SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
PRELIMINARY PROXY STATEMENT
Amendment No. 2
PURSUANT TO SECTION 14A OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant []
Check the appropriate box:
[X] Preliminary Proxy Statement
[] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[] Definitive Proxy Statement
[] Definitive Additional Materials
[] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
BICO, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee
[] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(I)(1), 14a-
6(i)(2) or Item 22 (a)(2) of Schedule 14a
[] $500 per each party to the controversy pursuant to Exchange
Act Rules 14a-6(i)(3)
[] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
And 0-11
1) Title of each class of securities to which transaction
Applies:
2) Aggregate number of securities to which transaction
Applies:
3) Per unit price or other underlying value of transaction
Computed pursuant to Exchange Act Rule 0-11 (set forth
The amount on which the filing fee is calculated and state
How it was determined):
4) Proposed maximum aggregate value of the transaction:
5) Total fee paid:
[X] Fee paid previously with preliminary materials
[] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
Which the offsetting fee was paid previously. Identify the
Previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PRELIMINARY
BICO, INC.
2275 SWALLOW HILL ROAD
PITTSBURGH, PA 15220
October 23, 2001
Dear Stockholder:
You are invited to attend a Special Meeting of Stockholders
to be held on November 30, 2001 at the Holiday Inn in
Washington, PA at 9:00 a.m., Eastern Standard Time.
The accompanying Notice of Special Meeting and Proxy
Statement provide information about the matter to be acted upon
by the stockholders.
Our Board of Directors appreciates your continued support
and urges you to vote FOR the item presented.
Sincerely,
Fred E. Cooper
CEO
PRELIMINARY
BICO, INC.
2275 Swallow Hill Road
Pittsburgh, PA 15220
Telephone 412-429-0673
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 30, 2001
The Special Meeting of the stockholders of BICO, Inc., a
Pennsylvania Corporation will be held at the Holiday Inn,
Washington, Pennsylvania, on November 30, 2001 at 9:00 a.m.,
local time, for the following purpose:
1. To amend our Articles of Incorporation, as amended; to
increase the number of authorized shares of common stock to
4,000,000,000, as set forth in the proxy statement.
By Order of the Board of Directors
___________________________________
Anthony J. Feola, Secretary
Date: October 23, 2001
PLEASE NOTE: ONLY BONA FIDE STOCKHOLDERS WILL BE ADMITTED TO THE
SPECIAL STOCKHOLDERS MEETING; PHOTO IDENTIFICATION AND PROOF OF
OWNERSHIP AS OF THE RECORD DATE WILL BE REQUIRED FOR ADMITTANCE.
If you can't attend the Special Meeting in person, you should
fill out and mail the enclosed proxy card as soon as you can to:
Proxy Tabulation Dept., Mellon Investor Services, 44 Wall Street,
6th Floor, New York, New York 10005. We'd appreciate your prompt
response via proxy. For your vote to count, you need to return
your proxy card by November 29, 2001. You can change your vote
by either: sending a written notice to our secretary, Anthony J.
Feola; by sending a new proxy with a later date; or by coming to
the meeting and changing your vote in person.
PRELIMINARY
BICO, Inc.
The Bourse, Building 2500, Second Floor
2275 Swallow Hill Road | Pittsburgh, PA 15220
(412) 429-0673 FAX (412) 279-1367
BICO, INC.
We plan to mail this Proxy Statement by October 29, 2001
PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
November 30, 2001
Our board of directors sent this proxy to you. If you send
in your proxy card and want to change your vote, you can do so in
one of three ways:
(1) Send a written notice to our secretary, Anthony J. Feola at
our address noted above
(2) Send a new proxy with a later date than the first one
(3) Come to the meeting and change your vote in person.
We're paying for all the costs and expenses to send this
proxy to you. Those costs include reimbursements to other people
who send proxies for us.
September 4, 2001 was the record date for this meeting.
Record date means that only the people who owned our stock on
September 4, 2001 are allowed to vote at this meeting and get
this proxy. Each share of our common stock is entitled to one
vote. We had 2,450,631,119 shares outstanding as of that record
date.
SOLICITATION OF PROXIES AND VOTING PROCEDURES
Our board of directors is soliciting this proxy. We are
paying the expenses of this solicitation, including the cost of
preparing, handling, printing and mailing the notice of special
meeting, proxy and proxy statement. We estimate that it will
cost about $200,000. Part of that total includes fees we'll pay
to Mellon Investor Services, our registrar and transfer agent,
for its assistance in the solicitation of proxies. We'll also
reimburse brokers and other persons holding shares in their names
or those of their nominees for their expenses for sending proxy
materials to stockholders and obtaining their proxies.
We urge you to specify your choice, date, and sign and
return the enclosed proxy in the enclosed envelope. We'd
appreciate your prompt response. Each share of our common stock
outstanding as of the record date is entitled to one vote on each
matter submitted to the stockholders for a vote at the meeting.
The matters submitted to a vote at the meeting will be decided by
the vote of a majority of all votes cast in person or by proxy at
the meeting. Abstentions will be treated as shares present and
entitled to vote for purposes of determining the presence of a
quorum, but will not be considered as votes cast in determining
whether the stockholders have approved a matter. If a broker or
other record holder or nominee indicates on a proxy that it does
not have authority as to certain shares to vote on a particular
matter (commonly referred to as "broker non-votes"), those shares
will not be considered as present and entitled to vote with
respect to that matter.
Transfer Agent
Mellon Investor Services in New York, New York acts as our
registrar and transfer agent for our common and preferred stock.
We act as our own warrant registrar transfer agent.
DESCRIPTION OF SECURITIES
Our authorized capital currently consists of 2,500,000,000
shares of common stock, par value $.10 per share and 500,000
shares of cumulative preferred stock, par value $10.00 per share.
Preferred Stock
Our Articles of Incorporation authorize the issuance of a
maximum of 500,000 shares of cumulative convertible preferred
stock, and authorize our board of directors to define the terms
of each series of preferred stock.
As of September 30, 2001, we had no outstanding shares of
preferred stock.
Common Stock
Holders of our common stock are entitled to one vote per
share for each share held of record on all matters submitted to a
vote of stockholders. Holders of our common stock do not have
cumulative voting rights, and therefore the holders of a majority
of the shares of common stock voting for the election of
directors may elect all of the directors, and the holders of the
remaining common stock would not be able to elect any of the
directors. Subject to preferences that may be applicable to the
holders of our preferred stock, if any, the holders of our common
stock are entitled to receive dividends that may be declared by
our board of directors.
In the event of a liquidation, dissolution or winding up of
our operations, whether voluntary or involuntary, and subject to
the rights of any preferred stockholders, the holders of our
common stock would be entitled to receive, on a pro rata basis,
all of our remaining assets available for distribution to our
stockholders. The holders of our common stock have no
preemptive, redemption, conversion or subscription rights. As of
September 30, 2001, we had 2,450,631,119 shares of
our common stock outstanding.
Dividends
We have not paid cash dividends on our common stock, with the
exception of 1983, since our inception. We do not anticipate
paying any dividends at any time in the foreseeable future. We
expect to use any excess funds generated from our operations for
working capital and to continue to fund our various projects.
