SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the fiscal year ended June 30, 1997
Commission file number: 0-21006
INFU-TECH, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
22-3127689
(I.R.S. Employer
Identification No.)
910 Sylvan Avenue
Englewood Cliffs, N.J.
(Address of principal executive offices)
07632
(Zip Code)
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 23, 1997 the aggregate market value of the voting stock held by
non-affiliates of the registrant was $4,318,436.
As of September 23, 1997, 3,249,692 shares of the registrant's common stock were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.
DIRECTORS SERVED ON
THE BOARD OF
DIRECTORS
NAME AGE SINCE
Jack Rosen............................51...........................1988
Joseph Rosen..........................46...........................1988
Israel Ingberman......................51...........................1988
Joseph Giglio.........................56...........................1992
Bruce Slovin..........................61...........................1992
Carl D. Glickman......................71...........................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
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 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 1980, he has been president and a director
of MacAndrews & Forbes Group, Inc., an industrial holding company. Since 1985,
he has been president and a director of Revlon Group Incorporated, a consumer
products holding company. In addition, Mr. Slovin is a director of Andrews Group
Incorporated (industrial holding company), M&F Worldwide Corp., (producer of
licorice extract and other flavoring agents), Cantel Industries, Inc.
(distributor of medical equipment) and The Coleman Company, Inc. (outdoor
recreational equipment manufacturer).
ITEM 11. EXECUTIVE COMPENSATION.
Executive officers of the Company who are also officers of CHA, other
than Jack Rosen, 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.
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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 years ended June 30, 1997, 1996 and the six months ended June 30,
1995, 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 1997 totalled more than $100,000:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payouts
Other
Annual Restricted All Other
Compen- Stock Options/ LTIP Compen-
Name and Principal Salary Bonus sation Award(s) SARs Payouts sation
Position(1) Year ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C>
Jack Rosen 1997 368,000(150,000(2) 200,000
Chairman of the Board 1996 300,000(2) None None None -- None None
and Chief Executive 1995* 150,000(2) -- --
Officer
Pritpal Virdee 1997 137,000 7,000 10,000
Executive Vice President1996 130,000 -- None None 2,500 None None
1995* 65,000 -- --
Benjamin Geizhals 1997 137,712(3) 5,000
Vice President 1996 130,000(3) None None None 2,000 None None
1995* 65,000(3) --
S. Colin Neill 1997 147,212(3) 25,000
Vice President and 1996 None None None None None
Chief Financial Officer 1995*
- - -----------
* Six months ended June 30, 1995.
(1) Officers devoted 100% of their time to the Company, except Mr. Rosen (who devoted approximately 33% 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. Pennessi left the
Company in November 1996. Mr. Rosen assumed the office of President on June 1, 1996.
(2) Since August 1992, Mr. Rosen had been employed part-time by the Company. His annual salary paid by the Company
was $100,000 until November 1996 and $150,000 thereafter. The bonus paid by the Company was $75,000. The
remainder of his working time is devoted to his duties as Chairman of CHA.
(3) The compensation of Mr. Geizhals and Mr. Neill is paid entirely by CHA. Their services are made available to the
Company under its Management Agreement with CHA.
</TABLE>
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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
1996 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.
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
1997 totalled more than $100,000:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Value at Assumed Annual
Rates of Stock Price Appreciation For
Individual Grants Option Term
Percent of Total
Number of Options/SARs
Securities under Granted to Exercise
option/SARs Employees in of Base
Name Granted (#) Fiscal Year% Price ($/Sh) Expiration Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Jack Rosen 200,000 59.5% 4.25 10/29/03 346,000 806,000
Pritpal Virdee 10,000 3% 4.125 10/18/06 25,950 65,750
Benjamin Geizhals 5,000 1.5% 4.125 10/18/06 12,975 32,875
S. Colin Neill 25,000 7.4% 4.19 07/08/06 66,000 167,000
</TABLE>
The following table sets forth certain information with regard to
exercises of options and SARs held at June 30, 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Number of Unexercised Value of Unexercised in-the-
Shares Acquired Options/SARs at Fisc Money Options/SARs at
Name Exercise (#) Value Realized ($) Year-End* Fiscal Year End ($)**
Exercisable(E)/ Exercisable(E)/
Unexercisable(U) Unexercisable(U)
<S> <C> <C> <C> <C>
Jack Rosen -- -- 230,000 (E) 0(E)
0(U) 0(U)
Pritpal Virdee -- -- 20,000(E) 12,500(E)
0(U) 0(U)
Benjamin Geizhals -- -- 7,000(E) 4,688(E)
0(U) 0(U)
S. Colin Neill -- -- 25,000(E) 0(E)
0(U) 0(U)
- - ----------
* The Corporation has not granted any SARs.
