1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. For the quarterly period ended
June 30, 1997.
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. For the transition period
from ________ to _________.
Commission File Number 0-20023
ALPHA-BETA TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2997834
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Innovation Drive
Worcester, MA 01605
(Address of principal executive offices)
508-798-6900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding at August 4, 1997
----- -----------------------------
Common stock, $.01 par value 16,825,989
================================================================================
2
ALPHA-BETA TECHNOLOGY, INC.
INDEX
-----
Page
----
PART I. FINANCIAL INFORMATION:
---------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at December 31, 1996,
and June 30, 1997 ................................................... 3
Condensed Consolidated Statements of Operations for the three and six
month periods ended June 30, 1996 and 1997, and from the period from
inception through June 30, 1997 ..................................... 4
Condensed Consolidated Statements of Cash Flows for the six month
periods ended June 30, 1996 and 1997, and from the period from
inception through June 30, 1997 ..................................... 5
Notes to Condensed Consolidated Financial Statements................. 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 10
PART II. OTHER INFORMATION:
-----------------
Item 1. Legal Proceedings...............................................13
Item 2. Changes in Securities...........................................13
Item 3. Defaults Upon Senior Securities.................................13
Item 4. Submission of Matters to a Vote of Security Holders.............13
Item 5. Other Information...............................................13
Item 6. Exhibits and Reports on Form 8-K................................13
SIGNATURES.................................................................14
- ----------
2
3
ALPHA-BETA TECHNOLOGY, INC. & SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, June 30,
1996 1997
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 21,885,111 $ 12,959,799
Marketable securities 18,700,325 11,834,186
Other current assets 646,231 516,807
------------- -------------
Total current assets 41,231,667 25,310,792
------------- -------------
Property and equipment, net of accumulated
depreciation and amortization 28,116,222 26,829,576
------------- -------------
Other assets:
Bond issuance costs, net 1,068,383 1,038,075
Other 135,554 223,889
------------- -------------
Total other assets 1,203,937 1,261,964
------------- -------------
$ 70,551,826 $ 53,402,332
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of term notes payable and
capital lease obligations $ 1,119,226 $ 1,149,226
Accounts payable 2,161,078 2,816,787
Accrued expenses 711,451 585,075
------------- -------------
Total current liabilities 3,991,755 4,551,088
------------- -------------
Term notes payable and capital lease obligations,
net of current portion 25,777,252 25,275,210
------------- -------------
Stockholders' equity :
Preferred stock, $.01 par value - authorized
-- 1,000,000 shares, issued - none -- --
Common stock, $.01 par value - authorized
-- 30,000,000 shares, issued and
outstanding -- 16,723,369 shares and
16,825,989 shares at December 31,
1996 and June 30, 1997, respectively 167,234 168,260
Additional paid-in capital 147,547,833 149,254,464
Deficit accumulated during the development stage (106,842,888) (125,805,754)
Deferred compensation (89,360) (40,936)
------------- -------------
Total stockholders' equity 40,782,819 23,576,034
------------- -------------
$ 70,551,826 $ 53,402,332
============= =============
See accompanying notes.
3
4
ALPHA-BETA TECHNOLOGY, INC. & SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
March 2, 1988
(inception)
Three months ended Six months ended through
June 30, June 30, June 30,
------------------------------- ------------------------------- -------------
1996 1997 1996 1997 1997
------------- ------------- ------------- ------------- -------------
Revenues:
Interest $ 770,361 $ 399,760 $ 1,217,757 $ 914,076 $ 8,946,554
Other 2,927 2,193 4,511 2,533 453,160
------------- ------------- ------------- ------------- -------------
Total revenues 773,288 401,953 1,222,268 916,609 9,399,714
------------- ------------- ------------- ------------- -------------
Expenses:
Research and development 6,006,951 6,589,405 11,751,266 13,978,615 97,747,406
General and administrative 1,176,703 1,009,356 2,296,535 2,287,434 24,967,821
Acquired in-process research and
development (Note 4) -- 2,014,004 -- 2,014,004 2,014,004
Interest 806,594 783,846 1,648,589 1,591,001 10,487,561
------------- ------------- ------------- ------------- -------------
Total expenses 7,990,248 10,396,611 15,696,390 19,871,054 135,216,792
------------- ------------- ------------- ------------- -------------
Net loss $ (7,216,960) $ (9,994,658) $ (14,474,122) $ (18,954,445) $(125,817,078)
============= ============= ============= ============= =============
Net loss per common share $ (0.43) $ (0.60) $ (0.93) $ (1.13)
============= ============= ============= =============
Weighted average number of common
shares outstanding 16,701,940 16,757,501 15,536,612 16,744,725
============= ============= ============= =============
See accompanying notes.
