SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 29, 2000
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Date of Report
(Date of Earliest Event Reported)
BioSyntech Inc.
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(Exact Name of Registrant as Specified in its Charter)
Nevada 0-27179 88-0329399
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
475 Boulevard Armand-Frappier
Laval, Quebec, Canada
H7V 4B3
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(Address of Principal Executive Office)
(450) 686-2437
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(Registrant's telephone number,
including area code)
Dream Team International, Inc.
3675 Pecos-McLeod, Suite 112
Las Vegas, NV 89119
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(Former Name and Former Address)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Amalgamation Agreement and related agreements,
as amended (the "Exchange Agreements"), dated February 15, 2000 by and
among BioSyntech, Inc. (formerly Dream Team International Inc., the
"Registrant" or the "Company"), a Nevada corporation, its wholly-owned
subsidiary 9083-5661 Quebec Inc., a Quebec corporation (the
"Purchaser"), Bio Syntech Ltd., a Quebec corporation ("Bio Syntech"),
and the shareholders of Bio Syntech (the "Bio Syntech Shareholders"),
on February 29, 2000, the Purchaser and Bio Syntech were merged into
one company under the name of Bio Syntech Canada Inc. ("Bio Syntech
Canada"). As a result of the Exchange Agreements, the Registrant became
the record and beneficial owner of all of the issued and outstanding
shares of Bio Syntech Canada's Common Stock and the Bio Syntech
Shareholders were issued non-voting exchangeable shares of Bio Syntech
Canada's Preferred Stock (the "Class A Shares"). The Class A Shares are
exchangeable on a share-for-share basis, for an aggregate of 15,177,036
shares (the "Registrant Shares") of Common Stock, $.001 par value, of
the Registrant. The Registrant Shares issued under the Exchange
Agreements are held in trust under the terms of an Exchange and Voting
Agreement (the "Trust Agreement"), by and among the Registrant, Pierre
Barnard (the "Trustee"), Bio Syntech and the Purchaser. (The foregoing
transactions are referred to collectively hereinafter as the
"Transactions").
Prior to the Transactions, there were 11,625,000 shares of
Common Stock outstanding, taking into account a 3.75 for 1 split
effectuated on December 28, 1999 and the repurchase of 10,875,000
shares of Common Stock on February 2, 2000. As part of the
Transactions, the Registrant completed two private placements (the
"Private Placements") yielding gross proceeds of $2,350,000 in which it
issued an aggregate of 470,000 shares of Common Stock and warrants (the
"Warrants") to purchase an aggregate of 470,000 additional shares of
Common Stock at a price of $7.00 on or before September 30, 2001. After
giving effect of the Transactions, there are 27,272,036 shares of
Common Stock outstanding. In addition, 1,500,000 shares of Common Stock
are reserved for issuance upon exercise of options granted or to be
granted under the Bio Syntech Canada Employee Stock Option Plan and
470,000 shares of Common Stock are reserved for issuance upon exercise
of the Warrants.
Each beneficial holder of the Class A Shares has voting rights
in that number of Registrant Shares equal in number to the number of
the Class A Shares held by such holder. Consequently, the Bio Syntech
Shareholders hold securities with voting rights equal to approximately
55.7% of the total voting power of the outstanding Common Stock. At
such time as the holders of Class A Shares may exchange such shares for
the Registrant Shares, they will have the right to direct the
disposition of such Registrant Shares.
The sole source of consideration for issuance to the Bio
Syntech Shareholders of the Class A Shares was the exchange of the Bio
Syntech
shares held by them. At such time as the Bio Syntech Shareholders may
exchange their Class A Shares for Registrant Shares, the sole source of
consideration for the transfer to them of the Registrant Shares will be
such Class A Shares.
Control of the Registrant was acquired by the Purchaser, by
virtue of the issuance of the 15,177,036 shares of Common Stock to the
Trustee as part of the Transactions. Prior to the Transaction, the
Registrant was controlled by Rebecca A. Berney and Caron A. Kelley, of
Las Vegas Nevada, by virtue of their holding respectively 5,062,500 and
4,875,000 shares of Common Stock, which shares were redeemed and
retired on February 2, 2000.
