- 525,000 $ -0-
Former Vice President 1997 $125,481 $ -0- $ -0- 310,000 $ -0-
of Finance, Chief Financial 1996 $125,481 $ -0- $ -0- 75,000 $ -0-
Officer and Secretary
Eugene Hirschkoff (1)....... 1998 $123,907 $ 5,000 $ -0- 400,000 $1,500
Vice President 1997 $115,991 $ 2,500 $ -0- 80,000 $1,500
Engineering 1996 $113,854 $ -0- $ -0- 25,000 $ -0-
Kenneth Squires (2)......... 1998 $120,949 $20,086 $ -0- 400,000 $ -0-
Vice President 1997 $ 99,730 $ 7,200 $ -0- 80,000 $ -0-
Marketing 1996 $ 94,984 $ 4,000 $ -0- 25,400 $ -0-
</TABLE>
- -----------------
(1) "Bonus" for Dr. Hirschkoff represents a payment earned under an incentive
bonus program. "All Other Compensation" represents educational
reimbursements.
(2) "Bonus" for Dr. Squires represents a payment earned under an incentive bonus
program.
5
<PAGE>
STOCK OPTIONS
The following table contains information concerning the grant of stock
options under the Company's 1997 Stock Option Plan to the Named Executive
Officers in fiscal 1998:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
OPTIONS/SARS PRICE APPRECIATION FOR
OPTIONS/SARS GRANTED TO EXERCISE OR OPTION TERM (1)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ------------------------
NAME (#) (2) FISCAL YEAR ($/SH) (3) DATE (4) 5% ($) 10% ($)
- ---- ------------ ------------ ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
D. Scott Buchanan.. 500,000 20% $ .42 10/02/07 $ 342,068 $ 544,686
325,000 13% $ .50 03/25/08 $ 264,696 $ 421,483
Herman Bergman..... 250,000 10% $ .42 10/02/07 $ 171,034 $ 272,343
275,000 11% $ .50 03/25/08 $ 223,973 $ 356,640
Eugene Hirschkoff.. 200,000 8% $ .42 10/02/07 $ 136,827 $ 217,874
200,000 8% $ .50 03/25/08 $ 162,889 $ 259,374
Kenneth Squires.... 200,000 8% $ .42 10/02/07 $ 136,827 $ 217,874
200,000 8% $ .50 03/25/08 $ 162,889 $ 259,374
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) There is no assurance provided to any executive officer or any other
holder of the Company's securities that the actual stock price
appreciation over the 10-year option term will be at the assumed 5
percent and 10 percent levels or at any other defined level. Unless the
market price of the Common Stock does in fact appreciate over the
option term, no value will be realized from the option grants made to
the Named Executive Officers.
(2) Options granted in fiscal 1998 were issued with vesting on an annual
basis over a two to four-year period commencing on the date of grant.
The grant dates for the options listed in the above table are as
follows:
<TABLE>
<CAPTION>
Options/SARs
Name Granted (#) Grant Date
------------------------------- ------------ ----------
<S> <C> <C>
D. Scott Buchanan.............. 500,000 10/02/97
D. Scott Buchanan.............. 325,000 03/25/98
Herman Bergman................. 250,000 10/02/97
Herman Bergman................. 275,000 03/25/98
Eugene Hirschkoff.............. 200,000 10/02/97
Eugene Hirschkoff.............. 200,000 03/25/98
Kenneth Squires................ 200,000 10/02/97
Kenneth Squires................ 200,000 03/25/98
</TABLE>
(3) The exercise price per share on the date of grant represents 100% of the
fair market value of the underlying shares at that date.
(4) The options have a term of 10 years, subject to earlier termination based
on certain events related to termination of employment.
6
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table provides information, with respect to the Named Executive
Officers, concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of the fiscal year. No options were
exercised by the Named Executive Officers during the fiscal year ended
September 30, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
SHARES VALUE NUMBER OF VALUE OF
ACQUIRED ON REALIZED UNEXERCISED OPTIONS UNEXERCISED IN-THE-MONEY
NAME EXERCISE (#) ($) AT FY-END OPTIONS/SARS AT FY-END ($)(1)
- ---------------------------- ------------ -------- ---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
D. Scott Buchanan........... -0- $ -0- 603,917 669,783 $ -0- $ -0-
Herman Bergman.............. -0- $ -0- 490,667 433,333 $ -0- $ -0-
Eugene Hirschkoff........... -0- $ -0- 210,833 329,167 $ -0- $ -0-
Kenneth Squires............. -0- $ -0- 196,233 329,167 $ -0- $ -0-
</TABLE>
- ---------------------------
(1) Calculated on the basis of the fair market value of the underlying
securities at September 30, 1998 ($ .26) minus the exercise price.
