10QSB: Optional form for quarterly and transition reports of small business issuers
Published on May 14, 2002
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
_______ 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: 001-13467
COMMONWEALTH BIOTECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
Virginia 54-1641133
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
601 Biotech Drive, Richmond, Virginia 23235
(Address of principal executive offices)
(804) 648-3820
(Issuer's telephone number)
_____________________________________
Check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act 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
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As of May 14, 2002, 2,076,164 shares of common stock, no par value, of the
-----------------------
registrant were outstanding.
Transitional Small Business Disclosure Format (Check one) Yes:______ No: X
----
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
Commonwealth Biotechnologies, Inc.
Balance Sheets
- --------------------------------------------------------------------------------
See notes to financial statements.
2
Commonwealth Biotechnologies, Inc.
Statements of Operations
See notes to financial statements.
3
Commonwealth Biotechnologies, Inc.
Statements of Cash Flows
- --------------------------------------------------------------------------------
See notes to financial statements.
4
Commonwealth Biotechnologies, Inc.
Notes To Financial Statements
Note 1. Basis of Presentation
The accompanying unaudited financial statements (except for the balance sheet at
December 31, 2001, which is derived from audited financial statements) have been
prepared in accordance with generally accepted accounting principles for interim
financial statements and Regulation S-B of the Securities and Exchange
Commission. Accordingly, they do not include all of the information required by
generally accepted accounting principles for complete financial statements. In
the opinion of the Company, all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position and the results of
operations for the periods presented have been included. The results of
operations for the three months ended March 31,2002 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2002.
Note 2. Earnings (Loss) Per Share
The Company follows the guidance provided in the Statement of Financial
Accounting Standards ("SFAS") No. 128, Earnings Per Share, which establishes
standards for computing and presenting earnings per share and applies to
entities with publicly held common stock or potential common stock. Those
entities that have only common stock outstanding are required to present only
basic per share amounts. Diluted per share amounts assume the conversion,
exercise or issuance of all potential common stock instruments such as warrants
and convertible securities, unless the effect is to reduce a loss or increase
earnings per share. At March 31, 2002 and 2001, common stock instruments have
not been included in the computation of earnings per share because their
inclusion would have had an anti-dilutive effect (reduced the loss per common
share) applicable to the net loss for all periods presented.
Note 3. Going Concern and Management Plan
The financial statements have been prepared assuming the Company will continue
as a going concern. The Company incurred losses totaling $96,024 during the
quarter ended March 31, 2002 and has a history of losses that have resulted in
an accumulated deficit of $8,334,210 at March 31, 2002. In addition, the Company
has had negative cash flows in three of the past five years. The years in which
the Company reached positive cash flows were years in which equity offerings
were completed.
Management has taken a number of steps to improve cash flow and liquidity.
Beginning in the summer of 2001, the Company reduced personnel levels, curtailed
research and development expenses, reduction of marketing expenditures, deferred
directors' fees and a portion of officers' compensation. The Company has also
reduced or delayed expenditures on items that are not critical to operations.
The Company is in active negotiations with a number of parties with respect to
strategic transactions that, if consummated, would favorably impact the
Company's financial condition. There can be no assurances, however, that any
such transactions will be consummated.
5
There can be no assurance that any funds required during the next twelve months
or thereafter can be generated from operations or that if such required funds
are not internally generated that funds will be available from external sources
such as debt or equity financings or other potential sources. The lack of
additional capital resulting from the inability to generate cash flow from
operations or to raise capital from external sources would force the Company to
substantially curtail or cease operations and would, therefore, have a material
adverse effect on its business. Further, there can be no assurance that any such
required funds, if available, will be available on attractive terms or that they
will not have a significantly dilutive effect on the Company's existing
shareholders.
There is substantial doubt about the Company's ability to continue as a going
concern. These financial statements do not include any adjustments relating to
the recoverability or classification of asset carrying amounts or the amounts
and classification of liabilities that may result should the Company be unable
to continue as a going concern.
Note 4. Engagement of Segerdahl & Company, Inc.
Effective April 22, 2002, Segerdahl & Company, an investment banking firm, has
been engaged to provide the company with investment banking services related to
the possible issuance of additional equity capital, facilitation of a
re-capitalization of the Company, or the completion of other transactions
designed to further the goals of profitability of the Company. The term of the
engagement is one year.
