EXHIBIT 10.16
AMERICAN STOCK EXCHANGE LISTING APPLICATION
AND ASSOCIATED EXHIBITS
DUNCAN, BLUM & ASSOCIATES
ATTORNEYS AT LAW
cduncan@sprintmail.com
Carl N. Duncan David E. Blum
5718 Tanglewood Drive 1863 Kalorama Road, N.W.
Bethesda, Maryland 20817 Washington, D.C. 20009
(301) 263-0200 (202) 232-6220
(301) 263-0300 (Fax) (202) 232-7891 (Fax)
July 24, 2001
VIA AIR COURIER
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Andrew S. English, Managing Director
Equity/Global Sales and Member Affairs
The American Stock Exchange
86 Trinity Place
New York, New York 10006
Re: BioQuest International, Inc. ("BQ")
Listing Application and Associated Filing Fee
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Dear Andrew:
It was a real pleasure to talk with you on July 5, 2001 regarding BQ's
then prospective Listing Application. Your insights were extremely beneficial
and we trust our discussion will facilitate your understanding of both BioQuest
and this self-underwritten, all-or-nothing 1,000,000 share Dutch Auction.
In conjunction with this Application, please find the following:
1. Associated Listing Application Exhibits;
2. BQ's $1,000 filing fee; and
3. BQ's Pre-Effective Amendment No. 3 concurrently filed today with the
SEC which, among other pertinent disclosures, describes the associated
distribution process.
Please note that BQ is seeking listing contingent upon (i) the
1,000,000 share all-or-nothing offering being successful and (ii) the market
value of BQ's publicly tradable share float being not less than $15,000,000.
Given BQ's minimum $10 per share price and an anticipated public float of
1,540,473 shares assuming the 1,000,000 shares are sold, we believe that both
standards will be met simultaneously.
Recognizing that this Application is only possible for entities which
are Section 12 listed, we have already prepared BQ's Form 8-A. Since BQ does not
qualify for use of the Form 8-A until the Registration Statement is declared
effective, that draft Form 8-A is attached for your preliminary perusal but will
not be filed until BQ's Registration Statement is declared effective.
For a similar reason, BQ will provide a completed "Distribution and
Trading Information Worksheet" once the 1,000,000 share all-or-nothing offering
is successfully closed.
Recognizing that this is a self-underwritten offering, a methodology of
securities distribution that AMEX has had little experience with, please observe
the care with which this Dutch Auction was organized. First, I think you will
see exemplary disclosure in the attached draft prospectus. In addition, there
are a number of safeguards incorporated into the offering which are unique,
specifically: the licensed technology which leaves no discretion for the issuer
to change the outcome of the clearing price; the use of an independent escrow
agent in lieu of the role often taken by the broker-dealer; and, finally, the
use of an independent auditor to assure the accuracy of the process and
associated share allocation. The bottom line for us is that this mechanism
democratizes the entire IPO allocation process, quite unlike the growing number
of lawsuits that have arisen over this very question, while maximizing the net
dollars raised by the issuer.
We also want AMEX to understand that BQ welcomes adding outside
expertise to our board of directors. This will be done concurrent to AMEX
Listing to satisfy its independence standards. Very simply, BQ has in mind a
number of very promising prospective board members but, until BQ has directors'
and officers' insurance in place, their appointment has been deferred to date.
Once BQ is declared effective and well along in that registration process, BQ
will be filing an application for directors' and officers' Insurance, thereby
permitting us to name members to the board and to satisfy AMEX requirements in
this area.
You indicated that having an independent valuation would be very
helpful. While certainly possible, the point of a Dutch Auction is to let
prospective investors determine that appropriate price, another example of the
democratization of the Dutch Auction process. Nonetheless, BQ believes the
$10-$20 price range is very realistic. We have outlined a valuation rationale
which we believe supports and validates that range as being both realistic and
conservative.
