<PAGE>
================================================================================
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 10-KSB/A
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
Commission File No. 0-21721
--------------------
CLINICOR, INC.
(Name of Small Business Issuer in Its Charter)
Nevada 88-0309093
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1717 West Sixth Street, Suite 400, Austin, Texas 78703
(Address of Principal Executive Offices) (Zip Code)
(512) 344-3300
(Issuer's Telephone Number, Including Area Code)
--------------------
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
(Title of Class)
--------------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- ---
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. [ ]
Issuer's gross revenue for fiscal year ended December 31, 1999: $14,780,184.
As of March 22, 2000, the aggregate market value of the common stock held by
non-affiliates of the Registrant, computed by reference to the last quoted price
at which such stock was sold on such date as reported on the Over-the-Counter
Bulletin Board was $2,385,353.
As of March 22, 2000, 4,169,734 shares of the Issuer's Common Stock were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
================================================================================
<PAGE>
This Amendment is filed to provide the information required by Items 9, 10
and 11 of Part III of Form 10-KSB. The Amendment sets forth the complete text of
each item as amended.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act
Directors and Executive Officers
The following table sets forth the name, age and position of each director
and executive officer of the Company. The table also sets forth the first year
such person became either a director or executive officer of the Company.
First Year Elected
Name Age Position with Company Officer or Director
---- --- --------------------- -------------------
Robert S. Sammis 47 President, Director 1992
James W. Clark, Jr. 47 Vice President of Finance, Chief 1997
Financial Officer, Treasurer,
Secretary, Director
Rosina Maar, M.D. 37 Vice President of Operations, 1999
Chief Operating Officer,
Director
Susan Krivacic 41 Senior Vice President of 1998
Marketing and Business
Development
Zola P. Horovitz, Ph.D. 65 Director 1996
Joel D. Liffmann 39 Director 1998
Robert S. Sammis has been the Company's President since June 1997. Prior to
June 1997, Mr. Sammis had served as the Company's Executive Vice President and
Chief Operating Officer since the Company's inception. He is also a director, a
position which he has held since the Company's inception. From March 1991 until
September 1992, Mr. Sammis served as Director of Barton Research, Inc., and from
August 1991 until September 1992, he served as Barton's Executive Vice President
and Chief Operating Officer. From 1986 until August 1992, Mr. Sammis was
engaged as a practicing CPA specializing in business consultation. Mr. Sammis
spent five (5) years with Arthur Andersen & Co. where he was an audit manager in
the firm's health care practice. Mr. Sammis holds an MBA degree from the
University of Texas.
James W. Clark, Jr. joined the Company as Vice President of Finance, Chief
Financial Officer, Treasurer, Secretary and a director in May 1997. From
February 1989 until April 1997, Mr. Clark was Vice President of Finance,
Treasurer and Chief Financial Officer of Bay Resources, a Florida based computer
leasing and consulting firm. Mr. Clark had previously worked as a management
consultant providing merchant banking services and initiating venture capital
investments on behalf of medium-sized
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Florida companies. Mr. Clark holds a Bachelor of Arts degree from Butler
University and is a Certified Public Accountant.
Rosina Maar, M.D., Chief Operating Officer, joined the Company in February
1999. Dr. Maar was employed by Quintiles, Inc. and Quintiles Transnational
Corporation from 1993 through February 1999. She served in various positions as
Worldwide Program Director, Director of Medical Services, Vice President of
Clinical Operations, and Senior Vice President, Strategic Planning and Business
Implementation. Prior to joining Quintiles, Dr. Maar was the Corporate Medical
Director of Cellcor, a biotechnology company that specialized in immunotherapy
for the treatment of cancers. She is Board-certified in Internal Medicine, and
completed her residency at Emory University School of Medicine. She obtained
her M.D. from the Morehouse School of Medicine, and holds a Bachelor of Science
degree in Health Systems Industrial Engineering from the Georgia Institute of
Technology, where she graduated with honors.
