10KSB: Optional form for annual and transition reports of small business issuers [Section 13 or 15(d), not S-B Item 405]
Published on April 1, 2002
FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2001
[ ] TRANSITION REPORT UNDER 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.
(Name of small business issuer in its charter)
Virginia 54-1641133
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
601 Biotech Drive
Richmond, Virginia 23235
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (804) 648-3820
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No ___
-
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [ ].
The issuer's revenues for the year ended December 31, 2001 were $4,786,087.
The aggregate market value of the shares of common stock, without par value
("Common Stock"), of the registrant held by non-affiliates on March 22, 2002 was
approximately $3,677,391 based on the closing sales price of the shares of $1.86
per share, as reported on the Nasdaq SmallCap Market on March 30, 2002.
As of March 22, 2002, there were 2,076,164 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement for its Annual
Meeting of Shareholders to be held on May 23, 2002 are incorporated by reference
into Part III of this Form 10-KSB.
Portions of the registrant's 2001 Annual Report to Shareholders are
incorporated by reference into Part II of this Form 10-KSB.
Transitional Small Business Disclosure Format (check one:) Yes ___ No X.
-
PART I
------
Item 1. Description of Business.
-----------------------
Overview
Commonwealth Biotechnologies, Inc. (the "Company" or "CBI") was founded in 1992
to provide sophisticated research and development support services on a contract
basis to the biotechnology industry. 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's revenues are derived principally from providing
macromolecular synthetic and analytical services to researchers in the
biotechnology industry or to researchers who are engaged in life sciences
research in government or academic labs throughout the world.
The Company provides these services to customers on a contract basis and derives
its revenues from these services, and not only from sales of commercial products
resulting from the research. This arrangement distinguishes the Company from
many other biotechnology companies in that the Company's revenues are not
derived from successful commercialization of a new biotechnology product. The
Company believes that it has developed a strong reputation as a leading provider
of biotechnology research and development analytical services. The Company is
focusing its expansion efforts on the maintenance and expansion of long-term
relationships with customers in the biotechnology industry and in establishing
new customer relationships. The Company has implemented new technologies to
provide new services to its customers, and is continuing to develop new products
and services to meet the changing needs of its customers.
The Company's approach to providing services is called "Concept-to-Clinic" and
is the key to CBI's continued success. It defines the approach taken with all
clients - design, development, implementation and testing. Whether the client is
a start-up company with research and development needs, or an established firm
wishing to move a product through clinical regulation, CBI stands ready as
partner of choice to provide the required services that ensures success. The use
of Concept-to-Clinic is evidenced in the broad array of services CBI offers its
clients.
Growth Strategy
The Company's strategy for growth focuses on expanding its long term contracts
in the areas described below. The Company is not currently pursuing scientific
improvements to its intellectual property portfolio, but is actively pursuing
licensing and corporate partners. In this regard, CBI licensed two of its
intellectual properties over the past year. AccutracTM, CBI's DNA sequencing
reagent, was licensed to Applied Biosystems, Inc., Foster City, CA, under terms
of a non-exclusive license agreement and HepArrest(TM) was licensed to MediRox
AB, Linkoping, Sweden for use as an in vitro reagent for reversal of
heparin-induced anticoagulation in blood samples collected at the point of care
from patients. MediRox paid a one-time license fee and is buying HepArrest
exclusively from CBI. Depending on how fast MediRox can grow its in vitro
diagnostic market, sales of HepArrest can become a contributing revenue source
for the Company.
CBI expanded its molecular diagnostics platform to detection and quantitation of
the various human Herpes viruses. Particular Herpes family members have been
linked to chronic fatigue syndrome, organ rejection, multiple sclerosis, and
Karposi's syndrome. CBI's platform offers rapid analysis combined with single
copy sensitivities. CBI developed the platform under contract from Vigen, Inc.,
Wilmette, IL, and while CBI is the named inventor on patents protecting this
platform filed with the US and PCT patent authorities, the patent is assigned to
Vigen. CBI performs the assays relative to this platform under a non-exclusive
license from Vigen. In the period May through December, CBI analyzed the blood
serum from more than 350 patients for the presence of DNA attributable to Herpes
viruses 4,5,6,7 and 8. CBI's platform is also being
Page 2
used in support of a clinical trial for new anti-Herpes medications. Even
without a formal marketing effort, gross revenues from Herpes viral assays were
$185,000 over this eight month period.
