As filed with the Securities and Exchange Commission on December 20, 2001
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-8
under
THE SECURITIES ACT OF 1933
BICO, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 3841 25-1229323
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization) Number)
2275 Swallow Hill Road, Bldg. 2500
Pittsburgh, Pennsylvania 15220 (412) 429-0673
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices and principal place of business)
2001 Equity Compensation Plan
Consulting Agreement
(full title of plan)
Fred E. Cooper, Chief Executive Officer
BICO, Inc.
2275 Swallow Hill Road, Building 2500, Pittsburgh, Pennsylvania 15220
(412) 429-0673
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
___________________________________________
Copy to:
Sweeney & Associates P.C.
7300 Penn Avenue, Pittsburgh, Pennsylvania 15208
(412) 731-1000
Proposed Proposed
Title of Amount to maximum Maximum Amount of
securities be offering aggregate registration
to be registered price per offering fee
registered share (1) price
Common Stock 113,000,000(2) $.025 $2,825,000 $706.25
Common Stock 12,000,000(3) $.025 $ 300,000 $ 75.00
Total 125,000,000 $781.25
(1) Calculated in accordance with Rule 457 of the Securities Act
of 1933, as amended, and based upon the average of the high and
low sales prices of common stock on the Electronic Bulletin Board
on December 18, 2001.
(2) The maximum number of shares as to which awards may be
granted under the 2001 Equity Compensation Plan.
(3) Registered pursuant to a Consulting Agreement
PROSPECTUS
BICO, Inc.
125,000,000 Shares of Common Stock
This prospectus forms a part of a registration statement
that registers an aggregate of 125 million shares of BICO common
stock. Up to 113 million shares may be issued under our 2001
Equity Compensation Plan, which is an exhibit. 12 million of
shares will be issued in connection with a consulting agreement,
which is also an exhibit.
When we issue the stock, the recipients may sell all or a
portion of the stock from time to time in the over-the-counter
market, in negotiated transactions, directly or through brokers
or otherwise, and at market prices prevailing at the time of such
sales or at negotiated prices. We will not receive any proceeds
from sales by the selling stockholders.
Our common stock trades on the electronic bulletin board
under the trading symbol "BIKO".
OUR BUSINESS INVOLVES SIGNIFICANT RISKS. YOU NEED TO REVIEW
THESE RISKS BEFORE YOU CONSIDER BUYING OUR COMMON STOCK. THESE
RISKS ARE DESCRIBED UNDER THE CAPTION "RISK FACTORS" BEGINNING ON
PAGE 2.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. If anyone tells you otherwise, it's a criminal
offense.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU
WITH INFORMATION THAT IS DIFFERENT. WE ARE OFFERING TO SELL
AND SEEKING OFFERS TO BUY SHARES OF OUR COMMON STOCK ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS
OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON
STOCK.
THE INFORMATION IN THIS PROSPECTUS ISN'T COMPLETE. IT MIGHT
CHANGE. WE'RE NOT ALLOWED TO SELL THE COMMON STOCK OFFERED BY
THIS PROSPECTUS UNTIL THE REGISTRATION STATEMENT WE HAVE FILED
WITH THE SEC BECOMES EFFECTIVE. THIS PROSPECTUS ISN'T AN OFFER TO
SELL OUR COMMON STOCK, AND WE ARE NOT SOLICITING OFFERS TO BUY
OUR COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT
ALLOWED.
The date of this prospectus is December 20, 2001
WHERE YOU CAN FIND MORE INFORMATION
The securities laws require us to file reports and other
information. All of our reports can be reviewed at the SEC's
web site, at www.sec.gov through the SEC's EDGAR database. You
can also review and copy any report we file with the SEC at the
SEC's Public Reference Room, which is located at 450 Fifth
Street, N.W., Washington, D.C., or at the SEC's regional offices,
including the ones located at 601 Walnut Street, Curtis Center,
Suite 1005E, Philadelphia, PA 19106-3432; and 75 Park Place, New
York, NY. You can also order copies for a fee from the SEC's
Public Reference section, at 450 Fifth Street, N.W. Washington,
D.C. 20549. Our stock trades on the electronic bulletin board.
This prospectus omits certain information that is contained
either in the full registration statement, including exhibits, on
Form S-8, or in the reports we file with the SEC. Our most
recent financial statements and other information regarding our
operations can be found in the reports listed below, and you
should review those reports along with this prospectus.
OTHER IMPORTANT DOCUMENTS YOU SHOULD REVIEW
Our latest financial statements, as well as other important
information, are contained in the following documents, all of
which are incorporated by reference to this prospectus. The
SEC allows us to disclose important information to you by
referring to other documents. We are also permitted to include
the following reports, which have been filed with the SEC, as
well as the reports we file with the SEC in the future, as part
of this prospectus, without copying the reports into the
prospectus. This is known as incorporation by reference. The
following documents are incorporated by reference:
(a) Our Annual Report on Form 10-K for the fiscal year ended
December 31, 2000.