Susan Krivacic, Senior Vice President, Marketing and Business Development,
joined the Company in March 1998. From 1996 through January 1998, Ms. Krivacic
was employed by Quintiles, Inc., a division of Quintiles Transnational
Corporation, where she served first as Director, Business Development and later
as Executive Director, Business Development Oncology Therapeutics. At
Quintiles, Ms. Krivacic implemented a marketing and business development
strategy for that entity's oncology therapeutics unit. Previously, from 1992 to
1996, Ms. Krivacic was employed by Pharmaco International, Inc. and various
predecessor companies, including Applied Biosciences International, the parent
company of Pharmaco Dynamics, Inc. Among other positions, Ms. Krivacic served,
from 1994 to 1995, as Director, Clinical Development Account Services for
Pharmaco International and as Associate Director, Business Development for the
toxicology division of Pharmaco LSR, Inc. Ms. Krivacic is a former Fulbright
Scholar. She received her Masters degree in Public Affairs in 1983 from the
Lyndon Baines Johnson School of Public Affairs, Austin, Texas. She received her
Bachelor of Arts degree from the University of Texas, where she graduated with
Honors in 1981.
Zola P. Horovitz, Ph.D. joined the Company as a director in November 1996.
Dr. Horovitz worked for the Bristol-Myers Squibb Corporation and one of its
predecessor entities, The Squibb Institute for Medical Research, for thirty-five
(35) years until his retirement in 1994. Since his retirement, Dr. Horovitz has
served as a consultant to the biotechnology and pharmaceutical industries. Dr.
Horovitz received an M.S. in Pharmacology in 1958 and his Ph.D. in Pharmacology
in 1960, both from the University of Pittsburgh. Dr. Horovitz serves as a
director of Diacrin Inc., Biocryst Pharmaceuticals Inc., Synaptic Pharmaceutical
Corp., Magainin Pharmaceuticals, Inc., AVIGEN Inc. and Shire Pharmaceuticals
Co., Heavenly Door.com and several privately-held companies.
Joel D. Liffmann joined the Company as a director in November 1998. Since
September 1996, Mr. Liffmann has been a partner at Oracle Partners, L.P., a
private investment firm specializing in public securities investing and merchant
banking in health care, bioscience and related industries. From January 1993 to
April 1996, Mr. Liffmann was the Senior Vice President of Business Development
at Merck-Medco, Inc. From March 1990 to December 1992, Mr. Liffmann served as
Vice President/Business Development at Medco Containment Services. From August
1987 to February 1990, Mr. Liffmann served as Vice President of Corporate
Finance and from August 1982 to July 1987 as Vice President of Equity Research
at Drexel Burnham Lambert. Mr. Liffmann holds a degree from Boston University.
Mr. Liffmann serves as a director of Halsey Drug Co., Inc. and several
privately-held companies.
Section 16(a) Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
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 Securities and Exchange Commission. Based
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solely on its review of copies of such forms received by it, the Company
believes that all of its officers, directors and greater-than-10% shareholders
have complied with their Section 16(a) filing requirements in 1999, except that
(i) the O'Donnell Family Limited Partnership and controlling parties failed to
file a Form 4 relating to the sale by the partnership of 41,697 shares of Common
Stock in May 1999 and (ii) Oracle Partners, a member of the Oracle Group (as
hereinafter defined), and controlling parties did not timely file a Form 4 or
Form 5 relating to the purchase of 6,000 shares of Common Stock in August 1999.
Item 10. Executive Compensation
Summary Compensation Table
The following table sets forth certain information regarding compensation
for the years ended December 31, 1997, 1998 and 1999, earned by or paid to (i)
Robert Sammis, the Chief Executive Officer, and (ii) the other persons who were
executive officers of the Company at December 31, 1999 and whose total salary
and bonus exceeded $100,000 individually during the year ended December 31, 1999
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
-------------------- --------------------------------
Awards Payouts
-------------- ---------------
Securities
Other Annual Underlying All Other
Salary Compensation Options Compensation
Name and Principal Position Year ($) ($) (#) ($)
- --------------------------- --------- ---------- ----------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
Robert S. Sammis............... 1999 144,375 1.220(1) 0 1,444(6)
Chief Executive Officer 1998 135,000 1,350(1) 0 954(6)
1997 135,000 2,235(1) 0 0
James W. Clark, Jr............. 1999 129,375 2,070(1) 20,000 1,294(6)
Vice President of Finance, 1998 120,000 22,000(2) 300,000(3) 860(6)
Chief Financial Officer 1997 80,693 25,000(2) 300,000(3) 0
and Treasurer
Rosina Maar, M.D............... 1999 196,875 35,000(4) 300,000 1,969(6)
Vice President of Operations
and Chief Operating Officer
Susan Krivacic................. 1999 145,000 500(4) 70,000 1,450(6)
Senior Vice President of 1998 86,668 0 150,000(5) 917(6)
Marketing and Business
Development
</TABLE>
____________________________
(1) The Company paid insurance premiums in the designated amounts on term life
insurance policies on the lives of Mr. Sammis and Mr. Clark.