Our Articles of Incorporation restrict our ability to pay cash
dividends under certain circumstances. For example, our board
can only declare dividends subject to any prior right of our
preferred stockholders to receive any accrued but unpaid
dividends. In addition, our board can only declare a dividend to
our common stockholders from net assets that exceed any
liquidation preference on any outstanding preferred stock.
Subordinated Convertible Debentures
From time to time, we issue subordinated convertible
debentures that have a one-year term. The debentures earn
interest and are convertible into shares of common stock. Our
debentureholders cannot vote at this meeting. Only our
stockholders can vote.
As of September 30, 2001, we had no debentures outstanding.
Employment Agreement Provisions Related to Changes in Control
We have employment agreements with change in control
provisions with the following officers: Fred E. Cooper, Anthony
J. Feola, Glenn Keeling, Michael P. Thompson, and one non-
executive officer. The agreements provide that in the event of a
"change of control," we must: issue to Mr. Cooper shares of
common stock equal to 5%; issue to Mr. Feola 4%; issue to Mr.
Keeling 3%; and issue to Mr. Thompson and the one non-executive
officer employee 2% each of our outstanding shares of common
stock. For purposes of these agreements, a change of control is
deemed to occur: when 20% or more of our outstanding voting stock
is acquired by any person; or when 1/3 or more of our directors
are not continuing directors, as defined in the agreements; or
when a controlling influence over our management or policies is
exercised by any person or by persons acting as a group within
the meaning of the federal securities laws.
Warrants
As of September 30, 2001, we had outstanding warrants - most
anyt of which are not currently exercisable - to purchase
95,196,560 shares of our common stock. These warrants
have exercise prices ranging from $.015 to $3.20 per share and
expiration dates through August 10, 2006, and are held by members
of our scientific advisory board, certain employees, officers,
directors, loan guarantors, and consultants. As of September 30,
2001, many of our outstanding warrants were not currently
exercisable - 85,996,898 warrants were subject to a
lock-up arrangement where the warrant holders agreed not to
exercise them until January 2002.
Holders of warrants are not entitled to vote, to receive
dividends or to exercise any of the rights of the holders of
shares of our common stock for any purpose until the warrant
holder properly exercises the warrant and pays the exercise
price.
MARKET PRICE FOR COMMON STOCK
Our common stock trades on the electronic bulletin board
under the symbol "BIKO." On October 22, 2001, the
closing bid price for the common stock was $.039 per share.
The following table sets forth the high and low bid prices for
our common stock during the calendar periods indicated, through
September 30, 2001. Because our stock trades on the electronic
bulletin board, you should know that these stock price quotations
reflect inter-dealer prices, without retail mark-up, markdown or
commission, and they may not necessarily represent actual
transactions.
Calendar Year High Low
and Quarter
1998 First Quarter $ .250 $ .0937
Second Quarter $ .1875 $ .0313
Third Quarter $ .359 $ .0313
Fourth Quarter $ .126 $ .049
1999 First Quarter $ .084 $ .049
Second Quarter $ .340 $ .048
Third Quarter $ .125 $ .070
Fourth Quarter $ .099 $ .050
2000 First Quarter $1.050 $.051
Second Quarter $.400 $.160
Third Quarter $.184 $.12
Fourth Quarter $.122 $.049
2001 First Quarter $.1355 $.05
Second Quarter $.072 $.037
Third Quarter $.057 $.01
As of September 4, 2001, we had approximately 135,400
holders, including those who hold in street name, of our common
stock, and no holders of our preferred stock.
SELECTED FINANCIAL DATA
YEARS ENDED DECEMBER 31st
2000 1999 1998 1997 1996
Total Assets $21,930,070 $15,685,836 $ 9,835,569 $12,981,300 $14,543,991
Long-Term
obligations $ 2,211,537 $ 1,338,387 $ 1,412,880 $ 2,697,099 $ 2,669,727
Working Capital $ 754,368 $ 4,592,935 ($ 9,899,008) $ 888,082 $ 1,785,576
Preferred Stock $ 0 $ 720,000 $ 0 $ 0 $ 0
Net Sales $ 340,327 $ 112,354 $ 1,145,968 $ 1,155,907 $ 597,592
TOTAL REVENUES $ 345,874 $ 165,251 $ 1,196,180 $ 1,260,157 $ 600,249
Other Income $ 589,529 $ 1,031,560 $ 182,033 $ 165,977 $ 176,478
Warrant
Extensions $ 5,233,529 $ 4,669,483 $ 0 $ 4,046,875 $ 9,175,375
Benefit (Provision)
for Income
Taxes $ 0 $ 0 $ 0 $ 0 $ 0
Net Loss ($42,546,303)($38,072,578)($22,402,644)($30,433,177)($24,045,702)
Net Loss per
Common Share:
Basic ($.04) ($.05) ($.08) ($.43) ($.57)
Diluted ($.04) ($.05) ($.08) ($.43) ($.57)
Cash Dividends
per share:
Preferred $ 0 $ 0 $ 0 $ 0 $ 0
Common
$ 0 $ 0 $ 0 $ 0 $ 0
For more information, you should read our Form 10-K for the
year ended December 31, 2000, which you can get from us by
following the directions on the last page of this proxy.
INCREASE IN NUMBER OF AUTHORIZED SHARES
Our Articles of Incorporation, as amended, authorize the
issuance of 2,500,000,000 shares of common stock, par value $.10
per share. As of September 30, 2001 we had 2,450,631,119 shares
of our common stock outstanding, plus currently exercisable warrants
to purchase 9,199,662 shares of our common stock.
All our shares of common stock will be equal to each other
with respect to liquidation rights and dividend rights and there
are no preemptive rights to purchase any additional shares of
common stock.
In the event of a liquidation, dissolution or winding up of
our operations, whether voluntary or involuntary, and subject to
the rights of any preferred stockholders, the holders of our
common stock would be entitled to receive, on a pro rata basis,
all of our remaining assets available for distribution to our
stockholders.
We have not paid cash dividends on our common stock,
with the exception of 1983, since our inception. We do not
anticipate paying any dividends at any time in the foreseeable
future. Our Articles of Incorporation restrict our ability to
pay cash dividends under certain circumstances. For example, our
board can only declare dividends subject to any prior right of
our preferred stockholders to receive any accrued but unpaid
dividends. In addition, our board can only declare a dividend to
our common stockholders from net assets that exceed any
liquidation preference on any outstanding preferred stock. Our
board of directors unanimously approved a resolution to propose
that the stockholders increase the number of authorized shares of
common stock to 4,000,000,000 by amending our Articles of
Incorporation.
Our shareholders have already authorized significant
increases in the number of our authorized shares of common stock
over the last several years. Because we have not been able to
generate any significant cash from operations we have
historically funded our activities by issuing stock to raise
capital. In 1996, we had 60 million shares authorized, and that
number has increased every year since then:
Our shareholders approved an increase to 100 million shares
in February 1997;
Our shareholders approved an increase to 150 million shares
in September 1997;
Our shareholders approved an increase to 300 million shares
in February 1998;
Our shareholders approved an increase to 600 million shares
in June 1998;
Our shareholders approved an increase to 975 million shares
in March 1999;
Our shareholders approved an increase to 1.7 billion shares
in February 2000;
Our shareholders approved an increase to 2.5 billion shares
in May 2001; and
We're now asking you to approve another increase to 4 billion shares.
