SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. [3])
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 Under Rule 14a-12
Amarillo Biosciences, Inc.
(Name of Registrant as Specified in Its Charter)
---------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 transaction:
(5) Total fee paid:
[_] 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
AMARILLO BIOSCIENCES, INC.
4134 BUSINESS PARK DRIVE
AMARILLO, TEXAS 79109
PROXY STATEMENT
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of Amarillo Biosciences, Inc. a Texas corporation (the "Company"), for
use only at the Annual Meeting of Stockholders to be held at Days Inn Hotel
East, 1701 East I-40, Amarillo, Texas 79102, (806) 379-6255, on the 22nd day of
June, 2006, at 10:00 A.M., local time, and at any adjournments thereof. The
approximate date on which this Proxy Statement and the accompanying Proxy were
first given or sent to security holders was May _____, 2006.
Each Proxy executed and returned by a stockholder may be revoked at any
time thereafter, by written notice to that effect to the Company, attention of
the Secretary, prior to the Annual Meeting, or to the Chairman, or the Inspector
of Election, at the Annual Meeting, or by the execution and return of a
later-dated proxy, except as to any matter voted upon prior to such revocation.
The Proxies in the accompanying form will be voted in accordance with the
specifications made and where no specifications are given, such Proxies will be
voted FOR the nominees for election as directors named herein. In the discretion
of the proxy holders, the Proxies will also be voted FOR or AGAINST such other
matters as may properly come before the meeting. The management of the Company
is not aware that any other matters are to be presented for action at the
meeting. Election of directors will be determined by a plurality of the votes of
the shares of common stock, par value $.01 per share (the "Common Stock"),
present in person or represented by proxy at the Annual Meeting and entitled to
vote. Accordingly, in the case of shares that are present or represented at the
Meeting for quorum purposes, not voting such shares for a particular director,
including by withholding authority on the Proxy, will not operate to prevent the
election of such director if he otherwise receives a plurality of the votes.
Votes will be counted manually by an election judge, who will be the
Company's Secretary or an Assistant Secretary, and who will execute an affidavit
certifying the vote as to each proposal.
VOTING SECURITIES
The Board of Directors has fixed the close of business on April 27, 2006
as the record date for the determination of stockholders entitled to receive
notice of and to vote at the Annual Meeting. The issued and outstanding stock of
the Company on April 27, 2006 consisted of 21,082,203 shares of Common Stock,
each entitled to one vote. A quorum of the stockholders is constituted by the
presence, in person or by proxy, of holders of record of Common Stock,
representing a majority of the number of votes entitled to be cast.
PRINCIPAL STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned as of April 1, 2006, by each person, other than officers and
directors, who is known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock.
1
Number of Shares Percentage of
Name and Address of Beneficial Owner Beneficially Owned Class
- ------------------------------------------------- ----------------------- -----------------
Hayashibara Biochemical Laboratories, Inc. 3,290,781 15.6%
2-3 Shimoishii 1 - chome
Okayama 700, Japan
Shares of the Company held by Hayashibara Biochemical Laboratories, Inc. may be
voted by its President, Ken Hayashibara. Dispositive power over such shares
resides with the Board of Directors of Hayashibara Biochemicals, Inc., as it may
be constituted from time to time.