4
5
ALPHA-BETA TECHNOLOGY, INC. & SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
March 2, 1988
Six months ended (inception)
June 30, through
--------------------------------------- June 30,
1996 1997 1997
---------------- ----------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (14,474,122) $ (18,954,445) $(125,817,078)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 1,717,244 1,314,219 13,119,670
Amortization of investment premium 46,674 45,399 1,873,667
Amortization of deferred financing and
bond issuance costs 115,378 115,378 692,368
Noncash compensation related to stock options,
warrants and common stock 133,405 160,552 2,259,502
Charges related with acquired in-process
research and development (Note 4) -- 2,014,004 2,014,004
Changes in operating assets and liabilities:
Other current assets (462,843) 132,144 (514,087)
Accounts payable 334,579 619,542 2,780,620
Accrued expenses (33,325) (169,233) 542,218
------------- ------------- -------------
Net cash used for operating activities (12,623,010) (14,722,440) (103,049,116)
------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in marketable securities (16,192,314) 6,812,319 (13,696,536)
Net cash used in the purchase of MycoTox -- (580,900) (580,900)
Increase in property and equipment (370,644) (275,405) (39,676,689)
Increase in restricted cash -- -- (32,425,737)
Payments from restricted cash -- -- 32,425,737
Decrease (increase) in other assets 6,581 11,665 (200,957)
Increase in bond issuance costs -- -- (1,303,237)
------------- ------------- -------------
Net cash used for (provided by)
investing activities (16,556,377) 5,967,679 (55,458,319)
------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible subordinated
notes payable to stockholders -- -- 2,300,000
Proceeds from equipment line of credit -- -- 3,261,600
Proceeds from equipment lease -- 291,032 291,032
Payments on capital lease obligations (6,363) -- (180,867)
Proceeds from notes payable -- -- 27,835,947
Payments on notes payable (680,959) (557,112) (4,438,413)
Proceeds from sale of convertible redeemable
preferred stock, net of issuance costs -- -- 24,560,465
Proceeds from sale of common stock, net of
issuance costs 39,453,316 95,529 117,837,470
------------- ------------- -------------
Net cash provided by financing activities 38,765,994 (170,551) 171,467,234
------------- ------------- -------------
Net increase (decrease) in cash and cash
equivalents 9,586,607 (8,925,312) 12,959,799
Cash and cash equivalents, beginning of period 10,120,843 21,885,111 --
------------- ------------- -------------
Cash and cash equivalents, end of period $ 19,707,450 $ 12,959,799 $ 12,959,799
============= ============= =============
Interest paid (net of capitalized interest) $ 1,648,589 $ 1,385,001 $ 9,851,137
============= ============= =============
See accompanying notes.
5
6
ALPHA-BETA TECHNOLOGY, INC & SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited)
March 2, 1988
Six months ended (inception)
June 30, through
--------------------------------------- June 30,
1996 1997 1997
---------------- ----------------- ----------------
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Equipment under capital lease ................... $ -- $ -- $ (178,886)
Furniture and equipment under capital lease ..... -- -- 178,886
Conversion of line of credit to term note payable -- -- (2,144,525)
Issuance of term note payable ................... -- -- 2,144,525
Grant of common stock ........................... 28,162 138,211 340,790
Compensation related to common stock grant ...... (28,162) (138,211) (340,790)
Cancellation of stock options ................... (54,333) -- (166,170)
Grant of stock options and restricted stock ..... -- -- 1,996,153
Deferred compensation on stock options and
restricted stock ............................. 54,333 -- (1,829,983)
Grant of warrants ............................... -- -- 132,000
Deferred compensation on warrants ............... -- -- (132,000)
Conversion of subordinated notes payable to
redeemable preferred stock ................... -- -- (2,300,000)
Issuance of redeemable preferred stock .......... -- -- 2,300,000
Conversion of redeemable preferred stock to
common stock ................................. -- -- (20,674,454)
Common stock .................................... -- -- 20,674,454
Other assets .................................... -- -- (50,000)
Issuance costs associated with proceeds
on sale of redeemable preferred stock ........ -- -- 50,000
Note payable .................................... -- -- 2,679,165
Grant of warrants ............................... -- -- 974,627
Note payable discount ........................... -- -- (3,653,792)
Unrealized losses (gains) on marketable
securities ................................... 59,010 8,421 (11,324)
Accumulated deficit ............................. (59,010) (8,421) 11,324
Capitalized interest in property and equipment .. -- -- (312,476)
Amortization of bond issuance costs ............. -- -- 83,315
Amortization of note payable discount ........... -- -- 229,161
------------ ------------ ------------
$ -- $ -- $ --
============ ============ ============
See accompanying notes
6
7
ALPHA-BETA TECHNOLOGY, INC. & SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The interim unaudited condensed consolidated financial statements contained
herein have been prepared in accordance with generally accepted accounting
principles for interim financial information. They do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In management's opinion, the unaudited
information includes all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the financial position,
results of operations, and cash flows for the periods presented. The results of
operations for the interim periods shown in this report are not necessarily
indicative of results expected for the full year. The financial statements
should be read in conjunction with the financial statements and notes for the
year ended December 31, 1996, included in the Company's Annual Report on Form
10-K.