(2) Mr. Clark received a nonaccountable relocation allowance in the amounts
shown.
(3) The table treats the "reset" of option exercise prices as grants of new
options. The indicated options were originally granted in 1997 to Mr. Clark
at an exercise price of $4.675 per share. The exercise price was adjusted
to $2.75 in 1998. The total number of securities underlying options granted
during 1997 and 1998 to Mr. Clark was 300,000.
(4) The Company paid bonuses in the indicated amounts to Dr. Maar and Ms.
Krivacic. In addition to the items shown on the table, Dr. Maar, who
maintains her principal residence outside of Austin, receives housing and
automobile allowances and other reimbursement to cover expenses incurred
while in Austin.
(5) An option to purchase the indicated number of securities at an exercise
price of $3.125 per share was granted to Ms. Krivacic in March 1998. The
exercise price was reset at $2.75 in May 1998.
(6) The indicated amounts represent matching contributions, both vested and
unvested, to the Company's 401(k) Plan.
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Option Grants in Last Fiscal Year
The following table sets forth information concerning individual grants of
stock options made during 1999 to each of the Named Executive Officers:
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
Percent of Total
Number of Securities Options Granted
Underlying Options to Employees in Exercise Expiration
Name Granted(1) Fiscal Year(1) Price Date
- ---------------------- -------------------- ----------------- -------- ----------
<S> <C> <C> <C> <C>
Robert S. Sammis........... 0 N/A N/A N/A
James W. Clark, Jr......... 20,000 3% $1.50 March 2006
Rosina Maar, M.D........... 300,000 49% $1.125 February 2006
Susan Krivacic 20,000 3% $1.50 March 2006
</TABLE>
____________________________
(1) The table treats the reset of option exercise prices as the grant of new
options.
Options Exercised and Fiscal Year-End Values
The following table sets forth information concerning each exercise of
stock options by the Named Executive Officers during fiscal 1999 and the
aggregate number and value of unexercised options held by the Named Executive
Officers at December 31, 1999.
<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired on Value Underlying Unexercised Options In-The-Money Options At
Exercise Realized At Fiscal Year-End (#) Fiscal Year-End ($)(1)
------------ ---------- ----------------------------- --------------------------
(#) ($) Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Sammis....... 0 0 50,000 100,000 0 0
James W. Clark, Jr..... 0 0 124,000 196,000 0 0
Rosina Maar, M.D....... 0 0 60,000 240,000 0 0
Susan Krivacic......... 0 0 44,000 176,000 0 0
</TABLE>
____________________________
(1) The value of unexercised, in-the-money options is the difference between
the exercise price of the options and the fair market value of the
Company's common stock at December 31, 1999 ($.41, which was the closing
price of the Common Stock on the Over-the-Counter Bulletin Board at year
end).
Director Compensation
The Company reimburses directors for expenses incurred, if any, in
attending meetings of the Board of Directors. The Company does not pay director
fees to directors for their service on the Board. During 1997, the Board
adopted an informal option policy, pursuant to which directors are to receive
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annual option grants of 5,000 shares each at then current market values.
Pursuant to this policy, the Board made the following option grants during 1999:
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
Number of Securities
Underlying Options
Name Granted Exercise Price Expiration Date
- ------------------------- ---------------------- ---------------- --------------
<S> <C> <C> <C>
Zola P. Horovitz, Ph.D........ 5.000 $1.50 May 2004
Joel D. Liffmann.............. 2,500 $1.50 May 2004
Joseph L. Dowling............. 2,500 $1.50 May 2004
Craig Macnab.................. 5,000 $1.50 May 2004
</TABLE>
Also during 1999, the Board paid $18,000 to Zola Horovitz in respect of
consulting services rendered.
