SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A No. 2
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the fiscal year ended June 30, 1996
Commission file number: 0-21006
INFU-TECH, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3127689
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
910 Sylvan Avenue 07632
Englewood Cliffs, N.J. (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (201) 567-4600
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
par value $.01
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. [ X ]
As of September 26, 1996 the aggregate market value of the voting stock held
by non-affiliates of the registrant was $5,136,688.
As of September 26, 1996, 3,214,600 shares of the registrant's common stock
were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
None
<PAGE>
PART III
Item 10. Directors and Executive Officers.
Directors Served on
the Board of
Directors
Name Age Since
Jack Rosen . . . . . . . . . 50 1988
Joseph Rosen . . . . . . . . 45 1988
Israel Ingberman . . . . . . 50 1988
Joseph Giglio. . . . . . . . 55 1992
Bruce Slovin . . . . . . . . 60 1992
Carl D. Glickman . . . . . . 70 1992
Jack Rosen has served as the chief executive officer (the President,
Chairman of the Board or both) and as a Director of the Company since 1992,
of CHA since its incorporation in 1981 and of CHA's subsidiaries from their
respective dates of incorporation, the first of which was in 1976. Mr. Rosen
is also the President and a Director of CompreMedx Corporation
("CompreMedx"), an 89.1%-owned subsidiary of CHA. He first became involved
in the health care field in September 1971 when he became a director of
Garden State Health Care Center of East Orange, New Jersey. He is actively
engaged, together with Joseph Rosen and Israel Ingberman, who are officers
and directors, and along with Jack Rosen, are the three principal
stockholders of the Company (the "Principal Stockholders"), in a variety of
enterprises, including real estate development and hotel ownership (the
"Rosen-Ingberman Enterprises"). Jack Rosen is the brother of Joseph Rosen.
Joseph Rosen has served as a Vice President and as a Director of CHA
since its incorporation in 1981 and as a director and officer of all its
subsidiaries (including CompreMedx) from their respective dates of
incorporation. He became an Assistant Secretary of the Company in March
1983. He first became involved in the health care field in October 1974 with
the organization of Jayber Inc., which operates a nursing home in West
Orange, New Jersey and now is a subsidiary of the Company. He is actively
engaged, together with the other Principal Stockholders, in the Rosen-
Ingberman Enterprises and with Israel Ingberman in nursing home ownership and
management ("R-I nursing homes"). He is the brother of Jack Rosen.
Israel Ingberman has served as Secretary, Treasurer and as a Director
of CHA since its incorporation in 1981 and as a director and officer of all
its subsidiaries (including CompreMedx) from their respective dates of
incorporation. He first became involved in the health care field in October
1974 with the organization of Jayber Inc. He is actively engaged, together
with the other Principal Stockholders, in the Rosen-Ingberman Enterprises and
in the R-I nursing homes with Joseph Rosen.
Joseph M. Giglio has been a director of CHA since January 1983. He
became a director of the Company in July 1992. Since December 1993, he has
been serving as the Chairman of Apogee Research, Inc., an infrastructure
consulting firm. From December 1993 until August 1994, he was the Senior
Advisor to the First Southwest Company. From April 1992 to November 1993,
he was an Executive Vice President of Smith Barney & Co. And from June 1991
to April 1992, he was a Managing Director of that firm. From January 1990
to June 1991, he was the President of Chase Municipal Securities, Inc., an
affiliate of The Chase Manhattan Bank, N.A. From August 1988 through
December 1989, Mr. Giglio was a Senior Vice President at Chase Securities,
Inc. in the Municipal Finance Division. For more than five years prior to
joining Chase, Mr. Giglio was the Senior Managing Director of the Public
Finance Department at Bear Stearns & Co., Inc. Mr. Giglio served as Chairman
of the National Council on Public Works Improvement, which released its final
report, "Fragile Foundation," in February 1988. Mr. Giglio chaired the U.S.
Senate Budget Committee's Private Sector
<PAGE>
Advisory Panel on Infrastructure Financing. He serves on the board of
directors of The Hudson Institute. Mr. Giglio has served as an Associate
Professor of Finance at New York University. He is a graduate of Rutgers
University, and holds a Master of Public Administration degree from New York
University and a Master's degree in Business from Columbia University.
Carl D. Glickman has been a director of CHA since August 1989. He
became a Director of the Company in July 1992. Since 1953, he has been the
president of The Glickman Organization, a real estate ownership and
management company. In addition, Mr. Glickman is a director of Andal
Corporation (a diversified manufacturing company), Bear Stearns Companies,
Inc. (an investment banking company), Jerusalem Economic Corporation (an
Israeli real estate company), Alliance Tyre and Rubber Co. (an Israeli tire
manufacturer), Franklin Holdings, Inc. (an investment company), Lexington
Corporate Properties, Inc. (a real estate investment trust), Modern Video Co.
