SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No )
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Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement Confidential, For Use
Of the Commission Only
(as permitted by Rule
14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Under Rule 14a-12
Igene Biotechnology, Inc.
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(Name of Registrant as Specified in Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement,
if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-
6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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Fee paid previously with preliminary materials:
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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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
IGENE BIOTECHNOLOGY, INC.
9110 Red Branch Road
Columbia, Maryland 21045
PROXY STATEMENT
Notice of Annual Meeting of Stockholders to be held June 6, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of IGENE Biotechnology, Inc. (the "Company") will be
held at the offices of Kimelman & Baird, LLC, 100 Park Avenue,
21st floor, New York, New York 10017 at 10:00 a.m. local time on
June 6, 2000 for the following purposes:
1. To elect seven (7) Directors.
2. To approve the appointment of Berenson & Company as
independent auditors of the Company for the fiscal year
ending December 31, 2000.
3. To transact such other business as may properly come
before the meeting, or any adjournment thereof.
Stockholders of record at the close of business on May 1,
2000, shall be entitled to notice of, and to vote at, the
meeting.
By order of the Board of Directors
/s/Stephen F. Hiu
----------------------------------------
Stephen F. Hiu
President and Treasurer
Dated: Columbia, Maryland
May 3, 2000
IMPORTANT: PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE
ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED TO ASSURE
THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.
The date of this Proxy Statement is May 3, 2000, the approximate
date on which this Proxy Statement and form of Proxy were first
sent or given to stockholders.
<PAGE>
The accompanying Proxy is solicited by the Board of
Directors of IGENE Biotechnology, Inc., a Maryland Corporation
(the "Company"), for use at the Annual Meeting of Stockholders
(the "Meeting") to be held on June 6, 2000, or any adjournment
thereof, at which stockholders of record at the close of business
on May 1, 2000 (the "Record Date") shall be entitled to vote.
The cost of solicitation of proxies will be borne by the Company.
The Company may use the services of its Directors, officers,
employees and others to solicit proxies, personally or by
telephone. Arrangements may also be made with brokerage houses
and other custodians, nominees, fiduciaries and stockholders of
record to forward solicitation material to the beneficial owners
of stock held of record by such persons. The Company may
reimburse such solicitors for reasonable out-of-pocket expenses
incurred by them in soliciting, but no compensation will be paid
for their services.
Each proxy executed and returned by a stockholder may be
revoked at any time before it is voted by timely submission of
written notice of revocation or by submission of a duly executed
proxy bearing a later date (in either case directed to the
Secretary of the Company) or, if a stockholder is present at the
Meeting, he or she may elect to revoke his proxy and vote his or
her shares personally.
There is being mailed herewith to each stockholder of record
the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1999 and a Quarterly Report on Form 10-QSB for
the three months ended March 31, 2000.
On the Record Date, the Company had 52,208,880 shares of
Common Stock outstanding and entitled to vote with respect to all
matters to be acted upon at the Meeting. Each holder of Common
Stock is entitled to one vote for each share of stock held by
such holder.
On the Record Date, the Company also had 26,467 shares of 8%
Cumulative Preferred Stock ("Series A Preferred Stock")
outstanding and entitled to vote with respect to all matters to
be acted upon at the Meeting. Each holder of Series A Preferred
Stock is entitled to two votes for each share of Preferred Stock
held by such holder. Holders of record of outstanding Common
Stock and Series A Preferred Stock will be entitled to vote
together as a single class at the Meeting.
<PAGE>
Pursuant to the terms of the Company's Series A Preferred
Stock, as a consequence of the non-payment of dividends on such
Stock for more than the past four consecutive dividend payment
dates, the holders of Series A Preferred Stock, if they so elect,
may vote as a separate class with respect to the election of two
additional directors, in accordance with the procedures set forth
in the Charter and by-laws of the Company. To date, the holders
of the Series A Preferred Stock have not exercised such right.
In the event they exercise their right, the Board would be
expanded to nine directors.
The presence of holders representing a majority of all the
votes entitled to be cast at the meeting will constitute a quorum
at the meeting. In accordance with Maryland law, abstentions,
but not broker non-votes, are counted for purposes of determining
the presence or absence of a quorum for the transaction of
business. Each item on the agenda must receive the affirmative
vote of a majority of the voting power voted at the meeting in
order to pass. Abstentions and broker non-votes are not counted
in determining the votes cast with respect to any of the matters
submitted to a vote of stockholders.