The Registrant was formed to provide a method for a foreign or
domestic private company to combine with a company whose securities are
registered under the Securities Exchange Act of 1934, as amended. Prior
to the Transactions, the Registrant had no operations, revenues,
material assets or liabilities. The Exchange Agreements were structured
to provide the Bio Syntech Shareholders with a capital gain deferral
under applicable Canadian tax laws, rules and regulations. In
anticipation of the Transactions, the Registrant changed its name to
"BioSyntech Inc."
On the effective date of the Transactions, the officers and
directors of the Registrant resigned and new officers and directors
were appointed. See "Management" below.
Copies of the Exchange Agreements and related transactions
documents are filed as exhibits to this Current Report on Form 8-K and
are incorporated in their entirety herein. The description of the
exhibits contained in this report is modified by such reference.
(b) The following table contains information at February 29, 2000
regarding the beneficial ownership of shares of Common Stock by the
Registrant's current directors and executive officers and those persons
or entities who, to the Registrant's knowledge, beneficially own more
than 5% of the Common Stock, after giving effect to the Transactions:
Shares of Common
Name and Stock Percentage of Common
Address of Beneficially Stock Beneficially
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9083-1496 Quebec Inc. (4) 7,640,000(4) 28.0%
475 Boulevard Armand-Frappier
Laval, Quebec, Canada H7V 4B3
Amine Selmani (4) 7,952,500(5) 28.8%
Chairman of the Board and President
475 Boulevard Armand-Frappier
Laval, Quebec, Canada H7V 4B3
Denis N. Beaudry (6) 0(6) --
Director
3744 Jean-Brillant, Suite 6332
Montreal, Quebec, Canada H3B 1P1
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Pierre Alary 0 --
Director
1101 Parent Street
Saint-Bruno, Quebec,
Canada J3V 6E6
Jean-Yves Bourgeois 0 --
Director
119 du Bearn Avenue
Saint-Lambert, Quebec,
Canada J4S 1K6
Pierre Ranger (7) 100,000 0.4%
Director
1800, Boulevard Le Corbusier, bur.
113
Laval, Quebec, Canada H7S 2K1
All Officers and Directors as a 8,052,500 29.1%
group
(5 persons)
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(1) Includes rights to acquire Registrant Shares through exchange of Class
A Shares.
(2) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days after February 29, 2000
upon the exercise or conversion of options, warrants or convertible
securities. Each beneficial owner's percentage ownership is determined
by assuming that options, warrants and convertible securities that are
held by such person (but not those held by any other person) and that
are exercisable or convertible within 60 days after February 29, 2000
have been exercised or converted.
(3) Based upon 27,272,036 outstanding shares of Common Stock.
(4) Mr. Selmani does not own directly any Class A Shares or Common Stock.
However, by virtue of his ownership of 9083-1496 Quebec Inc., Mr.
Selmani has shared voting and dispositive power with respect to the
7,640,000 Class A Shares owned by 9083-1496 Quebec Inc. Mr. Selmani
also may be deemed the beneficial owner of 312,500 shares of Common
Stock that would be held by him upon exchange of 312,500 Class A Shares
issuable upon exercise of options.
(5) Does not include an aggregate of 1,085,000 shares of Common Stock
beneficially owned by Monique Jarry, the spouse of Mr. Selmani.
(6) Denis N. Beaudry is the representative of Polyvalor on the Company's
Board of Directors. Does not include 1,072,000 shares of Common Stock
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beneficially owned by Polyvalor. (See "Agreement with Polyvalor.") Mr.
Beaudry disclaims beneficial ownership of such shares.
(7) Represents 100,000 shares of Common Stock that would be beneficially
owned upon exercise of an option granted under the Bio Syntech Canada
Employee Stock Option Plan.
Class A Shares
Bio Syntech Canada has authorized an unlimited number of Class A
Shares, of which 15,177,036 have been issued to the Bio Syntech Shareholders. In
addition 1,500,000 Class A Shares are reserved for issuance upon exercise of
options granted or to be granted under the Bio Syntech Canada Employee Stock
Option Plan.