(b) Our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001.
(c) Our Quarterly Report on Form 10-Q for the quarter ended June
30, 2001.
(d) Our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2001
(e) Our amendment to our Form 10-Q for September 30, 2001 filed
on Form 10-Q/A
(f) Our Proxy Materials filed October 29, 2001.
(g) Our Form 8-Ks filed on the following dates:
a. Form 8-K filed November 20, 2001 for the event dated
November 11, 2001
b. Form 8-K filed November 30, 2001 for the event dated
November 30, 2001
c. Form 8-K filed December 10, 2001 for the event dated
December 6, 2001
As long as this prospectus remains effective, all of our
subsequent filings with the SEC will also be incorporated by
reference.
We will send you a copy of these documents if you ask for
them. If you want to receive copies, please contact our
Shareholder Relations department at: Shareholder Relations
Department, BICO, Inc., 2275 Swallow Hill Road, Building 2500,
2nd Floor, Pittsburgh, PA 15220, by telephone at 412-429-0673 or
by fax at 412-279-1367.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED IN THIS
SECTION BEFORE MAKING THE DECISION TO INVEST IN OUR STOCK. YOU
SHOULD ALSO REFER TO THE OTHER INFORMATION IN THIS PROSPECTUS
INCLUDING OUR FINANCIAL STATEMENTS AND THE RELATED NOTES. THE
RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE THOSE THAT WE
CURRENTLY BELIEVE MAY MATERIALLY AFFECT OUR COMPANY. ADDITIONAL
RISKS AND UNCERTAINTIES THAT WE ARE UNAWARE OF OR THAT WE
CURRENTLY CONSIDER IMMATERIAL ALSO MAY BECOME IMPORTANT FACTORS
THAT AFFECT US. AN INVESTMENT IN OUR STOCK IS A HIGH RISK
INVESTMENT, AND YOU SHOULD BE PREPARED TO SUFFER A LOSS OF YOUR
ENTIRE INVESTMENT.
THIS PROSPECTUS ALSO CONTAINS FORWARD LOOKING STATEMENTS
THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THE RISKS
FACED BY US DESCRIBED BELOW AND ELSEWHERE IN THIS PROSPECTUS.
RISKS RELATED TO OUR BUSINESS
WE HAVE A HISTORY OF LOSSES, WE EXPECT THAT LOSSES WILL
CONTINUE TO INCREASE FOR THE FORSEEABLE FUTURE - AT LEAST
THE NEXT SEVERAL YEARS - AND OUR INDEPENDENT ACCOUNTANTS
HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO
CONTINUE AS A GOING CONCERN.
We have lost money in every period since we started our
current research and development projects - we had an accumulated
deficit of $249.3 million as of September 30, 2001 and $223.7
million as of December 31, 2000. We plan to invest heavily to
continue to develop our biomedical and environmental products and
to set up manufacturing and marketing of those products. We've
also made investments in other companies because we thought they
would help us generate revenue - so far none have produced
revenue except for INTCO. As a result, we expect to continue
to lose money for the foreseeable future - at least for the next
several years - and we expect that the losses will continue to
increase. We cannot assure you that we will ever achieve or
sustain profitability or that our operating losses will not
increase in the future. We have received a report from our
independent accountants containing an explanatory paragraph
stating that our historical losses and negative cash flows from
operations raise substantial doubt about our ability to continue
as a going concern.
WE HAVE A LIMITED OPERATING HISTORY, NO SIGNIFICANT REVENUES
AND LIMITED EXPERIENCE IN MARKETING THAT MAKES AN EVALUATION
OF OUR BUSINESS DIFFICULT.
Although we have been in business for years, we have not
generated any material revenue in our recent history. Our
revenues have increased during 2001, but not enough to make any
significant difference. The majority of our activities have
been related to the research and development of products. Our
current management team has limited experience in manufacturing
and marketing biomedical and environmental products. Therefore,
our historical financial information is of limited value in
evaluating our future operating results.
Our target markets - the health care and environmental
markets - change rapidly, and we may not have the experience
necessary to successfully market our products.
WE MAY NEED ADDITIONAL CAPITAL IN THE FUTURE TO SUPPORT OUR
OPERATIONS AND THAT ADDITIONAL FINANCING MAY NOT BE
AVAILABLE TO US.
We won't receive any money if you buy the stock offered in
this prospectus - we are registering the stock to issue to people
who will become selling stockholders, and they will get the money
if you buy this stock. Because we don't generate enough money
from selling our products or manufacturing products for other
companies, we will need to sell more securities - either
convertible securities like the preferred stock we discuss in
this prospectus, or regular common stock - in order to continue
to our business. Even if we can sell stock, and we can't
assure you that we'll be successful, it may not be enough to fund
our operations until - and unless - we become profitable. We
cannot quantify the specific amounts we will need, since the
research and development process is subject to continuous change.