CBI continues to grow its defense contract business. CBI's subcontract from the
Illinois Institute of Research Institute on behalf of a government Sponsor was
renewed in 2001 for proprietary protocol development work in the general area of
bio-defense. CBI is the prime contractor for a second government Sponsor. Under
this latter agreement, research is aimed at identifying novel molecules
associated with nefarious bio agents. A third contract with yet another
government sponsor, awarded in September 2001, for which CBI is the prime
contractor charges CBI with delineating strain identity by DNA sequence analysis
of particular human pathogenic bacteria. The Company believes that these
contracts demonstrate the high regard with which the various governmental
agencies view CBI and are acknowledgements of its expertise in the complex area
of detection and identification of agents that may be used in bio-warfare.
Together, these contracts are expected to bring nearly $2 million in gross
revenue to the Company during the course of one contractual year period.
Other areas for the Company's growth include:
- - Overexpression and characterization. The Company believes that there is a
pressing need for GLP rated facilities to perform validated assay work on
new recombinant products for large and small biotech companies. CBI is
currently performing such work under long term contracts to different
industry clients.
- - Assay Development. The Company believes that it is uniquely qualified to
help develop analytical assays for potential commercial products
(pharmaceutical and otherwise) for industry clients.
- - Reference Lab Work. CBI continues to grow its reference lab DNA work, which
encompasses human paternity testing and animal lineage analysis. CBI has
also developed unique methods for cell culture lineage analysis.
- - Microbiology. Working individually or teamed with industry partners, CBI
offers traditional and cutting edge microbiological analyses. Current
clients include those looking to confirm the presence of suspected
pathogens in suspicious powders. CBI also is consulting with major food
providers to put in place rapid and meaningful assays and surveys for food
borne pathogens.
- - Clinical Diagnostic Support. CBI continues to grow its laboratory support
services for human clinical trail studies. In addition to its assays for
the various human herpes viruses, CBI offers molecular diagnostic assays to
industry clients.
- - Genomics/Proteomics. As the DNA make-up of individual organisms (including
humans) is unveiled, CBI is able to help identify and characterize the
proteins which make up the "proteome" encoded by the DNA. The Company
believes that it's genomics and proteomics capabilities are well
recognized. CBI specializes at developing novel mass spectral methods for
characterization of organismal proteomes.
- - cGMP. A move towards cGMP status would permit CBI to take on many more
clients concerned with higher levels of compliance.
Regulatory Compliance
The Company is registered under the Clinical Laboratories Improvement Act (CLIA)
which enables the Company to accept human samples for analysis and to perform
analysis of human clinical samples for the presence of known genetic markers.
The Company is also accredited under the guidelines of the National Forensic
Science Technology Center, (NFSTC), to perform DNA identity testing for
submission of data into the Combined DNA Index System (CODIS) data base, and is
one of a select few commercial facilities nationwide accredited by the NFSTC to
perform criminal (felony) DNA database testing for submission into the FBI CODIS
database.
Page 3
The Company is accredited by the American Association of Blood Banks (AABB), and
the Company has participated in a validation study through the College of
American Pathologists (CAP). Accreditation by the AABB enables the Company to
perform paternity testing on private and public cases.
The Company is also accredited by the Centers for Disease Control to receive and
handle select agents. The Company operates and maintains an accredited Biosafety
level 3 facility.
The Company operates under GLP (Good Laboratory Practices) and has been
accredited by the United States Department of Agriculture to receive bovine DNA
samples from Europe to perform genetic, lineage, and identity analysis. The
Company participated in an international study to validate bovine DNA identity
testing in conjunction with a study group located in Denmark, and in addition,
is establishing DNA identity testing in horses.
These various accreditations enhance the Company's position in the marketplace
and bolster its "Concept-to-Clinic" offerings. In addition to managing clinical
trial work, the Company has the capacity to perform the associated lab services
and the results of these lab analyses will be acceptable to the regulatory
authorities.
Strategies for improving CBI's contract business
CBI will re-organize its management structure in 2002 and assign some of the
current duties and responsibilities of senior management to various senior
scientific staff members. This move will allow Dr. Harris, Dr. Freer and Mr.