The Class A Shares may be exchanged for an equal number of shares of
Common Stock (which shares are held by the Trustee for such exchange) upon
proper notification to the Registrant. The Registrant has issued and placed with
the Trustee the Registrant Shares, consisting of 15,177,036 shares of Common
Stock, for use in exchange of the Class A Shares pursuant to the Exchange
Agreements. By virtue of the Transactions, the Bio Syntech Shareholders are able
to defer certain Canadian taxes otherwise payable upon the disposition of their
shares in Bio Syntech Canada, while maintaining voting rights in the Registrant.
The Exchange Agreements set forth the rights and restrictions
pertaining to the Class A Shares and the Registrant Shares. The Registrant
Shares will be held by the Trustee pending exchange of the Class A Shares. Upon
exchange by the holder of Class A Shares, the Registrant Shares will be released
to the exchanging Bio Syntech Shareholder and an equal number of Class A Shares
will be delivered to the Registrant. The Bio Syntech Shareholders have the right
to vote their interests in the Registrant directly or through the Trustee.
The Registrant Shares, while held by the Trustee, will not be entitled
to participate in dividends declared by the Registrant; provided, however, the
Registrant has agreed that should it declare a dividend on its Common Stock it
will ensure that Bio Syntech Canada has the means to pay a like dividend on the
Class A Shares.
The following summary of the provisions of the Class A Shares should be
read in conjunction with the descriptions provided in the Exchange Agreements,
which are attached hereto as exhibits.
(i) Exchange Rights on the Liquidation of Registrant. Holders of the
Class A Shares have the right, upon the occurrence and during the continuance of
any proceeding in bankruptcy, insolvency, liquidation, dissolution or winding up
commenced by Bio Syntech Canada or against Bio Syntech Canada, to require the
Registrant to purchase all or any part of the Class A Shares held by them at an
amount equal to (a) the current market price of the Common Stock on the last
business day prior to the day of purchase plus (b) an additional amount equal to
the full amount of all dividends declared and paid on such Class A Shares and on
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all dividends declared on the Registrant's common stock which have not been
declared on the Class A Shares.
(ii) Automatic Exchange on the Liquidation of the Registrant. In order
for holders of the Class A Shares to participate on a pro rata basis with the
holders of the Registrant's common stock in the event of a voluntary or
involuntary dissolution, liquidation or winding-up of the Registrant, all of the
then outstanding Class A Shares shall be automatically exchanged for shares of
Common Stock of the Registrant in the absence of an affirmative written election
from a holder of Class A Shares not to participate in the automatic exchange.
(iii) Retraction by Holder. A holder of Class A Shares is entitled at
any time to require Bio Syntech Canada, subject to the right to purchase the
Class A Shares of the Registrant (the "Call Right"), to redeem any or all of the
Class A Shares held by it in an amount equal to the current market price of the
Common Stock on the last business day prior to the retraction date (the
"Retraction Price"), which may be satisfied in full by Bio Syntech Canada
causing to be delivered to such holder one share of common stock of the
Registrant held by the Trustee for each Class A Share held by the retracting
holder. If the Registrant exercises its Call Right, the retraction will be
considered an offer to sell the Class A Shares to the Registrant at the price of
(a) the Retraction Price plus (b) an additional amount equal to the full amount
of all dividends declared and paid on such Class A Shares and on all dividends
declared on the shares of Common Stock which have not been declared on the Class
A Shares.
(iv) Purchase For Cancellation. Bio Syntech Canada may at any time and
from time to time offer to purchase for cancellation all or any of the
outstanding Class A Shares at any price by tender to all of the holders of the
Class A Shares then outstanding at any price per share determined by Bio Syntech
Canada plus an amount equal to all declared and unpaid dividends thereon. If in
response to such tender offer, more Class A Shares are tendered than Bio Syntech
Canada is willing to purchase, Bio Syntech Canada shall purchase as nearly as
possible pro rata according to the number of shares tendered by each holder.
(v) Reciprocal Changes. If the Registrant issues or distributes its
warrants, options or other rights to purchase its securities to the holders of
its outstanding common stock or issues shares or securities of any other class
of the Registrant than the common stock exchangeable by the Class A Shares, or
evidences of indebtedness of the Registrant or assets of the Registrant, then
the Purchaser shall issue to the holders of the Class A Shares the economic
equivalent on a per share basis of such rights, options, securities, shares,
evidences of indebtedness or other assets.