Because BQ is a hybrid conglomerate of subsidiary entities, all of
which are connected to, or involved in the field of Alternative/Integrative
Medicine, we have looked principally to the healthcare and medical industries
for comparative P/E valuation ratios, as a general guide. In these industries
multiples can run as high as 25 to 30 times earnings. In keeping with our
conservative approach, we selected a range of between 9 and 15 times earnings.
Keeping in mind that BQ is a development company, we have used our
Proforma Statement of Operations found within our Business Plan. The following
represents consolidated projected earnings in Years 1 and 2, and provides a
range from a multiple of 9 to 15 times earnings.
Year 1
------
Total Net Income of $10 million x multiple of (9) = $90 million Total Net
Income of $10 million x multiple of (15) = $150 million
Year 2
------
Total Net Income of $22 million x multiple of (9) = $198 million Total Net
Income of $22 million x multiple of (15) = $330 million
Shares Issued and Outstanding
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Founders 8,500,000 shares
Private Placement Shareholders 540,473 shares
Shares Sold in IPO 1,000,000 shares
Total 10,040,473 shares x $10/share bid minimum
= $100,404,730 market cap
We also recognize that AMEX has traditionally preferred the use of
mini-maxi offerings. BQ would prefer that also. Given that prior Dutch Auctions
were both underwritten and all-or-nothing in character, we have acquiesced to
the SEC's mandating the all-or-nothing process, at least with this initial
offering.
Andrew, we really appreciate the initiative you have demonstrated in
conjunction with BQ's offering. As you are receiving these materials, I will
already be in Europe. While I can be reached by satellite phone please feel free
to contact Peter J. Ewens, BQ's Chairman and CEO. As I indicated, Mr. Ewens is
BQ's initial contact person, who will work with you in every way in your
capacity as liaison between the issuers you work with, and AMEX. Again thank you
for you assistance.
Sincerely,
/s/ Carl N. Duncan
Carl N. Duncan
CND:ljo
Enclosures: Listing Application and Exhibits
$1,000 Fee
BioQuest International, Inc. Pre-Effective Amendment No. 3
Form 8-A
Cc: Peter J. Ewens
The American Stock Exchange
Checklist for Original Listing Application
Company Name: BioQuest International, Inc.
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GENERAL
X Listing Application
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X Listing Agreement
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N/A Underwriter's Letter (for IPOs)
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X Other: N/A
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X SEC Form 8A (8A, 8, 10)
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X Listing Fee: $ 1,000
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ADDITIONAL COMMON STOCK
N/A Listing Application
OIL AND GAS COMPANIES
N/A Engineer's Reserve Report
MINING COMPANIES
N/A Table of Lands
N/A Engineer's Mining and Reserve Report
Items in bold are American Stock Exchange forms and
formats. Other items are Company documents.
The American Stock Exchange
Common Stock Listing Application
ORIGINAL LISTING APPLICATION Approved on:
No:
Date: June 30, 2001
-----------------------
BIOQUEST INTERNATIONAL, INC.
11217 Silverleaf Drive
Fairfax Station, Virginia 22039
Telephone (703) 764-4464
BIOQUEST INTERNATIONAL, INC. (the "Company") hereby makes application to The
American Stock Exchange LLC for the listing of:
1,000,000 issued and outstanding shares of its common stock,
no par value, and for authority to add to the list,
upon official notice of issuance; plus
0 additional shares of its common stock upon exercise
of stock to be issued pursuant to the Company's
initial public offering; plus
0 additional shares of its common stock upon exercise
of warrants; plus
0 additional shares of its common stock upon conversion
of the Company's outstanding preferred stock; making
a total of:
1,000,000 shares of said common stock, the listing of which is
herein applied for (of a total 10,040,473 issued and
25,000,000 authorized.)
Other than the unissued reserved shares of common stock herein applied for,
there are no authorized but unissued shares of common stock reserved for
issuance for any specific purpose.
ATTACHMENT
NOT APPLICABLE
The undersigned hereby certifies that the statements made herein and the papers
and exhibits submitted in support hereof are, to the best of such person's
knowledge and belief, true and correct.