Each time we ask our shareholders to approve an increase in
the number of authorized shares and we have to sell those new
shares to fund our operations, it dilutes the ownership of our
existing stockholders. However, until we have other sources of
funds, like material revenues from our projects, it's the only
way we can raise money to continue operations. If we do not
achieve sufficient cash flow from operations we may need to ask
our stockholders for another increase in the number of shares
authorized.
If you approve the increase, our board of directors will be
able to authorize the sale of those shares without your
additional approval. Our board will have the ability to use the
shares to raise more capital to fund our operations and research
and development projects, to invest in other companies that
already generate revenues or have short-term revenue-generating
potential, or to support the capital needs of our current
projects. Our board will authorize our management to use any
funds raised to fund existing or new research and development
projects, or other investments, as our management determines is
in the best interest of our company. We know that we will need
to sell new shares - we just don't know if we'll have to sell all
of them, or how much we'll receive. As of the date of this
proxy, we plan to sell convertible preferred stock and/or
convertible debentures in a private placement on a best-efforts
basis, as we've done in the past.
In 1998, we issued over 280 million shares from convertible
debentures;
In 1999, we issued over 515 million shares from convertible
debentures;
In 2000, we issued over 93 million shares from convertible
debentures and convertible preferred stock; and
In 2001, we issued over 297 million shares from convertible
debentures.
Those new convertible securities will not be and have not
been registered under the federal securities laws and may not be
offered or sold in the United States without registration or an
applicable exemption from registration requirements. Currently,
we expect that the convertible debentures or preferred stock
will be similar to prior sales - they will be convertible into common
stock after a holding period, at a discount to the market price
at the time of conversion, and will probably not have a minimum
conversion price. The convertible debentures and/or preferred
stock will probably not be secured and we will have the right to
redeem them. When we sell these convertible securities, it could
cause our stock price to fall significantly,and we don't have any
control over that. Factors including the timing of conversions,
the downward pressure on our stock price, and the additional number
of shares needed for conversion with no limit all contribute to the
downward pressure on our stock price. In addition, although the
purchasers of our convertible preferred stock agree not to sell our
stock short, if other investors sell short, it will further contribute
to the decline of our stock price. In the past few years, we've sold
both convertible securities and common stock in various offerings, all
of which were on a best-efforts basis:
We registered 800 million shares of common stock in the
third quarter of 2001;
We registered approximately 431 million shares in the third
quarter of 2000, which included both common stock and conversion
shares for convertible preferred stock and convertible
debentures;
We registered 375 million shares of common stock in the
second quarter of 1999; and
We registered 200 million shares of common stock in the last
quarter of 1998.
Selling more of these convertible securities will further
dilute your ownership in our stock, but until we find another way
of raising significant funds, we must continue to sell our stock.
We are making progress in our quest to generate revenues, and we
have received some contracts during the last several months:
Our Biocontrol Technology division received a $1.5 million
manufacturing contract from the U.S. Army, and $238,000
manufacturing contract from a private company. We believe the
U.S. Army contract will generate $1.5 million in revenue during
the first year, beginning in the 4th quarter of 2001, with
additional revenue for two additional years; we filed a copy of
that contract as an exhibit to our Form 8-K/A filed October 15,
2001.
Petrol Rem received a distribution agreement for
approximately $125,000 per year from Alaskan oil spill clean-up
company called F.R.O.G. to distribute Petrol Rem products. The
contract has an initial term of one year, with automatic renewals
on a yearly basis. Due to recent international events, including
the September 11th tragedy, the Alaskan company has been focused
on other matters, and they've told us that they hope to begin
selling our products within the next month. Through Tireless,
LLC, we received a sub-contract to help clean up tire piles in
Ohio. We began that project at the beginning of October, and
we'll begin billing for our services at the end of the month. We
believe the Tireless sub-contract could generate revenue of at
least $500,000 over the next year based on our equipment's
capacity to shred tires over the one-year period of the contract.
In addition, INTCO is generating revenue and income - since
Petrol Rem owns 51% of INTCO, that also helps our financial
situation.
On October 16, 2001, we announced that consolidated revenue
for the 3rd quarter of 2001 was approximately $1.8 million. The
revenue was generated primarily by Petrol Rem and its subsidiary,
INTCO - they had revenue of over $1.6 million.
ViaCirq is still negotiating a contract with China's Phoenix
Hospital Management to form a joint venture that would bring in
funds for ViaCirq. The tragic events of September 11, 2001 have
further delayed the travel and communication necessary to
finalize the transaction.
Rapid HIV Detection Corp is receiving purchase orders for
its rapid HIV testing kits, including an order for 14,000 tests
from Walter Reed Army Institute of Research in August - Walter
Reed ordered additional 1,200 tests in October. So far, Rapid
HIV has only generated minimal revenues of approximately $38,000,
primarily from sales of the InstantScreen test. We discuss Rapid
HIV later in this section.
Despite our progress, our management does not believe
that, until full-scale manufacturing of the noninvasive glucose
sensor begins, or the sale of our other products generate
significant revenues - revenues which exceed our expenses and generate
income and positive cash flow - we don't presently have alternative
means to raise additional funds. For example, since we began our Petrol
Rem and ViaCirq projects, through December 31, 2000 we've spent $13.9
million and $15.6 million, respectively, and only realized revenues
of $1,150,000, and $122,500, respectively for the first six months
of 2001 - from each of those projects. Because the market price
for our stock has remained low it has been necessary to sell more
shares than originally anticipated in order to raise sufficient
capital; therefore, our management and our board believe that
it's necessary to authorize more shares.
The proposal to increase the number of authorized shares is
part of our management's long-term plan to continue funding our
existing and future research and development projects, and to
fund manufacturing start-up of the noninvasive glucose sensor.
Any future sale of additional shares, whether in a public or
private offering, will dilute your holdings. Our management has
no current specific plans for any proceeds received from the
future sale of the additional shares, but may use any proceeds to
continue funding our operations, existing research and
development projects, manufacturing, and other unrelated projects
which they believe are in the best interest of our company.
Those projects are risky, and our management can't assure you
that any project will be successful or profitable.
During the past several years, we have invested in companies
we believe will generate revenue. In 2000, we invested
approximately $1.25 million in INTCO, an environmental clean-up
company. INTCO is part of our Petrol Rem subsidiary, and is
generating revenues and income. INTCO was generating income
when we acquired our interest in 2000, and its internal financial
information shows net income of approximately $287,000 from
January 1, 2001 through August 31, 2001. INTCO was the primary
reason for Petrol Rem's increased revenues in 2001; INTCO's
revenues aggregated approximately $1.1 million during the first
two quarters of 2001. In 2000, we also invested in Tireless LLC,
which is another part of our Petrol Rem operations. We provided
Tireless with $455,000 in working capital, and to date Tireless
has not generated any revenues.
We've also invested in other companies over the last
few years because our management believes they will either
generate revenues, or will bring strength and support to our
diabetes-related projects. Four of those companies, MicroIslet,
Inc., and Diabecore Medical Inc, which are research
and development companies, plus American Inter-Metallics, Inc.,
and Insight Data Link, are unconsolidated subsidiaries, none of
which have any revenues to date. Beginning in 1999 and through
June 30, 2001, we've invested a total of approximately $3.6
million in those four companies. We don't currently anticipate
increasing our investment in any of them. We loaned $110,000 to
the principal of American Inter-Metallics in order to assist that
company in closing a transaction which will generate revenues.