Employment Agreements
During 1996 Messrs. Thomas P. O'Donnell and Robert S. Sammis each became
parties to five-year employment contracts with the Company, pursuant to which
they became entitled to minimum base compensation of $150,000 and $135,000 per
year, respectively. The Company had the right to terminate either such
agreement with or without cause; provided, however, if employment was terminated
without cause, then the executive in question was entitled to receive a
severance payment equal to two (2) times the compensation received from the
Company in the twelve (12) months prior to the date of termination. If
employment was terminated either voluntarily by the executive or by the Company
for cause, then no severance was payable; provided, however, that if the
executive terminated his employment following a material reduction in his level
of responsibility, then such termination was deemed to be termination without
cause by the Company, and the executive was entitled to the severance payment
described above.
Effective February 28, 1998, Mr. O'Donnell and the Company entered into a
Confidential Agreement and Release, pursuant to which Mr. O'Donnell's employment
with the Company terminated. Pursuant to the Confidential Agreement and
Release, the Company is obligated to make total payments of approximately
$300,000 to Mr. O'Donnell over the course of a two-year period ending in
February 2000. In the Confidential Agreement and Release, Mr. O'Donnell
reaffirmed that he is bound by a noncompetition covenant and certain other
obligations through February 2000.
Mr. Sammis's employment contract, as described above, continues in effect.
Dr. Maar, Mr. Clark and Ms. Krivacic are also parties to employment
contracts. The agreement applicable to Dr. Maar provides for a two-year term
commencing in February 1999, with three automatic one-year renewal terms. The
agreement provides for minimum base compensation of $225,000 per year. The
agreement applicable to Mr. Clark provides for a one-year term, commencing in
June 1997, with four automatic one-year renewal terms. The agreement provides
for minimum base compensation of $120,000 per year. Ms. Krivacic's agreement,
which commenced in March 1998, also provides for an initial term of one year and
for four automatic one-year renewal terms. Her agreement provides for minimum
base compensation of $130,000 per year.
5
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Item 11. Security Ownership of Certain Beneficial Owners and Management
The Company is authorized to issue 75,000,000 shares of Common Stock. As
of December 31, 1999, there were 4,169,734 shares of Common Stock issued and
outstanding. The Company is authorized to issue 5,181 shares of Class A
Preferred Stock and 50,000 shares of Class B Preferred Stock. As of December
31, 1999, there were 4,603 shares of Class A Preferred Stock and 50,000 shares
of Class B Preferred Stock issued and outstanding.
Common Stock
The following table sets forth as of December 31, 1999, information with
respect to the beneficial ownership of the Company's outstanding Common Stock by
(i) each director of the Company, (ii) each of the Named Executive Officers,
(iii) all directors and executive officers of the Company as a group and (iv)
each shareholder known by the Company to be the beneficial owner of more than 5%
of the Company's outstanding Common Stock. Except as otherwise indicated, the
persons or entities listed below have sole voting and investment power with
respect to all shares of Common Stock owned by them. Pursuant to the beneficial
ownership rules under the Securities Exchange Act of 1934, as amended, each
named person and all directors and executive officers as a group are deemed to
be the beneficial owners of securities that may be acquired within sixty (60)
days of December 31, 1999 through the exercise of options or warrants. The
number of shares and percentages set forth opposite each shareholder's name in
the table below assumes the exercise of all such options and warrants. However,
the number of shares of Common Stock issuable upon exercise by any given
shareholder are not included in calculating the percentage of Common Stock
beneficially owned by any other shareholder.
