SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission file number 0-25998
BIOSAFE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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Nevada 95-4203626
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Fawcett Street
Cambridge, Massachusetts 02138
(Address of principal executive offices) (Zip Code)
(617) 497-4500
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value per share
Series A Warrants
Series C Warrants
Series D Warrants
Series E Warrants
Placement Agent Warrants
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. Yes X 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. ___
As of April 29, 1997, the market value of the voting stock of the
Registrant held by non-affiliates of the Registrant was $5,519,553.
The number of shares of the Registrant's common stock, par value
$.001 per share, outstanding as of April 29, 1997 was 17,662,569.
<PAGE>
Explanatory Note: This amendment amends the Form 10-K filed with
- ----------------- the Securities and Exchange Commission on March 31, 1997.
Items 10, 11, 12, and 13 have been changed.
PART I
Items 1 - 4
Items 1 - 4 are unchanged.
PART II
Items 5 - 9
Items 5 - 9 are unchanged.
PART III
Item 10. Directors and Executive Officers
Information Regarding Directors and Executive Officers
- ------------------------------------------------------
The following table and biographical descriptions set forth certain
information as of March 31, 1997, unless otherwise specified, with respect to
the directors and the executive officers who are not directors, based on
information furnished to the Company by each director and officer.
Directors and Executive Officers
--------------------------------
Directors or Officers Amount and Nature of
Beneficial Ownership Percent
Name Age Since of Common Stock of Class
---------------------------------------------------------------------------
Richard S. Golob 45 1996 21,355 *
Jay Matulich 43 1995 17,500 *
William B. Philipbar 71 1996 1,667 *
Daniel J. Shannon 62 1994 46,250 *
Barry D. Simmons 57 1990 217,875 1.2%
Philip W. Strauss 48 1995 250,000 1.4%
B.G. Taylor 72 1990 222,875 1.2%
Robert Rivkin 38 1994 250,875 1.4%
Joseph Motzkin 53 1996 30,000 *
* Less than one percent.
Jay J. Matulich. Mr. Matulich is a Senior Vice-President of Capital
Growth International L.L.C., formerly U.S. Sachem Financial Consultants,
L.P. ("Capital Growth"). From May 1990 to October 1994, Mr. Matulich was a
Vice President of Gruntal & Co., Incorporated, investment bankers. Mr.
Matulich was elected to the Board of Directors in March 1995 pursuant to an
agreement between the Company and Capital Growth, in connection with Capital
Growth's role as placement agent for certain securities of the Company.
Philip W. Strauss. Mr. Strauss has been the Chief Executive Officer and
President since March 27, 1996 and previously had been Executive Vice President
and Chief Operating Officer of the Company since September 1995. He has 24 years
of experience in project, business and corporate development. Mr. Strauss was
co-founder of BioMedical Waste Systems, Inc., a publicly-held waste management
firm, where he served as Executive Vice President from its inception in 1987
until May 1992 and as a Director from inception until May 1993.
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Richard S. Golob. Mr. Golob has been a Director of the Company since
May 8, 1996. He is President of World Information Systems, a private consulting
and publishing company in the environmental industry. Through World Information
Systems and his two newsletters, Hazardous Materials Intelligence Report and Oil
Pollution Bulletin, Mr. Golob provides information and advisrory services to
environmental companies on business development, marketing and financing. He is
also founder and chairman of the Environmental Business Conferences, which
provides biannual forums for environmental business executives to discuss
critical business issues. He served as a member of the Environmental Advisory
Board of Charles River Partnership IV, a venture capital fund that invests in
the environmental industry.
William B. Philipbar. Mr. Philipbar has been a Director of the
Company since May 8, 1996. He is currently a director of Matlack Systems,
Inc., Rollins Leasing Corp., Rollins Environmental Services, Inc. and
Consolidated Waste Systems. Until 1995 he was also a director of Charles River
Ventures, a company that he continues to serve as an advisor.
Daniel J. Shannon. Mr. Shannon has been a Director of the Company
since 1994. He is a certified public accountant with experience in public
and private finance, public service, health care, and pension management.