Appraisal Rights
Under Maryland law, a stockholder of a corporation
participating in certain major corporate transactions may, under
varying circumstances, be entitled to appraisal rights pursuant
to which such stockholder may receive cash in the amount of the
fair market value of his or her shares in lieu of the
consideration he or she would otherwise receive in the
transaction.
An objecting stockholder has the right to demand and receive
payment of the fair value of their stock from a successor
corporation if the corporation merges with another corporation.
Fair value of the stock will be determined as of the close of
business on the day the stockholders voted on the transaction
objected to. A stockholder may not demand the fair value of his
stock and is bound by the terms of the transaction if the stock
is listed on a national securities exchange or is designated as a
national market system secruity on an inter-dealer quotation
<PAGE>
system by the National Association of Securities Dealers, Inc. on
the record date for determining stockholders entitled to vote on
the transaction objected to. An objecting stockholder must file
a written objection with the corporation at or before the
stockholders' meeting at which the transaction will be
considered. Additionally, the objecting stockholder may not vote
in favor of the transaction, and within 20 days after the State
Department of Assessments and Taxation accepts the articles of
merger, must make a written demand on the successor for payment
for his stock, stating the number and class of shares for which
he demands payment. If the objecting stockholder does not comply
with this section, he will be bound by the terms of the merger.
Within 50 days after the State Department of Assessments and
Taxation accepts the articles for record, the successor or
objecting stockholder may petition a court of equity for an
appraisal to determine the fair value of the stock. Finally, if
the court finds that the objecting stockholder is entitled to an
appraisal of his stock, it shall appoint three (3) disinterested
appraisers to determine the fair value of the stock on terms and
conditions the court considers proper. Within 60 days, or
however long the court allows, the appraisers shall determine the
fair value of the stock as of the appropriate date and file a
report with their conclusions. Within 15 days after the report
is filed, any party may object to it and request a hearing. If
the appraiser's report is confirmed or modified by order,
judgment shall be entered against the successor and in favor of
each objecting stockholder party to the proceeding. If the
appraisers' report is rejected, the court may determine the fair
value of the stock and enter judgment for the stockholder, or
remit the proceedings to the same or other appraisers on terms
and conditions it considers proper.
Financial Information
Financial information for the Company for the fiscal year
ended December 31, 1999 is included in the Company's Annual
Report on Form 10-KSB, a copy of which accompanies this proxy
Statement.
It is expected that the following business will be
considered at the meeting and action taken thereon:
<PAGE>
1. ELECTION OF DIRECTORS
Pursuant to the By-Laws of the Company, the number of
Directors of the Company has been set at seven members. It is
proposed to elect seven Directors at this Meeting to hold office
for a one-year term until the 2001 Annual Meeting of Stockholders
and until their successors are duly elected and qualify. It is
intended that the accompanying form of Proxy will be voted for
the nominees set forth below, each of whom is presently a
Director of the Company. If some unexpected occurrence should
make necessary, in the Board of Directors' judgment, the
substitution of some other person or persons for any of the
nominees, shares will be voted for such other persons as the
Board of Directors may select. The Board of Directors is not
aware that any nominee may be unable or unwilling to serve as a
Director. The following table sets forth certain information
with respect to the nominees.
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION
Name Age Position with IGENE
- ------------------- --- -----------------------------------
<S> <C> <C>
Michael G. Kimelman 61 Chairman of the Board of Directors
Thomas L. Kempner 72 Vice Chairman of the Board of
Directors
Stephen F. Hiu 43 Director, President,
Treasurer, and Director
of Research and Development
Patrick F. Monahan 49 Director, Secretary, and
Director of Manufacturing
Joseph C. Abeles 85 Director
John A. Cenerazzo 76 Director
Sidney R. Knafel 69 Director
</TABLE>
MICHAEL G. KIMELMAN was elected a Director of the Company in
February 1991 and Chairman of the Board of Directors in March
1991. He is the Managing Partner of Kimelman & Baird, LLC. He
is a founder of Blue Chip Farms, a standard bred horse-breeding
farm, and has been an officer of the same since its inception in
1968. Mr. Kimelman is currently a Director of the Harness Horse
Breeders of New York State and serves on the Board of the
Hambletonian Society.