BIOQUEST INTERNATIONAL, INC.
By: /s/ Peter J. Ewens
-------------------
Peter J. Ewens, President
The American Stock Exchange
Initial Public Offering Listing Application
ORIGINAL LISTING APPLICATION *Amended on:
No: Approved on:
Date: June 30, 2001
BIOQUEST INTERNATIONAL, INC.
11217 Silverleaf Drive
Fairfax Station, Virginia 22039
Telephone (703) 764-4464
BIOQUEST INTERNATIONAL, INC. (the "Company") hereby makes application to The
American Stock Exchange LLC for the listing of:
1,000,000 issued and outstanding shares of its common stock,
no par value, and for authority to add to the list,
upon official notice of issuance; plus
0 additional shares of its common stock upon exercise
of stock to be issued pursuant to the Company's
initial public offering; plus
0 additional shares of its common stock upon exercise
of warrants; plus
0 additional shares of its common stock upon conversion
of the Company's outstanding preferred stock; making
a total of:
1,000,000 shares of said common stock, the listing of which is
herein applied for (of a total 10,040,473 issued and
25,000,000 authorized.)
Other than the unissued reserved shares of common stock herein applied for,
there are no authorized but unissued shares of common stock reserved for
issuance for any specific purpose.
PROSPECTUS
Attached hereto and incorporated herein by reference is a copy of the Company's
Preliminary Prospectus dated July 24, 2001 (the "Prospectus") proposed to be
used in connection with the sale of the common stock. All of the common stock is
expected to be sold pursuant to the 1,000,000 share all-or-nothing Dutch Auction
process described in such Prospectus. The net proceeds of the $8,000,000 -
$20,000,000 will be applied as set forth on pages 7-9 of the Prospectus. There
have been no material developments affecting the Company since the date of the
Prospectus.
The undersigned hereby certifies that the statements made herein and the papers
and exhibits submitted in support hereof are, to the best of such person's
knowledge and belief, true and correct.
BIOQUEST INTERNATIONAL, INC.
By: /s/ Peter J. Ewens
Peter J. Ewens, President
*Amended to reflect completion of the offering.
The American Stock Exchange
Listing Agreement
BioQuest International, Inc. (the "Company"), in consideration of the listing of
its securities, hereby agrees, with The American Stock Exchange LLC (the
"Exchange") that:
(1) The Company certifies that it will comply with all Exchange rules, policies
and procedures that apply to listed companies as they are now in effect and
as they may be amended from time to time, regardless of whether the
Company's organization documents would allow for a different result.
(2) The Company shall notify the Exchange at least 20 days in advance of any
change in the form or nature of any listed security or in the rights,
benefits and privileges of the holders of such security.
(3) The Company understands that the Exchange may remove its securities from
listing on the Exchange, pursuant to applicable procedures, if it fails to
meet one or more requirements of Paragraphs 1-2 of this Agreement.
(4) In order to publicize the Company's listing on the Exchange, the Company
authorizes the Exchange to use the Company's corporate logos, Web site
address (URL): www.BatoutofHealth.com, trade names and trade/service marks
in order to convey quotation information, transactional reporting
information and other information regarding the Company in connection with
the Exchange. In order to ensure the accuracy of the information, the
Company agrees to provide the Exchange with the Company's current corporate
logos, Web site address, trade names and trade/service marks and with any
subsequent changes. Questions regarding logo usage should be directed to:
Peter J. Ewens at (703) 764-4464.
The Company indemnifies the Exchange and holds it harmless from any
third-party rights and/or claims arising out of use by the Exchange or any
affiliate ("Corporations") of the Company's corporate logos, Web site
address, trade names, trade/service marks and/or the trading symbol used by
the Company.