We will need to raise more capital to fund our operations and our
research and development projects, and we may not be able to find
financing when we need it. If that happens, we will not be able
to continue operations long enough to bring our products to
market, or to market them long enough to become profitable, and
we will have to close some, or all, of our projects. Every time
we raise money by selling our securities it causes our existing
investors to experience additional dilution.
WE CANNOT BE SURE HOW LONG IT WILL TAKE TO BRING OUR
PRODUCTS TO MARKET OR WHETHER THEY WILL EVER BECOME
PROFITABLE. WE HAVE ALREADY INVESTED OVER $45 MILLION ON
PROJECTS, OTHER THAN OUR NONINVASIVE GLUCOSE SENSOR, THAT
STILL HAVEN'T GENERATED ANY REVENUE.
Our biomedical products, specifically the noninvasive
glucose sensor and the hyperthermia treatment device, are new
products that are not established in any market. Although we
have started to market the sensor in Europe, our revenues to date
have been minimal - only about $35,000. We cannot market the
sensor in the U.S. until we receive FDA approval - and we don't
know how much longer that will take. Our hyperthermia treatment
device is being used in one hospital, but we won't be able to
sell the device until we begin manufacturing. Even when we are
able to manufacture and sell these devices, we don't know how
long it will be before they become profitable.
So far, we have already invested over $45 million in various
projects, other than our noninvasive glucose sensor, including
the ViaCirQ hyperthermia project, the Petrol Rem environmental
products, the American Inter-Metallics propellant enhancement
project, and a metal-coating project - and we still don't have
any material revenues from any of those projects. The only
material revenue we generated at all has been from the Petrol Rem
products, and although Petrol Rem had gross revenues of $2.4
million through the first three quarters of 2001. Those Petrol
Rem revenues were primarily from INTCO - a subsidiary we acquired
at the end of 2000 for a total investment of approximately $1.25
million.
WE FACE SERIOUS COMPETITION, AND WE MAY NOT BE ABLE TO
COMPETE EFFECTIVELY. IF SOMEONE ELSE DEVELOPS A BETTER
PRODUCT BEFORE WE DO, WE WON'T BE ABLE TO SELL OUR PRODUCTS
OR MAKE ANY MONEY.
The medical device industry and the environmental industry
are very competitive. Other companies are developing
technologies and devices that will compete with ours. These
other companies may be further along in their research and
development may be better capitalized, have more sophisticated
equipment and expertise and various other competitive advantages
compared to us. These other companies may be able to bring their
products to market before we are able to enter the market, which
would have a serious negative impact on our ability to succeed.
Many of the large biomedical companies are funding research
into noninvasive glucose measurement, and one of them might beat
us to the market. Our sensor will also compete against existing
finger-prick technology, which is already well established. If
we cannot convince diabetics that our device is superior, we will
not be able to sell our sensor. Our hyperthermia device is a new
technology, which will compete against other, well-established
forms of cancer treatment. If we cannot convince the medical
community that our product offers superior alternatives, we will
not succeed with that device.
OUR PRODUCTS ARE THE TYPE THAT CAN BECOME OBSOLETE, AND NO
LONGER COMPETITIVE. IF THEY BECOME OBSOLETE, WE CAN'T SELL
THEM.
Both the medical device and environmental industries are
subject to rapid technological innovation and change. Although
we are not currently aware of any new product or technology that
would make our products obsolete, it is always possible. Future
technological developments could make our products significantly
less competitive or even no longer marketable.
OUR PATENTS ARE IMPORTANT TO US - IF OUR PATENTS ARE
CHALLENGED OR INFRINGED UPON, WE MIGHT NOT BE ABLE TO AFFORD
TO FIGHT FOR THEM. IF WE CAN'T PROTECT OUR PATENTS, WE
WON'T BE ABLE TO SELL OUR PRODUCTS SUCCESSFULLY.
We hold patents on many of our products, as well as
trademarks on the names of our products and procedures. We try
to file patent applications when we believe they are necessary,
both in the U.S. and in foreign countries where we seek to do
business. However, we cannot assure you that future patents will
be granted, or that our existing patents will not be challenged
or circumvented by a competitor. If any of our critical patents
are challenged, or if someone accuses us of infringing upon their
patents, it would be expensive and time-consuming to defend those
charges, and our projects could be delayed. Similarly, if
someone else infringes upon one of our patents, it would be
expensive and distracting for us to challenge them.
If our patents are challenged or infringed upon, we might
not be able to enter the market without a long legal battle to
determine which patent has priority. This type of delay and
expense would hurt our ability to successfully market our
products.
WE ARE DEPENDENT UPON HEALTH INSURANCE REIMBURSEMENT FOR OUR
BIOMEDICAL DEVICES, AND WE MAY NOT BE ABLE TO OBTAIN THAT
REIMBURSEMENT.
Our biomedical products are subject to the reimbursement
policies of insurance companies and Medicare. The doctors and
patients who want to use our devices will not be able to pay for
them without reimbursement from their health insurance providers.
If we are not able to convince those insurance providers that our
devices are worth reimbursement, we will not succeed.
