<PAGE> 1
BIO-MEDICAL AUTOMATION, INC.
303 East 17th Avenue, Suite 780, Denver, Colorado 80203
- ------------------------------------------------------------------------------
March 5, 2000
Ladies and Gentlemen:
As shareholders of record of Bio-Medical Automation, Inc. (the
"Company") you are entitled under Rule 14f-1 of the Securities Exchange Act of
1934 to notice of the following information.
Our Common Stock is the only class of voting securities we have
outstanding. Holders of Common Stock are entitled to one vote per share. As of
March 5, 2000, we had 643,128 shares of Common Stock outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSHIP AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of our Common Stock as of March 5, 2000.
<TABLE>
<CAPTION>
NAME & ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
----------------- -------------------- ----------
<S> <C> <C>
Steven N. Bronson* 512,647 (1) 62.5%
900 3rd Ave., Suite 201
New York, NY 10022
Leonard A. Hagan* -0- 0%
Dr. Kenneth S. Schwartz* 17,500 (2) 1%
Alvin L. Katz+ -0- 0%
David W. Orthman+ -0- 0%
David J. Wolenski+ -0- 0%
Officers and Directors as -0- 0%
a Group (four persons)
</TABLE>
* Messrs. Bronson, Hagan, and Schwartz will become a director, or a director
and executive officer, effective after March 15, 2000.
+ Messrs. Katz, Orthman, and Wolenski will resign as directors and officers
effective after March 15, 2000.
(1) Includes direct and indirect beneficial ownership, and includes 177,500
representing currently exercisable warrants or options to purchase common
stock.
(2) Includes 17,500 shares held indirectly by Dr. Schwartz's spouse.
Dr. Schwartz disclaims beneficial ownership of the shares owned by his
spouse.
NO LEGAL PROCEEDINGS
There are no legal proceedings pending against the Company.
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RECENT TRANSACTIONS AND CHANGE IN CONTROL
Before March 5, 2000 as a result of a Stock Purchase Agreement
("Purchase Agreement") and Stock Power and Assignment ("Assignment") dated
February 20, 2000, Steven N. Bronson acquired a controlling interest in the
Common Stock of the Company from the following individuals and certain of their
affiliates: Alvin L. Katz, David W. Orthman, David J. Wolenski, and Brantley J.
Halstead (the "Selling Shareholders") in a private transaction. Pursuant to the
terms and conditions of the Purchase Agreement and each individual Assignment,
the Selling Shareholders sold and conveyed shares of Common Stock of the Company
along with certain options and warrants to purchase shares of Common Stock (the
"Securities") to Mr. Bronson. In exchange for acquiring the Securities
Mr. Bronson paid a total of $270,243.70 in personal funds.
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
Currently the Board of Directors of the Company consists of three
persons, and one other person is an executive officer of the Company as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION DATE FIRST APPOINTED
- ---- --- -------- --------------------
<S> <C> <C> <C>
Alvin L. Katz 70 President and Director 10/96
David J. Wolenski 38 Director 9/96
David W. Orthman 49 Director 9/92
Brantley J. Halstead 42 Chief Financial Officer 2/98
and Treasurer
</TABLE>
Mr. Katz, Mr. Wolenski, Mr. Orthman, and Mr. Halstead have each agreed
to resign as directors and officers effective after March 15, 2000. Prior to
their resignation, the Board of Directors will appoint the following persons to
fill the positions indicated:
<TABLE>
<CAPTION>
NAME AGE POSITION DATE FIRST APPOINTED
- ---- --- -------- --------------------
<S> <C> <C> <C>
Steven N. Bronson 34 President, Secretary, 3/15/00
Treasurer and Director
Leonard A. Hagan 48 Director 3/15/00
Kenneth S. Schwartz 43 Director 3/15/00
</TABLE>
Each of the directors holds office until the next annual meeting of
shareholders and until his or her successor is elected and qualified or until
his or her earlier death, resignation, or removal.
Steven N. Bronson will serve as the President, Secretary, Treasurer and
a Director of the Company as of after March 15, 2000. Mr. Bronson is the
President of Catalyst Financial LLC, a full service securities brokerage and
investment firm and has held that position since September 24, 1998. During the
period of 1991 through September 23, 1998, Mr. Bronson was President of Barber &
Bronson Incorporated, a full service securities brokerage investment banking
firm. Mr. Bronson has served as the sole officer and director of Medtech
Diagnostics, Inc., a publicly traded corporation, since September, 1998 and as
Medtech's Chairman, President and Chief Executive Officer during the period of
June, 1996 through September, 1998. In addition, Mr. Bronson is the Chairman of
Mikron Instrument Company, Inc., a publicly traded corporation.