Reynolds to have more time to become more actively involved in the early
interaction with potential clients and development of new business which thus
extends the Company's marketing efforts. Dr. Harris will assume the
responsibilities of Chief Scientific Officer (CSO) in addition to his duties as
President. This is in keeping with his strengths in interacting very positively
with potential clients and should give those potential clients additional
assurance when developing scientific relationships. Dr. Freer will assume the
responsibilities of Chief Operating Officer (COO) in addition to his duties as
Chair of the Board of Directors. This move will consolidate his current
oversight of marketing, sales, compliance, safety, and drug development services
under one organizational entity. Finally, the DNA laboratories were re-organized
at the end of 2001 to allow Mr. Reynolds more time to fully participate in
strategic marketing and business development activities. The focus of these
marketing efforts will be to develop new, long-term contracts and business
relationships with pharmaceutical, biotech, and research companies.
Analytical Support Services
In order to analyze and experiment with cell components and macromolecules,
researchers need to analyze, sequence, purify, synthesize, and characterize
those components. Thus, the Company's business is dependent upon the use of
sophisticated, analytical equipment. In light of increasing cost pressures, many
companies, universities, and research institutions seek to avoid incurring the
costs to equip and staff laboratories, which can perform these analytical
services. Instead, they choose to contract with the Company for these services.
The Company is a fee-for-service contractor and typically takes no ownership
position in the intellectual property rights resulting from services it performs
under contract for either short term or long term contract customers. A key to
the growth of the Company has been to integrate a number of foundation
technologies and provide a broad range of capabilities to customers who
otherwise must go to several different sources for their needs. Since commencing
operations, the Company has become noted for providing a wide range of services
relating to design, synthesis, purification, and analysis of peptides, proteins,
and oligonucleotides.
Page 4
Providing a wide range of services is an important element of the Company's
competitive strategy. Virtually all of its closest competitors provide either
DNA level technologies or protein/peptide level technologies. There are few
major competitors which offer integrated DNA/RNA and protein/peptide
technologies and none that offer these technologies combined with sophisticated
biophysical analytical techniques, such as calorimetry, spectroscopy, and mass
spectral analysis. Thus, the Company can provide complete research programs to
its customers. "One stop biotechnology shopping" has proved attractive in
securing long term contracts with customers ranging from major pharmaceutical
industry researchers to major government Sponsors of research, including
agencies of the Department of Defense.
The services offered by the Company are fully detailed in its promotional
brochures, and on its World Wide Web page. The Company has instituted
"fax-on-demand" for customers who seek technology descriptions and pricing
information.
Customers
CBI continues to redefine its client population and actively seeks clients with
long term project goals, rather than individual orders for selected
technologies. "Concept-to-Clinic" defines the approach taken with all clients -
design, development, implementation and testing. CBI's clients are from private
companies, academic institutions and government agencies across the globe.
Whether the client is a start-up company with research and development needs, or
an established firm wishing to move a product through the regulatory process,
CBI stands ready as partner of choice to provide the required services which
ensure success. CBI's long term contract revenues increased nearly 50% in 2001
as compared to 2000.
CBI has made a conscious effort to redefine its client base. Through its
aggressive marketing efforts, CBI has successfully changed its image from a
"menu" driven company (where a client might order one or two analyses) to a
"project oriented" company (where a client contracts with CBI to move a project
from conception to practice). In the evolution of CBI's business and as prices
and technologies changed, it became increasingly clear to the Company that it
would be very difficult to sustain business if CBI had to rely on investigators
who provided individual samples for analysis. It was simply not economically
viable to consider nurturing growth on the basis of orders for individual
analyses or individual orders for a limited DNA sequencing project. The only
answer was large scale, solution oriented, one stop shopping.
Operations
Requests for quotes from potential customers are received via phone, e-mail,
from the Company's World Wide Web page, or by hard copy directed to the
Company's business coordinator or laboratory manager. All inquiries are answered
by direct mail of the Company brochure and price lists, with follow up phone
calls, where appropriate. Price quotes for small projects or scientists who
possess the expertise necessary to respond appropriately generate routine
analytical procedures. Quotes for more complex projects are developed
collaboratively by the Company personnel having the requisite expertise. Most
quotations are sent back to the inquiring scientist within one working day.