<PAGE>
THOMAS L. KEMPNER is Vice Chairman of the Board of Directors and
has been a Director of the Company since its inception in October
1981. He is and has been Chairman and Chief Executive Officer of
Loeb Partners Corporation, investment bankers, New York, and its
predecessors since February 1978. He is currently a Director of
Alcide Corporation, CCC Information Services Group, Inc., Fuel
Cell Energy, Inc., Intermagnetics General Corp., and Roper Starch
Worldwide, Inc. He is a Director Emeritus of Northwest Airlines,
Inc.
STEPHEN F. HIU was appointed President and Treasurer in March
1991, and elected a Director in August 1990. He has been
Director of Research and Development since January 1989 and,
prior thereto, was Senior Scientist since he joined the Company
in December 1985. He was a post-doctoral Research Associate at
the Virginia Polytechnic Institute and State University,
Blacksburg, Virginia, from January 1984 until December 1985. Dr.
Hiu holds a Ph.D. degree in microbiology from Oregon State
University and a B.S. degree in biological sciences from the
University of California, Irvine.
PATRICK F. MONAHAN was appointed Director of Manufacturing and
elected a Director of the Company in April 1991 and was elected
as Secretary in September 1998. He has managed the Company's
fermentation pilot plant since 1982, and its manufacturing
operation since its inception in 1998. Prior thereto, he was a
technical specialist in the fermentation pilot plant of W.R.
Grace and Co. from 1975 to 1982. He received an Associate in
Arts degree in biology from Allegheny Community College and a
B.S. degree in biology with a minor in Chemistry from Frostburg
State College, Frostburg, Maryland.
JOSEPH C. ABELES, private investor, was elected Director of the
Company on February 28, 1991. Mr. Abeles serves as Director of
Intermagnetics General Corporation, Bluegreen Corporation, and
Ultralife Batteries, Inc.
JOHN A. CENERAZZO was Chairman of the Board from November 1989 to
April 1991. He served as President of the Company from August
1988 through September 1989 and has been a Director since
September 1987. He also serves as a Director of U.S. Axle
Corporation and Chairman and Director of Technicon Enterprises,
Inc.
<PAGE>
SIDNEY R. KNAFEL, a Director of the Company since 1982, has been
Managing Partner of SRK Management Company, a private investment
concern, New York, since 1981, Chairman of Insight
Communications, Inc. since 1985, and of BioReliance Corporation
since 1982. Mr. Knafel is also currently a Director of Cellular
Communications International, Inc., CoreComm Incorporated,
General American Investors Company, Inc., and NTL Incorporated.
Committees of the Board of Directors
The Company has two standing committees of the Board of
Directors. Set forth below is a description of the functions of
those committees and the members of the Board of Directors who
serve on such committees.
Audit Committee
The responsibilities of the Audit Committee include
recommending to the Board of Directors the independent certified
public accountants to conduct the annual audit of the books and
accounts of the Company, reviewing the proposed scope of the
audit and approving the audit fees to be paid. The Audit
Committee also reviews, with the independent certified public
accountants and with the Company's management, the adequacy and
effectiveness of the internal auditing, accounting and financial
controls of the Company. There were no meetings of the Audit
Committee in 1999. The functions of the Committee were performed
by the Board during 1999.
Compensation Committee
The Compensation Committee approves the salaries of all
officers and certain other employees of the Company. It also
supervises the administration of all benefit plans and other
matters affecting executive compensation, subject to further
approval of the Board of Directors. The members of the
Compensation Committee during 1999 were Messrs. Thomas L. Kempner
and Sidney R. Knafel. There were no meetings of the Compensation
Committee in 1999.
<PAGE>
Board Compensation
During 1999, Directors were not compensated for their Board
or Committee activities. The Board of Directors held 4 meetings
in 1999. Each Director of the Company attended in excess of 75%
of the total number of meetings of the Board of Directors
including committee meetings for which each respective director
was a member.