WE HAVE ACQUIRED COMPANIES THAT ARE NOT PROFITABLE OR WORTH
WHAT WE ORIGINALLY ESTIMATED.
Our officers and directors have discretion in how to spend
the money we raise. One of the ways they have used part of the
money is to acquire interests in other companies. So far, none
of our investments in other companies have helped generate
revenue, except for INTCO. We have also acquired companies that
do not generate revenue, even though we project that they will.
In the past, we have invested in companies that are not worth
what we paid for them, and we have lost our investment.
For example, we purchased a majority interest in a metal-
coating company in 1998 - because it did not perform the way we
expected, we had to write-off our entire investment, including a
$4.4 million write down in 1999. You should carefully review our
financial statements for more detailed information on the
investment and the write-downs. We cannot guarantee that we
will not make the same mistake in the future.
WE MAY BE DISTRACTED OR SUFFER LOSSES DUE TO LEGAL
PROCEEDINGS.
We are involved in several legal proceedings. Although we
cannot project how they will be resolved, you should know that we
might suffer losses depending upon the outcome. Both the
Pennsylvania Securities Commission and the U.S. Attorneys' office
are investigating us, and we have provided them with the
information they requested. We don't know how much longer these
investigations will last, and we don't know how they will be
resolved. If either one of these investigations results in
findings that we, or someone we're responsible for, violated the
law, we could suffer significant monetary damages, harm to our
reputation, or the loss of the services of key employees. We
don't know what those damages might be, but they could include
fines or restrictions on how we are allowed to do business in the
future.
These legal proceedings cost us money, mostly in legal fees,
that we could be using for our projects. Even if we don't have
to pay any money or suffer any other damages as a direct result
of these proceedings, you should be aware that we might be
distracted from our other responsibilities while we deal with
these legal matters, and that distraction could also hurt us.
We settled our class action lawsuit and have or will pay a total
of $3.675 million to settle that action.
WHEN WE SELL STOCK OR CONVERTIBLE SECURITES LIKE OUR
DEBENTURES OR PREFERRED STOCK, IT DILUTES OUR EXISTING
STOCKHOLDERS. WE HAVE ALREADY SUFFERED SIGNIFICANT DILUTION
AND WE KNOW THAT IT WILL CONTINUE.
Each time we sell and issue stock, it dilutes the holdings
of our existing stockholders. Since 1989, and through December
2001, we, along with Diasense, have raised over $190 million in
private and public offerings. We have already issued over 1.5
billion shares of stock and we plan to issue more, since that's
the only way we can survive until - and if - our product sales
can support our operations. Dilution occurs when more shares are
issued to own the same company - it means that when we issue more
stock, our previous stockholders own a smaller piece of our
company than they did before the new shares were issued. When we
sell stock, or we sell convertible securities like preferred
stock or debentures, we have to issue more shares of stock upon
the sale or the conversion. We plan to raise more money by
selling more stock. You should know that your ownership in our
company will continue to be diluted - significantly - each time
we sell and issue more stock.
For example, this chart shows the money we've raised by
selling stock and other securities, like debentures, during the
last three years, along with the total number of shares
outstanding at the end of each year:
YEAR FUNDS RAISED NUMBER OF SHARES
OUTSTANDING
AT YEAR END
1997 $22,300,000 138,583,978
1998 $10,720,000 420,773,568
1999 $30,730,000 956,100,496
2000 $29,900,000 1,383,714,167
You can see that, as we raise more money, the total number
of our shares outstanding increases dramatically. As long as we
continue to raise money by selling stock - and that is our
intention - this dilution will continue.
BECAUSE WE HAVE SOLD CONVERTIBLE DEBENTURES AND PREFERRED
STOCK, IT COULD HAVE A NEGATIVE IMPACT ON OUR STOCK PRICE.
We sell convertible securities like convertible debentures
and convertible preferred stock to raise money. In addition to
the dilution that occurs when we sell convertible securities and
they're converted, those conversions can have other negative
effects on our stock. If all of the debentures and preferred
stock were converted at the same time, the supply of stock for
sale would increase dramatically. Without a corresponding
increase in the demand for our stock, our stock price would fall.
As the table in the previous risk factor also illustrates, the
lower the price, the more shares we have to issue upon
conversions. There is no limit on the number of shares to be
issued for conversions of either the debentures or the preferred
stock.
During 2001, we sold convertible debentures, and they've all
been converted. We have also sold convertible preferred stock,
but none of the preferred stock has been converted yet. To give
you an example of what happens when convertible securities are
converted, the following table shows the market price on the date
we sold our debentures, as well as the conversion price. The
conversion price is determined based on a five-day average price
at the time of conversion, with a 20% discount. We paid the
interest on those conversions in cash - if we had paid the
interest in shares of our common stock, more stock would have
been issued.