DIRECTOR COMPENSATION
Directors are reimbursed for their out-of-pocket expenses incurred in
attending meetings of the Board of Directors and its committees. The Company
does not presently pay fees to its Directors for their participation as a
member of the Board of Directors.
Each non-employee Board Member is eligible to receive grants of a
non-qualified stock option to purchase shares of Common Stock of the Company.
Certain options have previously been granted to directors that are now
exercisable or exercisable within 60 days of January 26, 1999. See "Security
Ownership of Management."
EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS
No formal employment contract exists with any of the current executive
officers of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal 1998, Martin P. Egli and Enrique Maso served as non-employee
members of the Company's Compensation Committee. Neither of these individuals
was an officer or employee of the Company at any time during the 1998 fiscal
year or at any other time.
No current executive officer of the Company has ever served as a member of
the board of directors or compensation committee of any other entity that has
or has had one or more executive officers serving as a member of the
Company's Board of Directors or Compensation Committee.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY. The Compensation Committee of the Board of Directors
(the "Committee") is responsible for developing and making recommendations to
the Board with respect to the Company's executive compensation policies. In
addition, the Committee, pursuant to authority delegated by the Board,
determines on an annual basis the compensation to be paid to the Company's
Chief Executive Officer and each of the other executive officers of the
Company.
The Committee has adopted the following objectives as guidelines for
its compensation decisions:
- Provide a competitive total compensation package that enables the Company
to attract and retain key executives.
- Integrate all compensation programs with the Company's short-term and
long-term business objectives and strategic goals.
- Ensure that compensation is meaningfully related to the value created for
shareholders.
7
<PAGE>
EXECUTIVE OFFICER COMPENSATION PROGRAM COMPONENTS. The Committee reviews the
Company's compensation program to ensure that salary levels and incentive
opportunities are competitive and reflect the performance of the Company. The
Company's compensation program for executive officers consists of base
salary, annual cash incentive compensation and long-term compensation in the
form of stock options. In addition, certain executive officers may also be
provided supplemental long-term disability insurance.
BASE SALARY. Base salary levels for the Company's executive officers are
determined, in part, through comparisons with companies in the medical device
industry and other companies with which the Company competes for personnel.
In addition, the Committee also evaluates individual experience and
performance and specific issues particular to the Company, such as success in
raising capital, creation of shareholder value and achievement of specific
Company milestones. The Committee reviews each executive's salary once a year
and may increase each executive's salary at that time based on: (i) the
individual's increased contribution to the Company over the prior 12 months;
(ii) the individual's increased responsibilities over the prior 12 months;
and (iii) any increase in median competitive pay levels. Individual
contributions are measured with respect to specific individual
accomplishments established for each executive.
ANNUAL INCENTIVE COMPENSATION. The Company's officers are eligible to receive
annual cash incentive compensation at the time their base salaries are
reviewed based on achieving defined specific goals and objectives during the
12 months prior to review. This compensation is intended to provide a direct
financial incentive in the form of an annual cash bonus to executives who
achieve the Company's defined specific goals. Individual contributions are
also considered in determining cash bonuses. Equal weight is given to
achievement of individual accomplishments and strategic corporate goals.
Bonus awards are set at a level competitive within the local medical device
manufacturing and high technology industry as well as among a broader group
of medical device manufacturing and high technology companies of comparable
size and complexity. Such companies are not necessarily included in the
indices used to compare shareholder returns in the Stock Performance Graph.
Other than bonuses awarded to Doctors. Hirschkoff and Squires under an
incentive bonus program, no other cash bonuses were offered to the Company's
executive officers in the fiscal year ended September 30, 1998.
LONG TERM INCENTIVE COMPENSATION. The 1997 Stock Incentive Plan is the
Company's long-term incentive plan for executive officers and, to a lesser
degree, all other employees. The Committee strongly believes that by
providing those persons who have substantial responsibility for the
management and growth of the Company with an opportunity to increase their
ownership of Company stock, the best interests of shareholders and executives
will be more closely aligned.
Generally, stock options are granted every year with exercise prices equal to
the prevailing market value of the Company's Common Stock on the date of
grant, have 10-year terms and have vesting periods of four years. Awards are
made at a level calculated to be competitive within both the local
biotechnology industry and a broader group of biotechnology and medical
device manufacturing companies of comparable size and complexity.