Incoming orders are logged onto the Company's project management system,
assigned a work order number, and delivered to the appropriate scientist
designated to oversee and coordinate all aspects of the particular project. The
work to be done is scheduled on the appropriate instruments, and all necessary
reagents or other supplies needed to complete the project are ordered as needed.
Every customer is required to sign a service agreement prior to the Company
initiating any requested work.
As a commercial contracts is completed, progress reports are usually sent to the
customer detailing the results found to date, and the conclusions to be drawn.
If the project is relatively straightforward, such as an amino acid analysis,
spectroscopy, or DNA sequence analysis, the results are faxed or e-mailed to the
customer prior to sending the customer the hard copy of the results. If the
project involves a synthesis of a peptide or oligonucleotide, for example, the
product is sent to the customer by express mail service. A data
Page 5
sheet accompanies every product, which details the physicochemical properties of
the compound, including the results of all analytical tests performed which
support the claimed purity and composition. The customer is invoiced upon
completion of the work, or at particular points in the work program. The
customer pays for the analytical services provided in accordance with the
Company's standard fee structure and typically retains all rights to any
intellectual property resulting from the analysis.
All data generated at the Company are archived for the customer. Where
appropriate, the data are archived on selected storage media, such as back up
tapes or computer disks. A file is maintained for every customer, and these
files are also archived. The Company employs appropriate security measures to
ensure the confidentiality of customer information.
The Company operates under strict Standard Operating Protocols ("SOPs") which
detail the particular technologies used to complete the work in progress. SOPs
are made available to the customer upon request. In addition, the Company's
technical team follows standard operating procedures, which help to produce
consistent, high quality results.
Proprietary Research and Development
CBI has developed its own intellectual properties that promise to add a
significant revenue stream to the company when they are fully commercialized.
HepArrest(TM) is intended for use in acute surgical situations where the
anticoagulant effects of Heparin must be reversed. When surgery is concluded,
restoration of clotting function is critical to prevent unwanted bleeding and
related post-operative complications. CBI has completed virtually all
pre-clinical laboratory studies necessary to file its own IND for HepArrest(TM).
With implementation of its drug development platform, CBI is positioned to move
HepArrest(TM) through the regulatory compliance process. Concomitantly, the
Company is seeking a licensing partner who will complete the IND and clinical
trial process on its behalf. United States patents have been issued for
HepArrest(TM). National patent filings for the product are pending in Europe,
Canada and Japan, the three largest potential markets for HepArrest(TM) outside
of the United States. Even if a new product were to be developed shortly,
HepArrest(TM) is considerably further along in the commercialization process. If
HepArrest(TM) comes to market and continues to perform in clinical trials as it
has in pre-clinical trials, it is not unimaginable that HepArrest(TM) could
capture a significant market share.
On April 30, 2001, the Company signed a patent license agreement with Applied
Biosystems Group of PE Corporation, New York. This license agreement grants
Applied Biosystems a non-exclusive, worldwide, perpetual, non-assignable license
under the patent. This enables them to research, develop, make, have made,
import, market, use, sell, have sold, offer to sale, distribute, have
distributed and otherwise exploit products and services and to pass on to end
user customers of Applied Biosystems or its distributors the right to use such
product and services. The Company received licensing fees of $400,000 of which
$200,000 was received in cash in the second quarter and the remaining $200,000
in product and service credits. These credits were utilized to purchase
equipment in June 2001.
The Company takes appropriate steps to protect its intellectual property rights
and those of its customers. The Company's practice is to require its employees
and consultants to execute non-disclosure and proprietary rights agreements upon
commencement of employment or consulting arrangements with the Company. These
agreements acknowledge the Company's exclusive ownership of all intellectual
property developed by the individual during the course of his work with the
Company and require that all proprietary information disclosed to the individual
by the Company or its customers remain confidential.
Page 6
Marketing
The Company has expanded its customer base primarily through word-of-mouth
referrals and attendance at a limited number of trade shows, seminars and
meetings. Because of its ability to offer a wide range of biotechnology research
services, the Company enjoys a favorable reputation among its customers, and
many new customers come to the Company by word-of-mouth recommendation. The
Company has constructed its own World Wide Web Home Page (www.cbi-biotech.com)
and is listed with several biotechnical and biomedical oriented sites on the
World Wide Web.