The transaction involves the creation of a distribution system in
Europe to sell American Inter-Metallic's products and generate
revenue. As of the date of this filing, American Inter-
Metallics informed us that they are in the final stages of
closing that transaction and they expect to repay the loan within
the next month. We don't intend to make any additional loans or
investments in connection with American Inter-Metallics. Through
our subsidiary Petrol Rem, we've also loaned money to Practical
Environmental Solutions, Inc., a Pennsylvania company that
acquired technology used to safely convert municipal sludge to
recyclables that comply with state and federal environmental
laws. Petrol Rem has loaned a total of $3.1 million to Practical
Environmental as of June 30, 2001. Practical Environmental has
made interest payments on the amount due. The loan, which was
originally due on August 31, 2001 has been extended until January
31, 2002; no principal payments have been made to date. Our
management is considering whether to convert all or part of that
loan to an equity investment - they are making that decision
because Practical Environmental is willing to make that
conversion and because Practical Environmental has been generating
revenues since January 2001. As of September 30, 2001, Practical
Environmental's internal financial information shows revenues of
$426,000; they are still operating at a loss. We don't currently
intend to make any additional loans or investments in Practical
Environmental, except for the possible conversion of the existing
loan to equity.
In 2001, we formed Rapid HIV Detection Corp., which we
recently formed to market rapid HIV tests. Those rapid HIV tests
include:
InstantScreen, which is the initial test for HIV;
InstantConfirm, which is used to verify all positive
results; and
InstantDifferentiate, which indicates whether the patient
has HIV-1 or HIV-2. HIV-1 is the most common form of
HIV; HIV-2 is a less aggressive form found in some parts
of the world, including West Africa.
The InstantScreen test takes 30 seconds to produce results.
Only a few drops of blood are needed, and the blood is drawn with
a finger prick, rather than intravenously with a needle and vial
of blood. No additional material or special knowledge is needed
to administer the test, and only elementary level reading skills
are required. The test can be produced in different formats,
depending upon whether it will be used in a doctor's office,
hospital or in the field.
The InstantConfirm test takes about 8 minutes to perform and
is the first rapid HIV test to use the Western-Blot type HIV
confirmation technology. The Western-Blot is recognized as the
gold standard of HIV confirmation. This phase of the test is
critical, since false-positive results have been a significant
historical problem with HIV testing.
The InstantDifferentiate is used if the patient tests
positive for HIV, in order to determine whether the patient is
infected with HIV-1 or HIV-2. HIV-2 is a less aggressive form of
HIV that causes AIDs after a longer period of time than HIV-1,
and is prevalent in certain parts of the world, including West
Africa.
In order to acquire the exclusive, world-wide marketing
rights to the rapid HIV tests, we entered into a marketing
agreement with GAIFAR, a German company which owned all the
rights to the tests, and Dr. Heinrich Repke, the man who
developed the tests. The marketing rights were assigned to Rapid
HIV Detection Corp - we own 75% and GAIFAR owns 25% of Rapid
HIV's common stock. GAIFAR retained the manufacturing rights for
the tests. We entered into the agreement in June 2001 and
acquired the marketing rights at that time. The initial terms of
the agreement allowed us a due diligence period of 8 weeks to
withdraw from the agreement, but in July, all the parties agreed
to extend that date until October 15, 2001. The parties also
agreed that we would need to provide a copy of a resolution
signed by our board of directors approving the contract. In
October, we completed our due diligence period and our board
provided their unanimous resolution, making the marketing
agreement fully effective, which means that we no longer have a
right to withdraw. The marketing agreement, which we filed as
an exhibit to a Form 8-K filed October 15, 2001, has a minimum
ten-year term and calls for total payments of $7,000,000 through
the 3rd quarter of 2002. When the marketing agreement became
effective in October 2001, all funds previously loaned were
applied to the total $7 million consideration. The original
agreement called for a loan in the amount of $500,000 to the
owner of the rapid HIV tests and technology, but we agreed to
loan another $125,000 during the 2nd quarter while we continued
our due diligence, so the total loans were $625,000 as of June
30, 2001. During the 3rd quarter of 2001, we loaned an
additional $375,000 while we completed our due diligence;
therefore, the total loan amount applied to the $7 million total
due was $1 million. That loan was made part of the
consideration we paid to acquire the exclusive worldwide
marketing rights to the rapid HIV tests and technology, and is
now part of our investment in Rapid HIV. The remaining $6
million in payments are due from October 20, 2001 through August
20, 2002. The payments include a range of $125,000 per month for
the 3 months from October- December 2001 to $1 million per month
for the 4 months from April - July of 2002. The original
marketing agreement provided for payments through the 2nd quarter
of 2002, and we renegotiated for a longer payment period in
October 2001.
We will be using some of the proceeds from selling the stock
proposed in this proxy to make future payments under the
marketing agreement, unless we can generate enough revenue from
selling the rapid HIV tests to cover the payments. If we fail to
make the payments when they are due, we will lose the marketing
rights. Our management entered into the Marketing Agreement and
plans to spend that money because they believe that the tests are
superior, and that we will be able to sell them to generate
revenue. The tests are priced according to the quantities
purchased and the purchaser's intended use. For example,
InstantScreen tests are priced at $5 or less - we plan to charge
a research facility, like Walter Reed, less than $5, and charge
commercial users closer to $5, depending upon the quantity. The
InstantConfirm and InstantDifferentiate tests will probably be
sold together, and we plan to charge between $12-15 for that
package.
Based on studies conducted by various health institutions,
which are summarized in the next two bullet points, our
management believes investing in Rapid HIV is in the best
interest of our company:
In approximately 200 tests performed by the Noguchi Memorial
Institute for Medical Research in Ghana, as well as 250 samples
in an evaluation by the World Health Organization, and 150
samples evaluated by the National Institute for Virology in South
Africa, our rapid HIV test performed with 100% accuracy.
Walter Reed Army Institute of Research completed its own
evaluation of the our rapid HIV test - in nearly 600 samples, our
rapid HIV test showed perfect results - 100% sensitivity and 100%
specificity.
Our management also believes that investing in Rapid HIV is a
good use of our company's funds because they believe that our
rapid HIV tests are superior overall to other available tests,
including Determine, Oraquick and Medmira:
One significant problem with other tests is that they have
not performed as well in the field as they have in a laboratory.
Our Rapid HIV tests can be used anywhere. This enables us to
take the tests directly to the people who need it, rather than
trying to convince them to travel distances to laboratories or
hospitals.
Another significant problem with HIV testing on a massive
scale is time - only a rapid HIV test will work. The speed of
our tests allows each patient to receive results immediately,
without leaving the test site. Tests that require the patient to
leave samples and return for them later not only jeopardize
confidentiality - but those tests are also susceptible to an
alarming but common occurrence - patients who never return for
their test results.
Our test does not require refrigeration and contains
compounds that destroy the HIV cells and other infectious cells
contained in test sample. Those cells are destroyed by one of
the chemical agents included in the test solution for that
purpose - those chemical agents can only destroy the cells in the
test sample, and cannot help to cure HIV. This means our tests
can be discarded without further sterilization or the need for
toxic waste treatment.