Amount of Stock Debenture Number of
Debenture Price on Conversion Shares
Converted Debenture Price Issued
Sale Date Upon
Conversion
$99,712 $.052 $.048 2,048,653
$200,000 $.092 $.045 4,465,881
$223,760 $.052 $.042 5,498,609
$2,195,874 $.110 $.041 53,850,304
$970,000 $.080 $.041 23,694,784
$119,816 $.052 $.037 3,199,356
$770,000 $.080 $.038 20,306,941
$204,807 $.110 $.036 5,604,395
$298,740 $.052 $.035 8,496,461
$682,610 $.110 $.035 19,274,402
$2,645,000 $.077 $.035 74,263,775
$334,154 $.052 $.032 10,291,490
$179,273 $.095 $.032 5,574,424
$332,510 $.052 $.035 9,377,072
$285,363 $.080 $.032 8,865,718
$280,242 $.052 $.031 8,939,104
$420,136 $.052 $.030 10,914,628
$231,728 $.052 $.020 10,514,311
$59,202 $.052 $.011 5,522,621
Several factors - the timing of conversions; the downward
pressure on our stock price; and the additional number of shares
needed for conversions with no limit, could separately or in
combination cause our stock price to fall significantly - and we
don't have any control over them. If we have funds available,
our only option might be to redeem some of the debentures or the
preferred stock, but we may not be able to do so, or we might not
be able to redeem enough in time to make a difference.
OUR COMPANY AND ITS AFFILIATES ARE SUBJECT TO CONFLICTS OF
INTEREST
Fred E. Cooper, Anthony J. Feola, Glenn Keeling and Michael
P. Thompson are employed by BICO, and are also officers and/or
directors of our affiliates and subsidiaries, Diasense, Inc.,
Petrol Rem, Inc., ViaCirQ, Inc., and Rapid HIV Detection Corp.
These people are subject to competing demands and may face
conflicts of interest. The good faith and integrity of these
members of management is of utmost importance to our business and
operations.
BICO owns 52% of Diasense; 75% of Petrol Rem, 99% of
ViaCirQ; and 75% of Rapid HIV Detection Corp. All of these
officers own stock or warrants Diasense, Petrol Rem, ViaCirQ, or
Rapid HIV:
Diasense - Mr. Cooper owns 22,000 shares of stock and
warrants to purchase 1,680,045 shares at $.50 to $1 per share;
Mr. Feola owns 20,000 shares of stock and warrants to purchase 1
million shares at $.50 per share; Mr. Keeling owns 100,000 shares
of stock and warrants to purchase 300,000 shares at $.50 per
share; and Mr. Thompson owns warrants to purchase 200,000 shares
at $.50 per share.
Petrol Rem - Mssrs. Cooper and Feola own warrants to
purchase 1 million shares of stock at $.10 per share; Mr. Keeling
owns warrants to purchase 500,000 shares of stock at $.10 per
share; and Mr. Thompson owns warrants to purchase 200,000 shares
at $.10 per share.
ViaCirQ - Mr. Cooper owns warrants to purchase 1.25 million
shares of stock at $.10 per share; Mr. Feola owns warrants to
purchase 750,000 shares of stock at $.10 per share; Mr. Keeling
owns warrants to purchase 1.25 million shares of stock at $.10
per share; and Mr. Thompson owns warrants to purchase 100,000
shares of stock at $.10 per share.
Conflicts of interest could arise if one or more of our
officers act in a way that benefits them and hurts BICO or
another one of our subsidiaries. To protect ourselves, we
require that any action that benefits any individual executive
officer or director of any of our companies has to be approved by
a majority of the disinterested directors. We also make sure
that each of our boards of directors includes outside directors -
people who are not employees - and those outside directors must
approve any action that might present a conflict. For example,
if BICO issues warrants or loans money to Mssrs. Cooper, Feola or
Keeling, who are BICO directors, BICO's other disinterested
directors, including the outside directors, must approve the
warrants or loans first. The same policy applies to Diasense,
Petrol Rem and ViaCirQ. We believe this policy helps avoid
conflicts that could hurt us.
WE DEPEND ON OUR KEY OFFICERS, AND WE WOULD SUFFER IF THEY
LEFT.
We are dependent upon our key officers: Fred E. Cooper, our
CEO; Anthony J. Feola, our COO, Michael P. Thompson, our CFO, and
Glenn Keeling, the CEO of ViaCirq. We do not have any key-man
life insurance on these men, and our business would suffer if
they left for any reason.
WE ARE DEPENDENT UPON EMPLOYEES AND INDEPENDENT CONTRACTORS
WHO ARE DIFFICULT TO REPLACE.
Because we are developing new technologies, devices and
engineering methods, we depend on certain employees and
independent contractors who may not devote their full-time
efforts to our operations. We depend on some of our employees
who have a specific expertise that is not common. We also need
independent contractors to assist us in areas where our employees
do not have the necessary expertise. If we lose the services of
any of these employees or independent contractors and are unable
to replace them, our business could suffer.
WE SOMETIMES NEED SUPPLIERS AND PARTS THAT ARE DIFFICULT TO
FIND.