** Based upon the amount by which the market price of the Company's Common
Stock on June 27, 1997 ($4.125 per share) exceeded the exercise
price of the options.
</TABLE>
5
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Compensation Committee Interlocks and Insider Participation
During the year-ended June 30, 1997, the Company's Compensation
Committee reviewed and approved the compensation of the Chairman of the Board.
Compensation of the Company's senior executive officers, other than its Chairman
of the Board and chief executive officer, was set by the Chairman of the Board.
During the year ended June 30, 1997, the Company was charged $27,000 by
a corporation owned by Jack Rosen, the Chairman of the Board of the Company, for
use of an airplane owned by that 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, 1997 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 1997 the management fee
charged to the Company by CHA totalled $416,000. On August 8, 1997, the term of
the Management and Non-Competition Agreement was extended to September 30, 2000.
During 1997, among the nursing homes with which the Company does
business were seven facilities which were owned or managed by CHA and three
facilities which are owned by companies controlled by CHA's Principal
Stockholders. During 1997, the Company's sales to the nursing homes owned or
managed by CHA totalled $564,000. At June 30, 1997, the Company's accounts
receivable from those nursing homes totalled $1,214,000. During 1997, the
Company realized revenues of $428,000 or 7.1% 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
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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 services do not
affect the manner 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 23, 1997 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 1997 and by directors and executive officers as a group are as
follows:
<TABLE>
<CAPTION>
Amount and Nature of
Title of Class Name and Address of Beneficial Beneficial Ownership Percent of Class
Owner
<S> <C> <C> <C>
Common Stock Continental Health Affiliates, Inc. 1,870,000 57.5%
910 Sylvan Avenue shares
Englewood Cliffs, NJ 07632
Common Stock Joseph Giglio 30,000 (a) (b)
4350 East West Highway, Suite 600 shares
Bethesda, MD 20814
Common Stock Jack Rosen 230,000(a) 6.6%
910 Sylvan Avenue shares
Englewood Cliffs, NJ 07632
Common Stock Joseph Rosen 10,000(a) (b)
910 Sylvan Avenue shares
Englewood Cliffs, NJ 07632
Common Stock Israel Ingberman 10,000(a) (b)
910 Sylvan Avenue shares
Englewood Cliffs, NJ 07632
Common Stock Carl D. Glickman 30,000 (a) (b)
The Leader Building, Suite 1140 shares
Cleveland, OH 44114
Common Stock Bruce Slovin 30,000 (a) (b)
35 E. 62nd Street shares
New York, NY 10021
Common Stock Pritpal Virdee 20,000 (a) (b)
910 Sylvan Avenue shares
Englewood, NJ 07632
Common Stock S. Colin Neill 25,000 (a) (b)
910 Sylvan Avenue shares
Englewood Cliffs, NJ 07632
Common Stock Benjamin Geizhals 7,000(a) (b)
910 Sylvan Avenue shares
Englewood Cliffs, NJ 07632
Common Stock All directors and executive 392,000(a) 10.8%
officers as a group (10 persons) shares
- - ---------
(a) Consists entirely of shares which may be purchased on exercise of options which were exercisable within 60 days
after September 30, 1997.
(b) Less than 1%.
</TABLE>
At September 30, 1997 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 13.2%, 9.1% and 8.6%, respectively, of the
outstanding common stock of CHA. Other directors and executive officers of the
Company owned, in total, an additional 3.5% of the outstanding common stock of
CHA.
<PAGE>
On September 23, 1997 Cede & Co. owned of record 1,313,059 shares of the
Company's Common Stock, constituting 40.4% 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 ss. 16(a) of the Securities Exchange Act of
1934, as amended, with regard to the year ended June 30, 1997.
<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.
Date: October 29, 1997 By:----------------------------------
/s/ Benjamin Geizhals Benjamin Geizhals
Vice President and General Counsel
S-1
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