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Leonard Hagan will serve as a Director of the Company as of after March
15, 2000. For the past seven years and currently, Mr. Hagan has worked as a
certified public accountant and is a partner at Hagan & Burns CPA's, PC, in New
York, NY. He received his Bachelors of Arts degree in Economics from Ithaca
College in 1974, and earned his Masters of Business Administration degree from
Cornell University in 1976.
Dr. Kenneth Steven Schwartz will serve as a Director of the Company as
of after March 15, 2000. From 1982 to the present, Dr. Schwartz has been self
employed as a dentist in New York, NY. Dr. Schwartz received his Bachelor of
Sciences from Brooklyn College in 1977 and earned his D.D.S. from New York
University College of Dentistry in 1982.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
There are no material relationships between the Company and the current
officers and directors or any of the persons expected to become directors or
executive officers of the Company other than those transactions described below:
Corporate Loans During the fiscal year ended December 31, 1998 and 1999
certain related parties advanced loans to the Company as follows:
After December 31, 1997, Alvin L. Katz, then a director of the Company,
advanced funds to the Company for working capital purposes. The Company issued
an interest bearing (at 10%) promissory note in the amount of $75,000 which was
secured by substantially all of the Company's assets. Mr. Katz's loan to the
Company was originally repayable on December 30, 1998, but was extended by Mr.
Katz for no additional consideration until February 28, 1999. The Company repaid
this loan in February 1999.
Subsequent to December 31, 1997, Mr. Wolenski loaned the Company an
additional $213,200, for working capital purposes. This amount bore interest at
2% over prime. The Company repaid this amount in February 1999.
Transaction With Catalyst The Company entered into an investment
banking agreement in June 1998 with Catalyst Financial Corp. of Miami, Florida
("Catalyst"). At the time the Company entered into the agreement with Catalyst,
Steven Bronson who owned more than 10% of the Company's outstanding stock, was
also affiliated with Catalyst. It was the Company's intention to use Catalyst as
its primary advisor in its efforts to facilitate its restructuring. The Company
paid Catalyst approximately $40,000 as consideration for assisting in the sale
of the Company's assets to JOT Automation, Inc. ("JOT") in March 1999. As a
result of the completion of the transaction with JOT, the agreement expired.
Change in Control In a transaction described in "Recent Transactions
and Change In Control," the following persons sold the following securities to
Steven Bronson pursuant to the Purchase Agreement. The following table sets
forth information regarding the private transaction recently completed between
certain officers and directors of the Company who sold shares, options, and
warrants to Mr. Bronson:
<TABLE>
<CAPTION>
Total
$.75 $1.00 $1.125 $1.25 consideration
Name Shares Warrants* Warrants+ Options/\ Options# received
- ---- ------ --------- --------- --------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alvin L. Katz and affiliates 64,284 3,750 25,000 25,000 0 $73,623.20
David W. Orthman and wife 109,710 0 0 35,000 0 $118,695.50
David J. Wolenski 46,000 0 0 35,000 0 $51,800.00
Brantley J. Halstead 22,500 0 0 0 25,000 $26,125.00
</TABLE>
* Exercisable through October 10, 2001.
+ Exercisable through April 1, 2001.
/\ Exercisable through June 24, 2002.
# Exercisable through February 16, 2003.
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INDEBTEDNESS OF MANAGEMENT
There is no indebtedness nor has there been any indebtedness of
management to the Company in excess of $60,000 since the last fiscal year
beginning January 1, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors, executive officers and persons who own more
than ten percent of a registered class of the Company's equity securities, to
file with the SEC initial reports of ownership and reports to changes in
ownership of Common Stock and other equity securities of the Company. Officers
and directors and greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, as of February 20, 2000, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with:
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------
Awards Payout
Annual Compensation -------------------- ------
---------------------------- Restricted Options LTIP All Other
Name and Position Year Salary Bonus Other Awards & SAR's Payout Compensation
- ----------------- ---- ------ ----- ----- ---------- ------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David J. Wolenski 1999 18,000 -0- -0- -0- -0- -0- -0-
Chief Executive 1998 48,000 4,050 -0- 10,969 -0- -0- -0-
Officer (1) 1997 48,000 -0- -0- 18,750 -0- -0- -0-
Alvin L. Katz 1999 -0- -0- -0- -0- -0- -0- -0-
President and Chief 1998 n/a n/a n/a n/a n/a n/a n/a
Executive Officer (1) 1997 n/a n/a n/a n/a n/a n/a n/a
</TABLE>
(1) Mr. Wolenski ceased being, and Mr. Katz became, Chief Executive Officer on
November 1, 1999.
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None of the individuals expected to be directors or executive officers
have been employed by the Company in the past three years. Commencing after
March 15, 2000:
Mr. Steven Bronson, as President, Secretary and Treasurer is expected
to receive a salary in the amount of $48,000 per year.
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