Human Resources
The Company currently has 33 full time employees including 7 employees in
administration, marketing, sales, and customer relations, 1 computer network
specialists, and 25 employees in laboratory operations; in which some employees
also participate in research and development. Eleven of the Company's employees
hold doctorate degrees, and 7 have master's degrees. None of the Company's
employees are represented by a labor union. The Company has experienced no work
stoppages and believes its relations with its employees to be good.
Competition
The Company faces several types of competition. The Company believes there are
between 15 and 19 companies concentrating on peptide synthesis and about 25
other companies offering DNA related services in the United States. Very few
companies offer both DNA/RNA and protein/peptide analysis. Other competition
comes from divisions of larger research oriented companies or university core
facilities. The principal competitive factors are pricing, expertise, and range
of services offered, and the Company believes that it competes effectively on
all of these factors.
Government Regulation
The Company does not require government regulatory approvals to provide its
current services. Numerous federal, state and local agencies, such as
environmental, working condition and other similar regulators, have jurisdiction
to take action that could have a material adverse effect upon the Company's
ability to do business. The Company believes that it is in general compliance
with existing federal, state and local laws and regulations and does not
anticipate that continuing compliance will have any material effect upon the
capital expenditures, earnings or competitive position of the Company.
The Company anticipates that its pursuit of its growth strategy will subject the
Company to a heightened level of government regulation of its operations. For
example, in pursuing opportunities to provide analytical services to customers
seeking the approval of the United States Food and Drug Administration (the
"FDA") of products, the Company's operations will become subject to compliance
with standards established by the FDA, including inspections by the FDA and
other federal, state and local agencies regarding work performed by the Company
on specific FDA submission projects. If significant violations are discovered
during an inspection, the Company may be restricted from undertaking additional
work on projects until the violations are remedied. The Company has a license
from the Nuclear Regulatory Commission ("NRC") for conduct of work involving
radionuclides and operates a BSL3 facility under accreditation from the Centers
for Disease Control.
The commercialization of the Company's proprietary technologies would also be
subject to extensive government regulation and approval requirements, including
the need for pre-clinical laboratory and animal tests and human clinical trials.
The Company does not have, and does not anticipate developing, the facilities
and expertise necessary to obtain FDA approval for or to manufacture any
pharmaceutical products that may result from its technologies. Instead, the
Company would license these technologies to third
Page 7
parties having the necessary facilities and expertise, which would assume
responsibility for and control of regulatory matters.
Item 2. Description of Property
-----------------------
Facilities
Construction of the Company's present facility was completed in November 1998 at
an overall cost of approximately $ 5.1 million financed primarily through the
Virginia Small Business Financing Authority (the "VSBFA") which issued $
4,000,000 in tax exempt industrial revenue bonds ("IRBs") for the benefit of the
Company. As of December 31, 2001, the aggregate principal amount of the
outstanding IRBs was approximately $ 3,915,000. In connection with the IRB
financing, liens were placed on the facility and substantially all of the
Company's assets, including its accounts receivables. The Company possesses a
limited right to prepay the IRB obligations pursuant to the terms of the Loan
Agreement attached as Exhibit 10.14 to this Annual Report on Form 10-KSB. The
debt associated with the IRBs amortizes as follows:
Principal Amount Due ($) Date Due Applicable Interest Rate (%)
- ------------------------ -------- ----------------------------
330,000 March 15, 2023 8.0
85,000 March 15, 2001 5.2
90,000 March 15, 2002 5.3
95,000 March 15, 2003 5.4
100,000 March 15, 2004 5.5
105,000 March 15, 2005 5.6
110,000 March 15, 2006 5.7
115,000 March 15, 2007 5.8
125,000 March 15, 2008 5.9
130,000 March 15, 2009 6.0
140,000 March 15, 2010 6.1
145,000 March 15, 2011 6.2
155,000 March 15, 2012 6.3
2,275,000 March 15, 2022 7.0
The Company's facility, located in Richmond, Virginia, encompasses 32,000 square
feet of state-of-the-art laboratory and administrative space. The building is
designed to facilitate movement of samples throughout each laboratory, and where
necessary, to maintain and ensure custody of samples. The building houses
expansion space, which was purposefully left undeveloped to accommodate new
technologies as they come on board. The Company took possession of its current
facility in late November 1998, and all labs were fully operational in the
facility by mid December 1998. The Company believes that the facility is
adequately insured.