(5) The Company warrants and represents that the trading symbol to be used by
the Company does not violate any trade/service mark, trade name or other
intellectual property right of any third party. The Company's trading
symbol is controlled by the Exchange and is provided to the Company for the
limited purpose of identifying the Company's security in authorized
quotation and trading systems. The Exchange reserves the right to change
the Company's trading symbol at the Exchange's discretion at any time.
Exchange Warranties: Disclaimers of Warranties. For any goods or services
provided to Company, the Exchange shall endeavor to provide them in a good and
workmanlike manner. Beyond the warranties states in this section, there are no
other warranties of any kind, express, implied or statutory (including the
implied warranties of merchantability or fitness for a particular use or
purpose).
continued
LIMITATION OF CORPORATIONS' LIABILITY:
(1) In no event will the Corporations be liable for trading losses, losses of
profits, indirect, special, punitive, consequential, or incidental loss or
damage, even if the Corporations have been advised of the possibility of
such damages.
(2) If the Corporations are held liable, the liability of the Corporations is
limited:
(a) for goods and services for which the Company is specifically charged,
to the amount paid by Company for those goods or services during the
twelve months preceding the accrual of the claim; and
(b) in all other instances, to the amount of the annual listing fee paid
by the Company during the twelve months preceding the accrual of the
claim.
(3) For goods and services provided under a separate written agreement, the
limitation of liability provisions in that agreement shall govern any
claims relating to or arising from the provision of those goods and
services.
(4) This subsection shall not relieve the Corporations from liability for
damages that result from their own gross negligence or willful tortuous
misconduct, or from personal injury or wrongful death claims.
(5) The Corporations shall not be liable for any third parties' good or
services.
(6) The Company agrees that these terms reflect a reasonable allocation of risk
and limitation of liability.
By: /s/ Peter J. Ewens
SIGNATURE
Dated: June 30, 2001 Peter J. Ewens, President
PLEASE PRINT NAME AND TITLE
Accepted at New York, New York, The American Stock Exchange LLC
By: _________________________________
SIGNATURE
Dated: _________________________ _________________________________
PLEASE PRINT NAME AND TITLE
The American Stock Exchange
Listing Agreement
BioQuest International, Inc. (the "Company"), in consideration of the listing of
its securities, hereby agrees with The American Stock Exchange LLC (the
"Exchange") that it will:
(1) Comply with all Exchange rules, policies and procedures that apply to
listed companies as they are now in effect and as they may be amended from
time to time, regardless of whether the Company's organization documents
would allow for a different result.
(2) Notify the Exchange at least 20 days in advance of any change in the form
or nature of any listed security or in the rights, benefits, and privileges
of the holders of such security.
I am an officer of the Company, authorized to sign this agreement on the
Company's behalf.
By: /s/ Peter J. Ewens
SIGNATURE
Dated: June 30, 2001 Peter J. Ewens, President
PLEASE PRINT NAME AND TITLE
Please fill out and return to:
Amex Equity Listings Department
The American Stock Exchange
86 Trinity Place
New York, NY 10006-1872
(800) 875-1247
The American Stock Exchange N/A
Sample Underwriter's Letter
DATE
Mr./Ms. _____________________
The American Stock Exchange
86 Trinity Place
New York, NY 10006-1872
Re: ______________________
Dear Mr./Ms.:
We are acting as representatives of the underwriters in connection with
________________ (the "Company") initial public offering of (number and issue).
We are currently organizing a syndicate to include approximately _____________
securities firms to underwrite and distribute the issue.
We understand that the listing criteria of The American Stock Exchange (the
"Exchange") with respect to a public offering in excess of one million (issue)
requires a minimum of 400 public round lot holders.
We can assure the Exchange that the distribution of the Company's (issue) in its
initial public offering will satisfy or exceed the distribution requirements
described above for listing on the Exchange. We will achieve these criteria by
using our own retail sales offices, our institutional department, and the
underwriting syndicate currently being organized.
Very truly yours,
By: ___________________________________
SIGNATURE
___________________________________
PLEASE PRINT NAME AND TITLE
The American Stock Exchange
Distribution and Trading Information Worksheet
(To be filed once 1,000,000 share all-or-nothing Dutch Auction offering is
successfully concluded.)