(a motion picture production company) and Office Max, Inc. (an office supply
retailer).
Bruce Slovin has been a Director of CHA since June 1988. He became a
Director of the Company in July 1992. Mr. Slovin is a graduate of Harvard
Law School and Cornell University. Since 1985, he has been president and a
director of Revlon Group Incorporated, an industrial products holding
company. Since 1980, he has been president and a director of MacAndrews &
Forbes Group, Inc., an industrial holding company. In addition, Mr. Slovin
is a director of Andrews Group Incorporated (a publishing and entertainment
company), Power Control Technologies, Inc. (a manufacturer of aerospace
components), Cantel Industries, Inc. (a distributor of furniture and medical
equipment) and The Coleman Company, Inc. (an outdoor recreational equipment
manufacturer).
Item 11. Executive Compensation.
Executive officers of the Company who are also officers of CHA, other
than Jack Rosen and Richard S. Gordon, receive annual compensation from CHA
and receive no annual compensation from the Company. Services of these
officers are included in the services provided to the Company by CHA, for
which it receives a management fee.
<PAGE>
The following table sets forth the annual compensation paid by the
Company or CHA (including annual compensation paid by CHA for services not
related to the Company), and the long-term compensation paid by the Company,
during the year ended December 31, 1994, the six months ended June 30, 1995
and year ended June 30, 1996, to the chief executive officer of the Company
and to each of the other executive officers of the Company at that date whose
annual salary and bonus from the Company and CHA during 1994 totalled more
than $100,000:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C>
<CAPTION>
Annual Compensation Long-Term Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Awards Payouts
Other
Annual Restricted All Other
Compen- Stock Options/ LTIP Compen-
Name and Principal Salary Bonus sation Award(s) SARs Payouts sation
Position<F2> Year ($) ($) ($) ($) (#) ($) ($)
Jack Rosen
Chairman of the Board 1996 300,000<F3> None None None - None None
and Chief Executive 1995<F1> 150,000<F3> -
Officer 1994 300,000<F3> -
Michael Pennessi 1996 146,667 - None None 2,500 None None
President and Chief 1995<F1> 75,000 - -
Operating Officer 1994 150,000 - 2,500
Pritpal Virdee 1996 130,000 - None None 2,500 None None
Executive Vice 1995<F1> 65,000 - -
President 1994 120,000 - 2,500
Richard S. Gordon 1996 120,312 - None None 1,000 None None
Executive Vice 1995<F1> 49,479 5,000 -
President 1994 99,920 37,154 5,000
Benjamin Geizhals 1996 130,000<F4> None None None 2,000 None None
Vice President 1995<F1> 65,000<F4> -
1994 130,000<F4> -
</TABLE>
[FN]
<F1> Six months ended June 30, 1995.
<F2> Officers devoted 100% of their time to the Company, except Mr. Rosen (who
devoted approximately 33% of his time), Mr. Gordon (who devoted
approximately 65% of his time), and Mr. Geizhals (who devoted
approximately 50% of his time) to the Company. Mr. Pennessi served as
President and Chief Operating Officer until June 1, 1996 at which time
he became Executive Vice President. Mr. Rosen assumed the office of
President on June 1, 1996.
<F3> Since August 1992, Mr. Rosen had been employed part-time by the Company at
a salary of $100,000 per year. The remainder of his working time is
devoted to his duties as Chairman of CHA.
<F4> The compensation of Mr. Geizhals is paid entirely by CHA. His services are
made available to the Company under its Management Agreement with CHA.
During fiscal 1997, Mr. Rosen was awarded a bonus totalling $150,000 as
a result of performance of the Company and CHA during fiscal 1996. These
bonuses will be reported as compensation received during fiscal 1997.
Directors' Compensation
Each director who does not otherwise receive a salary from the
Company receives a director's fee of $5,000 per year. In addition,
under Infu-Tech's 1992 Stock Option Plan, each member of the
committee which awards options to Infu-Tech officers (Joseph
Giglio, Carl Glickman and Bruce Slovin) received an option to
purchase 10,000 shares when the Plan was adopted and receives an
option to purchase 5,000 shares each year after that.