In accordance with the terms of its engagement letter with Segerdahl, as a
retainer, the Company issued to Segerdahl a three year warrant to purchase
100,000 shares of the Company's common stock at an exercise price of $2.00 per
share (the "Retainer Warrant"). The Retainer Warrant contains a net issuance
provision and provides for unlimited piggyback registration rights as to the
shares of common stock underlying the Retainer Warrant. The Retainer Warrant
will only vest in the event (i) the Company completes a Transaction or (ii) the
Company's common stock trades at a price per share at or above $5.00 per share
for 10 of 20 consecutive trading days during the term of the engagement.
In addition, as a transaction fee, the Company issued to Segerdahl a three year
warrant to purchase 100,000 shares of the Company's common stock at an exercise
price of $2.00 per share (the "Transaction Fee Warrant"). The Transaction Fee
Warrant contains a net issuance provision and provides for unlimited piggyback
registration rights as to the shares of common stock underlying the Transaction
Fee Warrant. The Transaction Fee Warrant will only vest in the event (i) the
Company completes a Transaction; provided that (x) the acquisition of certain
intellectual property rights previously identified by the Company and (y) the
completion of certain short-term financing noted below shall not be deemed to be
a Transaction for the purposes of the Transaction Fee Warrant, and (ii) the
Company's common stock trades at a price per share at or above $7.00 per share
for 10 of 20 consecutive trading days during the term of the engagement.
Whether or not a Transaction is contemplated, the Company also agreed to
reimburse Segerdahl up to $10,000 for out-of-pocket and properly documented
expenses incurred by
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Segerdahl in connection with the performance of its services provided pursuant
to the engagement.
Pursuant to the engagement, Segerdahl may arrange short-term financing
alternatives for the Company, for such services and to the extent Segerdahl
completes such short-term financing unaffiliated with Segerdahl, the Company
will pay Segerdahl a fee equal to 7% of such financing.
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following should be read in conjunction with the Company's Financial
Statements and Notes included herein.
Going Concern
- -------------
Since 1997 and through 2002, the Company incurred recurring operating losses due
to increased operating costs without corresponding increases in revenues.
Through 2001, these deficits were substantially funded through use of funds
obtained from a private placement and its Initial Public Offering ("IPO"). The
Company has also used proceeds from its offerings for capital acquisitions,
which were primarily funded through its issuance of Industrial Revenue
Development Bonds. At December 31, 2001, the Company had used virtually all of
the funds received in connection with its offerings.
The financial statements have been prepared assuming the Company will continue
as a going concern. The Company incurred losses of $96,024 during the first
quarter in 2002 as compared to $474,495 during 2001 and has a history of losses
that have resulted in an accumulated deficit of $8,334,210 as of March 31, 2002.
In addition, the Company has had negative cash flows in three of the past five
years. The years in which the Company reached positive cash flows were years in
which equity offerings were completed.
At the outset of 2002, the Company is in an uncertain cash position. However,
management believes that the Company has the capacity to address the immediate
needs for cash and liquidity through an aggressive approach on a number of
fronts. In 2001, when confronted with potentially static revenues and declining
cash reserves, management reduced staffing through layoffs and attrition and
reduced or eliminated non-production related expenditures. Fiscal practices have
been strictly enforced which restricted all material purchases to service
on-going work only and serve to minimize all material inventories.
There can be no assurance that any funds required during the next twelve months
or thereafter can be generated from operations or that if such required funds
are not internally generated that funds will be available from external sources,
such as debt or equity financing or other potential sources. The lack of
adequate cash reserves resulting from the inability to generate cash flow from
operations or to raise capital from external sources would force the Company to
substantially curtail or cease operations and would, therefore, have a material
adverse effect on its business. The Company is actively exploring the
availability of varying financial and strategic transactions, which, if
consummated, would address the Company's need to improve its financial condition
and/or its operations.
There can be no assurance, however, that any such required funds, if presented,
will be available on attractive terms or that they will not have a significantly
dilutive effect on the Company's existing shareholders.
8
The Company's independent auditors have included a paragraph emphasizing "going
concern" in their report on our 2001 financial statements. These financial
statements do not include any adjustments relating to the recoverability or
classification of asset carrying amounts or the amounts and classifications of
liabilities that may result should the Company be unable to continue as a going
concern.