<TABLE>
<CAPTION>
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned Class
- ------------------- ----------------------------- --------------------------
<S> <C> <C>
The Oracle Group 3,311,758(1) 44.4%
712 Fifth Avenue, 45th Floor
New York, New York 10019
Finova Mezzanine Capital, Inc. 1,818,182(2) 30.4%
500 Church Street, Suite 200
Nashville, Tennessee 37219
Robert S. Sammis 1,041,283(3) 24.7%
1717 West 6th St., #400
Austin, Texas 78703
O'Donnell Family Limited Partnership 621,081(4) 14.9%
7809 Brightman Lane
Austin, Texas 78733
Robert K. Williams, III 474,206(5) 11.2%
153 Kingswood Circle
Danville, California 94506
Thomas P. O'Donnell 291,283(6) 7.0%
7809 Brightman Lane
Austin, Texas 78733
</TABLE>
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<TABLE>
<CAPTION>
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned Class
- ------------------- ----------------------------- ------------------------
<S> <C> <C>
A. H. Rogers 255,451(7) 6.1%
17 South Briar Hollow Lane, Suite 304
Houston, Texas 77027
Randolph J. Haag 236,231(8) 5.5%
P. O. Box 12293
Zephyr Cove, Nevada 89448
James W. Clark, Jr. 139,000(9) 3.2%
1717 West 6th Street, #400
Austin, Texas 78703
Rosina Maar, M.D. 120,000(10) 2.8%
1717 West 6th Street, #400
Austin, Texas 78703
Susan Krivacic 44,000(11) 1.0%
1717 West 6th Street, #400
Austin, Texas 78703
Zola P. Horovitz, Ph.D. 22,500(12) .5%
30 Philip Drive
Princeton, New Jersey 08540
Joel D. Liffmann 2,500(13) .1%
712 Fifth Avenue, 45th Floor
New York, New York 10019
All Directors and Executive Officers as a 1,369,283(14) 30.2%
group (6 persons)
</TABLE>
____________________________
(1) "The Oracle Group," as used herein, refers to the following funds: Oracle
Partners, L.P., Quasar International Partners C.V., Oracle Institutional
Partners, L.P. and GSAM Oracle Fund, Inc. The shares listed (the "Oracle
Shares") include 3,068,667 shares that are issuable to The Oracle Group
pursuant to The Oracle Group's option to convert 4,603 shares of Class A
Preferred Stock to the Company's Common Stock and 217,391 shares that are
issuable to Oracle Partners, L.P., upon exercise of immediately exercisable
warrants. The Oracle Group may be deemed to beneficially own such 217,391
shares. Larry N. Feinberg is the Managing General Partner of Oracle
Partners, L.P. and Oracle Institutional Partners, L.P. Oracle Investment
Management, Inc., which is owned by Mr. Feinberg, acts as the investment
manager to Quasar International Partners C.V. and GSAM Oracle Fund, Inc.
Mr. Feinberg may be deemed to beneficially own the shares owned by The
Oracle Group.
(2) Include 1,818,182 shares that are issuable pursuant to this entity's option
to convert 50,000 shares of Class B Preferred Stock to the Company's Common
Stock.
(3) Mr. O'Donnell and Mr. Sammis have entered into agreements with each of Drs.
Dell, Ramsdell and Shulman, pursuant to which Messrs. Sammis and O'Donnell
are jointly entitled to direct the manner in which the aggregate 291,283
shares owned by Drs. Dell, Ramsdell and Shulman shall be voted. Mr. Sammis
may therefore be deemed to beneficially own these shares. Also includes
50,000 shares issuable to Mr. Sammis pursuant to immediately exercisable
options.
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(4) Ms. Kristina Breen O'Donnell Balcezak, a daughter of Thomas P. O'Donnell,
is the sole officer and director of the general partner of the O'Donnell
Family Limited Partnership and has voting and dispositive power with
respect to the 621,081 shares owned by the Partnership. Ms. O'Donnell may
therefore be deemed to beneficially own these shares.
(5) Includes (i) 109,400 shares held by Guarantee and Trust Co. FBO Robert K.
Williams III Sep/IRA, as to which Mr. Williams has voting and dispositive
power and (ii) 51,606 shares issuable to Mr. Williams pursuant to
immediately exercisable sales agent warrants.
(6) Mr. O'Donnell and Mr. Sammis have entered into agreements with each of Drs.
Dell, Ramsdell and Shulman, pursuant to which Messrs. Sammis and O'Donnell
are jointly entitled to direct the manner in which the aggregate 291,283
shares owned by Drs. Dell, Ramsdell and Shulman shall be voted. Mr.
O'Donnell may therefore be deemed to beneficially own these shares.
(7) Includes (i) 70,682 shares held by The Tennant Co. MPP Plan FBO A. H.
Rogers, (ii) 30,568 shares held by The Tennant Co. PSP Plan FBO A. H.