Executive Compensation
During the last completed fiscal years, no executive
officer's annual cash compensation exceeded $100,000. Following
the resignation of the Company's former CEO, during 1998, the
functions of chief executive officer have been performed by the
Company's Board of Directors (Messrs. Abeles, Cenerazzo, Hiu,
Kempner, Kimelman, Knafel, and Monahan) acting as a group. The
Directors were not compensated for their Board or Committee
Activities.
Other than the 1986 and 1997 employee stock option plans and
the Simple Retirement Plan described below, the Company has no
profit sharing or incentive compensation plans.
Simple Retirement Plan
- ----------------------
Effective February 1, 1997 the Company adopted a Simple
Retirement Plan under Internal Revenue Code Section 408(p). The
plan is a defined contribution plan, which covers all of the
Company's employees who receive at least $5,000 of compensation
for the preceding year. The plan permits elective employee
contributions. The Company makes a nonelective contribution of
2% of each eligible employee's compensation for each year. The
Company's contributions to the plan for 1999 were $6,569, which
is expensed in the 1999 statement of operations.
Stock Option Plan
- -----------------
The 1997 Stock Option Plan (the "Plan"), which was approved
by the stockholders on November 17, 1997, and which succeeds the
1986 Stock Option Plan, provides for the issuance of options to
acquire up to 20,000,000 shares of Common Stock of the Company.
The Plan is administered by a committee of the Board of
Directors.
<PAGE>
The purpose of the Plan is to advance the interests of the
Company by encouraging and enabling the acquisition of a larger
personal proprietary interest in the Company by directors, key
employees, consultants and independent contractors who are
employed by, or perform services for, the Company and its
subsidiaries and upon whose judgment and keen interest the
Company is largely dependent for the successful conduct of its
operations. It is also expected that the opportunity to acquire
such a proprietary interest will enable the Company and its
subsidiaries to attract and retain desirable personnel, directors
and other service providers.
Options are exercisable at such rates and times as may be
fixed by the committee. Options become exercisable in full upon
(i) the holder's retirement on or after his 65th birthday, (ii)
the disability or death of the holder, (iii) or under special
circumstances as determined by the Committee. Options generally
terminate on the tenth business day following cessation of
service as an employee, director, consultant or independent
contractor.
Options may be exercised by payment in full of the option
price in cash or check, or by delivery of previously-owned shares
of common stock having a total fair market value on the date of
exercise equal to the option price, or by such other methods as
permitted by the Committee.
The Plan contains anti-dilution provisions in the event of
certain corporate transactions.
The Board of Directors may at any time withdraw from, or
amend the Plan and any options not heretofore granted.
Stockholder approval is required to (i) increase the number of
shares issuable under the plan, (ii) increase the number of
options which may be granted to any individual during a year,
(iii) or change the class of persons to whom options may be
granted. No options shall be granted under the Plan after
September 19, 2007.
Options to acquire 12,748,250 shares of common stock have
been granted under the 1986 and 1997 Stock Option Plans and
11,248,250 options are outstanding under the Plans as of May 1,
2000.
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of May 1,
2000, with respect to beneficial ownership of shares of the
Company's outstanding Common Stock by (i) each person known to
the Company to own more than five percent of its Common Stock,
(ii) each Director, and (iii) all Directors and executive
officers as a group.
<TABLE>
<CAPTION>
Number of
Name and Address Shares Percent*
- ----------------------------- ------------- ----------
Directors and Officers:
- ----------------------
<S> <C> <C>
Joseph C. Abeles 15,012,789(1) 23.06%
c/o Abel Associates
220 E. 42nd Street
New York, NY 10017
John A. Cenerazzo 1,912,456(2) 3.55%
Stokesay Castle Lane
Reading, PA 19606
Stephen F. Hiu 5,020,300(3) 8.78%
c/o IGENE Biotechnology, Inc.
9110 Red Branch Road
Columbia, MD 21045
Thomas L. Kempner 66,532,836(4) 63.25%
c/o Loeb Partners Corporation
61 Broadway
New York, NY 10006
Michael G. Kimelman 9,821,950(5) 16.16%
c/o Kimelman & Baird, LLC
100 Park Avenue
New York, NY 10017
Sidney R. Knafel 63,659,933(6) 62.00%
c/o SRK Management
126 East 56th Street
New York, NY 10022
Patrick F. Monahan 3,064,200(7) 5.55%
c/o IGENE Biotechnology, Inc.