SECURITY OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of the Company's
stock as of December 31, 2005 by each executive officer and director and by all
executive officers and directors as a group:
Amount and Nature
Name and Address of Owner of Beneficial Percent of Class
Ownership Owned
Joseph Cummins
2122 Harrison
Amarillo, TX 79109 2,025,032(1) 8.9%
Dennis Moore
402 Fish Hatchery
Hamilton, MT 59840 864,299(2) 3.9%
Katsuaki Hayashibara
2-3, Shimoishii, 1-chome
Okayama, 700 Japan 912,365(3) 4.2%
Stephen Chen
Floor 7-1, No. 18
Xin Yi Road, Sec. 5 864,125(4) 3.9%
Taipei, Taiwan
James Page
103 Clubhouse Lane, #182
Naples, FL 34105 864,125(5) 3.9%
Thomas D'Alonzo
908 Vance Street
Raleigh, NC 27608 38,139(6) .2%
Thomas Ulie
P.O. Box 814
Mercer Island, WA 98040 671,300 3.2%
---------------------------------------------------
Total Group (all directors and executive
officers - 5 persons) 5,529,946 22.2%
2
(1) 1,788,486 of these shares are exercisable options
(2) 814,125 of these shares are exercisable options
(3) 864,125 of these shares are exercisable options
(4) 814,125 of these shares are exercisable options
(5) 864,125 of these shares are exercisable options
(6) 31,139 of these shares are exercisable options, and 2,000 are owned by his
children.
PROPOSAL ONE
ELECTION OF DIRECTORS
Six directors will be elected at the meeting to hold office until the next
Annual Meeting of Stockholders and until their respective successors are elected
and qualify. The By-Laws of the Company permit the Board of Directors to fix the
number of directors at no less than one nor more than thirty persons and the
Board of Directors has fixed the number of directors at six persons. The Proxies
solicited by this proxy statement may not be voted for a greater number of
persons than the number of nominees named. It is intended that these Proxies
will be voted for the following nominees, but the holders of these Proxies
reserve discretion to cast votes for individuals other than the nominees for
director named below in the event of the unavailability of any such nominee. The
Company has no reason to believe that any of the nominees will become
unavailable for election. Set forth below are the names of the nominees, the
principal occupation of each, the year in which first elected a director of the
Company and certain other information concerning each of the nominees.
Abstentions or broker non-votes on this proposal will not affect the
determination of a quorum, but could cause one or more directors to not be
elected, as each nominee requires the affirmative vote of a majority of the
shares represented at the meeting (in person or by proxy) in order to be
elected.
The Board of Directors unanimously recommends that the stockholders vote
FOR this proposal.
The name of, and certain information with respect to, all directors,
executive officers and all persons nominated or chosen to become a director are
as follows (all of the following have been nominated to serve as directors):
Director
Name and Age Since Principal Occupation for the Past Five Years
- ------------------------------------------------ ----------- -----------------------------------------------------
Joseph Cummins, DVM, PhD (1)(3), 62 1984 Chairman of the Board of the Company since June
1984. Has served as President of the Company since
December 1994 and as Chief Financial Officer since
October 1997. Received a PhD degree in microbiology
from the University of Missouri in 1978 and a
doctor of veterinary medicine degree from Ohio
State University in 1966.
3
Stephen Chen, PhD (2)(4)(6), 55 1996 President and Chief Executive Officer of STC
International, Inc., a health care investment firm,
since May 1992. From August 1989 to May 1992,
Director of Pharmaceutical Research and Development
for the Ciba Consumer Pharmaceuticals Division of
Ciba-Geigy.
Dennis Moore, DVM (1)(4)(5)(6), 58 1986 Doctor of veterinary medicine since 1972 and was in
private practice from 1972 to 1995. Management of
personal investments since 1995.
James Page, MD (1)(2)(5), 77 1996 Prior to retiring in 1991 as a Vice President with
Adria Laboratories, Inc., held various upper
management level positions with Carter Wallace,
Inc., Merck Sharpe & Dohme Research Laboratories
and Wyeth Laboratories.
Thomas D'Alonzo, 63 1998 - A former ABI director, Mr. D'Alonzo is a seasoned
2002 executive with experience in all major facets of
pharmaceutical operations: Sales and marketing,
manufacturing, quality assurance, finance and
licensing and strategic planning. He is
experienced in research intensive biotech start up
and attendant fundraising activities. Mr. D'Alonzo
has served on the Board of Directors for Salix
Pharmaceuticals, Inc. since 2000, Bio-Informatics
Group, Inc. since 2002, and Dara BioSciences, Inc.
since 2005. Mr. D'Alonzo has been retired since
1999, except for the Board positions shown above.