Item 3. Legal Proceedings
-----------------
On April 18, 2001, the Company filed a lawsuit against Virginia Commonwealth
University ("VCU") and the Comptroller of the Commonwealth of Virginia for
breach of contract and unjust enrichment. The Company alleges that VCU breached
the terms of a subcontract related to a grant awarded to VCU by the Department
of Health and Human Service (the "Department"). Pursuant to the subcontract, the
Company was to provide services to VCU in connection with the grant. Upon the
award of the grant, the Company alleges that VCU breached the subcontract by
utilizing its graduate students to provide the services called for by the
subcontract. The Company is seeking damages in the aggregate amount of $ 227,645
plus pre-judgment and post-judgment interest. This amount relates solely to the
first two years of VCU's grant. In addition, the Company is seeking a
declaratory judgment stating that should the Department renew VCU's grant for a
third year, VCU should be deemed to have further breached the subcontract. The
Company is
Page 8
seeking damages in the amount of $101,317 plus pre-judgment and post-judgment
interest for this alleged breach.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No matter was submitted to a vote of security holders during the fourth quarter
of 2001.
PART II
-------
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
The information set forth on page 4 the Company's 2001 Annual Report to
Shareholders under the caption "Market for Common Equity" is incorporated herein
by reference.
Item 6. Management's Discussion and Analysis or Plan of Operation
---------------------------------------------------------
The information set forth on pages 5 through 13 of the Company's 2001
Annual Report to Shareholders under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" is incorporated
herein by reference.
Item 7. Financial Statements.
---------------------
The Company's financial statements and the related notes thereto, together with
the report of McGladrey & Pullen, LLP, set forth on pages 14 through 30 of
the Company's 2001 Annual Report to Shareholders are incorporated herein by
reference.
Item 8. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure.
---------------------
The Company is not presently involved in any disagreements with its independent
auditors on accounting financial disclosures.
PART III
--------
Item 9. Directors, Executive Officers, Promoters and Control Persons;
-------------------------------------------------------------
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
Directors
The information relating to the directors of the Company set forth in the
Company's definitive proxy statement relating to the Company's Annual Meeting of
Shareholders to be held on May 23,2002 (the "Proxy Statement") under the caption
"Proposal 1: Election of Directors" is incorporated herein by reference.
Executive Officers
The information relating to the executive officers of the Company set forth in
the Proxy Statement under the caption "Executive Compensation - Executive
Officers of the Company" is incorporated herein by reference.
Page 9
Compliance with Section 16(a) of the Securities Exchange Act of 1934
The information relating to compliance with Section 16(a) of the Securities
Exchange Act of 1934, as amended, is set forth in the Proxy Statement under the
caption "Section 16(a) Beneficial Ownership Reporting Compliance" is
incorporated herein by reference.
Item 10. Executive Compensation.
-----------------------
The information set forth in the Proxy Statement under the caption "Executive
Compensation" is incorporated herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
--------------------------------------------------------------
The information set forth in the Proxy Statement under the caption "Voting
Securities and Principal Holders Thereof" is incorporated herein by reference.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
The information set forth in the Proxy Statement under the caption "Certain
Relationships and Related Transactions" is incorporated herein by reference.
Page 10
Item 13. 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 Form of Underwriter's Warrant, as amended (1)
4.3 Form of Management Warrant, as amended (1)
10.1 Placement Agreement by and between the Company and Anderson &
Strudwick, Incorporated ("A&S") (1)
10.2 Warrant Agreement between the Company and A&S (1)
10.3 Warrant Agreement between the Company and Richard J. Freer,
as amended (1)
10.4 Warrant Agreement between the Company and Thomas R. Reynolds,
as amended (1)
10.5 Warrant Agreement between the Company and Robert B. Harris,
as amended (1)
10.6 Employment Agreement for Richard J. Freer (1)
10.7 Employment Agreement for Thomas R. Reynolds (1)
10.8 Employment Agreement for Robert B. Harris (1)
10.9 Executive Severance Agreement for Richard J. Freer (1)
10.10 Executive Severance Agreement for Thomas R. Reynolds (1)
10.11 Executive Severance Agreement for Robert B. Harris (1)
10.12 1997 Stock Incentive Plan, as amended (1)
10.13 2000 Stock Incentive Plan (3)
10.14 Loan Agreement between the Company and the Virginia Small
Business Financing Authority (2)
13.1 Annual Report to Shareholders for the Fiscal Year Ended
December 31, 2001 incorporated in Form 10-KSB (4)
23.1 Letter of Consent from McGladrey & Pullen LLP (4)
- -----------------------
(1) Incorporated by reference to the Company's Registration Statement on Form
SB-2, Registration No. 333-31731.