9110 Red Branch Road
Columbia, MD 21045
<PAGE>
Number of
Name and Address Shares Percent*
- ----------------------------- ------------- ----------
Directors and Officers (continued):
- ----------------------------------
All Directors and Officers 165,024,464(8) 88.39%
As a Group (7 persons)
Others:
Thomas R. Grossman 3,192,150(9) 5.95%
Fraydun Manocherian 6,734,725(10) 11.92%
- ------------------------
</TABLE>
* Under the rules of the Securities and Exchange Commission,
the calculation of the percent assumes for each person that
only such person's warrants, options or convertible notes
are exercised or converted and that no other person
exercises or converts outstanding warrants, options or
convertible notes. Accordingly, these percentages are not
on a fully-diluted basis.
(1) Includes 2,109,404 shares, 2,250 shares issuable upon
conversion of 1,125 shares of Series A Preferred Stock,
$311,663 in long-term notes convertible into 3,782,083
shares, and warrants to purchase 9,093,427 shares. Also
includes 4,140 shares held by his wife and 12,500 shares
issuable upon conversion of 6,250 shares of Series A
Preferred Stock held by his wife.
(2) Includes 283,458 shares, warrants to purchase 1,103,513
shares, 32,750 shares subject to options currently
exercisable and $40,622 in long-term notes convertible into
492,321 shares. Also includes 414 shares held by his wife.
(3) Includes 65,300 shares held by Dr. Hiu, and 4,955,000
shares subject to options currently exercisable.
(4) Includes 386,972 shares and warrants to purchase 536,917
shares held by Mr. Kempner; 5,666,916 shares, $140,873 in
long-term notes convertible into 1,616,065 shares and
warrants to purchase 21,628,007 shares held by a trust under
which Mr. Kempner is one of two trustees and the sole
beneficiary; 1,482,987 shares, $79,200 in long-term notes
convertible into 1,147,670 shares and warrants to purchase
4,622,848 shares held by a trust under which Mr. Kempner is
one of two trustees and a one-third beneficiary; 182,526
shares and warrants to purchase 98,565 shares held by Mr.
<PAGE>
Kempner's wife; 203,880 shares and warrants to purchase
110,095 shares held by trusts under which Mr. Kempner is one
of two trustees and his brothers are beneficiaries; and
5,626,918 shares, $140,872 in long-term notes convertible
into 1,616,065 shares and warrants to purchase 21,606,405
shares held by a trust under which Mr. Kempner is one of two
trustees and one of his brothers is the beneficiary.
(5) Includes 251,104 shares, 1,500,000 options currently
exercisable, warrants to purchase 5,325,672 shares and
$63,070 in long-term notes convertible into 804,568 shares
held by Mr. Kimelman. Also includes 831,600 shares and
warrants to purchase 750,890 shares held by Kimelman &
Baird, LLC, in which Mr. Kimelman has a 50% interest, and
181,656 shares held by M. Kimelman & Co., in which Mr.
Kimelman has a 60% interest. Also includes warrants to
purchase 176,460 shares held by his wife, in which Mr.
Kimelman disclaims any beneficial interest.
(6) Includes 13,190,551 shares, warrants to purchase 46,753,677
shares, and $306,200 in long-term notes convertible into
3,715,706 shares owned or beneficially owned by Mr. Knafel.
(7) Includes 64,200 shares held by Mr. Monahan, and 3,000,000
shares subject to options currently exercisable.
(8) Includes 30,532,026 shares, 9,487,750 shares which are
subject to options currently exercisable or exercisable
within 60 days, unexpired warrants to purchase 111,815,462
shares, 14,750 shares subject to the conversion of 7,375
shares of redeemable preferred stock, and $1,082,500 in long-
term notes convertible into 13,174,478 shares.
(9) Includes 1,753,400 shares and warrants to purchase 1,438,750
shares.
(10) Includes 2,455,525 shares and warrants to purchase
4,279,200 shares.
Compensation Committee Interlocks and Insider Participation
Thomas L. Kempner and Sidney R. Knafel are members of the
Compensation Committee. None of the executive officers of the
Company has served on the Board of Directors or compensation
committee of any other entity whose officers serve either on the
Company's Board of Directors or Compensation Committee.