<PAGE>
Option Plans
The following table sets forth certain information with regard
to options granted during 1996 to the Company's chief executive
officer and its other executive officers whose salary and bonus
from the Company and CHA during 1996 totalled more than $100,000:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<S> <C>
Potential Value at Assumed Annual
Rates of Stock Price Appreciation
Individual Grants For Option Term
<S> <C> <C> <C> <C> <C> <C>
Number of Percent of Total
Securities Options/SARs
under Granted to Exercise of
option/SARs Employees in Base Price
Name Granted (#) Fiscal Year (%) ($/Sh) Expiration Date 5% ($) 10% ($)
Jack Rosen - - - - - -
Michael Pennessi 2,500 4 2.25 7/8/05 3.550 8,975
Pritpal Virdee 2,500 4 2.25 9/8/05 3,550 8,975
Richard S. Gordon 1,000 1.6 2.25 9/8/05 1.420 3,590
Benjamin Geizhals 2,000 3.3 2.25 9/8/05 2,840 7,180
</TABLE>
The following table sets forth certain information with regard
to exercises of options and SARs held at June 30, 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<S> <C> <C> <C> <C>
Number of Unexercised Value of Unexercised in-
Options/SARs at Fiscal the-Money Options/SARs at
Year-End <F1> Fiscal Year End ($)<F2>
Shares Acquired on Exercisable(E) Exercisable(E)
Name Exercise (#) Value Realized ($) Unexercisable (U) Unexercisable (U)
Jack Rosen - - 30,000(E) 0(E)
0(U) 0(U)
Michael Pennessi - - 27,500(E) 0(E)
0(U) 0(U)
Pritpal Virdee - - 10,000(E) 13,750(E)
0(U) 0(U)
Richard S. Gordon - - 6,000(E) 9,950(E)
0(U) 0(U)
Benjamin Geizhals - - 2,000(E) 4,250(E)
0(U) 0(U)
</TABLE>
[FN]
<F1> The Corporation has not granted any SARs.
<F2> Based upon the amount by which the market price of the Company's Common
Stock on June 28, 1996 ($4.375 per share) exceeded the exercise price
of the options.
Compensation Committee Interlocks and Insider Participation
During the year-ended June 30, 1996 Company does not have a
Compensation Committee. Salaries of its senior executive officers,
other than its Chairman of the Board and chief executive officer, are set
by the Chairman of the Board. The salary of the Chairman of the Board was
approved by the Board of Directors prior to the initial public offering of the
Company's shares.
During the year ended June 30, 1996, the Company was charged
$14,000 by a corporation owned by Jack Rosen, the Chairman of the
Board of the Company, for use of an airplane owned by that
<PAGE>
corporation. The Company believes the rates it was charged for use
of that airplane were lower than those which would have been
available from an independent charter company for use of a similar
airplane.
All the members of the Company's Board of Directors are also
directors of CHA. Also, three of the members of the Company's
Board of Directors are officers of CHA. Transactions between the
Company and CHA during the year ended June 30, 1996 were as
follows:
Prior to the initial public offering of the Company's Common
Stock, completed on December 31, 1992, all the Company's capital
stock was owned by CHA and the Company was operated as a wholly
owned subsidiary of CHA. This included CHA's making available to
the Company services of CHA's senior management and financial,
accounting, legal and other administrative personnel.
In connection with the initial public offering of the
Company's Common Stock, the Company and CHA entered into a
Management and Non-Competition Agreement under which, until
September 30, 1997, (i) CHA will provide to the Company services of
a chief financial officer, a general counsel and other senior
executives, other than a chief executive officer (which will be
Jack Rosen or another person paid by the Company) and a principal
accounting officer (which, if different from the chief financial
officer, will be a person paid by the Company), (ii) neither CHA
nor the Company will make any loans to the other of them, (iii) all
other transactions between the Company and CHA will be on terms
determined by the Board of Directors of the Company to be no less
favorable to the Company than the terms which would be available
from unrelated parties, (iv) CHA will not directly or indirectly
engage in the business of providing infusion therapy to patients at
home or in nursing homes or similar long term care facilities
(other than those owned or operated by CHA or subsidiaries) and (v)
the Company will not directly or indirectly operate nursing homes
or similar long term care facilities. The Company pays CHA a
management fee under the agreement equal to 1.6% of the Company's
revenues. CHA's liability for providing services to the Company
will be limited to losses resulting from willful malfeasance, bad
faith or gross negligence. The Company will indemnify CHA and its
officers, employees and agents, for losses resulting from the
provision of services under the agreement, except when there is an
adjudication that the loss resulted from the indemnified person's
willful misfeasance, bad faith or gross negligence. During 1996
the management fee charged to the Company by CHA totalled $394,000.