(vi) Reclassifications. If the Registrant subdivides, redivides or
changes the outstanding number of its common stock into a greater number or
reduces, combines or consolidates the outstanding number of its common stock
into a lesser number or reclassifies or otherwise changes its common stock or
effects an amalgamation, merger, reorganization or other transaction affecting
its common stock, then Bio Syntech Canada will make the same or an economically
equivalent change simultaneously to, or in the rights of the holders of, the
Class A Shares.
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(vii) Registration of Registrant Shares. The Registrant has agreed to
use its best efforts to register for sale in the United States secondary market
all of the Registrant Shares to be held by the Trustee on behalf of the Bio
Syntech Shareholders. The Registrant intends to register such shares by filing
with the United States Securities and Exchange Commission, as soon as possible,
a registration statement on Form SB-2 pursuant to the Securities Act of 1933.
The timing of the sales of the registered sales, and the prices at which such
shares are sold into the public market (if such market develops, of which there
can be no assurance), will be determined, respectively, by the holders of the
registered shares and by market conditions at the time of such sales. None of
the proceeds of such sales will belong to the Registrant or be applied for its
benefit.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The information set forth in Item 1. Changes in Control of Registrant
is incorporated by reference herein.
The Registrant intends to continue the business development undertaken
by Bio Syntech which, as result of the Transactions, has become a subsidiary of
the Registrant.
Business
References herein to the Company include the Company's subsidiary, Bio
Syntech Canada, unless the context otherwise requires.
The Company is a development stage company engaged in the development
of biotherapeutic delivery systems made of proprietary biomaterials. The
Company's systems are intended to enable or enhance the treatment of diseases or
injuries for which therapies exist or are under development, but must be
transported to the site of action. The Company has limited revenues to date. Its
future operations are dependent upon financing necessary to complete research
and development projects and market the Company's products. There can be no
assurance that the Company will be able to complete the development of its
products, or if completed, that they can be successfully marketed. Furthermore,
there is no assurance that even if the products are completed and marketed, the
revenues therefrom will be sufficient to fund the Company's future operations or
to fund additional research, development and marketing.
Company Background
The Company was founded in 1995 by a research group in advanced
biomaterials at the Ecole Polytechnique de Montreal (the University of
Montreal's engineering faculty, "Ecole Polytechnique"). The founders included
Amine Selmani, Ph.D., other researchers, and Polyvalor Inc., the business
venture arm of the Ecole Polytechnique. Polyvalor is an entity created by Ecole
Polytechnique for the purpose of commercializing the technology in which Ecole
Polytechnique has an interest. The Company has its administrative and commercial
offices, as
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well as its research and development facilities, at 475 Armand-Frappier
Boulevard, in Laval (Quebec), in the Greater Montreal Area (see "Property").
Agreement with Polyvalor
In October 1997, the Company entered into a technology assignment
agreement (the "Assignment Agreement"), as amended in September 1999 and as
amended and restated in March 2000, with Polyvalor Limited Partnership, a
Canadian limited partnership, as represented by its General Partner, Polyvalor
Inc. ("Polyvalor"). Through the Assignment Agreement, the Company acquired from
Polyvalor all rights related to certain patents and know-how (the
"Technologies"). The Technologies were based upon the work of Dr. Selmani and
his team of collaborators at Ecole Polytechnique. In consideration of said
assignment, the Company agreed to pay to Polyvalor a royalty of 5% on all gross
sales of all products and services sold by the Company, up to a maximum
cumulative amount of CDN $3,000,000 (US$2,069,679 based on a foreign exchange
rate on March 1, 2000 of CDN$1.4495 to UD$1.0).
In connection with the Assignment Agreement, Bio Syntech Canada issued
to Polyvalor 1,072,000 Class A Shares and granted Polyvalor the right to
nominate one director to the Company's Board of Directors.