The result of our test can be permanently attached to the
patients' file, allowing the patient to provide his HIV status at
any time.
Our tests are affordable - we plan to charge $5 or less in
most instances for the InstantScreen test.
Although our initial focus is marketing our rapid HIV tests
outside the United States, we are also pursuing FDA approval to
sell the test in the U.S. GAIFAR and Dr. Repke began the FDA
process in November 2000 and we are currently working with GAIFAR
to design the trials needed for a full submission. Our past
experience with the FDA indicates that it will not be a quick or
easy process. We began trying to obtain FDA approval for our
noninvasive glucose sensor in 1994, and we still don't have FDA
approval. We've conducted several sets of clinical trials in our
effort to obtain FDA approval for our noninvasive glucose sensor,
and the trials we began in October 2000 are continuing. We have
not received any revenue from our noninvasive glucose sensor
since 1999.
Except for the transactions we discussed in this section,
we don't have any specific plans to invest in other companies through
acquisitions or joint ventures, or other investments at this time.
We also plan to use the proceeds from selling our stock to
help continue to fund our various projects. For example, our
research and development expenses increased to $6.6 million in
2000 from $4.4 million in 1999. Most of our research and
development expenses are incurred in connection with our
noninvasive glucose sensor project, which is still in the
clinical trials designed and conducted by Joslin Diabetes Center
in connection with our efforts to obtain FDA approval.
We also have payments due in connection with the settlement
of our class action lawsuit. We agreed to pay a total of $3.45
million to settle the lawsuit; we made a payment of $2,150,000 in
September 2001. The parties agreed to extend the payments due on
the last $1.3 million payment, plus an additional $225,000 for
extending the payment due dates. We made two payments of $500,000
each in October and plan to make a $525,000 payment in November.
We plan to use the proceeds from selling some of our new stock to
make the final payment.
Part of any proceeds we receive from selling our stock will
also be used for general and administrative expenses, including
salaries and bonuses. In 2000, we paid our executive officers
and directors a total of approximately $3,768,000, which includes
all payments from not only BICO, but all of our subsidiaries. In
the first quarter of 2001, we had to pay David L. Purdy
approximately $900,000 when he left BICO. We've replaced him
with someone who earns less than Mr. Purdy. Other than that
payment to Mr. Purdy, which we already made, we don't expect
executive compensation to increase during 2001.
In the past, we made loans to certain officers and directors
for the reasons we discuss in the Loans section of this proxy -
the primary reason was to refinance loans secured by BICO stock,
so the stock wouldn't have to be sold. We believe that if our
officers had been forced to sell their stock, and to disclose the
sale, it would have hurt our stock price because many people view
insider stock sales as a negative message. We haven't made any
similar loans since 1999, and we don't plan to make any more
loans at the present time.
Although our stockholders approved a reverse stock split of
up to one for twenty in June 1998, we have no current plans to
conduct a reverse stock split.
Our common stock trades on the electronic bulletin board.
Until late 1998, we traded on the Nasdaq Small-Cap market. In
1998, Nasdaq implemented new requirements to trade on the Small-
Cap market, including a $1 minimum price per share. Since our
stock trades at less than $1 per share, we were delisted. Our
stock continues to trade with acceptable trading volume on the
electronic bulletin board. Although our overall stock price has
declined over the past several years - as you can see from the
Market Price for Common Stock section - we don't believe the
declining price of our stock has much to do with our delisting
from Nasdaq. Rather, we believe it is due in part to the
increasing number of authorized shares as well as the reality
that we need to continue to sell our stock to fund operations,
and the dilutive impact of those facts.
Our board of directors unanimously recommends that you
approve the proposal to amend our Articles of Incorporation to
increase the number of our authorized shares of common stock to
4,000,000,000. We need a majority to approve the increase. If
you don't specify any vote and you send in a properly executed
proxy, your stock will be voted in favor of the increase.
OUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
RECENT DEVELOPMENTS
In July 2001, we filed a registration statement of Form S-3 to
conduct an offering of 800 million shares of our common stock at
$.04 per share on a best-effort basis. Because the price of our
stock fell below $.04, we were unable to sell at that price and we
raised $9,900,000 in late July and early August by selling 769,410,099
shares of stock at an average price of approximately $.013 per share
to a small number of institutional or accredited investors. Sales
to these investors occurred at prices determined based on a formula, disclosed
to those investors, which called for shares to be sold at 88% of the closing
bid price over a period of several days following the investor's commitment.
In Note J to our Form 10-Q for the quarter ended June 30, 2001, we disclosed
that we had issued 409,100,387 shares from subscriptions of $5,650,000 - after
that Form 10-Q was filed, we issued an additional 360,309,712 shares from
subscriptions of $4,250,000. We initially raised $11,164,000 from sale of
common stock subscriptions, but we cancelled $1,254,000 in commitments from our
investors because our stock price was so low, so we raised a net total of
$9,900,000 by issuing 769,410,099 shares. We filed an amendment to Note J of
our Form 10-Q on October 24, 2001 to reflect that updated information. In
mid-August, following these sales, we filed a post effective amendment to the
registration statement indictating that we would offer the shares at $.015.
Neither our registration statement nor our post-effective amendment correctly
reflected the pricing of the offering to the accredited investors. We have been
advised by counsel that it is not likely that we would face liability from
initial investors in the offering. We are uncertain what effect, if any, our
incorrect disclosure regarding the terms of the offering may have had on
secondary market transactions, and whether there may be a basis to assert any
claims against us by purchasers or sellers of our stock other than the initial
investors, or the amount of any possible claims. If there are any successful
claims, we would need to use proceeds from the new shares we're asking you to
approve to address those claims.
DIRECTORS AND EXECUTIVE OFFICERS
Name Age Director Position
Since
Fred E. Cooper 56 1989 Chief Executive Officer,
Executive Vice President,
Director
Anthony J. Feola 53 1990 Chief Operating Officer,
Director
Michael P. Thompson 51 Chief Financial Officer
Glenn Keeling 50 1991 Senior Vice President,
Director
Ben Johnson 57 Executive Vice President
Stan Cottrell 58 1998 Director
Paul W. Stagg 54 1998 Director
FRED E. COOPER, 56, is our chief executive officer, executive
vice president and a director; he devotes approximately 60% of
his time to BICO, and 40% to Diasense. Prior to joining us, Mr.
Cooper co-founded Equitable Financial Management, Inc. of
Pittsburgh, PA, where he was the executive vice president until
he left in August 1990. Our board of directors appointed him
chief executive officer in January 1990. He is also an officer
and director of Diasense and Rapid HIV Detection Corp., and a
director of Petrol Rem and Coraflex.
ANTHONY J. FEOLA, 53, is our chief operating officer; he rejoined
BICO in April 1994, after serving as Diasense's vice president of
marketing and sales from January 1992 until April 1994. Prior to
January 1992, he was our vice president of marketing and sales.
Prior to joining us in November 1989, Mr. Feola was vice
president and chief operating officer with Gateway Broadcasting
in Pittsburgh in 1989, and national sales manager for
Westinghouse Corporation, also in Pittsburgh, from 1980 until
1989. He was elected a director in February 1990, and also
serves as the secretary of Rapid HIV Detection Corp. and a
director of Diasense, Coraflex, and Petrol Rem.