Thomas Ulie, 57 ___ Chief Executive Officer of First Island Capital,
Inc. since 1994, Mr. Ulie is experienced in
investment business, including investment banking,
research, corporate management, and money
management, and is a Chartered Financial Analyst
and a Supervisory Analyst (with the NYSE).
Currently on the Board of Directors of Gray*Star,
Inc., and Cardiomedics, Inc.
(1) Member of the Executive Committee.
(2) Member of the Compensation Committee.
(3) Member of the Finance Committee.
(4) Member of the Audit Committee.
(5) Member of the Administration Committee for the 1996 Employee Stock Option
Plan and the Outside Director and Advisor Stock Option Plan
(6) Member of the Administration Committee for the 2006 Employees Stock Option
and Stock Bonus Plan.
4
PROPOSAL TWO
AUTHORIZATION TO VOTE PROXIES ON OTHER BUSINESS TO PROPERLY COME BEFORE THE
MEETING.
The Company's stockholders are being asked to approve the voting of their
Proxies upon other business to properly come before the Annual Meeting. This
would include the transaction of business properly before any adjournment of the
meeting, subject, however, to approval of proposition 3 (see below).
Management is not aware of any other business that will be brought before
the meeting; however, Article I, Section 1 of the Bylaws of the Company provides
that, "Any business may be transacted at an annual meeting, except as otherwise
provided by law or by these Bylaws." Accordingly, it is possible that one or
more stockholders may bring one or more matters before the meeting, and
management wishes to be able to vote duly executed Proxies on any such matters
brought before the meeting. Abstentions or broker non-votes on this proposal
will not affect the determination of a quorum, but could cause this proposal to
fail, as in order to pass, this proposal requires the affirmative vote of a
majority of the shares represented at the meeting (in person or by proxy).
The Board of Directors unanimously recommends that the stockholders vote
FOR this proposal.
PROPOSAL 3
ADJOURNMENT OF MEETING TO SOLICIT ADDITIONAL VOTES
The stockholders are being asked to approve the voting of their Proxies
for the purpose of adjourning the meeting to solicit additional votes. It is not
certain that the meeting will have to be adjourned, but management does
anticipate the possibility that sufficient Proxies may not be received prior to
the meeting date to constitute a quorum, and in that event, management would
like the authority for the Board of Directors to vote the Proxies to adjourn the
meeting from time to time as may be necessary to solicit additional votes, so
that the annual meeting may be properly held, and so that directors may be
elected for the ensuing year. Abstentions or broker non-votes on this proposal
will not affect the determination of a quorum, but could cause this proposal to
fail, as in order to pass, this proposal requires the affirmative vote of a
majority of the shares represented at the meeting (in person or by proxy).
The Board of Directors unanimously recommends that the stockholders vote
FOR this proposal.
Compliance with Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires directors and officers of the Company and persons who
own more than 10 percent of the Company's Common Stock to file with the
Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of the Common Stock. Directors,
officers and more than 10 percent shareholders are required by the Exchange Act
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the year ended December 31, 2005, all filings
applicable to its directors, officers and more than 10 percent beneficial owners
were timely filed.
5
Board of Directors
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, although it
is not involved in day-to-day operating details. Members of the Board are kept
informed of the Company's business by various reports and documents sent to them
as well as by operating and financial reports made at Board and Committee
meetings. Three meetings of the Board of Directors were held during 2005. No
incumbent director attended fewer than 75% of the meetings of the Board of
Directors or meetings of Committees of the Board on which they served.
Ten times during 2005, the Board of Directors conducted business by
unanimous written consent, in lieu of holding a meeting.
Audit, Nominating, and Compensation Committees
The Company has standing Audit, Nominating, and Compensation Committees of
the Board of Directors established in accordance with 15 U.S.C. ss.
78c(a)(58)(A).