(2) Incorporated by reference to the Company's Current Report on Form 8-K,
dated April 6, 1998, File No. 001-13467.
(3) Incorporated by reference to the Company's Registration Statement on Form
S-8, Registration No. 333-51074.
(4) Filed herewith.
Page 11
Executive Compensation Plans and Arrangements
The following is a list of all executive compensation plans and
arrangements filed as exhibits to this annual report on Form 10-KSB or
incorporated herein by reference:
1. Warrant Agreement between the Company and Richard J. Freer, as amended
(1)
2. Warrant Agreement between the Company and Thomas R. Reynolds, as
amended (1)
3. Warrant Agreement between the Company and Robert B. Harris, as amended
(1)
4. Employment Agreement between the Company and Richard J. Freer (1)
5. Employment Agreement between the Company and Thomas R. Reynolds (1)
6. Employment Agreement between the Company and Robert B. Harris (1)
7. Executive Severance Agreement between the Company and Richard J. Freer
(1)
8. Executive Severance Agreement between the Company and Thomas R.
Reynolds (1)
9. Executive Severance Agreement between the Company and Robert B. Harris
(1)
10. 1997 Stock Incentive Plan (1)
11. 2000 Stock Incentive Plan (2)
- ------------------------
(1) Previously filed as an exhibit to the Company's Registration Statement on
Form SB-2, Registration No. 333-31731, and incorporated by reference
herein.
(2) Previously filed as an exhibit to the Company's Registration Statement on
Form S-8, Registration No. 333-51074, and incorporated by reference herein.
(b) Reports on Form 8-K
The Company did not file any Current Reports on Form 8-K during the
fiscal quarter ended December 31, 2001.
Page 12
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMMONWEALTH BIOTECHNOLOGIES, INC.
Date: March 29, 2002 By: /s/ Robert B. Harris, Ph.D.
---------------------------
Robert B. Harris, Ph.D
President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Page 13
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 Form of Underwriter's Warrant, as amended (1)
4.3 Form of Management Warrant, as amended (1)
10.1 Placement Agreement by and between the Company and Anderson &
Strudwick, Incorporated ("A&S") (1)
10.2 Warrant Agreement between the Company and A&S (1)
10.3 Warrant Agreement between the Company and Richard J. Freer,
as amended (1)
10.4 Warrant Agreement between the Company and Thomas R. Reynolds,
as amended (1)
10.5 Warrant Agreement between the Company and Robert B. Harris,
as amended (1)
10.6 Employment Agreement for Richard J. Freer (1)
10.7 Employment Agreement for Thomas R. Reynolds (1)
10.8 Employment Agreement for Robert B. Harris (1)
10.9 Executive Severance Agreement for Richard J. Freer (1)
10.10 Executive Severance Agreement for Thomas R. Reynolds (1)
10.11 Executive Severance Agreement for Robert B. Harris (1)
10.12 1997 Stock Incentive Plan, as amended (1)
10.13 2000 Stock Incentive Plan (3)
10.14 Loan Agreement between the Company and the Virginia Small
Business Financing Authority (2)
13.1 Annual Report to Shareholders for the Fiscal Year Ended
December 31, 2001 incorporated in Form 10-KSB (4)
23.1 Letter of Consent from McGladrey & Pullen LLP (4)
- -----------------------
(1) Incorporated by reference to the Company's Registration Statement on Form
SB-2, Registration No. 333-31731.
(2) Incorporated by reference to the Company's Current Report on Form 8-K,
dated April 6, 1998, File No. 001-13467.
(3) Incorporated by reference to the Company's Registration Statement on Form
S-8, Registration No. 333-51074.
(4) Filed herewith.
Page 14