D. Scott Buchanan became President and Chief Operating Officer of the Company
on December 20, 1996. Effective January 2, 1997 his base salary was increased
from $125,000 to $175,000 in consideration for the increased responsibilities
then assumed by Dr. Buchanan. In March 1997, Dr. Buchanan was also appointed
Chief Executive Officer of the Company. It is the Committee's objective to
have any increasing percentage of Dr. Buchanan's total compensation each year
tied to the attainment of performance targets and stock price appreciation of
his option shares.
8
<PAGE>
SUMMARY
After its review of all existing programs, the Committee continues to believe
that the Company's compensation program for its executive officers is
competitive with the compensation programs provided by other companies with
which the Company competes. The Committee intends that any amounts to be paid
under the annual incentive plan will be appropriately related to corporate
and individual performance, yielding awards that are directly linked to the
achievement of Company goals and annual financial and operational results.
We conclude our report with the acknowledgement that no member of the
Compensation Committee is a former or current officer or employee of the
Company or any of its subsidiaries.
COMPENSATION COMMITTEE
/s/ Martin P. Egli
/s/ Enrique Maso
January 26, 1999
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares total shareholder returns over the last five
fiscal years to the weighted average return of stocks of companies included
in the Nasdaq Composite Index and a peer group index consisting of the
Medical Instrument and Supplier Manufacturers Index. The total return for
each of the Company's Common Stock, the Nasdaq Composite Index and the
Medical Instrument and Supplier Manufacturers Index assumes the reinvestment
of dividends, although dividends have not been declared on the Company's
Common Stock. The Nasdaq Composite Index tracks the aggregate price
performance of equity securities of companies traded on the Nasdaq. The
Company's Common Stock is traded on the Nasdaq over the counter bulletin
board. The Medical Instrument and Supplier Manufacturers Index consists of
companies with a Standard Industrial Classification Code identifying them as
a manufacturer of medical instruments or supplies. The shareholder return
shown on the graph below is not necessarily indicative of future performance
and the Company will not make or endorse any predictions as to future
shareholder returns.
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, PEER GROUP AND BROAD MARKET
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
------------------------------------------------------------------
COMPANY/INDEX/MARKET 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Biomagnetic Technologies 100.00 47.98 59.99 23.99 13.43 7.99
SIC Code Index 100.00 113.02 179.65 208.26 249.01 263.86
NASDAQ Market Index 100.00 105.82 128.48 150.00 203.88 211.88
</TABLE>
10
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
the Company as of January 26, 1999 by each director and nominee to the Board
of Directors and by each of the Named Officers and by all directors and
executive officers of the Company as a group. All shares are subject to the
named person's sole voting and investment power except where otherwise
indicated.
<TABLE>
<CAPTION>
NAME SHARES BENEFICIALLY OWNED
------------ -------------------------
NUMBER (1) PERCENT (2)
---------- -----------
<S> <C> <C>
Herman Bergman (3)..................................... 1,009,000 1.2%
D. Scott Buchanan (4).................................. 739,835 *
Martin P. Egli (5)..................................... 21,717,602 26.1%
Eugene Hirschkoff (6).................................. 297,177 *
Enrique Maso........................................... 25,000,000 30.0%
Kenneth Squires (7).................................... 273,789 *
Aron P. Stern (8)...................................... 8,333 *
Rodolfo Llinas (8)..................................... 18,750 *
Galleon Graetz (8)..................................... 12,499 *
All directors and executive officers as a group (9).... 49,076,985 58.9%
</TABLE>
- --------------------
* Less than 1%.
(1) Except as indicated in the footnotes to this table, the persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them, subject to
community property laws, where applicable. Share ownership in each case
includes shares issuable on exercise of certain outstanding options as
described in the footnotes below.
(2) Percentage of ownership is calculated pursuant to SEC Rule 13d-3d(1).
(3) Shares beneficially owned include options to purchase 964,000 shares of
Common Stock held by Mr. Bergman which are now exercisable or
exercisable within 60 days of January 26, 1999.
(4) Shares beneficially owned include options to purchase 707,043 shares of
Common Stock held by Dr. Buchanan which are now exercisable or
exercisable within 60 days of January 26, 1999.
(5) Consists of 18,717,602 shares owned by Dassesta, and 3,000,000 shares
owned by Swisspartners. Mr. Egli is a managing director of
Swisspartners S.P. Investment Network LTD., which owns 100% of the
capital stock of Dassesta.
(6) Shares beneficially owned include options to purchase 259,835 shares of
Common Stock held by Dr. Hirschkoff which are now exercisable or
exercisable within 60 days of January 26, 1999.
(7) Shares beneficially owned include options to purchase 246,235 shares of
Common Stock held by Dr. Squires which are now exercisable or
exercisable within 60 days of January 26, 1999.