2. NET LOSS PER COMMON SHARE
For the three and six month periods ended June 30, 1996 and 1997, net loss
per common share was computed using the weighted average number of common shares
outstanding during the period.
3. MARKETABLE SECURITIES
The amortized cost and estimated fair market values of the Company's
securities at June 30, 1997 are presented below. The Company did not realize any
gains or losses from securities sold in the six months ended June 30, 1997 and
1996.
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET
SECURITIES AVAILABLE FOR SALE COST GAINS LOSSES VALUE
- --------------------------------- ------------- ----------- ------------ -----------
U.S. Government Agency
obligations (average maturity
of 4 months) ................. $ 2,500,556 $ 4,769 $ -- $ 2,505,325
Corporate debt securities
(average maturity of 5 months) 9,322,306 6,555 -- 9,328,861
----------- ----------- ----------- -----------
$11,822,862 $ 11,324 -- $11,834,186
=========== =========== =========== ===========
4. ACQUISITION OF MYCOTOX, INC.
On June 9, 1997 the Company acquired all the outstanding shares of MycoTox,
Inc., a privately owned biotechnology company located in Denver, Colorado. Under
the agreement, MycoTox shareholders received an up-front payment valued at $1.0
million consisting of $500,000 in cash and 56,813 shares of Alpha-Beta common
stock. On June 9, 1998, an additional 113,636 shares of common stock will be
issued to MycoTox shareholders. The 56,813 and 113,636 common shares granted on
June 9, 1997 and June 9, 1998, respectively, were valued at $8.80 per share
(the 10 day average price of the Company's common stock
7
8
ALPHA-BETA TECHNOLOGY, INC. & SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
preceding June 9, 1997). An additional $1.0 million of common stock will be
issued subject to the attainment of future performance milestones.
The aggregate purchase price of $2,164,024 consisted of the following:
Common stock $ 1,500,000
Liabilities assumed 79,024
Cash paid for acquisition
and acquisition costs 585,000
===========
$ 2,164,024
===========
In conjunction with the acquisition, the Company recorded approximately
$2,014,000 as in-process research and development expense. The $1.0 million of
common stock which is subject to future performance milestones will be recorded
if those milestones are achieved. For financial statement purposes, this
acquisition was accounted for as a purchase, and accordingly, the results of
operations of MycoTox subsequent to June 9, 1997, are included in the Company's
consolidated statements of operations.
The purchase price was allocated based upon the fair value of the assets
and intangible assets acquired. The purchase price has preliminarily been
allocated as follows:
Current assets $ 6,820
Equipment 43,200
Goodwill 100,000
In-process research and
development 2,014,004
===========
$ 2,164,024
===========
The in-process research and development has been expensed as a charge
against operations as of the closing of the transaction, and is included in the
accompanying consolidated statement of operations. The amount allocated to
acquired in-process research and development relates to projects that had not
yet reached technological feasibility and that, until completion of development,
have no alternative future use. These projects will require substantial high
risk development and testing prior to the reaching of technological feasibility.
5. LICENSE AGREEMENT
In May 1997, the Company entered into a license and sublicense agreement
with a third party for patent rights and know how relating to whole glucan
particles. In connection with this agreement, the Company received 200,000
shares of Series C convertible preferred stock of this entity, which represents
an ownership interest of approximately 9% on a fully-diluted basis. The Company
is also entitled to receive license fees based on the net sales, if any, of
products incorporating the licensed technology. The Company has not recorded
any value relating to this transaction as there is significant uncertainty
surrounding the realizibility of any value from the shares received.