Mr. Shannon is currently Director of LaSalle Street Capital Management, Ltd.
("LaSalle Capital"), a subsidiary of LaSalle National Trust, a financial
institution headquartered in Chicago, Illinois. Mr. Shannon's duties as
Director of LaSalle Capital are primarily those of an advisor to clients in the
marketing of investment products.
Barry D. Simmons, MD. Dr. Simmons has been a Director of the Company
since 1990. He is an orthopedic surgeon and has been associated with Brigham
Orthopedic Associates, Inc. at the Brigham and Women's Hospital since 1974.
Dr. Simmons has been the Chief, Hand Surgery Service, at the Brigham and
Women's Hospital since 1982. In 1985, Dr. Simmons was appointed an
Associate Clinical Professor of Orthopedic Surgery at Harvard Medical School,
and in that same year, he began his association with Waterville Valley
Medical Associates, Inc. situated at the Waterville Valley Ski Area.
B.G. Taylor. Mr. Taylor has been a Director of the Company since
1990. He is a private investor and was President and Chief Operating
Officer of The Halliburton Services Company and Executive Vice President of
The Halliburton Company. Mr. Taylor has over 40 years of diverse operating
experience in large organizations.
Senior Executive Officers Who Are Not Directors
Robert Rivkin. Mr. Rivkin, a Certified Public Accountant, has been Vice
President of BioSafe since July 1994, Chief Financial Officer since March 1995,
Secretary since May 1995 and Treasurer since June 1996. Prior to joining
BioSafe, Mr. Rivkin was a principal at The Envirovision Group Inc., a full
service environmental engineering, consulting and contracting company, where he
was responsible for marketing and strategic planning, finance and overall
business management. Previously, Mr. Rivkin practiced public accounting in New
York where he specialized in mergers and acquisitions, IPO's and SEC reporting.
Joseph E. Motzkin. Mr. Motzkin has been a Vice President of BioSafe
since August 1996. Prior to joining BioSafe, he was a Manager at Laidlaw
Waste Systems and Prins Recycling Corporation, where he operated landfills,
established recycling programs, and directed sales programs and customer
service activities. Mr. Motzkin has 26 years of experience in the solid
waste management business.
2
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The Board of Directors and Its Committees
- -----------------------------------------
Board of Directors
The Company is currently managed by a seven-member Board of Directors,
a majority of whom are independent of the Company's management. Each director
will hold office for the term to which he is elected and until his successor is
duly elected and qualified.
The Board of Directors held 10 meetings during fiscal year 1996. Each
of the directors attended at least 75% of the total number of meetings of the
Board of Directors and of the committees of the Company of which he was a
member.
The Board of Directors has appointed an Audit Committee, Compensation
Committee and an Executive Committee.
Compensation Committee. The Compensation Committee, which consisted of
Messrs. Matulich, Simmons and Taylor as of December 31, 1996, makes
recommendations and exercises all powers of the Board of Directors in connection
with certain compensation matters, including incentive compensation and benefit
plans. The Compensation Committee administers, and has authority to grant awards
under, the BioSafe International, Inc. 1995 Stock Option and Incentive Plan (the
"Plan") to the employee directors and management of the Company and its
subsidiaries and other key employees. The Compensation Committee met one time in
1996.
Executive Committee. The Executive Committee, which consists of Messrs.
Strauss, Golob, and Philipbar, is authorized to manage and direct the affairs of
the Company between meetings of the Board of Directors, subject to limitations
imposed by applicable law and other resolutions of the Board of Directors. The
Executive Committee met six times in 1996.
Audit Committee. The Audit Committee which currently consists of
Messrs. Matulich, Philipbar and Shannon, is empowered to recommend to the Board
the appointment of the Company's independent public accountants and to
periodically meet with such accountants to discuss their fees, audit and
non-audit services, and the internal controls and audit results for the Company.