Overview
- --------
The Company's revenues are derived principally from providing macromolecular
synthetic and analytical services to researchers in the biotechnology industry
or who are engaged in life sciences research in government or academic labs
throughout the world. Development of innovative technologies for biotechnology
requires sophisticated laboratory techniques and the Company provides these
services to customers on a contract basis. The Company's customers consist of
private companies, academic institutions and government agencies, all of which
use biological processes to develop products for health care, agricultural, and
other purposes.
The Company generally derives revenue from two types of customers: those who
require a discrete set of services ("lab services"), and those who contract with
the Company on an extended basis for performance of a variety of integrated
services (commercial contracts and government contracts). More often than not,
the Company's customers provide repeat business to the Company. The Company
views commercial and government contracts as the more important source of
revenue. The Company has continued to focus its efforts on identifying these
customers. These contracts generally range from a few months to more than a
year. Revenues are generally recognized as services are rendered or as products
are delivered. In addition, revenue is also recognized with performance-based
installments payable over the contract as milestones are achieved.
The Company also derives revenues from genetic identity and clinical services.
There has been a dramatic and constant increase in the number of private
paternity cases implemented at the Company and in the number of molecular
diagnostic assays performed. The Company designed and implemented molecular
diagnostic assays for the presence of DNA attributable to the various human
herpes viruses. This platform technology is being used to serve individual
patients across the country and in support of an on-going clinical study with a
new anti-viral therapeutic. The Company has grown its molecular diagnostic
platform in several other critical areas and its services are being used in
support of still other on-going clinical trials and in support of fundamental
research and development programs for its clients.
The Company is continuing to expand its microbiology test services in the area
of food safety, general microbiology, and assessment of biological pathogens in
test samples. The Company is currently being used to determine the presence of
bacterial organisms in suspicious powders and other test samples.
The Company continues to grow its defense contract business and is now actively
engaged in pursuit of three different defense related contracts in the general
area of bio-defense. The Company acts as both prime and subcontractor for bio
defense related work.
9
Results of Operations
Three Months Ended March 31, 2002 Compared with Three Months Ended March 31,
2001.
Revenues
The Company experiences fluctuations in all revenue categories. Continuation of
existing projects, or engagement for future projects is usually dependent upon
the customer's satisfaction with the scientific results provided in initial
phases of the scientific program. Continuation of existing projects or
engagement of future projects also often depends upon factors beyond the
Company's control, such as the timing of product development and
commercialization programs of the Company's customers. The combined impact of
commencement and termination of research contracts from several large customers
and unpredictable fluctuations in revenue for laboratory services can result in
very large fluctuations in financial performance.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were
$131,464 for the 2002 Quarter, or 12.0% of the total revenue as compared to
($148,129) during the comparable 2001 Quarter or (10.9%) of total revenue.
Gross revenues decreased by $268,244 or 19.7% from $1,363,487 during the first
quarter of 2001 (the "2001 Quarter") to $1,095,243 during first quarter of 2002
(the "2002 Quarter").
Revenues realized from lab services increased by $94,849 or 67.3% from $140,982
during the 2001 Quarter to $235,831 during the 2002 Quarter. This increase is
primarily due to an influx of new clients requesting work on a one-time basis.
Historically, net revenues have been earned from lab services, however, the
Company views commercial and government projects as the more important source of
revenue (as mentioned below) and has continued to focus its efforts on
identifying long-term customers.
Revenues realized from various commercial contracts decreased by $279,677 or
43.1%, from $648,375 during the 2001 Quarter to $368,698 during the 2002
Quarter. This decrease is primarily due to work being completed with two major
clients. During the 2001 Quarter, revenues from both clients amounted to
$294,230. There was essentially no work done for these clients during the 2002
Quarter.
Revenues realized from various government contracts decreased by $59,907 or
12.7%, from $470,471 during the 2001 to $410,564 during the 2002 Quarter. This
decrease was primarily due to delay in the release of funds necessary to perform
work for the Illinois Institute of Technology Research Institute (IITRI)
program. The hold-status placed by IITRI is due to a delay in release of monies
to IITRI, by the Sponsor of the research program. However, during the 2002
Quarter, some of the funds have been released to the Company and the remainder
of the funds that were delayed is expected to be released during the remainder
of the second quarter of 2002. As funds are released, work is re-commenced on
the program objectives.