<PAGE>
Certain Relationships and Transactions
The Company distributed, to holders of record on February 13,
1998, transferable rights to subscribe for and purchase 0.54 of a
Unit for each share of common share or equivalent owned by such
holder. Each Unit entitled the holder to receive $0.10 principal
amount of 8% Notes due March 31, 2003 and warrants to purchase
one share of common stock at an exercise price of $0.10 per
share. Common shares or equivalents included: Common Stock,
Preferred Stock, unexpired warrants, options currently
exercisable, and convertible notes outstanding. The Company
raised $5,000,000 through this Rights Offering, which was fully
subscribed, and issued $5,000,000 in 8% Notes due March 31, 2003
and 50,000,000 warrants to subscribers. Certain directors and
investors agreed to purchase Units equal to the difference
between $2,000,000 and the proceeds from the Rights Offering;
however, concurrently therewith the Company was required to repay
$1,875,000 in promissory notes. The Rights Offering expired
March 31, 1998. In consideration of certain directors and
investors agreeing to subscribe to Units such that the Company
receives at least $2,000,000, the Company issued additional
warrants to these directors and investors to purchase 20,000,000
shares of common stock, exercisable at $0.10 per share and
expiring ten years after issue.
During 1998, the Company also issued 4,000,000 warrants to
purchase common shares, at $.10 per share, to its Chairman of the
Board; and 9,500,000 warrants to purchase common shares, at $.10
per share, to certain directors who were the holders of $950,000
in demand notes issued during 1998.
During 1999, the Company also issued 1,500,000 options to
purchase common shares, at $.05 per share (which was the market
value of the stock as of the date issued), to its Chairman of the
Board under its 1997 Stock Option Plan.
During 1999, the Company issued to certain directors and
other accredited investors 24,791,668 new shares of common stock
at prices ranging from $.05 to $.08, based on the current market
price of the Company's stock at the time of issue. The total
proceeds received in these issues was $1,500,000. In return for
committing to these investments, these investors also received
24,791,668 warrants to purchase shares of common stock at
equivalent prices (ranging from $.05 to $.08 per share, based on
the current market price of the Company's stock at the time of
issue), expiring 10 years from the dates of issue. The funds
received in these transactions have been used to continue
operations of the Company and to fund legal expenses associated
with on going litigation (See item 3. Legal Proceedings).
<PAGE>
Section 16(a) Beneficial ownership Reporting Compliance
The Company believes that during 1999, all of its officers,
directors and holders of more than 5% of its Common Stock
complied with all filing requirements under Section 16(a) of the
Securities Exchange Act of 1934, except as follows: In 1997
certain directors of the Company made various loans to the
Company. The loans are evidenced by demand promissory notes
convertible into Common Stock. These directors also received
warrants to purchase shares of Common Stock in 1997 and 1998 in
conjunction with the 1997 notes and a 1998 rights offering.
During 1999, certain directors and other accredited investors
also purchased stock through direct purchases of new stock and
received warrants in conjunction with these purchases. The
Company believes that none of the foregoing securities
transactions were reported on Forms 4 or Forms 5 filed with the
Securities and Exchange Commission. In making this disclosure,
the Company has relied solely on representations of its
directors, officers and more than 5% holders and on copies of
reports that have been filed with the Securities and Exchange
Commission.
2. APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Berenson
& Company as independent auditors of the Company for the fiscal
year ending December 31, 2000. A representative of Berenson &
Company is not expected to be present at the meeting.
The Board of Directors of the Company recommends a vote FOR
approval of the appointment of Berenson & Company as the
Company's auditors.
3. OTHER MATTERS
Stockholder Proposals
Proposals of stockholders intended to be presented at the
Company's 2001 Annual Meeting of Stockholders must be received by
the Company on or prior to April 30, 2001, to be eligible for
inclusion in the Company's Proxy Statement and form of Proxy to
be used in connection with such meeting.
Other Business
At the date of this Proxy Statement, the only business which
the Board of Directors intends to present or knows that others
will present at the Meeting is that hereinabove set forth. If
any other matter or matters are properly brought before the
meeting, or any adjournment thereof, it is the intention of the
persons named in the accompanying form of Proxy to vote the Proxy
on such matters in accordance with their judgment.