MICHAEL P. THOMPSON, 51, joined BICO as our interim chief
financial officer in August 2000, and was elected our chief
financial officer by our board of directors in January 2001.
Prior to joining us, he was a partner in Thompson Dugan, P.C.,
the CPA firm that served as our outside auditors until August
2000, when Mr. Thompson joined us as interim CFO. He has been a
CPA for over 25 years. He is also the chief financial officer for
Diasense and Petrol Rem, and a director of ViaCirq.
GLENN KEELING, 50, joined our board of directors in April 1991.
Mr. Keeling currently is a full-time employee of BICO in the
position of senior vice president; his primary responsibilities
are to manage our ViaCirq operations. From 1976 through 1991, he
was a vice president in charge of new business development at
Equitable Financial Management, Inc., a regional equipment
lessor. His responsibilities included initial contacts with
banks and investment firms to open new lines of business
referrals in connection with financing large equipment
transactions. He is also president and a director of ViaCirq.
BEN JOHNSON, 57, joined BICO in 2001 as our executive vice
president and the director of our Washington, DC office. Prior
to joining us, he spent from 1993-2001 on the staff for the
President of the United States. From 1999-2001, he was the
assistant to the President and director of the President's
Initiative for One America, the first freestanding White House
office in history to focus on closing the opportunity gap that
exists for minorities in the U.S. From 1997-1999, he was deputy
assistant to the President and deputy director of public liaison.
From 1993-1997, he served as special assistant to the President
and associate director of public liaison, the primary liaison to
the national African-American community. He also serves as an
officer and director of Rapid HIV Detection Corp.
STAN COTTRELL, 58, was appointed to our board of directors in
1998. Mr. Cottrell is the chairman and founder of Cottrell
Associates International, Inc., which provides international
business development, brokerage, specialty marketing and
promotional services. He is a former director of marketing for
Inhalation Therapy Services and was employed by Boehringer
Ingelheim, Ltd. as a national product manager. Mr. Cottrell is a
world ultra-distance runner and the author of several books.
PAUL W. STAGG, 54, was appointed to our board of directors in
1998. Mr. Stagg is the owner of P.C. Stagg, LLC. Prior to his
current position, he was the marketing manager for the Wholesale
Division of First Financial Resources, Inc., where he was
responsible for marketing, underwriting, sorting and coordinating
various types of financing for institutional investors. Prior to
his current position, he was district distributor of marketing
for Ginger Mae, a division of United Companies of Baton Rouge,
LA.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We share common officers and directors with our
subsidiaries. In addition, BICO and Diasense have entered into
several intercompany agreements including a purchase agreement, a
research and development agreement and a manufacturing agreement,
which we describe later in this section. Our management believes
that it was in our best interest to enter into those agreements
and that the transactions were based upon terms as fair as those
which may have been available in comparable transactions with
third parties. However, we did not hire any unaffiliated third
party to determine independently the fairness of those
transactions. Our policy concerning related party transactions
requires the approval of a majority of the disinterested
directors of both the corporations involved, if applicable.
Employment Relationships
Our board of directors approved employment agreements
on November 1, 1994 for our current officers, Fred E. Cooper,
Anthony J. Feola and Glenn Keeling, and approved an employment
agreement for Michael P. Thompson in August 2000.
Fred E. Cooper, chief executive officer, executive
vice president and a director, is a director of Diasense, Petrol
Rem, and Rapid HIV Detection Corp. He is also the CEO of Rapid
HIV Detection Corp and the president of Diasense. Mr. Cooper
devotes approximately 60% of his time to BICO and 40% to
Diasense. Anthony J. Feola, chief operating officer and a
director, is also the secretary of Rapid HIV Detection Corp, and
a director of Diasense, and Petrol Rem. Glenn Keeling is our
senior vice president and a director. Mr. Keeling is also the
president and a director of ViaCirq. Michael P. Thompson is our
chief financial officer. He is also the chief financial officer
for Diasense and Petrol Rem, and a director of ViaCirq. Ben
Johnson, executive vice president and director of our Washington,
D.C. office, is also the executive vice president and a director
of Rapid HIV Detection Corp.
Property
Two of our current executive officers and/or directors
and three former directors are members of the nine-member 300
Indian Springs Road Real Estate Partnership that in July 1990
purchased our real estate in Indiana, Pennsylvania. Each member
of the partnership personally guaranteed the payment of lease
obligations to the bank providing the funding. The five members
of the partnership who are also current or former officers and/or
directors of BICO, David L. Purdy, Fred E. Cooper, Glenn Keeling,
Jack H. Onorato and C. Terry Adkins, each received warrants on
June 29, 1990 to purchase 100,000 shares of our common stock at
an exercise price of $.33 per share until June 29, 1995. Those
warrants still outstanding as of the original expiration date
were extended until June 29, 2003. Mr. Purdy, who was a
director and executive officer at the time of the transaction,
resigned from our board of directors on June 1, 2000, and
resigned as an officer in November 2000, effective February 2001.
Mr. Adkins, who was a director at the time of the transaction,
resigned from our board of directors on March 30, 1992. Mr.
Keeling, who was not a director at the time of the transaction,
joined our board of directors on May 3, 1991. Mr. Onorato, who
was not a director at the time of the transaction, was a BICO
director from September 1992 until April 1994. The property was
sold in October 2000 for $475,000, and each of the partners
received $12,698, after the mortgage was paid.
Like all our warrants, the warrants issued to the
members of 300 Indian Springs Road Real Estate Partnership had
exercise prices equal to or above the current quoted market price
of our common stock on the date of issuance.
Warrants
On April 28, 1999, we granted warrants to purchase our
common stock at $.129 per share until April 28, 2004 in the
following amounts: 4,000,000 to Fred E. Cooper, our chief
executive officer and a director; 2,000,000 to Anthony J. Feola,
our chief operating officer and a director; 2,000,000 to Glenn
Keeling, our senior vice president and a director; 4,000,000 to
David L. Purdy, our former chairman and director; 250,000 to Stan
Cottrell, a director; and 250,000 to Paul Stagg, a director. The
exercise price of $.129 per share was equal to the market price
on April 28, 1999.
On August 28, 2000, we granted warrants to purchase
1,000,000 shares of our common stock at $.125 per share until
August 28, 2005 to Michael P. Thompson, our chief financial
officer. The exercise price of $.125 per share was equal to the
market price on August 28, 2000.
On January 11, 2001, we granted warrants to purchase 500,000
shares of our common stock at $.073 per share until January 11,
2006 to Ben Johnson, our executive vice president. The exercise
price of $.073 per share was equal to the market price on January
11, 2001.
On February 1, 2001, we granted warrants to purchase 200,000
shares of our common stock at $.102 per share until February 1,
2006 to Paul Stagg, a director. The exercise price of $.102 per
share was equal to the market price on February 1, 2001.
On May 23, 2001, we granted warrants to purchase our common
stock at $.0525 per share until May 23, 2006 in the following
amounts: 15 million to Fred E. Cooper, our chief executive
officer and a director; 10 million to Anthony J. Feola, our chief
operating officer and a director; 8 million to Glenn Keeling, our
senior vice president and a director; 3 million to Michael P.
Thompson, our chief financial officer; 1 million to Stan
Cottrell, a director and 1 million to Paul Stagg, a director.