10
Revenues realized from genetic testing decreased by $38,060 or 50.5%, from
$75,304 during the 2001 Quarter to $37,244 during the 2002 Quarter. This
decrease is a direct result of the cancellation of a major contract by a
customer who chose to continue the work internally.
Cost of Services
Cost of services consists primarily of materials, labor, subcontractor costs and
overhead. The cost of services decreased by $427,113 or 35.0%, from $1,219,071
during the 2001 Quarter to $791,958 during the 2002 Quarter. The cost of
services as a percentage of revenue was 72.3% and 89.4% during the 2002 and 2001
quarters, respectively.
Labor costs decreased by $76,975, or 21.5%, from $358,351 during the 2001
Quarter to $281,376 during the 2002 Quarter. This decrease reflects the cost
cutting measures taken by management that included reduced staffing through
layoffs and attrition.
The costs for direct materials decreased by $169,558, or 48.4%, from $350,404
during the 2001 Quarter, to $180,846 during the 2002 Quarter. This decrease is
directly attributable the change in fiscal practices have been strictly enforced
which restricted all material purchases to service on-going work only and serve
to minimize all material inventories which included the elimination of
non-production related expenditures.
Subcontractor costs during the 2001 Quarter amounted to $93,176. This was due to
costs incurred from subcontractors in the area of drug development. There were
no subcontractor costs during the 2002 Quarter.
Overhead cost consists of indirect labor, depreciation, freight charges, repairs
and miscellaneous supplies not directly related to a particular project. Total
overhead costs decreased by $87,403, or 21.0%, from $417,140 during the 2001
Quarter to $329,737 during the 2002 Quarter. This decrease is primarily due to
the following: 1) reduction of overhead salaries that were charged to direct
labor, 2) management reduced staffing through layoffs and attrition and reduced
or eliminated non-production related expenditures, 3) reduced maintenance costs
on equipment, and 4) elimination of amortization costs associated with the
purchase of contracts in Drug Development.
Sales, General and Administrative
Sales, general and administrative expenses ("SGA") consist primarily of
compensation and related costs for administrative, marketing and sales
personnel, facility expenditures, professional fees, consulting, taxes, and
depreciation. Total SGA costs decreased by $254,387, or 43.4%, from $586,622
during the 2001 Quarter to $332,235 during 2002 Quarter. As a percentage of
revenue, these costs were 30.3% and 43.0% during 2002 and 2001, respectively.
Total compensation and benefits decreased by $64,831 or 35.1% from $184,925
during the 2001 Quarter to $120,094 during the 2002 Quarter. This decrease is
primarily attributable to the reduction in administrative staff due to the cost
cutting measures implemented by Management in 2001.
11
Facility costs decreased by $26,236 or 69.8% from $37,564 during the 2001
Quarter to $11,328 during the 2001Quarter. This decrease is primarily due to the
elimination of rent paid for the offices of the drug development division.
Depreciation decreased by $10,309 or 29.3% from $35,192 during the 2001 Quarter
to $24,883 during the 2002 Quarter. This decrease is primarily due to the
write-off of obsolete equipment in the fourth quarter in 2001.
Taxes and Licenses decreased by $10,419 or 30.0% from $34,772 during the 2001
Quarter to $24,353 during the 2002 Quarter. This decrease is due to a reduction
in sales tax paid to Virginia.
Office expenses decreased by $18,755 or 56.9% from $32,956 during the 2001
Quarter to $14,201 during the 2002 Quarter. This decrease is primarily due to
across the board cuts in all items associated with conducting business in the
office.
Other costs decreased by $29,450 or 86.3% from $34,126 during the 2001 Quarter
to $4,676 during the 2002 Quarter. This decrease is primarily due to a reduction
in bank fees costs as well as an adjustment to the allowance for bad debt
account.
Marketing costs decreased by $91,454 or 84.4%, from $108,313 during the 2001
Quarter to $16,859 during the 2001 Quarter. Based on Management's decision to
control expenditures, there was virtually no advertising done during the 2002
Quarter. Whereas during the first quarter of 2001, the Company opted to increase
its marketing exposure throughout the marketplace with major increases in
advertising and public relations.
Other Income (Expenses)
Interest income decreased by $38,132, or 94.5% from $40,344 during the 2001
Quarter to $2,212 during the 2002 Quarter. This decrease is due to the complete
utilization of funds obtained from the private placement and the IPO.