<PAGE>
Incorporation of Certain Documents by Reference
The Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1999, and Quarterly Report on Form 10-QSB
for the three months ended March 31, 2000, copies of which
accompany this Proxy Statement, are incorporated herein by
reference.
All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the securities Exchange Act of 1934
(the "Exchange Act") subsequent to the date of this Proxy
Statement and prior to the meeting shall be deemed to be
incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents. Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded
for the purposes of this proxy Statement to the extent that a
statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated
by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Proxy
Statement.
The Company will provide, without charge, to each person to
whom a copy of this Proxy Statement is delivered, upon the
written or oral request of such person and by first class mail or
other equally prompt means within one business day of receipt of
such request, a copy of any or all of the documents incorporated
herein by reference (other than exhibits, unless such exhibits
are specifically incorporated herein by reference). Requests
should be directed to: Investor Relations, IGENE Biotechnology,
Inc., 9110 Red Branch Road, Columbia, Maryland 21045.
The Company is subject to the informational requirements of
the Exchange Act and, in accordance therewith, files reports,
proxy or information statements and other information with the
commission. Such reports, proxy or information statements,
exhibits and other information filed by the Company with the
Commission can be inspected and copies at the pubic reference
facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Regional Offices of the Commission at 7 World Trade Center (13th
Floor), New York, New York 10048 and Northwestern Atrium Center,
500 Madison Street, Suit 1400, Chicago, Illinois 60661-2511.
<PAGE>
Copies of such materials can be obtained by mail from the Public
Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and its
public reference facilities in New York, New York and Chicago,
Illinois, at prescribed rates. The Commission also maintains an
Internet web site, whose address is www.sec.gov that contains
reports, proxy and information statements and other information
regarding issuers who file electronically with the commission.
/s/Stephen F. Hiu
------------------------------
Stephen F. Hiu
President and Treasurer
Dated: May 3, 2000
<PAGE>
APPENDIX 1 FORM OF PROXY
IGENE BIOTECHNOLOGY, INC.
2000 Annual Meeting of Shareholders - June 6, 2000
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Stephen F. Hiu, Michael G.
Kimelman and Thomas L. Kempner, and each of them the proxies of
the undersigned with full power of substitution to vote at the
Annual Meeting of Stockholders of the Company to be held at 10:00
a.m. on Tuesday, June 6, 2000, and at any adjournment or
adjournments thereof (the "Meeting"), with all power which the
undersigned would have if personally present, hereby revoking any
proxy heretofore given. The undersigned hereby acknowledges
receipt of the proxy statement at the Meeting and instructs the
proxies to vote as directed on the reverse side.
The Board of Directors recommends a vote "FOR" all proposals.
(To Be Signed on Reverse Side)
<PAGE>
X Please mark your
votes as in this
example.
FOR WITHHOLD
1. Election ____ ____ Nominees: Joseph C. Abeles
of John A. Cenerazzo
Directors Stephen F. Hiu
(Instruction: To withhold Thomas L.Kempner
authority to vote for any Michael G. Kimelman
individual nominee, write Sidney R. Knafel
that nominee's name below) Patrick F. Monahan
---------------------------
2. To ratify the appointment Berenson & Company as independent
auditors for the fiscal year ending December 31, 2000.
FOR AGAINST ABSTAIN
____ ____ ____
3. With discretionary authority upon such other matters as may
properly come before the Meeting.
PLEASE RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature Date
------------------------------ ------------------
Signature Date
------------------------------ ------------------
(SIGNATURE IF HELD JOINTLY)
Note: Please sign exactly as name appears on stock
certificate. When shares are held by joint tenants both should
sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other
authorized officer. If a partner, please sign in partnership
name by authorized person.
<PAGE>
APPENDIX 2 LETTER TO STOCKHOLDERS
9110 Red Branch Road
Columbia, Maryland 21045-2024
(410) 997-2599
April 17, 2000
Dear Shareholder:
We are pleased to report to you that in the last year, Igene has
truly begun the transition from being a Research and Development
company to a commercial enterprise with real products. Due to the
persistence of the entire Igene team, our Company has made great
progress in every aspect of its business: research, manufacturing
and sales.