Our products involve designs that are new, and we often need
to have component parts fabricated especially for our
experimentation, testing and development. Suppliers for these
parts are not always readily available, or available at all, so
we have to create the parts in-house. This can result in delays
in our development - so far, these delays have not been material
- but we cannot assure you that they won't be material in the
future. If we are unable to obtain a supplier or create the
necessary parts ourselves, we have to redesign the product, which
also results in significant delays. Although we try to minimize
our dependence on custom parts when we design products,
unforeseeable problems can arise which negatively affect our
operations.
WE HAVE LIMITED COMMERCIAL MANUFACTURING EXPERIENCE, WHICH
MAKES IT HARDER FOR US TO COMPETE WITH MORE EXPERIENCED
MANUFACTURERS.
We have a contractual duty to manufacture our medical
devices. We have leased space, which has been modified, for our
manufacturing needs, but our current management team has limited
experience with large-scale commercial manufacturing. If we are
not able to hire the right people, or to provide manufacturing
expertise ourselves, we will not be able to successfully
manufacture our biomedical devices, even if they are approved for
sale in the U.S., or even if we are able to make sales.
WE CANNOT SELL PRODUCTS WITHOUT GOVERNMENT APPROVAL. WE
HAVE BEEN, AND CONTINUE TO BE, INVOLVED IN A LONG, EXPENSIVE
GOVERNMENTAL APPROVAL PROCESS THAT WE MUST COMPLETE BEFORE
WE CAN SELL OUR PRODUCTS.
The Food and Drug Administration and other federal and state
agencies control many of our products. FDA approval is necessary
to market our biomedical products in the U.S. If we do not get
approval, we cannot sell our products in the U.S.
We are currently conducting clinical trials for our
noninvasive glucose sensor - these trials will continue through
2002, and we hope to have FDA approval once the trials are
completed and the results are submitted. We have suffered
significant delays in the FDA approval in the past - those delays
occurred for several reasons, including the following. The FDA
did not give us a decision on the 510(k) Notification we
submitted in 1994 until 1996. In 1996, after the FDA's panel
refused to approve our submission, the FDA told us to make a
different filing, on a PreMarket Approval Application - known as
a PMA. Rather than immediately pursue the PMA, we decided to
focus on getting certification to sell our sensor in Europe,
which we completed in June 1998. We had serious cash flow
problems in 1998, and it delayed all of our projects further.
Late in 1998 and early 1999, we started the PMA process. We
filed the first module of our PMA in May 1999 and the second
module in May 2000. The FDA asked for more information in
September 1999, and we responded. Then, in November 1999, the
FDA asked for additional information. We finished compiling all
that additional information, and in July 2000 we submitted an
Investigational Device Exemption to the FDA that included the
protocol for our clinical trials. An Investigational Device
Exemption is a request to the FDA for approval to conduct
clinical trials on a device that is not FDA-approved. Once the
FDA approved the protocol for our clinical trials, those trials
began in 2000.
Once we complete our clinical trials, we will submit the
data to the FDA. We are working with outside biomedical
consultants to help us obtain FDA approval following these
clinical trials; however, we cannot assure you when or if that
will happen.
IF WE ARE HIT WITH PRODUCT LIABILITY CLAIMS THAT EXCEED OUR
INSURANCE, WE WILL HAVE TO PAY THE EXCESS.
We don't have any current product liability claims against
us, but we are engaged in activities that involve testing and
selling biomedical devices. These kinds of activities expose us
to product liability claims. We currently have $10,000,000 in
product liability insurance. If a claim against us is successful
and exceeds that amount, we could be liable for the balance.
RISKS RELATED TO THIS OFFERING
OUR COMMON STOCK MAY BE VOLITILE, WE DO NOT TRADE ON AN
ESTABLISHED STOCK EXCHANGE, AND YOU MAY NOT BE ABLE TO SELL
YOUR STOCK AT OR ABOVE YOUR PURCHASE PRICE.
Our stock currently trades on the electronic bulletin board,
which is not a formal stock exchange. As a result, it may be
more difficult to obtain trading information than if our stock
still traded on the Nasdaq. Because our stock price did not meet
the Nasdaq Small-Cap market requirements implemented in 1998, we
were delisted and we're no longer able to trade there. Although
we have maintained acceptable trading volume since we left
Nasdaq, we cannot assure you that our trading volume will
continue. As a result, you may be unable to sell your stock when
you want to sell it. In addition, our stock price has fluctuated
significantly, and you may not be able to sell your stock at or
above your purchase price when you are ready to sell
OUR STOCK IS CONSIDERED PENNY STOCK, SO IT'S SUBJECT TO
REGULATIONS THAT COULD MAKE IT MORE DIFFICULT FOR YOU TO
SELL YOUR STOCK.
Our stock is considered penny stock because of its low price.
The penny stock low-priced securities regulations could affect
the way you sell your stock, and the way our stock is sold. These
regulations require broker-dealers to disclose the risk
associated with buying penny stocks and to disclose their
compensation for selling the stock.