Interest costs incurred by the Company during the 2002 and 2001 Quarters
included (1) interest paid to financial institutions for loans made to the
Company; (2) interest paid for the Company's IRBs; and (3) amortization of costs
incurred as a consequence of the completion of the Company's IRB financing.
Interest expense decreased $3,348 or 4.6% from $72,633 during the 2001 Quarter
to $69,285 during the 2002 Quarter.
Liquidity and Capital Resources
For a discussion of the Company's current financial condition, please see the
section entitled "Going Concern". The 2002 Period reflected an increase in cash
of $129,836 from operating activities, as compared to a decrease of $433,870
from operating activities during the 2001 Period. The increase in cash during
the 2002 Period was primarily due to reduced staffing through layoffs and
attrition and reduced or eliminated non-production related expenditures.
12
The decrease in cash during the 2001 Period was primarily due to substantial
investments made by the Company in facility costs, personnel, equipment, and
marketing efforts.
Net working capital as of March 31, 2002 and December 31, 2001 was $55,715 and
$13,408 respectively. This increase is a direct result of the cost cutting
measures taken by the Company during the fourth quarter of 2001.
The Company underwent an internal strategic review of its platform technologies
and an extensive independent examination of its fiscal policies and procedures.
The latter review confirmed that Management acted appropriately to reduce
staffing through lay-offs and attrition and to reduce or eliminate all
non-production related expenditures. Fiscal practices were strictly enforced
which restrict all material purchases to service on-going work only and serve to
minimize all material inventories. While reductions in advertising and marketing
negatively impact CBI's ability to attract new work through the print media,
expanded development and use of the Company's web page (done with internal
resources) combined with favorable word-of-mouth and limited print advertising,
continue to enhance CBI's exposure to life sciences investigators throughout the
world.
As a further result of the internal review, several technology platforms, which
were not contributing to the overhead and profitability of the Company, were
eliminated while still others were re-priced. Management is keenly aware of the
need to continuously streamline its operations while maintaining its competitive
edge.
The Company's efforts continue to focus on long-term contractual projects
because they are more important sources of revenues. Long-term projects
generally range in duration from a few months to several years. In the fourth
quarter of 1999, the Company was awarded a five-year subcontract with the
Illinois Institute of Technology Research Institute. The contract is valued at
approximately $8.5 million. During the third Quarter of 2001, the third year of
this contract was awarded to the Company and provided revenues of approximately
$668,000 of which $473,000 will be recognized during the 2002 Period. The
Company expects that the fourth year of the project will be awarded in 2002 with
expected revenues of $1,130,000.
In addition, the Company received an additional project in late September 2001
valued at $887,000 of which $546,000 will be recognized during the 2002 Period.
In early May, the Company was notified of a $250,000 increase to one of our
existing bio-defense contracts in which the work will commence immediately.
Work on a third Government project, awarded in September 2001, is just now
beginning, due to delays caused by the events of September 11th. This latter
contract is for $550,000 for September 2001 through August, 2006. The Sponsor
has the option to increase this contract by $250,000.
On February 28, 2002, the Company received $139,000 in advance for work to be
completed over a twenty-four months period. At present, the work scope for this
client will provide $417,000 in additional revenues to the Company. However,
management believes that the work scope will be expanded by the client as data
is collected and that the magnitude of the contract will be increased.
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In June, 2002, CBI expects to begin work on a new subcontract award of nearly
$500,000 from a major national defense firm to perform vaccine quality control
analyses. The initial period of this subcontract is two years, but the bulk of
the revenues will be received in the first year. CBI is also currently
negotiating other long-term contracts, including two new potential five-year
contracts in bio-defense on which we are teamed with the contract incumbents.
On April 23, 2002, the Company announced that it has engaged the services of
Segerdahl & Co., a registered broker-dealer, for the express purpose of
exploring the strategic options of CBI, with a focus on raising additional
equity capital, facilitating a re-capitalization, or the completion of any other
transaction which furthers the goals of profitability of the company. The intent
of any such transaction would be to maximize shareholder value. In addition, any
such transaction would be subject to applicable securities rules, including the
possibility of shareholder approval.
Forward Looking Statements
Management has included herein certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. When used, statements
that are not historical in nature, including the words "anticipated",
"estimate", "should", "expect", "believe", "intend", and similar expressions are
intended to identify forward-looking statements. Such statements are, by their
nature, subject to certain risks and uncertainties.