Audit Committee Report
The Audit Committee has reviewed and discussed with management the audited
financial statements included in the Company's Form 10-KSB for the year ended
December 31, 2005, a copy of which is included in the Proxy solicitation
materials sent to each stockholders. The Audit Committee has also discussed with
the independent auditors the matters required to be discussed by SAS 61
(codification of statements on auditing standards, AU Section 380), as
heretofore modified or supplemented. The Audit Committee has received the
written disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1, as heretofore modified or
supplemented, and has discussed with the independent accountants, the
independent accountants' independence. Based upon the aforesaid review and
discussions, the Audit Committee has recommended to the Board of Directors that
the audited financial statements be included in the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2005.
Stephen Chen Katsuaki Hayashibara Dennis Moore
The Board of Directors has not adopted a written charter for the Audit
Committee.
The Audit Committee consists of Stephen Chen, Katsuaki Hayashibara and
Dennis Moore. All members of the Audit Committee are "independent" according to
the definition of "independent director" set forth in NASD Rule 4200. The
function of the Audit Committee is to serve as an advisory committee to the
Board of Directors of the Company; to review financial statements and other
reports prepared by the Company and any reports or other communications rendered
by the Company's independent certified public accounts and to coordinate with
the accountants any matters raised from time to time by the accountants; to meet
with the representative of the Company's independent certified public
accountants at least annually; and to take under advisement any matters referred
by the accountants. The Audit Committee met one time during 2005.
The Board of Directors created a Nominating Committee on February 26,
2005. The Nominating Committee does not have a charter. Current members of the
Nominating Committee are Joseph M. Cummins, Katsuaki Hayashibara, and Dennis
Moore. The function of the Nominating Committee is to nominate a slate of
directors to stand for election as Directors of the Company at the Company's
annual shareholders meeting. The nominees set forth in these Proxy Materials for
election as directors were proposed by the Nominating Committee, and nominated
by the Board of Directors of the Company. The Committee will consider nominees
recommended by security holders for election to the Board of Directors in 2006,
and subsequent years. Security holders shall follow the following procedures in
submitting recommendations for nominees to the Board of Directors: the proposed
nominee's name, address, telephone number, employer, present occupation and
general business or scientific qualifications shall be mailed or faxed to the
Company, in written form. The Nominating Committee will review such submissions,
and if they determine that the Company would benefit by having such person on
its Board of Directors, the Nominating Committee will send to the nominee a more
detailed Questionnaire, which will solicit from said nominee relevant data
required by rules and regulations of the Securities and Exchange Commission, and
other data or information which they deem to be material. Upon receipt of the
completed Questionnaire, the Nominating Committee will determine whether to
include such persons among the nominees recommended by the Nominating Committee
for election as a director at the ensuing annual shareholders meeting.
6
The Nominating Committee believes that for a nominee to be recommended by
the Nominating Committee for election as a Director, the nominee should meet the
following minimum qualifications, and should possess the following specific
qualities or skills: each nominee should be of good reputation, and should have
substantial experience either in the biotech or a biotech-related industry, or
in corporate finance and accounting, including without limitation, capital
formation. The Nominating Committee identifies and evaluates nominees based upon
recommendations from the Company's officers, directors and stockholders, and
such process includes review of biographical data, solicitation of references
and recommendations, and personal interviews. A nominee for director is
evaluated in the same manner, regardless of whether he has been recommended by a
security holder, by management, or by an existing director.
Joseph Cummins is the Chief Executive Officer of the Company and not an
"independent" member of the Nominating Committee under NASD Rule 4200(a)(15).
Dennis Moore and Katsuaki Hayashibara are independent members of the Nominating
Committee under Rule 4200(a)(15).
The Compensation Committee consists of Stephen Chen and James Page. The
function of the Compensation Committee is to serve as an advisory committee to
the Board of Directors of the Company regarding all matters of director, officer
and employee compensation, and to report to the Board of Directors from time to
time as they might deem necessary, with any recommendations for changes in level
of compensation or fringe benefits for officers, directors or employees. The
Compensation Committee met one time in 2005.