The Company is occupying approximately 7,400 square feet of
office space in an office building in Englewood Cliffs, New Jersey
which is owned by the principal stockholders of CHA. The rent
expense is $9,600 per month. The Company believes the terms on
which it is occupying this space are more favorable to it than the
terms on which it could rent a similar amount of corporate space
from an unaffiliated person.
Among the nursing homes with which the Company does business
are seven facilities which are owned or managed by CHA and three
facilities which are owned by companies controlled by CHA's
Principal Stockholders. During 1996, the Company's sales to the
nursing homes owned or managed by CHA totalled $524,000. At June
30, 1996, the Company's accounts receivable from those nursing
homes totalled $1,025,000. On the other hand, the Company owed CHA $436,000
for unpaid management fees. During 1996, the Company realized
revenues of $392,000, or 7% of the Company's total contract
services revenues, from the sale of products and services to
residents of the seven nursing homes owned or managed by CHA and
the three nursing homes owned by companies controlled by CHA's
Principal Stockholders.
The Company was paid $628,000 in February 1992 in connection
with the settlement of a lawsuit by the purchaser of CHA's former
Home Nurse Staffing Division. In connection with the settlement,
the Company agreed not to compete with the purchaser in providing
nursing services in California, Arizona and Tennessee for a period
of five years and terminated a non-competition provision which had
barred the purchaser from providing infusion therapy services. The
restrictions against providing nursing
<PAGE>
services do not affect themanner in which the Company is currently doing
business, and has not had a material adverse effect on the Company's business.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The following table contains information concerning the
ownership of the Company's Common Stock at September 26, 1996 by
each person known to the Company to be a beneficial owner of more
than 5% of any class of the Company's voting security, by the
Company's directors, by each of the executive officers of the
Company who is among the five most highly compensated executive
officers of the Company in 1996 and by directors and executive
officers as a group are as follows:
<TABLE>
<S> <C> <C> <C>
<CAPTION>
Name and Address Amount and Nature of
Title of Class of Beneficial Owner Beneficial Owner Percent of Class
Common Stock Continental Health Affiliates, Inc. 1,870,000 shares 59%
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Common Stock Joseph Giglio 25,000 shares<F1> <F2>
4350 East West Highway, Suite 600
Bethesda, MD 20814
Common Stock Jack Rosen 30,000 shares <F2>
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Common Stock Joseph Rosen 10,000 shares <F2>
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Common Stock Israel Ingberman 10,000 shares <F2>
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Common Stock Carl D. Glickman 25,000 shares <F1> <F2>
The Leader Building, Suite 1140
Cleveland, OH 44114
Common Stock Bruce Slovin 25,000 shares <F1> <F2>
35 E. 62nd Street
New York, NY 10021
Common Stock Michael Pennessi 27,500 shares <F1> <F2>
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Common Stock Pritpal Virdee 10,000 shares <F1> <F2>
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Common Stock Richard S. Gordon 6,000 shares <F1> <F2>
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Common Stock Benjamin Geizhals 2,000 <F2>
910 Sylvan Avenue
Englewood Cliffs, NJ 07632
Common Stock All directors and executives 170,500 shares <F1> 5%
officers as a group (12 persons)
<FN>
<F1> Consists entirely of shares which may be purchased on exercise of which
were exercisable within 60 days after September 26, 1996.
<F2> Less than 1%.
</TABLE>
At September 30, 1996, Jack Rosen, who is the chief executive officer and a
director of the Company, and Joseph Rosen and Israel Ingberman, who are
directors of the Company, owned a 15%, 10% and 9.5%, respectively, of the
outstanding common stock of CHA. Other directors and executive officers of the
Company owned, in total, an additional 3% of the outstanding common stock of CHA
(including common stock issuable on exercise of options to purchase common stock
of CHA which were exercisable on, or would be exercisable within 60 days after,
September 28, 1996).
<PAGE>
On October 25, 1995 Cede & Co., owned a record of 1,270,360 shares of the
Company's Common Stock, constituting 39.5% of the outstanding Common Stock. The
Company understands those shares were held beneficially for members of the New
York Stock Exchange, some of whom may in turn have been holding shares
beneficially for customers.
Item 13. Certain Relationships and Related Transactions
Transactions between the Company and its Board of Directors are described
under "Compensation Committee Interlocks and Insider Participation."
Filing of Reports
To the best of the Company's knowledge, no director, executive officer or
beneficial owner of more than 10% of the Company's stock failed to file on a
timely basis reports required by Section 16(a) of the Securities Exchange
Act of 1934, as amended, with regard to the year ended June 30, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Amended Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
INFU-TECH, INC.
By: /s/ Benjamin Geizhals
Date: October 30, 1996 Benjamin Geizhals
Vice President and General Counsel