The exercise price of $.0525 per share exceeded the market price
on May 23, 2001.
On July 30, 2001, we granted warrants to purchase 1 million
shares of common stock at $.05 per share until July 30, 2006 to
Ben Johnson, our executive vice president. The exercise price of
$.05 per share exceeded the market price on July 30, 2001.
Loans
In 1999, we consolidated all of Fred E. Cooper's
outstanding loans from us, including accrued interest, into one
loan in the amount of $777,399.80 at 8% interest. Mr. Cooper
began repaying the loans in May of 1999. The loan balance as of
July 31, 2001 was $701,173. Our board of directors - with Mr.
Cooper abstaining - approved these loans because they were for a
good business purpose. The business purposes were: to provide
Mr. Cooper with funds during his initial years with BICO, when he
waived a salary; and to refinance loans secured by BICO stock, so
the stock wouldn't have to be sold. We believe that if Mr.
Cooper had been forced to sell his stock, and to disclose the
sale, it would have hurt our stock price because many people view
insider stock sales as a negative message. In addition, Mr.
Cooper owns 30% of a corporation called B-A-Champ.com, an
internet company. During 1999 and 2000, we loaned B-A-Champ.com
an aggregate of $55,256 at 6% interest. In 2000, we converted
that outstanding loan to common stock and invested an additional
$400,000 - we now own 5,087,511 shares of stock, resulting in
BICO's total ownership of 51% ownership of B-A-Champ.com. The
business purpose of the loan and the conversion was that we
received an equity interest in that company, which expects to
generate revenues.
In 1999, we consolidated all of Anthony J. Feola's
outstanding loans from us, including accrued interest, into one
loan in the amount of $259,476.82 at 8% interest. Mr. Feola
began repaying the loans in May of 1999. The loan balance as of
July 31, 2001 was $206,128. Our board of directors approved these
loans - with Mr. Feola abstaining - because they were for a good
business purpose. The business purpose was to refinance loans
secured by BICO stock, so the stock wouldn't have to be sold. We
believe that if Mr. Feola had been forced to sell his stock, and
to disclose the sale, it would have hurt our stock price because
many people view insider stock sales as a negative message.
In 1999, we consolidated all of Glenn Keeling's outstanding
loans from us, including accrued interest, into one loan in the
amount of $296,358.07 at 8% interest. Mr. Keeling began repaying
the loans in May of 1999. The loan balance as of July 31, 2001
was $223,259. Our board of directors approved these loans -
with Mr. Keeling abstaining - because they were for a good
business purpose. The business purpose was to refinance loans
secured by BICO stock, so the stock wouldn't have to be sold. We
believe that if Mr. Keeling had been forced to sell his stock,
and to disclose the sale, it would have hurt our stock price
because many people view insider stock sales as a negative
message.
In September 1995, we granted a loan in the amount of
$250,000 to Allegheny Food Services in the form of a one-year
renewable note bearing interest at prime rate as reported by the
Wall Street Journal plus 1%. Interest and principal payments
have been made on the note, and as of July 31, 2001, the balance
was $40,351. Our board of directors approved this loan because
of its business purpose - in return for granting the loan, we
received an option to purchase a franchise owned by Joseph
Kondisko, a former director of Diasense, who is a principal owner
of Allegheny Food Services. The franchise generates revenue,
which is why we made the investment - until our products begin to
generate significant revenues, we investigate other ways to
generate revenue to fund our operations. We have not exercised
the option, which has an exercise price of $200,000, but it
remains valid until 2005.
All future loans to officers, directors and their affiliates
will also be made only after board approval, and for good
business purposes.
Compare 5-Year Cumulative Total Return
Among BICO ("BIKO"),
Market Index and SIC Code Index
EDGAR Support has advised that the graph will not transmit, the
following information is sufficient.
COMPANY/INDEX/MARKET FISCAL YEAR ENDING
1995 1996 1997 1998 1999 2000
BICO, INC. 100.00 26.09 5.22 1.84 1.31 2.61
SIC CODE INDEX 100.00 108.91 126.33 172.48 156.77 181.83
NASDAQ MARKET INDEX 100.00 124.27 152.00 214.39 378.12 237.66
Table indicates value of investment at each year-end, assuming $100
invested on January 1, 1993. Assumes Dividend Reinvested.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the indicated information as
of June 30, 2001 with respect to each person whom we know is
beneficial owner of more than 5% of the outstanding common stock,
each of our directors and executive officers, and all of our
directors and executive officers as a group.
As of June 30, 2001, we had 1,644,831,165 shares of our
common stock outstanding. The table below shows the common stock
currently owned by each person or group, including common stock
underlying warrants, all of which were currently exercisable, as
of June 30, 2001. The right-hand column sets forth the
percentage of the total number of shares of common stock
outstanding as of June 30, 2001, which would be owned by each
named person or group if they exercised all of their warrants,
together with common stock they currently owned. An asterisk - *
- means less than 1%. Except as otherwise indicated, each person
has the sole power to vote and dispose of each of the shares
listed in the columns opposite his name.
Amount and Percent of Beneficial
Name and Address Nature of Ownership of
of Beneficial Beneficial Total Outstanding
Owner Ownership (1) Common Stock (2)
Fred E. Cooper 21,076,200 (3) *
2275 Swallow Hill Road
Bldg. 2500, 2nd Floor
Pittsburgh, PA 15220
Stan Cottrell 1,350,000 (4) *
4619 Westhampton Drive
Tucker, GA 30084
Anthony J. Feola 13,404,000 (5) *
2275 Swallow Hill Road
Bldg. 2500, 2nd Floor
Pittsburgh, PA 15220
Robert B. Johnson 1,500,000 (6) *
1140 Connecticut Ave., NW
11th Floor
Washington, D.C. 20036
Glenn Keeling 10,738,500 (7) *
2275 Swallow Hill Road
Building 2500, 2nd Floor
Pittsburgh, PA 15220
Paul Stagg 1,570,000 (8) *
168 LaLanne Road
Madisonville, LA 70447
Michael P. Thompson 4,000,000(9) *
2275 Swallow Hill Road
Bldg. 2500, 2nd Floor
Pittsburgh, PA 15220
All directors 53,638,700(10) 3.1%
and executive
officers as a
group (7 people)
NOTE: In August 2001, the officers and directors listed above
entered into agreements not to exercise the warrants set forth
below until December 2001. This means that the warrants are only
currently exercisable after that time.
(1) Includes ownership of all shares of common stock which each
named person or group has the right to acquire, through the
exercise of warrants, within sixty (60) days, together with the
common stock currently owned.
(2) Represents total number of shares of common stock owned by
each person, which each named person or group has the right to
acquire, through the exercise of warrants within sixty (60) days,
together with common stock currently owned, as a percentage of
the total number of shares of common stock outstanding as of June
30, 2001. For individual computation purposes, the total number
of shares of common stock outstanding as of June 30, 2001 has
been increased by the number of additional shares which would be
outstanding if the person or group exercised all outstanding
warrants.
(3) Includes warrants to purchase the following: 300,000 shares
of common stock at $.25 per share until May 1, 2003; 4,000,000
shares of common stock at $.129 per share until April 28, 2004;
and 15,000,000 shares of common stock at $.0525 per share until
May 23, 2006. In addition, Mr. Cooper is entitled to certain
shares of common stock upon a change of control of BICO as
defined in his employment agreement.