The Audit Committee also is empowered to meet with the Company's accounting
personnel to review accounting policies and reports. The Audit Committee met one
time during 1996.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's executive
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 Small-Cap Market. Officers, directors and
greater than 10% stockholders 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 review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
the fiscal year ended December 31, 1996, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than 10% beneficial
owners were satisfied except that Mr. Joseph Motzkin inadvertently filed a Form
3 Statement of Beneficial Ownership Securities, which was due August 11, 1996,
approximately 30 days late.
3
<PAGE>
Item 11. Executive Compensation
Director Compensation
- ---------------------
Pursuant to a Resolution adopted by the Directors in January 1996, the
Company is not paying cash compensation to its Directors. Non-Employee Directors
are entitled to stock option grants under the 1995 Stock Option Plan for
Non-Employee Directors.
The Board may reconsider the payment of cash compensation to Directors at a
future date.
Executive Compensation
- ----------------------
Summary Compensation Table. The following table sets forth the aggregate
cash compensation paid by the Company with respect to the fiscal years ended
December 31, 1996, 1995 and 1994 to the Company's Chief Executive Officer and
the one other senior executive officer in office on December 31, 1996 who earned
at least $100,000 in cash compensation during 1996 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Awards
Annual ------
Compensation Shares
------------- Underlying
Name and Principal Position Year Salary Options
($) (#)
- ----------------------------------- ----- -------- ------------
Philip Strauss(1) 1996 150,000 250,000
President and Chief 1995 43,750 200,000
Executive Officer
Robert Rivkin 1996 150,000 206,250
Vice President, Chief Financial 1995 150,000 0
Officer, Secretary and Treasurer 1994 75,000 43,750
Richard H. Rosen (2) 1996 45,000 0
Chief Executive Officer, President 1995 180,000 0
and Treasurer 1994 180,000 175,000
- -----------------
(1) Mr. Strauss became Chief Executive Officer on March 27, 1996. Prior to
that, Mr. Strauss was Executive Vice President and Chief Operating Officer
which offices he had held since September 19, 1995.
(2) Dr. Richard H. Rosen resigned from all offices and positions with the
Company on March 27, 1996.
4
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Option Grants in Fiscal Year 1996. The following table sets forth the
options granted during fiscal year 1996 and the value of the options held on
December 31, 1996 by the Company's named executive officers.
OPTION GRANTS IN FISCAL YEAR 1996
Number of Percent of
Shares Total Options
Underlying Granted to Exercise or [Grant Date
Options Employees in Base Price Expiration Present
Name Granted Fiscal Year ($/share) Date Value $]
- --------------------------------------------------------------------------------
Philip Strauss 250,000 34% $2.25 2006 $204,250
Robert Rivkin 206,250 28% $2.25 2006 $168,506
Option Exercises and Year-End Holdings. The following table sets forth
the options exercised during fiscal year 1996 and the value of the options held
on December 31, 1996 by the Company's Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND FISCAL YEAR-END 1996 OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options Options
at Fiscal at Fiscal
Year-End (#) Year-End ($)
Shares ------------- ---------------
Acquired On Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisabl Unexercisable
- ---------------- ------------- -------------- ------------- ---------------
Philip Strauss 0 0 250,000/0 0
Robert S. Rivkin 0 0 250,000/0 0
Richard H. Rosen 0 0 0 0
Option Repricings. The following table sets forth the options repriced
during fiscal year 1996.
10-YEAR OPTION REPRICING
Length
Number of Market of Original
Securities Price of Exercise Option
Underlying Stock at Price at New Term
Options Time of Time of Exercise Remaining
Repriced Repricing Repricing Price at Date of
Name Date (#) ($) ($) ($) Repricing
- --------------------------------------------------------------------------------
Philip Strauss 6/28/96 200,000 $5.44 $5.44 $2.25 9 years
Employment Agreements. As of December 31, 1996, the Company was a party
to an employment agreement with Mr. Rivkin. The terms of the Company's
employment agreement with Mr. Rivkin, provides (i) that Mr. Rivkin receive a
salary of $150,000 per year; and (ii) that he agree not to compete with BioSafe
following termination of his employment by BioSafe for a period of one year
following such termination. The terms of this agreement shall continue in effect
until terminated by either party. BioSafe may exercise the right to terminate
the agreement with or without cause at any time and Mr. Rivkin may exercise the
right to terminate the agreement on 30 days' written notice at any time.