Katsuaki Hayashibara has declined to stand for reelection to the Board of
Directors of the Company, and the Board of Directors will select a replacement
for him on the Audit Committee and Nominating Committee, at the annual meeting
of the Board of Directors.
The Company has a process for Security Holders to send communications to
the Board of Directors. Specifically, all Security Holder communications to the
Board are sent directly to each board member. Any communication addressed to a
specific board member is sent directly to that board member, and any
communication directed to "the Board," "the Board of Directors," or "Directors"
in general, is sent to each director then serving.
The Company strongly encourages, but does not require, the attendance of
each director at each Annual Meeting. Only one director attended the Company's
2005 Annual Meeting, but four of the five then incumbent directors participated
in the 2005 Annual Meeting of Directors, which immediately followed the 2005
Annual Meeting of stockholders, with three (3) of said directors participating
in said meeting by conference telephone. Management has made an effort to clear
this year's Annual Meeting date with all of the directors, and each director and
director nominee is expected to attend, with the exception of Katsuaki
Hayashibara, who has declined to stand for reelection to the Board of Directors.
DIRECTORS' FEES AND COMPENSATION DURING 2005
Cash Compensation Security Grants
------------------------------------- -------------------
Number of
Securities
Meeting Fees Consulting Fees Underlying
Name (1) (2) Options
- ------------------------------------------------------ ---------------- ----------------- -------------------
Stephen Chen, Ph.D. -- -- 600,000
Katsuaki Hayashibara -- -- 600,000
Dennis Moore, D.V.M. -- -- 600,000
James Page, M.D. -- -- 600,000
Dr. Joseph M. Cummins -- -- 600,000
7
(1) Directors do not receive compensation for attendance at directors'
meetings, but may claim reimbursement for actual out-of-pocket expenses
incurred in connection with their attendance at such meetings.
(2) Each director may receive $1,200 per day for employment on special
projects or assignments, prorated for partial days.
EXECUTIVE COMPENSATION
The following table presents the compensation paid by the Company to the
named executive officers for 2003 through 2005.
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------------------------------------------------------
Other Securities
Name and Principal Compen- Underlying
Position Year Salary Bonus sation Options
- ------------------------------------- -------- -------------- --------- -------------- ----------------
Dr. Joseph M. Cummins, 2005 $177,000 $ - $ - 600,000
Chairman of the Board,
President and Chief 2004 $ 74,716 $ - $ - 650,000
Executive Officer
2003 $103,779 $ - $ - 490,000
Option Grants in 2005
The following table sets forth certain information relating to options
granted in 2005 to the executive officers named above, to purchase shares of
common stock of the Company.
Number of
Shares of
Common
Name Stock % of Total
Underlying Options Granted Exercise or
Options to Employees Base Price Expiration
Granted (#) in 2005 ($/Sh) Date
- -------------------------------------- ------------------ ------------------- --------------- ----------------
Joseph M. Cummins..................... 100,000 7.7% $0.40 (1) 02/25/2010
500,000 38.5% $0.30 (1) 08/22/2010
(1) The fair market value of the common stock on the date of the grant.
Aggregated Option Exercises at December 31, 2005
And Year-End Option Values
The following table sets forth information for the executive officers
named above, regarding the exercise of options during 2005 and unexercised
options held at the end of 2005.
8
Number of Shares of Value of Unexercised
Common Stock Underlying In-The-Money
Shares Value Unexercised Options at Options at
Acquired on Realized December 31, 2005 (#) December 31, 2005 ($) (1)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------------------------------------------------------------------------------------------------------
Joseph Cummins -- -- 1,788,486 / None $769,049 / None
- ------------------------------------------------------------------------------------------------------------------------
(1) Calculated based on the closing price of the common stock ($0.43) as
reported by OTC BB on December 30, 2005.