Technology Background
The Company focuses on the creation and development of advanced
injectable vehicles for biotherapeutics, cells and genetic material, and intends
to commercialize these products for the biomedical and pharmaceutical markets.
Current development targets include all therapeutics that cannot be administered
orally, either because they are inactivated in the digestive tract, or because
their therapeutic activity is needed only at a specific site in the body. The
Company's main efforts are focused on researching and developing, either
internally or in collaboration with corporate partners, several programs
exploiting the multiple benefits of its delivery systems, which include the
delivery of, among others, therapeutic proteins, genetic material for
site-specific gene therapy, and living cells or bioartificial organs for
tissue-engineering applications.
Technology and Product
The Company has developed three platform technologies all aimed at the
generation of solutions to efficiently deliver biologically active therapeutics.
(1) BST-Gel(TM): An injectable thermosensitive self-forming
solvent and detergent-free hydrogel for biotherapeutic
delivery;
(2) BST-Spheres: Microspheres for biotherapeutic delivery; and
(3) BST-Cargel(TM): Chondrocytes in an adhesive exogenous matrix
delivered arthroscopically for the treatment of cartilage
defects.
BST-Gel(TM)
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BST-Gel(TM) is a family of polymeric gels that are liquid at low
temperatures and solid at the temperature. This injectable delivery system is
derived from natural sources and contains no toxic chemicals such as chemical
cross-linkers, organic solvents, or detergents. One of its key properties is its
in situ gelling after its injection in liquid form, thus forming a reservoir for
the sustained release of its therapeutic payload that requires no surgery for
its implantation. BST-Gel(TM) is biodegradable, and has an adjustable
composition. The amounts injected vary for different requirements, which result
in controllable residence times ranging from a few days to several weeks. The
Company has developed specialized matrices and an encapsulation technology that
can be used in conjunction with BST-Gel(TM) to provide a proprietary form of
delivery of therapeutic agents and can have the following applications:
o delivery of small molecules, peptides and recombinant
proteins;
o bioengineering of tissues with cells or growth-factor
therapeutics;
o delivery of bone-repair therapeutics;
o delivery of genetic material (DNA vaccines and gene
therapy); and
o development of vaccines based on the sustained
release of antigens.
BST-Spheres
The Company has developed and patented BST-Spheres, a proprietary
process to generate polymer based microspheres used in the delivery of
biotherapeutics, which is free of organic solvents. This proprietary process
offers several advantages over the current approach of making microspheres:
o It does not require the use of toxic chemicals such
as organic solvents or detergents;
o It can be adapted to a wide range of biomaterials,
whether or not biodegradable;
o It is injectable for the sustained release of
biotherapeutics;
o It can be used with a broad range of biotherapeutic
types, from small to large compounds; and
o It may enhance the biotherapeutic-loading capacity of
the vehicle.
BST-Cargel(TM)
BST-Cargel(TM) is a proprietary generation of bioengineered living
articular cartilage-tissue implants developed from cells encapsulated and grown
within a BST-Gel(TM) -based matrix for arthroscopic delivery. A particular
formulation of the gel maintains the cell viability during the delivery period
while assuring the adhesion of BST-Gel(TM) to the underlying bone and
surrounding cartilage. Preclinical studies have shown that chondrocytes embedded
in BST-Gel (TM) produce a matrix having the characteristics of normal cartilage
tissue.
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Future Products and Research and Development
The Company intends to continue to develop new technologies based on
advanced biomaterials to address unfulfilled medical needs. The Company is
focusing its effort on the development of biomaterials with superior
compatibility with biotherapeutics such as large macromolecules, genetic
material and living cells. With its understanding of the challenges raised for
biotherapeutics delivery, combined with its expertise in the field of
biomaterials and formulation, the Company positioned to participate in an
expanding market of new biologics-derived therapeutics.
Competition
The biotechnology and pharmaceutical industries are subject to rapid
and substantial technological change. There is intense competition in the
development, manufacturing, marketing and commercialization of products from
academic institutions, government agencies, research institutions, biotechnology
and pharmaceutical companies, and other drug delivery companies. There can be no
assurance that developments by others will not render our product candidates or
technologies obsolete or noncompetitive. Many actual and potential competitors
have substantially greater capital resources, manufacturing and marketing
experience, research and development resources and production facilities than
the Company. Many of these competitors also have significantly greater
experience than does the Company in undertaking preclinical testing and clinical
trials of new pharmaceutical products and obtaining required regulatory
approvals.