Among the factors that could cause the actual results to differ materially from
those projected are the following:
. business conditions and the general economy,
. the development and implementation of the Company's long-term business
goals,
. federal, state, and local regulatory environment,
. lack of demand for the Company's services,
. the ability of the Company's customers to perform services similar to
those offered by the Company "in-house,"
. potential cost containment by the Company's customers resulting in fewer
research and development projects,
. the Company's ability to receive accreditation to provide various
services, including, but not limited to paternity testing, and
. the Company's ability to hire and retain highly skilled employees,
14
Other risks, uncertainties, and factors that could cause actual results to
differ materially from those projected are detailed from time to time in reports
filed by the company with the Securities and Exchange Commission, including
Forms 8-K, 10-QSB, and 10-KSB.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit Number Description of Exhibit
3.1 Amended and Restated Articles of Incorporation (1)
3.2 Amended and Restated Bylaws (1)
4.1 Form of Common Stock Certificate (1)
4.2 Indenture of Trust by and between the Virginia Small
Business Financing Authority and Crestar Bank relating
to the issuance of industrial revenue bonds for the
benefit of the Company (2)
10.1 Warrant Agreement between the Company and Richard J.
Freer, as amended (1)
10.2 Warrant Agreement between the Company and Thomas R.
Reynolds, as amended (1)
10.3 Warrant Agreement between the Company and Robert B.
Harris, as amended (1)
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10.4 Employment Agreement for Richard J. Freer (1)
10.5 Employment Agreement for Thomas R. Reynolds (1)
10.6 Employment Agreement for Robert B. Harris (1)
10.7 Executive Severance Agreement for Richard J. Freer (1)
10.8 Executive Severance Agreement for Thomas R. Reynolds (1)
10.9 Executive Severance Agreement for Robert B. Harris (1)
10.10 1997 Stock Incentive Plan, as amended (1)
10.11 Loan Agreement by and between the Virginia Small Business
Financing Authority and the Company (2)
_______________________
(1) Incorporated by reference to the Company's Registration Statement on Form
SB-2, Registration No. 333-31731, as amended.
(2) Incorporated by reference to the Company's Current Report on Form 8-K,
dated April 6, 1998, File No. 001-13467.
(b) Reports on Form 8-K. On April 23, 2002, the Company announced that
it has engaged the services of Segerdahl & Co., a registered broker-dealer, for
the express purpose of exploring the strategic options of CBI, with a focus on
raising additional equity capital, facilitating a re-capitalization, or the
completion of any other transaction which furthers the goals of profitability of
the company. The intent of any such transaction would be to maximize shareholder
value. In addition, any such transaction would be subject to applicable
securities rules, including the possibility of shareholder approval.
17
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
COMMONWEALTH BIOTECHNOLOGIES, INC.
By: /s/ James H. Brennan
---------------------------------
James H. Brennan
Controller and Principal Accounting
Officer
March 14, 2002
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
3.1 Amended and Restated Articles of Incorporation (1)
3.2 Amended and Restated Bylaws (1)
4.1 Form of Common Stock Certificate (1)
4.2 Indenture of Trust by and between the Virginia Small Business
Financing Authority and Crestar Bank relating to the issuance
of industrial revenue bonds for the benefit of the Company (2)
10.1 Warrant Agreement between the Company and Richard J. Freer,
as amended (1)
10.2 Warrant Agreement between the Company and Thomas R. Reynolds,
as amended (1)
10.3 Warrant Agreement between the Company and Robert B. Harris, as
amended (1)
10.4 Employment Agreement for Richard J. Freer (1)
10.5 Employment Agreement for Thomas R. Reynolds (1)
10.6 Employment Agreement for Robert B. Harris (1)
10.7 Executive Severance Agreement for Richard J. Freer (1)
10.8 Executive Severance Agreement for Thomas R. Reynolds (1)
10.9 Executive Severance Agreement for Robert B. Harris (1)
10.10 Form of Incentive Stock Option Agreement (1)
10.11 Loan Agreement by and between the Virginia Small Business
Financing Authority and the Company (2)
__________________________
(1) Incorporated by reference to the Company's Registration Statement on Form
SB-2, Registration No. 333-31731, as amended.
(2) Incorporated by reference to the Company's Current Report on Form 8-K,
dated April 6, 1998, File No. 001-13467.
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