CERTAIN TRANSACTIONS
Hayashibara Biochemical Laboratories, Inc. ("HBL")
The Company has relied significantly on HBL, the largest shareholder of the
Company, for a substantial portion of both its capital and product supply
requirements, and currently is party to six (6) material agreements with HBL:
1. Joint Development and Manufacturing / Supply Agreement dated March 13,
1992. This agreement has been amended on January 7, 1996, May 10, 1996, and
September 7, 2001, and will expire March 12, 2008, at which time it will
automatically renew for an additional three (3) years unless the parties agree
otherwise. This agreement provides the Company with a source of natural human
interferon alfa for use in the Company's interferon alfa-containing products.
Additional information on the development agreement is set forth in footnote 4
to the consolidated financial statements accompanying to the 10-KSB.
2. Japan Animal Health License Agreement dated January 20, 1993. The
original term of this agreement expired January 19, 2000, but has been
automatically renewed for successive three (3) year terms since that date, and
will currently expire January 19, 2009, subject to prior written agreement of
the parties. The agreement licenses to HBL certain company technical information
and patents, in connection with the oral use of HBL interferon in animals in
Japan. Under this agreement, HBL pays the Company a royalty of 8% on sales of
HBL interferon for oral use in animals in Japan. The amount received by the
Company from such royalties since January 1, 2004, is $42,134, all of which was
received in 2005.
3. Manufacturing / Supply Agreement dated June 1, 1994, subsequently
amended May 10, 1996. This manufacturing and supply agreement provides for the
supply of interferon by HBL to the Company for non-oral administration in all
species. The current expiration date of this agreement is May 31, 2009, after
which time the agreement will automatically renew for successive five (5) year
periods, subject to the agreement of the parties. The Company is not currently
either acquiring from HBL nor reselling to any other party, interferon for
non-oral administration in any species.
4. Distribution Agreement dated September 17, 1997 (TNF-a). This agreement
provides for the acquisition of the Company of tumor necrosis factor alpha
(TNF-a) from HBL, and the resale by the Company of TNF-a containing products,
subject to payment of certain transfer fees, license fees, and manufacturing and
supply fees to HBL. The agreement will expire September 16, 2007, whereupon it
will automatically renew for successive three (3) year terms unless one of the
parties gives written notice of termination to the other prior to commencement
of the renewal term. The Company is not currently purchasing TNF-a from HBL, nor
has it done so during the past two (2) years.
9
5. Distribution Agreement dated September 17, 1997 (INF-g). This agreement
was amended April 4, 2000, and provides for the acquisition by the Company of
interferon gamma (INF-g) from HBL, and the resale by the Company of INF-g
containing products, subject to payment of certain transfer fees, license fees,
and manufacturing and supply fees to HBL. The agreement will expire September
16, 2010, whereupon it will automatically renew for successive three (3) year
terms unless one of the parties gives written notice of termination to the other
prior to commencement of the renewal term. The Company is not currently
purchasing INF-g from HBL, nor has it done so during the past two (2) years.
6. Distribution Agreement dated October 13, 2000 (ACM). This agreement
provides for the acquisition of the Company of anhydrous crystalline maltose
(ACM) from HBL, and the resale by the Company of ACM containing products,
subject to payment of certain transfer fees, license fees, and manufacturing and
supply fees to HBL. The agreement expired October 12, 2005, and since then has
automatically renewed for successive one (1) year terms, with the current term
to expire October 12, 2006. Thereafter, the agreement will continue to
automatically renew for successive one (1) year terms, unless one of the parties
gives written notice of termination to the other party within thirty (30) days
prior to the commencement of the renewal term. The Company is not currently
purchasing ACM from HBL, nor has it done so during the past two (2) years.
Loans from HBL.