Trademarks
The Company vigorously pursues a policy of seeking patent protection to
preserve its proprietary technology and its right to capitalize on the results
of its research and development activities. The Company also relies upon trade
secrets, know-how, continuing technological innovations and licensing
opportunities to develop and maintain its competitive position. The Company
regularly searches for third-party patents in its fields of endeavor, both to
shape its own patent strategy as effectively as possible and to identify
licensing opportunities. The Company also relies upon trademarks and tradenames
to protect its technology. The Company has filed an application for the
registration of trademarks for its names BST-GEL(TM), BST-CARGEL(TM) and
ARTHRO-BST(TM) in the United States and Canada and in various other countries.
Revenues and Other Financing
Since inception, the Company has operated using funds received from
equity investment to develop its products and to pay administrative expenses.
The Company projects that additional funds may be received from sales of its
products and its securities. There is no assurance that the Company will be
successful in any sales of its products or that it will be able to raise any
funds through the sales of its securities. In such event the Company may be
required to seek financing for its operations from other sources, including debt
financing or borrowing from financial institutions or other sources. There can
be no assurance that any such funding will be available, or available on terms
acceptable to the Company, if and when needed by the Company.
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Property
The Company has its administrative and commercial offices as well as
Research and development facilities at 475 Armand-Frappier Boulevard, in Laval
(Quebec), in the Greater Montreal Area. A 90,000-square-foot area of land has
been acquired by Bio Syntech Canada on which 20,000-square-foot building was
built to specifications to house the administrative, commercial, scientific, and
technical personnel. This state-of-the-art complex is equipped to conduct
high-level research and development and preliminary production of biomaterials.
In addition, as part of the Company's research and development infrastructure,
research laboratories at the Ecole Polytechnique have been renovated and
equipped for the development of technologies related to articular-cartilage
engineering and biomaterial-testing devices. The Company's laboratories in Laval
are designed to be upgradable to comply with Good Laboratory Practices (GLPs),
while additional space will be devoted in the future to sites for operations
compliant with Good Manufacturing Practices (GMPs).
Management
Name Age Title
Amine Selmani 43 Chairman of the Board, President
Denis N. Beaudry 56 Director
Pierre Alary 41 Director
Jean-Yves Bourgeois 36 Director
Pierre Ranger 45 Director
Amine Selmani, 43, President and Chief Executive Officer. Mr. Selmani
has served as President and Chief Executive Officer of the Company since
February 2000 and President and Chief Executive Officer of Bio Syntech since its
inception in November 1997. Prior to founding Bio Syntech, Mr. Selmani had eight
years of teaching experience at the Chemical Engineering Department and
Biomedical Institute of the Polythechnic School of Montreal as an Associate
Professor from 1992 to 1997 and as an Assistant Professor from 1989 to 1992. Mr.
Selmani received his Bachelor of Science and Master of Science Degrees in
Physical Chemistry in 1979 and 1981, respectively, from the University of
Bordeaux. He also obtained his Doctoral and Post Doctoral Degrees in Materials
Science from the University of Montreal in 1985 and Dalhousy University in 1988,
respectively.
Denis N. Beaudry, 56, Director. Mr. Beaudry has been a Director of the
Company since February 2000. Mr. Beaudry is President of Polyvalor, Montreal,
Quebec, Canada, a limited partnership formed by the Ecole Polytechnique for the
purpose of commercializing the intellectual property of the Ecole Polytechnique.