Rogers and (iii) 32,395 shares held by A. H. Rogers IRA, all as to which
Mr. Rogers has voting and dispositive power.
(8) Includes (i) 50,000 shares issuable to Mr. Randolph J. Haag pursuant to
immediately exercisable options and (ii) 51,606 shares issuable to Mr. Haag
pursuant to immediately exercisable sales agent warrants.
(9) Includes 124,000 shares issuable to Mr. Clark pursuant to immediately
exercisable options.
(10) Includes (i) 60,000 shares issuable to Dr. Maar pursuant to immediately
exercisable options and (ii) 60,000 shares issuable to Dr. Maar pursuant to
options that may be exercised within sixty (60) days..
(11) Includes 44,000 shares issuable to Ms. Krivacic pursuant to immediately
exercisable options.
(12) Includes 22,500 shares issuable to Dr. Horovitz pursuant to immediately
exercisable options.
(13) Includes 2,500 shares issuable to Mr. Liffmann pursuant to immediately
exercisable options.
(14) Includes (i) 291,283 shares owned by Drs. Dell, Ramsdell and Shulman, as to
which Mr. Sammis has voting power; (ii) 50,000 shares issuable to Mr.
Sammis pursuant to immediately exercisable options; (iii) 124,000 shares
issuable to Mr. Clark pursuant to immediately exercisable options, (iv)
60,000 shares issuable to Dr. Maar pursuant to immediately exercisable
options, (v) 60,000 shares issuable to Dr. Maar pursuant to options that
may be exercised within sixty (60) days, (vi) 44,000 shares issuable to Ms.
Krivacic pursuant to immediately exercisable options, (vii) 22,500 shares
issuable to Dr. Horovitz pursuant to immediately exercisable options, and
(viii) 2,500 shares issuable to Mr. Liffmann pursuant to immediately
exercisable options.
Preferred Stock
All of the Company's Class A Preferred Stock is owned by The Oracle Group,
as described in footnote (1) to the preceding table. All of the Company's Class
B Preferred Stock is owned by Finova Mezzanine Capital, Inc. None of the Class
A Preferred Stock or Class B Preferred Stock is owned by any director of the
Company or by any of the Named Executive Officers.
Potential Change in Control
In any election of directors, the holders of Class A Preferred Stock,
voting separately as a class, are entitled to elect that number of directors
(the "Class A Directors") as is proportionate to their ownership interest in the
Company, determined on an as-converted basis (giving effect to the conversion
of both the Class A Preferred Stock and the Class B Preferred Stock). On
an as-converted basis, the holders of
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Class A Preferred Stock currently have an approximate 34% interest in the
Company, which interest may increase over time as mandatory in-kind dividends
are paid with respect to the Class A Preferred Stock. The holder of the Class B
Preferred Stock may, at its option, vote as a class to elect one (1) member of
the Board of Directors (the "Class B Director").
Any failure to pay dividends on the Class A Preferred Stock is referred to
herein as a "Class A Nonpayment Event." A failure of the Company to pay
dividends on the Class B Preferred Stock on six (6) consecutive payment dates or
if the aggregate unpaid dividends ever equal or exceed $18 per share is referred
to herein as a "Class B Nonpayment Event." If a Class A Nonpayment Event or a
Class B Nonpayment Event occurs, then the Class A Directors are entitled to cast
two (2) votes on all matters, the Class B Director is entitled to cast the same
number of votes as may collectively be cast by the Class A Directors, and the
directors elected by the holders of Common Stock continue to have the right to
cast one (1) vote on all such matters. Accordingly, the directors elected by
the two (2) classes of Preferred Stock would together control the Board. If a
Class B Nonpayment Event occurs and there are no Class A Directors, then the
Class B Director would immediately be entitled to that number of votes as would
constitute a majority of all votes cast by the Board of Directors.
In August 1999, the Company suspended cash payment dividends on its Class B
Preferred Stock in order to maintain adequate working capital to fund its
operations. There can be no assurance that future dividend payments will be
made or that a Class B Nonpayment Event will not occur.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CLINICOR, INC.
Date April 26, 2000 By /s/ Robert S. Sammis
------------------ ----------------------------
Robert S. Sammis
President, Principal Executive Officer
10