HBL loaned $1 million to the Company on November 30, 1999 and an
additional $1 million on February 29, 2000, both loans bearing interest at 4.5%
per annum. The November 30, 1999 loan has been extended until December 2006 and
the February 29, 2000 loan has been extended to February 29, 2007. The aggregate
balance on both notes at December 31, 2005, including principal and accrued
interest, was $2,510,701. The Company considers those loans, and the related
extensions therein discussed, to be of considerable benefit to the Company, and
to be on terms more favorable than could be obtained from an independent
institutional lender, or from a non-related third party.
SandersBaker, P.C.
During 2005, the Company used the law firm of SandersBaker, P.C. Mr.
Edward Morris, Secretary of the Company, is a partner in that firm. The Company
was invoiced $20,354 by said firm in 2005.
INDEPENDENT PUBLIC ACCOUNTANTS
Lopez, Blevins, Bork & Associates, LLP, of Houston, Texas, serve as the
Company's independent public accountants. The accountants are given the
opportunity each year (including 2006) to have one or more representatives
attend the Company's Annual Meeting, and to make a statement if they desire to
do so. The Company has not been notified that said accounting firm intends to
have one or more representatives present at the 2006 Annual Meeting, and
accordingly, it is not anticipated that such representatives will be available
to respond to questions.
Through 2003, Carlos Lopez, the Company's principal independent
accountant, was employed by Malone & Bailey, PLLC, who prepared the Company's
audited financials for the year ending December 31, 2003. During 2004, Mr. Lopez
shifted his employment to Lopez, Blevins, Bork & Associates, LLP, and in order
to retain the services of Mr. Lopez, the Company changed its public accounting
firm to said firm. Accordingly, during the Company's two (2) most recent fiscal
years, no former accountant has resigned, declined to stand for reelection, or
been dismissed.
10
The following summarizes the fees incurred by the Company during 2004 and
2005 for accountant and related services.
Audit Fees
------------------------------------------------------------------
2005 2004
------------------------------------------------------------------
Malone & Bailey, PLLC $15,000
------------------------------------------------------------------
Lopez, Blevins, Bork & Assoc. LLP $17,875 $ 3,500
------------------------------------------------------------------
Audit-Related Fees
------------------------------------------------------------------
2005 2004
------------------------------------------------------------------
Johnson & Sheldon $465 $575
------------------------------------------------------------------
Tax Fees
------------------------------------------------------------------
2005 2004
------------------------------------------------------------------
Johnson & Sheldon $2,750 $2,100
------------------------------------------------------------------
All Other Fees
None.
STOCKHOLDER PROPOSALS
SUBMITTED PURSUANT TO Rule 14a-8
Stockholders may present proposals for inclusion in the Company's proxy
statement for the 2007 annual meeting of stockholders provided they are received
by the Company no later than January 25, 2007, and are otherwise in compliance
with applicable Securities and Exchange Commission regulations.
STOCKHOLDER PROPOSALS SUBMITTED OUTSIDE THE PROCESS OF RULE 14a-8
A shareholder proposal for inclusion in the Company's Proxy Statement for
the 2007 Annual Meeting of Stockholders, which is submitted outside the
processes of Rule 14a-8, will be considered untimely if presented after April
26, 2007.
GENERAL
So far as is now known, there is no business other than that described
above to be presented for action by the stockholders at the meeting, but it is
intended that the proxies will be voted upon any other matters and proposals
that may legally come before the meeting and any adjournments thereof in
accordance with the discretion of the persons named therein.
COST OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company. It is
expected that the solicitations will be made primarily by mail, but regular
employees or representatives of the Company may also solicit proxies by
telephone or telegraph and in person, and arrange for brokerage houses and other
custodians, nominees and fiduciaries to send proxy material to the principals at
the expense of the Company.
EDWARD L. MORRIS
Secretary
11
ANNUAL MEETING OF STOCKHOLDERS OF
AMARILLO BIOSCIENCES, INC.