(4) Includes warrants to purchase 250,000 shares of common stock
at $.129 per share until April 28, 2004; and warrants to purchase
1,000,000 shares of common stock at $.0525 until May 23, 2006.
(5) Includes warrants to purchase the following: 100,000 shares
of common stock at $.25 per share until November 26, 2003;
100,000 shares of common stock at $.25 per share until May 1,
2003; 350,000 shares of common stock at $.50 per share until
October 11, 2002; 2,000,000 shares of common stock at $.129 per
share until April 28, 2004; and 10,000,000 shares of common stock
at $.0525 per share until May 23, 2006. In addition, Mr. Feola is
entitled to certain shares of common stock upon a change of
control of BICO as defined in his employment agreement.
(6) Includes warrants to purchase the following: 500,000 shares
of common stock at $.0730 per share until January 11, 2006; and
1,000,000 shares of common stock at $.05 per share until July 30,
2006.
(7) Includes warrants to purchase 100,000 shares of common stock
at $1.48 per share until August 26, 2003; 2,000,000 shares of
common stock at $.129 per share until April 28, 2004; and
8,000,000 shares of common stock at $.0525 per share until May
23, 2006. In addition, Mr. Keeling is entitled to certain shares
of common stock upon a change of control of BICO as defined in
his employment agreement.
(8) Includes warrants to purchase 20,000 shares of common stock
at $.06 per share until April 27, 2003; 250,000 shares of common
stock at $.129 per share until April 28, 2004; 200,000 shares of
common stock at $.102 per share until February 1, 2006; and
1,000,000 shares of common stock at $.0525 per share until May
23, 2006.
(9) Includes warrants to purchase 1,000,000 shares of common
stock at $.125 per share until August 28, 2005; and 3,000,000
shares of common stock at $.0525 per share until May 23, 2006.
In addition, Mr. Thompson is entitled to certain shares of common
stock upon a change of control of BICO as defined in his
employment agreement.
(10) Includes shares of common stock available under warrants to
purchase an aggregate as set forth above.
STOCKHOLDER PROPOSALS
All stockholder proposals to be presented at the next Annual
Meeting of the Company must be received by the Company at its
principal executive offices by October 15, 2001 for inclusion in
the proxy materials relating to the next Annual Meeting.
OTHER MATTERS
Our management does not know of any other matters that are
to be presented for action at the meeting. Should any other
matter come before the meeting, however, the person named in the
enclosed proxy shall have discretionary authority to vote all
shares represented by valid proxies with respect to such matter
in accordance with his judgment.
WHERE YOU CAN FIND MORE INFORMATION
The securities laws require us to file reports and other
information. All of our reports can be reviewed at the SEC's
web site, at www.sec.gov through the SEC's EDGAR database. You
can also review and copy any report we file with the SEC at the
SEC's Public Reference Room, which is located at 450 Fifth
Street, N.W., Washington, D.C., or at the SEC's regional offices,
including the ones located at 601 Walnut Street, Curtis Center,
Suite 1005E, Philadelphia, PA 19106-3432; and 75 Park Place, New
York, NY. You can also order copies for a fee from the SEC's
Public Reference section, at 450 Fifth Street, N.W. Washington,
D.C. 20549. Our stock trades on the electronic bulletin board.
This proxy omits certain information that is contained in
the other reports we filed with the SEC. Our most recent
financial statements and other information regarding our
operations can be found in the reports listed below, and you
should review those reports along with this proxy.
OTHER IMPORTANT DOCUMENTS YOU SHOULD REVIEW
Our latest financial statements, as well as other important
information, are contained in the following documents, all of
which are incorporated by reference to this proxy. The SEC
allows us to disclose important information to you by referring
to other documents. We are also permitted to include the
following reports, which have been filed with the SEC, as well as
the reports we file with the SEC in the future, as part of this
proxy, without copying the reports into the proxy. This is known
as incorporation by reference. The following documents are
incorporated by reference:
(a) Our Annual Report on Form 10-K for the fiscal year ended
December 31, 2000
(b) Our Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2001 and June 30, 2001
(c) Our Form 8-Ks filed on the following dates:
a. Our Form 8-K filed August 14, 2001 for the event dated
August 10, 2001
b. Our Form 8-K filed August 16, 2001 for the event dated
August 14, 2001
c. Our Form 8-K filed September 6, 2001 for the event dated
August 31, 2001
d. Our Form 8-K filed September 12, 2001 for the event dated
September 10, 2001
e. Our Form 8-K filed October 1, 2001 for the event dated
September 27, 2001
f. Our Form 8-K filed October 5, 2001 for the event dated
October 2, 2001
g. Our Form 8-K filed October 5, 2001 for the event dated
October 4, 2001
h. Our Form 8-K filed October 11, 2001 for the event dated
October 9, 2001
i. Our Form 8-K filed October 15, 2001 filing copies of two
contracts
j. Our Form 8-K filed October 16, 2001 for the event dated
October 16, 2001
We will send you a copy of these documents if you ask for
them. If you want to receive copies, please contact our
Shareholder Relations department at: Shareholder Relations
Department, BICO, Inc., 2275 Swallow Hill Road, Building 2500,
2nd Floor, Pittsburgh, PA 15220, by telephone at 412-429-0673 or
by fax at 412-279-9690.
By Order of the Board of Directors
__________________________________
Anthony J. Feola, Secretary
PRELIMINARY PROXY CARD
BICO, INC. PROXY
2275 Swallow Hill Road THIS PROXY IS SOLICITED ON
Pittsburgh, PA 15220 BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having received the notice of the special
meeting of stockholders and the BICO, Inc. proxy statement,
hereby appoint(s) Anthony J. Feola proxy of the undersigned
(with full power of substitution) to attend the special
meeting and all adjournments thereof and there vote all of the
undersigned's shares of BICO common stock that the undersigned
would be entitled to vote if he, she or they personally attended
the meeting, on all matters presented for a vote. To cast your
vote, please check the box next to the appropriate response.
1. Approval of an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares of
common stock to 4,000,000,000.
| | FOR | | AGAINST | | ABSTAIN
2. In his discretion upon the transaction of other business as
may properly come before the special meeting.
| | FOR | | AGAINST | | ABSTAIN
The undersigned hereby revokes all previous proxies for the
special meeting, acknowledges receipt of the notice of the special
meeting and proxy statement furnished therewith and ratifies all
that the said proxies may do by virtue hereof.
This proxy when properly executed will be voted in the
manner specified herein. If no specification is made, this proxy
will be voted in favor of Item 1 and the authority provided by
Item 2 will be deemed granted.
Please sign exactly as name appears below. Joint owners
should each sign personally. If signing in any fiduciary or
representative capacity, give full title as such. For shares
held by a corporation, please affix corporate seal.
Date:_________________________
_________________________
Signature
_________________________
Sign, date and return
This proxy immediately in
The enclosed envelope
To Mellon Investor Services
NOTE: ONLY BONA FIDE STOCKHOLDERS WILL BE ADMITTED TO THE SPECIAL
STOCKHOLDERS MEETING; PHOTO IDENTIFICATION AND PROOF OF OWNERSHIP AS
OF THE RECORD DATE WILL BE REQUIRED FOR ADMITTANCE.