Since 1984, he has occupied the position of Director of the Centre de
Developpement Technologique of the Ecole Polytechnique whose sphere of
activities includes technology transfer, licensing of technology and software,
joint
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creation with private industry of laboratories and research centers, strategic
alliances, research partnerships, industrial chairs and the emergence of high
technology enterprises. In 1998, he joined Polyvalor as President and General
Manager. His role consisted of enhancing the value of research results for
commercial use by means of start-up of high-tech companies in which Polyvalor
holds a participation or interest. Mr. Beaudry was President of the Quebec
Association of University Research Directors in 1992, and is at present a member
of the Board of Directors of the Centre des Technologies Textiles, the College
Rosemont, the Corporation de Financement de l'Institut de Cardiologie de
Montreal, the Centre de Technologies du Gaz Naturel, the Corporation Commerciale
de Materiaux Composites, the Centre de Developpement Rapide de Produits et de
Procedes, and the firms Sinlab Inc., Phytobiotech Inc., Polyplan Inc., Odotech
Inc. and COESI Inc.
Pierre Alary, CA, 41, Director. Mr. Alary has been a Director of the
Company since February 2000. Mr. Alary has been a Vice President for finance and
information technologies at Bombardier Transport, a designer, manufacturer and
distributor of rail cars. Prior to joining Bombardier Transport, Mr. Alary has
held various positions, including as Senior Partner, at Ernst & Young LLP,
specializing in the biotechnology industry.
Jean-Yves Bourgeois, 36, Director. Mr. Bourgeois has been a Director of
the Company since February 2000. Since 1999, Mr. Bourgeois has been a Director
and Senior Vice President in charge of corporate finance for eastern Canada of
Canaccord, a securities broker/dealer. Prior to joining Canaccord, Mr. Bourgeois
served as a Chief Financial Officer for Aeterna Laboratories. Mr. Bourgeois had
also been in charge of small capital market development, specializing in high
technology and biotechnology industries, for TD Securities, a securities
broker/dealer. From 1992 to 1997, Mr. Bourgeois held various positions,
including the head of corporate finance for eastern Canada, at Gordon Capital,
where he specialized in high technology and biotechnology industries.
Pierre Ranger, 45, Director. Mr. Ranger has been a Director of the
Company since February 2000. Since 1991, Mr. Ranger has been a teaching
professor in the orthopedic residents program at the CMDP Sacred Heart Hospital
of Montreal. Mr. Ranger received his Doctoral of Medicine Degree from the
University of Montreal in 1979 and Diploma of Sports Medicine in 1996.
Remuneration
No fees or other remuneration were paid to directors of the Company
during the year ended December 31, 1999, with the exception of reimbursement of
expenses. The Board of Directors will determine the remuneration of the
directors and officers of the Company during the current and subsequent fiscal
years.
The following table sets forth, for the periods indicated, all
compensation awarded to, earned by or paid to the chief executive officer of
Biosyntech (the "CEO") and the other executive officers of Biosyntech
(collectively, the "Named Executive Officers").
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Summary Compensation Table
Long-Term
Annual Compensation Compensation
Name and Principal
Position Year(1) Salary Bonus(2) # of Options
- -------- ------- ------ -------- ------------
Amine Selmani 1999 $120,000 - 312,500
Chief Executive Officer 1998 $120,000 - -
and President
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(1) The Company commenced operations in November 1997.
(2) Certain of the executive officers of the Company routinely receive
other benefits from the Company, the amounts of which are customary in
the Company's industry. The Company has concluded, after reasonable
inquiry, that the aggregate amounts of such benefits during each of the
periods reflected in the table above did not exceed the lesser of
US$50,000 (CDN$73,600) or 10% of the compensation set forth above for
any named individual in respect of any such period.
Risk Factors
Going Concern Question; Uncertainty of Future Profitability
The Company has suffered losses from its start-up activities and has no
operations or revenues, which raises doubt about its ability to continue as a
going concern. The ability of the Company to continue as a going concern is
dependent upon obtaining the necessary financing to complete its research and
development projects, to market those products once available and upon future
profitable operations. There can be no assurance that the Company will be able
to complete the development of its products, or if completed, that it will be
able to market them successfully. There is no assurance that even if completed
and marketed that revenues from the products will be sufficient to fund the
Company's operations or fund any additional research, development or marketing.
The Company may be required to raise additional capital through debt or equity
financing. There are no assurances that the Company will receive any revenues
from operations or other proceeds nor that it will be able to raise such capital
through debt or equity financing. If the Company is not able to raise such
financing or to obtain alternative sources of funding, management will be
required to curtail development. There is no assurance that the Company will be
able to continue to operate.