5
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Stock Performance Graph
- -----------------------
The Securities and Exchange Commission requires the Company to present a
chart comparing the cumulative total shareholder return on its Common Stock with
the cumulative total shareholder return of (i) a broad equity market index and
(ii) a published industry index or peer group. Although such a chart would
normally be for a five-year period, the Common Stock has been listed on the
Nasdaq Small-Cap Market only since November 14, 1995 and, as a result, the
following chart reflects only the period during which the Common Stock has been
listed on that market. The chart compares the Common Stock with (i) the Media
General Nasdaq Market Value Index (the "Nasdaq Index") and (ii) the Media
General Waste Management Industry Index (the "Waste Management Index"). The
total return for each of the Common Stock, the Nasdaq Index and the Waste
Management Index, assumes the reinvestment of dividends, although dividends have
not been declared on the Company's Common Stock. This chart assumes an
investment of $100 on November 14, 1995 in each of the Common Stock, the stocks
comprising the Nasdaq Index and the stocks comprising the Waste Management
Index. The Nasdaq Index tracks the aggregate price performance of all domestic
equity securities traded on the Nasdaq Market.
Date Volume High/Ask Low/Bid Close
- ---- ------ -------- ------- -----
11/30/95 842,000 4 3/4 4 3/16 4 5/16
12/29/95 1,163,900 4 3/8 3 15/16 4 3/16
01/31/96 1,843,100 4 5/8 3 1/16 3 3/4
02/29/96 2,652,300 4 7/16 3 3/8 3 3/8
03/29/96 3,189,300 4 3/16 2 1/16 3
04/30/96 733,400 3 1/16 2 7/16 2 13/16
05/31/96 991,400 3 5/8 2 5/8 3 1/2
06/28/96 1,394,900 3 5/8 2 2 1/4
07/31/96 1,049,300 2 1/4 1 7/16 1 13/16
08/30/96 4,039,600 2 1/16 1 5/16 1 3/8
09/30/96 1,026,900 1 9/16 1 1/4 1 7/16
10/31/96 1,696,200 1 9/16 1 1 1/4
11/29/96 2,024,000 1 1/2 0 7/8 1
12/31/96 3,857,200 1 1/16 0 9/16 0 11/16
01/31/97 1,850,200 0 7/8 0 5/8 0 5/8
02/28/97 1,094,000 0 11/16 0 5/16 0 7/16
03/31/97 1,305,500 0 9/16 0 5/16 0 3/8
6
<PAGE>
Report of the Compensation Committee
- ------------------------------------
The Compensation Committee's executive compensation philosophy is to
establish competitive levels of compensation, link management's pay to the
achievement of the Company's performance goals, and enable the Company to
attract and retain qualified management. The Company's compensation policies
seek to align the financial interests of senior management of the Company with
those of the stockholders.
Base Salary. The Company has established base salary levels for senior
management based on a number of factors, including market salaries for such
positions, the responsibilities of the position, the experience, and the
required knowledge of the individual. The Compensation Committee attempts to fix
base salaries on a basis generally in line with base salary levels for
comparable companies.
Incentive Compensation. During each fiscal year the non-employee
directors who are members of the Compensation Committee may consider granting
senior executives of the Company awards of stock or options under the Plan. Such
awards are based on various factors, including both corporate and individual
performance during the preceding year and incentives to reach certain goals
during future years. During 1996, the Company lowered the exercise price of
options granted to all Company employees, including the Named Executives, in
lieu of raising salaries. The new exercise price is $2.25.