The regulations may have the effect of discouraging brokers
from trading our stock. For example, brokers selling our
stock have to obtain a written agreement from the purchaser and
determine that our stock is a suitable investment for that
purchaser. Many brokers will not want to bother with those
requirements, so they won't sell our stock, and that could reduce
the level of trading activity, making it more difficult for you
to sell your stock.
THE VOLATILITY OF OUR COMMON STOCK COULD EXPOSE US TO
SECURITIES LITIGATION.
In the past, following periods of volatility in the market
price of a company's securities, securities class action suits
have been filed. Due to the historic volatility of our common
stock, we may be particularly susceptible to this kind of
litigation. If it were to happen to us, the litigation would be
expensive and would divert our management's attention from
business operations. Any litigation that resulted in a finding
of liability against us would adversely affect our business,
prospects and financial condition, along with the price of our
stock. We have already been the subject of one class action
lawsuit, which was filed in 1996. We settled that lawsuit in
2000 for a total of $3,675,000.
THE WAY WE SELL AND ISSUE STOCK COULD HAVE AN ANTI-TAKEOVER
EFFECT.
We've sold stock and we intend to continue to sell stock to
raise money to fund our operations. When we issue those
additional shares of common stock, either from conversions of
preferred stock, or from sales of stock, the stock could be used
to oppose or delay a hostile takeover attempt or delay or prevent
changes in control or in our management. For example, without
further stockholder approval, our board of directors could
strategically sell stock to purchasers who would oppose a
takeover or a change in our management. Although our sales of
stock are based on our business and financial needs, and not on
the threat of a takeover, you should be aware that it could have
an anti-takeover effect. We are not aware of any takeover
attempts, but if a takeover was proposed, it could mean you might
be offered a premium for your stock over the market price - but
the way we issue and sell our stock could discourage a takeover
attempt.
STOCK COVERED BY THIS PROSPECTUS
2001 Equity Compensation Plan
We created this plan to issue our stock to our non-executive
employees and consultants. We do not plan to issue any of the
stock from this plan to our officers, directors, 10%
stockholders, or anyone else who would be considered an affiliate
under the securities laws. If we decide we want to issue stock
from the plan to those people, we'll have to amend this
prospectus and make other changes to do so.
We plan to issue stock to our non-executive employees. We
may issue more stock from this plan to non-executive employees or
consultants in the future, and we won't need shareholder approval
to do that. The plan is set up so that a committee made up of
our CEO, CFO and one director (other than our CEO) are needed to
make decisions on who receives stock, and how many shares they'll
receive. A copy of the plan is attached as an exhibit.
Consulting Service Agreement with Rick Swafford
On December 17, we entered into a consulting services
agreement with Rick Swafford. Mr. Swafford's primary function
will be to provide consulting services to us regarding an
initial, phase one evaluation of our overall business and
corporate structure and operations. The scope of his evaluation
shall include a comprehensive review of our organizational
structure, a review and evaluation of our subsidiary operations,
and an evaluation of additional issues affecting us, as Mr.
Swafford deems relevant. We have agreed to issue to Mr. Swafford
12 million shares of our common stock in consideration for
providing these services, and we've also agreed to register that
common stock on his behalf. A copy of the agreement is attached
as an exhibit.
Federal Income Tax Effects
The following discussion applies to the issuance of the
stock and is based on federal income tax laws and regulations in
effect on December 31, 2000. It does not purport to be a
complete description of the federal income tax consequences of
the issuance, nor does it describe the consequences of state,
local or foreign tax laws that may be applicable. You must
consult with your own tax advisor before making any decision
regarding our stock.
If you receive stock as compensation, you must include in
your gross income the excess of the fair market value of the
property received over the amount, if any, paid for the property
in the first taxable year in which beneficial interest in the
property either is "transferable" or is not subject to a
"substantial risk of forfeiture." A substantial risk of
forfeiture exists where rights and property that have been
transferred are conditioned, directly or indirectly, upon the
future performance (or refraining from performance) of
substantial services by any person, or the occurrence of a
condition related to the purpose of the transfer, and the
possibility of forfeiture is substantial if such condition is not
satisfied. If you are a person who is subject to the short swing
profit recovery rule of Section 16(b) of the Securities Exchange
Act of 1934, your stock is considered subject to a substantial
risk of forfeiture so long as the sale of such property at a
profit could subject the stockholder to suit under that section.
Your rights are treated as transferable if and when you can sell,
assign, pledge or otherwise transfer any interest in the stock to
any person. If you would not be subject to the short swing
profit recovery rule of Section 16(b) of the Securities Exchange
Act of 1934 and the stock will be currently transferable and not
subject to a substantial risk of forfeiture, you would be
obligated to include in gross income the fair market value of the
stock.