BioQuest International, Inc. (the "Company"), hereby certifies, to the best of
its knowledge and belief, that the following information about its common stock
(the "Security") is true and correct as of June 30, 2001.
1. NUMBER OF SECURITIES IN PUBLIC DISTRIBUTION
Number of Securities outstanding
-------------------------------
Less number of non-public holdings (item 3)
-------------------------------
Balance - number of Securities in public distribution
-------------------------------
Less number of shares held in lots 1 to 99
(other than non-public shares)
-------------------------------
Balance - number of Securities in public distribution held in
lots of 100 or more
===============================
2. NUMBER OF HOLDERS
Number of beneficial holders
-------------------------------
Less number of non-public holders (item 3)
-------------------------------
Balance - number of public holders
-------------------------------
Less number of holders of lots 1 to 99 (other than non-public and
odd-lot holders) (item 3)
-------------------------------
Balance - number of public holders of lots of 100 or more
===============================
NOTE: A separate form should be prepared for each class of security for which application to list is made.
continued
3. NON-PUBLIC HOLDINGS
List below the beneficial ownership of the Securities of each officer,
director and 10% (or greater) holder, including members of the
immediate family and any affiliate or associate of any of the foregoing
persons:
Name Relationship to Company Amount of Holdings
By: /s/ Peter J. Ewens
SIGNATURE
Dated: June 30, 2001 Peter J. Ewens, President
PLEASE PRINT NAME AND TITLE
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
BIOQUEST INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Virginia 54-1965777
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(State of incorporation or organization) (IRS Employer
Identification No.)
11217 Silverleaf Drive
Fairfax Station, Virginia 22039
(Address of principal executive offices)
(Zip Code)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instructions A(c)(1), please check the
following box. [ ]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instructions A(c)(2) please check the following box. [ ]
Securities Act registration statement file number to which this
Form 8-A relates:
333-46666
Securities to be registered pursuant to Section 12(b) of the Act:
Name of Each Exchange On Which
Title of Each Class To Each Class
Be So Registered Is To Be Registered
---------------------- -------------------------------
COMMON STOCK AMERICAN STOCK EXCHANGE*
* Registrant's common shares are expected to be listed on the American Stock
Exchange concurrent with successful completion of its 1,000,000 share
all-or-nothing Dutch Auction offering being made pursuant to the Securities Act
of 1933 (Registration Statement 333-46666).
Securities to be registered pursuant to Section 12(g) of the Act:
N/A
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The class of securities to be registered hereby is the common stock, and
associated rights, no par value per share, of BioQuest International, Inc., a
Virginia corporation.
The description of the BioQuest common stock is contained in the prospectus,
dated August ___, 2001, included in the Registrant's Registration Statement on
Form SB-2 (No. 333-46666) under the caption "Description of Capital Stock,"
which is incorporated herein by reference.
ITEM 2. EXHIBITS.
The securities described herein are to be registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934. In accordance with Part II to the
instructions regarding exhibits on Form 8-A, the following exhibits are hereby
incorporated herein by reference.
1. Certificate of Incorporation and Certificate of Amendment of BioQuest
International, Inc. is set forth as Exhibits 3.1.1 and 3.1.2 to the
Registration Statement on Form SB-2.
2. By-laws, as amended, of BioQuest International, Inc. are set forth as
Exhibit 3.2 to the Registration Statement on Form SB-2.
3. Form of Common Stock Certificate is set forth as Exhibit 3.3 to the
Registration Statement on Form SB-2.
4. Form of Prospectus is attached to the Registration Statement on Form SB-2.
SIGNATURE
Pursuant to the requirements of Section 12(g) of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
BIOQUEST INTERNATIONAL, INC. (Registrant)
Date: August ____, 2001
By: /s/ Peter J. Ewens
Name: Peter J. Ewens
Title: CEO and Chairman