8
9
ALPHA-BETA TECHNOLOGY, INC. & SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6. NEW ACCOUNTING STANDARD
In March 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings Per Share", ("SFAS 128"). SFAS 128 establishes standards for
computing and presenting earnings per share and applies to entities with
publicly held common stock or potential common stock. This statement is
effective for fiscal years ending after December 15, 1997 and early adoption is
not permitted. When adopted, this statement will require restatement of prior
years earnings per share. The Company will adopt this statement for its fiscal
year ended December 31, 1997. In addition, the Company believes that the
adoption of SFAS 128 will not have a material effect on its financial
statements.
9
10
ALPHA-BETA TECHNOLOGY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Since its inception in March 1988, Alpha-Beta Technology, Inc. has been
engaged in research and development of new classes of carbohydrate products. The
Company has not received significant revenues from the sale of its products and
expects to incur substantial operating losses for the next several years. As of
June 30, 1997, the Company's accumulated deficit was $125,805,754.
RESULTS OF OPERATIONS
Revenues
- --------
Revenues to date have consisted primarily of interest earned from the
investment of cash balances. For the three month periods ended June 30, 1997
and 1996, revenues were $401,953 and $773,288 respectively. This decrease of
$371,335 was primarily due to less interest earned as a result of lower average
cash balances in the second quarter of 1997 compared with the second quarter of
1996. Revenues in the six month periods ended June 30, 1997 and 1996 were
$916,609 and $1,222,268, respectively. The decrease of $305,659 in the 1997
period resulted primarily from less interest earned as a result of lower
average cash balances in the six months ended June 30, 1997, as compared to the
same period in 1996.
Operating Expenses
- ------------------
For the three month periods ended June 30, 1997 and 1996, research and
development expenses were $6,589,405 and $6,006,951, respectively. For the six
month periods ended June 30, these expenses increased 19% to $13,978,615 in 1997
from $11,751,266 in 1996. These increases were primarily due to costs related to
conducting the Phase III clinical trial for Betafectin. The Company does not
expect research and development expenses to continue to increase over 1996
levels for the remainder of 1997; however, these expenses may increase in future
years, reflecting activities related to further development and
commercialization of Betafectin PGG-glucan, the development of additional
products and the operation of the commercial manufacturing facility for research
and development purposes.
For the three and six month periods ended June 30, 1997 and 1996, the
Company recorded $2,014,004 of in-process research and development expense
related to the acquisition of Mycotox, Inc. See footnote 4 in notes to
consolidated financial statements for a full discussion of expenses associated
with this acquisition.
For the three month periods ended June 30, 1997 and 1996, general and
administrative expenses were $1,009,356 and $1,176,703, respectively. This
decrease of $167,347 was primarily due to a decrease in professional service
expenses. For the six month periods ended June 30, these expenses decreased to
$2,287,434 in 1997 from $2,296,535 in 1996. General and administrative expenses
are not expected to increase over 1996 levels in 1997; however, these expenses
may increase in future years reflecting planned efforts to commercialize
Betafectin.
For the three month periods ended June 30, 1997 and 1996, interest expense
was $783,846 and $806,594, respectively. For the six month periods ended June
30, interest expense
10
11
decreased to $1,591,001 in 1997 from $1,648,589 in 1996. This decrease of
$57,588 was primarily due to lower loan balances in the first half of 1997
compared with the first half of 1996.
Net Loss
- --------
The net loss for the six months ended June 30, 1997 was $18,954,445 ($1.13
per share) compared to $14,474,122 ($.93 per share) for the same period in 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company had $24,793,985 in cash equivalents and marketable securities
at June 30, 1997, compared to $40,585,436 at December 31, 1996. This decrease
was primarily due to approximately $14,722,000 of cash used for operating
activities and $585,000 of cash used for the June 1997 acquisition of Mycotox,
Inc. (see footnote 4 in notes to consolidated financial statements).
The Company expects to incur substantial additional operating expenses in
1997 and in future years related to research, development, and clinical studies
of Betafectin and other products, as well as the establishment of commercial
manufacturing and sales and marketing capabilities. As of June 30, 1997, the
Company had working capital of approximately $20,760,000. Based on its current
rate of expenditures, the Company projects that its existing capital resources
would enable it to maintain its current and planned operations and capital
expenditures into the second quarter of 1998. The Company's capital requirements
will depend upon numerous factors, including the progress of the Company's
research and development programs, preclinical testing and clinical trials, the
timing and cost of obtaining regulatory approvals, and the costs associated with
expanding manufacturing and establishing marketing capabilities. The Company may
raise additional funds prior to obtaining regulatory approval for Betafectin
(and, if required, prior to the completion of additional Phase III clinical
trials of Betafectin) through collaborative alliances, equity or debt
financings or other arrangements. There can be no assurance that additional
funds will be available on favorable terms or that the Company will enter into
collaborative or other arrangements. The Company's ability to raise additional
funds or to enter into collaborative or other arrangements may depend upon a
number of factors including the results of the Company's clinical development
programs, the status of its discussions with the FDA concerning obtaining
regulatory approval of Betafectin and the overall market for biotechnology
stocks.