Submitted by the Compensation Committee:
Jay Matulich and Barry D. Simmons
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
Jay Matulich and Dr. Simmons served on the Compensation Committee in
1996. No member of the Compensation Committee has ever served as an officer
of the Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Principal Stockholders
The following table presents information as to all directors and
senior executive officers of the Company as of March 31, 1997 and persons or
entities known to the Company to be beneficial owners of more than 5% of the
Company's Common Stock as of March 31, 1997, unless otherwise indicated, based
on representations of officers and directors of the Company and filings received
by the Company on Schedules 13D and 13G or Form 13F under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). All such information was
provided by the stockholders listed and reflects their beneficial ownership
known by the Company on March 31, 1997.
7
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Beneficial Ownership of Common Stock
------------------------------------
Directors, Officers Shares Percent
and 5% Stockholders(1) Owned of Class
---------------------- ----- --------
Richard Golob(2) 21,355 *
Liviakis Financial
Communications, Inc. 910,000 5.15%
2118 P Street, Suite C
Sacramento, CA 95816
Jay Matulich(3) 17,500 *
Joseph Motzkin 30,000 *
William B. Philipbar(2) 1,667 *
Bob Rivkin(4) 250,875 1.41%
Richard Rosen 997,209 5.61%
162 Washington Street
Belmont, MA 02178
Barry D. Simmons(5) 217,875 1.2%
Daniel J. Shannon(6) 46,250 *
Philip W. Strauss(4) 250,000 1.4%
B.G. Taylor(7) 222,875 1.2%
All directors and officers
as a group (7 persons) 1,058,397 6.0%
* less than 1%
(1) The persons named in the above table have sole voting and investing
power with respect to all shares shown as beneficially owned by them
subject to community property laws where applicable and the information
contained in footnotes to this table.
(2) Includes 1,667 shares subject to stock options which are fully vested
and are currently exercisable.
(3) Shareholdings do not include shares and warrants held by Capital Growth
International, L.P., of which Mr. Matulich disclaims beneficial
ownership. Also includes 2,500 shares subject to stock options
which are fully vested and are currently exercisable.
(4) Includes 250,000 shares subject to stock options which are fully
vested and are currently exercisable.
(5) Includes 17,750 shares of Common Stock held by Dr. Simmons' immediate
family, including one minor child and two adult children, of which
shares he disclaims beneficial ownership. Also includes 1,667 shares
subject to stock options which are fully vested and are currently
exercisable.
(6) Includes 46,250 shares subject to stock options which are fully vested
and are currently exercisable.
(7) Includes 1,500 shares of Common Stock held by Mr. Taylor's wife, of
which shares he does not disclaim beneficial ownership. Also includes
2,500 shares subject to stock options which are fully vested and are
currently exercisable.
8
<PAGE>
Item 13. Certain Relationships and Related Transactions
Liviakis Financial Communications, Inc. ("Liviakis") holds
910,000 shares of Common Stock, which amounts to more than 5% of the currently
outstanding shares of Common Stock. Liviakis had entered into a consulting
agreement with the Company which the Company terminated in December 1996.
Jay Matulich, a Director of the Company, is a Senior Vice
President of International Capital Growth("Capital Growth"), which holds 57,745
Placement Agent Warrants at an exercise price of $2.30 per share. In June 1996,
Capital Growth was the placement agent for an overseas' offering of the
Company's common stock. In connection with this offering, Capital Growth
received a fee calculated at 8% of gross proceeds, resulting in approximately
$513,000. In addition, the Company exchanged 701,563 Warrants exercisable at a
price of $10 into 350,000 Warrants exercisable at a price of $3.50 . Through
March 29, 1996, Capital Growth also had a continuing relationship with the
Company pursuant to which Capital Growth provided advisory and investment
banking services to the Company, principally in connection with financing
matters. The Company pays Capital Growth $4,500 per month for such services,
beginning on March 29, 1995. The terms of this relationship were comparable to
terms that would have been obtainable from unaffiliated sources.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Item 14 is unchanged.
9
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SIGNATURES
Pursuant to the requirements of Section 13 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.
BIOSAFE INTERNATIONAL, INC.
Date: April 30, 1997 By: Robert Rivkin
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Robert Rivkin
Vice President, Chief Financial Officer,
Secretary and Treasurer
(Principal Financial and Accounting Officer)