11
<PAGE>
(8) Shares beneficially owned consists entirely of options to purchase
shares of Common Stock held by these officers and directors which are
now exercisable or exercisable within sixty days of January 26, 1999.
(9) Shares beneficially owned include all shares held by entities
affiliated with certain directors as described in the footnotes above
and include options to purchase 2,216,695 shares of Common Stock held
by all directors and executive officers as a group which are now
exercisable or exercisable within 60 days of January 26, 1999.
PRINCIPAL SHAREHOLDERS
The following are the only persons known by the Company to own beneficially, as
of January 26, 1999, five percent (5%) or more of the outstanding shares of its
Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES BENEFICIALLY OWNED
OF BENEFICIAL OWNER (1) NUMBER (1) PERCENT (2)
- ----------------------- ---------- -----------
<S> <C> <C>
Enrique Maso...................................... 25,000,000 30.0%
Europa Residence
Place des Moulins
98 000 Montecarlo
Monaco
Dassesta International S.A........................ 18,717,602 22.5%
AM Schanzengraben 23
CH-8002 Zurich, Switzerland
Experta BiL...................................... 5,000,000 6.0%
Beethovenstrasse 48
P.O. Box 970
CH-8039 Zurich, Switzerland
Caja De Ahora Y Pensiones De Barcelona........... 10,000,000 12.0%
Avenida Diagonal, 621-629
08028 Barcelona, Spain
</TABLE>
- --------------------
(1) Except as indicated in the footnotes to this table, the persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them, subject to
community property laws, where applicable.
(2) Percentage of ownership is calculated pursuant to SEC Rule 13d-3(d)(1).
12
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Mr. Egli, a director of the Company, is a managing director of Swisspartners.
Dassesta is a wholly owned subsidiary of Swisspartners and a principal
shareholder of the Company. See "Security Ownership of Management" and
"Principal Shareholders."
In December 1997, the Company sold 4,000,000 unregistered shares of common
stock to Dassesta and an additional 1,500,000 unregistered shares of common
stock to Bank Leu under Regulations S at $.50 per share. Consideration
received by the Company in relation to the common stock sales consisted of
cash totaling $793,000 and cancellation of its then outstanding loan
principal of $1,700,000, related accrued interest of $38,000 and accounts
payable of $219,000, all owed to Dassesta.
In February 1998, the Company discounted two customer notes for a net amount
of $355,000 received from Dassesta. The face amount of these notes was
2,200,000 French Francs, equal to approximately $366,000 at the then current
exchange rate.
As of July 1998, the Company had borrowed $2,000,000 from Dassesta. The loan
was a 180 day unsecured loan bearing interest at 8%. In August 1998, the
Company paid off the total principal of $2,000,000 owed to Dassesta plus
$36,000 of related accrued interest using proceeds from the August 1998
financing of $15,000,000.
On August 5, 1998, the Company received $15,000,000 from the sale of
30,000,000 shares of common stock at $.50 per share to offshore investors
pursuant to Regulation S. Of the total 30,000,000 shares, 10,000,000 shares
were sold to "La Caixa", Caja de Ahorros y Pensiones de Barcelona, one of the
leading financial institutions of the Kingdom of Spain, 10,000,000 shares
were sold to Dassesta, 5,000,000 shares were sold to Experta Bil, 2,000,000
shares were sold to Swisspartners and 3,000,000 shares to other European
banks.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
BIOMAGNETIC TECHNOLOGIES, INC,
By /s/ D. Scott Buchanan January 28, 1999
---------------------------------- ----------------
D. Scott Buchanan Date
President, Chief Executive Officer
14
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By /s/ D. Scott Buchanan January 28, 1999
---------------------------------- ----------------
D. Scott Buchanan Date
President, Chief Executive Officer
Director
By /s/ Aron Stern January 28, 1999
---------------------------------- ----------------
Aron Stern, Chief Financial Officer and Date
Principal Accounting Officer
By * January 28, 1999
---------------------------------- ----------------
Herman Bergman, Director Date
By * January 28, 1999
---------------------------------- ----------------
Rodolfo Llinas, Director Date
By * January 28, 1999
---------------------------------- ----------------
Martin P. Egli, Director Date
By * January 28, 1999
---------------------------------- ----------------
Enrique Maso Date
Chairman of the Board
By * January 28, 1999
---------------------------------- ----------------
Galleon Graetz, Director Date
*By /s/ D. Scott Buchanan January 28, 1999
---------------------------------- ----------------
D. Scott Buchanan Date
(Attorney-in-Fact)
15