On June 9, 1997 the Company acquired all the outstanding shares of
MycoTox, Inc., a privately owned biotechnology company located in Denver,
Colorado. Under the agreement, MycoTox shareholders received an up-front payment
valued at $1.0 million consisting of $500,000 in cash and 56,813 shares of the
Company's common stock. On June 9, 1998, an additional 113,636 shares of common
stock will be issued to MycoTox shareholders. The 56,813 and 113,636 common
shares granted on June 9, 1997 and June 9, 1998, respectively, were valued at
$8.80 per share (the 10 day average price of the Company's common stock
preceding June 9, 1997). An additional $1.0 million of common stock will be
issued subject to the attainment of future performance milestones.
On August 4, 1997, the Company announced its preliminary analysis of its
Phase III clinical study of Betafectin for the prevention of serious infections
in patients at high risk for post-operative infections. In the overall study 21%
of placebo patients suffered serious post-operative infections compared with 17%
of Betafectin-treated patients. This positive trend did not achieve statistical
significance in the incidence of patients who developed serious infections by
day 30 post-surgery, the primary end-point of the trial. However, a significant
reduction of infections was demonstrated in one of the two prospectively defined
strata in the trial, patients undergoing non-colorectal gastrointestinal
surgeries. In this stratum, 36% of the placebo patients suffered serious
post-operative infections compared with 22 % of the Betafectin-treated patients.
In the other
11
12
prospectively defined stratum, patients undergoing colorectal surgeries, there
was no difference in the incidence of serious infections between the placebo
and Betafectin arms. The Company is continuing to analyze the data from the
trial. The Company plans to discuss the results of the trial with the FDA to
determine the appropriate steps to take in the development of Betafectin. These
steps may include, but are not limited to, the following; filing a product
license application ("PLA") for use in non-colorectal surgery patients based on
the recently completed Phase III trial; conducting a confirmatory Phase III
trial in non-colorectal surgery patients in parallel with a PLA filing; or
conducting a confirmatory Phase III trial in non-colorectal surgery patients
prior to filing a PLA. The Company will also be reviewing the impact of these
results on the ongoing Phase II trial of Betafectin for the prevention of
serious infection in patients undergoing surgery for inflammatory bowel
disease and on other facets of the Company's operations.
CERTAIN FACTORS AFFECTING FUTURE EVENTS AND RESULTS
This Form 10-Q to Stockholders contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Act of 1934. Actual events and results could differ materially from
those set forth in the forward looking statements. Certain factors that might
cause such differences include, but are not limited to, the following: further
analysis of the data from the Company's Phase III clinical trial; the need for
additional Betafectin clinical trials and the outcome of those trials should
they occur; the outcome of its other clinical development programs; obtaining
the requisite regulatory approvals for Alpha-Beta Technology's products from the
U.S. Food and Drug Administration; the need and ability to obtain additional
financing; the challenges of integrating the operations of a newly acquired
business; the competitive environment and market conditions for the
biotechnology industry; and general economic conditions.
12
13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. None
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Stockholders of Alpha-Beta Technology, Inc. was
held on May 28, 1997, for the purpose of: (1) the election of D. Davidson
Easson Jr., Sc.D. and Bernard Canavan, M.D. as the two Class II Directors
of the Company to serve until the 2000 Annual Meeting of Stockholders and
until their successors are duly elected and qualified; and (2) the
approval of the Company's 1997 Stock Option and Grant Plan. The following
table describes the results of the shareholder votes.
VOTES VOTES
IN FAVOR WITHHELD
---------------------
Election of D. Davidson Easson Jr., Sc.D. as a Classs II Director 14,676,562 59,627
Election of Bernard Canavan, M.D. as a Class II Dirercor 14,675,962 60,227
VOTES VOTES
IN FAVOR OPPOSED ABSTAIN
-------------------------------------
Approval of the Company's 1997 Stock Option and Grant Plan 6,196,179 3,625,947 30,254
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
- Mycotox, Inc. Merger Agreement
- Mycotox, Inc. Registration Rights Agreement
B. Reports on Form 8-K. None
13
14
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 thereunto duly authorized.
ALPHA-BETA TECHNOLOGY, INC.
Date: August 13, 1997 /s/ William D.Romeo
--------------- -------------------------------------
William D. Romeo, Director of Finance
14