Limited Operating History
The Company's operations will be subject to all the risks inherent in
the establishment of a relatively new business enterprise, including the lack of
a
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significant operating history. There can be no assurance that future operations
will be profitable. Revenues and profits of the Company, if any, will depend
upon various factors, including market acceptance of the Company's concepts,
market awareness, reliability of the biotherapeutic products, and general
economic conditions. There is no assurance that the Company will achieve its
goals and the failure to achieve such goals.
Uncertainty of Product Development
The Company is pursuing, and intends to continue, an aggressive product
development program. Successful product development in the bio-therapeutic
industry is highly uncertain, and only a small minority of research and
development programs ultimately result in the commercialization of a product. Of
the products candidates that are commercialized, all may not be commercially
successful. Product candidates that appear promising in the early phases of
development may fail to reach the market for numerous reasons, including,
without limitation, results indicating lack of effectiveness or harmful side
effects in clinical or preclinical testing, failure to receive necessary
regulatory approvals, uneconomical manufacturing costs, the existence of third
party proprietary rights, failure to be cost effective in light of existing
therapeutics or other factors. There can be no assurance that the Company will
be able to produce future products that have commercial potential.
Additionally, success in preclinical and early clinical trials does not
ensure that large scale clinical trials will be successful. Clinical results are
frequently susceptible to varying interpretations that may delay, limit or
prevent further clinical development or regulatory approvals. The length of time
necessary to complete clinical trials and receive approval for product marketing
by regulatory authorities varies significantly by product and indication and is
often difficult to predict.
Uncertainty of Regulatory Approvals
The Company's research and development, preclinical testing, clinical
trials, facilities, manufacturing and marketing of its products are subject to
extensive regulation by numerous governmental authorities in Canada, the U.S.
and other countries. The success of the Company's product candidates will depend
in part upon obtaining and maintaining regulatory approval to market products in
approved indications. Even if regulatory approval is obtained, a marketed
product and its manufacturer are subject to continued review. Later discovery of
previously unknown problems with a product or manufacturer may result in
restrictions on such product or manufacturer, including withdrawal of the
product from the market. Failure to obtain necessary approvals, or the
restriction, suspension or revocation of any approvals or the failure to comply
with regulatory requirements could have a material adverse effect on the
Company.
Trademark, Patent and License Uncertainties
The patent positions of biotechnology companies can be highly uncertain
and involve complex legal, scientific and factual questions. To date there has
emerged no consistent policy regarding breadth of claims allowed in such
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companies' patents. Accordingly, there can be no assurance that patents and
patent applications relating to the Company's products and technologies will not
be challenged, invalidated or circumvented or will afford protection against
competitors with similar products or technology. Patent disputes are frequent
and can preclude commercialization of products. The Company may in the future be
involved in patent litigation. Such litigation, if decided adversely, could
subject the Company to significant liabilities, cause the Company to obtain
third party licenses or cease using the technology or product in dispute.
However, there can be no assurance that such licenses will be available on terms
acceptable to the Company, or at all.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired: It is impracticable
to provide the required financial statements at the time this
Report is filed. The required financial statements will be
filed as soon as practicable, but no later than 60 days after
this Report must be filed.
(b) Pro Forma Financial Information: It is impracticable to
provide the required pro form financial information at the
time this Report is filed. The required pro forma financial
information will be filed as soon as practicable, but no later
than 60 days after this Report must be filed.
(c) Exhibits:
2.1 Amalgamation Agreement made December 2, 1999, as amended and
restated on February 15, 2000, among BioSyntech Inc., Bio
Syntech Ltd. and 9083-5661 Quebec Inc.
4.1 Exchange and Voting Agreement made February 16, 2000 Agreement
among BioSyntech Inc., 9083-5661 Quebec Inc., Pierre Barnard
and Bio Syntech Ltd.
4.2 Support Agreement made February 15, 2000 among BioSyntech
Inc., 9083-5661 Quebec Inc. and Bio Syntech Ltd.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BIOSYNTECH INC.
March 15, 2000 By: /s/ Amine Selmani
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Amine Selmani, President
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