June 22, 2006
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Proof #1
Revised
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Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
| |
| |
v v
Please detach along perforated line and mail in the envelope provided.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSAL 2 AND PROPOSAL 3.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE |X|
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1. Election of Directors: 2. Authorize voting of your proxy upon such other FOR AGAINST ABSTAIN
business as may properly come before the meeting. |_| |_| |_|
NOMINEES:
|_| FOR ALL NOMINEES |_| Joseph M. Cummins
|_| Stephen Chen 3. Authorize voting of your proxy for the purpose of FOR AGAINST ABSTAIN
|_| WITHHOLD AUTHORITY |_| James Page adjouning the meeting for the purpose of soliciting |_| |_| |_|
FOR ALL NOMINEES |_| Dennis Moore additional votes.
|_| Thomas D'Alonzo
|_| FOR ALL EXCEPT |_| Thomas Ulie This proxy is solicited on behalf of the Board of Directors of the
(See instructions below) Company. This proxy, when properly executed, will be voted in accordance
with the instructions given above. If no instructions are given, this
proxy will be voted "FOR" election of the Directors and "FOR" proposal 2
and proposal 3.
INSTRUCTION: To withhold authority to vote for any
individual nominee(s), mark "FOR ALL EXCEPT" and fill in
the circle next to each nominee you wish to withhold, as
shown here: |X|
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To change the address on your account, please check
the box at right and indicate your new address in
the address space above. Please note that changes to
the registered name(s) on the account may not be
submitted via this method. |_|
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Signature of Stockholder ________________ Date: ________ Signature of Stockholder ________________ Date: ________
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
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Proof #1
Revised
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COMMON STOCK PROXY
AMARILLO BIOSCIENCES, INC.
Annual Meeting of Stockholders
To Be Held June 22, 2006
This proxy is solicited on behalf of the Board of Directors
Revoking any such prior appointment, the undersigned, a stockholder of
Amarillo Biosciences, Inc., hereby appoints Joseph M. Cummins, Stephen Chen,
James Page, and Dennis Moore, and each of them, attorneys and agents of the
undersigned, with full power of substitution, to vote all shares of the Common
Stock of the undersigned in said Company at the Annual Meeting of Stockholders
of said Company to be held in the Days Inn Hotel East, 1701 E I-40, Amarillo,
Texas 79102 on June 22, 2006 at 10:00 A.M. local time and subject to approval of
proposal (3), at any adjournments thereof, as fully and effectually as the
undersigned could do if personally present and voting, hereby approving,
ratifying and confirming all that said attorneys and agents or their substitutes
may lawfully do in place of the undersigned as indicated below.
This proxy when properly executed will be voted as directed. If no
direction is indicated, this proxy will be voted for proposals (1), (2) and (3),
and will be voted in the discretion of the proxy holders on other matters to
properly come before the meeting.
(Continued and to be signed on the reverse side)
AMARILLO BIOSCIENCES, INC.
4134 BUSINESS PARK DRIVE
AMARILLO, TEXAS 79110
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 22, 2006
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Amarillo Biosciences, Inc. (the
"Company") will be held at Days Inn Hotel East, 1701 East I-40, Amarillo, Texas
79102, (806) 379-6255, on the 22nd day of June, 2006 at 10:00 A.M., local time,
for the following purposes:
1. To elect six Directors to serve until the next Annual Meeting and until
their respective successors are elected and qualify.
2. To authorize voting of Proxies upon such other business as may properly
come before the meeting.
3. To authorize voting of Proxies for the purpose of adjourning the
meeting for the purpose of soliciting additional votes.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record as of the close of business on April 27, 2006
are entitled to receive notice of and to vote at the meeting. A list of such
stockholders shall be open to the examination of any stockholder during ordinary
business hours, for a period of ten days prior to the meeting, at the principal
executive offices of the Company, 4134 Business Park Drive, Amarillo, Texas
79110.
By Order of the Board of Directors
EDWARD L. MORRIS
Secretary
Amarillo, Texas
June ___, 2006
If you do not expect to be present at the meeting, please fill in, date
and sign the enclosed Proxy and return it promptly in the enclosed return
envelope.