In 1999, Igene began probably the largest commercial fish feeding
study in the world using its natural astaxanthin product,
AstaXin(R). This study, which made use of a newly developed
proprietary strain of yeast developed by Igene in 1998, was
conducted with more than a half million salmon and trout and was
performed in cooperation with a dozen Chilean fish producers.
Those testing the product believe the results obtained thus far
confirm that Igene's natural product for pigmentation of farm-
raised salmon and trout is comparable, if not superior, to the
synthetic product that currently dominates that market. Due to
the highly positive documented results obtained, the companies
which have completed their initial study have begun to expand
their usage of our product in their fish feed. This resulted in
revenue during the fourth quarter of 1999 of approximately
$18,000, which continued in the first quarter of 2000 at
approximately $78,000. It now appears that our second quarter
sales will be at least double that of the first quarter. As
additional companies complete their trials we are cautiously
optimistic that our sales will continue to grow.
To support the Company's growing business in Chile, Igene will
complete the establishment of Igene Chile, Ltda., a Chilean
subsidiary based in Puerto Montt, Chile, in the 2nd quarter of
2000. Since 1999, Igene has maintained a local office in Chile
and has hired a full time technical representative, who together
with Igene staff traveling from Columbia, Maryland have provided
technical and sales support to our customers in Chile. This
technical support was instrumental in creating sales. Once the
customers were knowledgable about our product, they were willing
to try it, and once they saw the results they were willing to
purchase it. Consequently, the Company intends to continue and
expand its technical service and has recently added a
veterinarian specializing in aquatic health to its technical
staff in Chile.
<PAGE>
To complement the fish feeding studies in Chile, we also report
the preliminary findings of an independent study conducted by
Akvaforsk in Norway. This highly regarded aquaculture research
facility has shown the efficiency of Igene's proprietary enzyme
technology for making 98% of the natural astaxanthin contained in
the yeast available for uptake by salmon and trout, while other
competitors' processes are less than half as effective. In
addition, the stability of the product through the commercial
feed production process was confirmed.
These successful results and the beginning of product sales in
Chile have prompted Igene and its manufacturing partner to
negotiate a new agreement to make available additional
manufacturing capacity. The Company is capable of tripling
capacity within three months, if necessary, and to nine fold
within a year.
At Igene's Research and Development Center and pilot plant in
Maryland, we continue to make significant improvements in the
strain and manufacturing process. These improvements have
resulted in reductions in our cost of manufacture and an overall
increase in product yields. It is anticipated that by operating
at maximum efficiency at our manufacturing plant in Mexico City
and by successfully implementing improvements developed in our
pilot plant, the Company will be able to produce a natural
astaxanthin product which is significantly more efficient in its
pigmenting ability and less expensive to manufacture.
With the approval of the Canadian government this past year for
the use of Igene's natural astaxanthin product in fish feeds, the
potential for additional market opportunities has increased. The
Company continues to actively pursue registration and approvals
for its product in the European Union.
In January 2000, the Company hired a marketing consultant to
begin the development of a marketing plan for the production and
sale of a dietary supplement containing Igene's natural
astaxanthin product. Published data has already indicated that
astaxanthin is several hundred times more potent as an
antioxidant than vitamin E. By utilizing and adapting Igene's
technology developed for its fish pigmentation product, Igene may
be able to expand into this new market with a natural astaxanthin
supplement.
All of the above would not have been accomplished except for the
continuing dedication and technical expertise of Igene's
employees both in Maryland and in Chile, the guidance of our
Board of Directors, and the incredible financial loyalty of
Thomas Kempner and Sidney Knafel of our Board.
Sincerely,
Michael G. Kimelman
Chairman
Stephen F. Hiu
President
<PAGE>
SAFE HARBOR. Except for statements of historical fact, the
statements in this press release are forward-looking. Such
statements are subject to a number of risks and uncertainties
that could cause actual results to differ materially from the
statements made. These factors include, but are not limited to,
general economic conditions, changes in sales levels to our
largest customers, weather patterns, risks associated with the
acceptance of new products, competition, and other factors more
fully detailed in the Company's recent quarterly 10-QSB and
annual 10-KSB filings with the Securities and Exchange
Commission.