Restrictions Under Securities Laws
The sale of the stock must be made in compliance with
federal and state securities laws. Although we don't plan to
issue stock from the plan to our officers, directors and 10% or
greater shareholders, as well as certain other persons or parties
who may be deemed to be "affiliates" of ours under federal
securities laws, you should be aware that resales by affiliates
can only be made pursuant to an effective registration statement,
Rule 144 or other applicable exemption. Our officers, directors
and 10% and greater stockholders may also be subject to the
"short swing" profit rule of Section 16(b) of the Securities
Exchange Act of 1934.
PLAN OF DISTRIBUTION
The stock covered by this prospectus may be distributed from
time to time by the selling stockholders in one or more
transactions that may take place on the over-the-counter market.
These include ordinary broker's transactions, privately-
negotiated transactions or through sales to one or more broker-
dealers for resale of these shares as principals, at market
prices existing at the time of sale, at prices related to
existing market prices, through Rule 144 transactions or at
negotiated prices. Usual and customary or specifically
negotiated brokerage fees or commissions may be paid by the
selling stockholder in connection with sales of securities.
The selling stockholders may sell the stock in one or more
of the following methods, which may include crosses or block
transactions:
through the "pink sheets", on the over-the-counter
Bulletin Board, or on such exchanges or over-the-
counter markets on which our stock may be listed from
time-to-time, in transactions which may include special
offerings, exchange distributions and/or secondary
distributions, pursuant to and in accordance with the
rules of such exchanges, including sales to
underwriters who acquire the shares for their own
account and resell them in one or more transactions or
through brokers, acting as principal or agent;
in transactions other than on such exchanges or in
the over-the-counter market, or a combination of such
transactions, including sales through brokers, acting
as principal or agent, sales in privately negotiated
transactions, or dispositions for value by any selling
stockholder to its partners or members, subject to
rules relating to sales by affiliates;
through the issuance of securities by issuers
other than us, convertible into, exchangeable for, or
payable in our shares; or
through the writing of options on our shares,
whether or not such options are listed on an exchange,
or other transactions requiring delivery of our shares,
or the delivery of our shares to close out a short
position.
Any such transactions may be effected at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed
prices.
In making sales, brokers or dealers used by the selling
stockholders may arrange for other brokers or dealers to
participate. The selling stockholders and others through whom
such securities are sold may be "underwriters" within the meaning
of the Securities Act for the securities offered, and any profits
realized or commission received may be considered underwriting
compensation.
At the time a particular offer of the securities is made by
or on behalf of the selling stockholders, to the extent required,
a prospectus is to be delivered. The prospectus will include the
number of shares of common stock being offered and the terms of
the offering, including the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriter for
the shares of common stock purchased from the selling
stockholders, and any discounts, commissions or concessions
allowed or reallowed or paid to dealers, and the proposed selling
price to the public.
Sales of securities by the selling stockholders and us or
even the potential of these sales may have a negative effect on
the market price for shares of our common stock. You should
carefully review the Risk Factors section that begins on the 2nd
page of this prospectus.
DESCRIPTION OF SECURITIES
Our authorized capital currently consists of 4 billion shares of
common stock, par value $.10 per share and 500,000 shares of
cumulative preferred stock, par value $10.00 per share.
Preferred Stock
Our Articles of Incorporation authorize the issuance of a
maximum of 500,000 shares of cumulative convertible preferred
stock, and authorize our board of directors to define the terms
of each series of preferred stock. In 2001, our board of
directors authorized the creation of four new series of
convertible preferred stock - series G, H, I and J. As of
December 19, 2001 we had a total of 16,930 shares of our
preferred stock outstanding, as follows:
10,530 shares of Series G
2,000 shares of Series H
4,000 shares of Series I
400 shares of Series J
None of our convertible preferred stock is secured by any of
our assets. Each share of our preferred stock has a value of
$500 per share. There is no minimum conversion price, so the
lower the bid price of our stock, the more shares we will need to
issue when our preferred stock is converted - there is no limit
on the number of shares of our common stock that our preferred
stock can be converted into. This means that, if our stock price
is low, the preferred stockholders could own a large percentage
of our outstanding common stock - except that they have each
agreed not to own more than 5% of our common stock at any one
time. We only sold our preferred stock to accredited investors.
We can redeem our preferred stock.
Each series of preferred stock has its own minimum holding
period and each series defines its conversion price.
Our series G preferred stock has a minimum holding period of
the earlier of: 60 days from issuance or the date a registration
statement covering the common stock is declared effective by the
SEC. The series G preferred is convertible into our common stock
at a 24% discount to the 5-day average of our closing bid price
immediately prior to conversion.
Our series H preferred stock has a minimum holding period of
the earlier of: 75 days from issuance or 35 days after the date
a registration statement covering the common stock is declared
effective by the SEC. The series H is convertible into our
common stock at a 20% discount to the 5-day average of our
closing bid price immediately prior to conversion.
Our Series J preferred stock has a minimum holding period of
30 days from issuance and is convertible into our common stock at
a 20% discount to the 5-day average of our closing bid price
immediately prior to conversion.
As of December 19, 2001 we raised a total of $6,465,000 from
selling our series G, H and J preferred stock.
We issued 4,000 shares of our series I preferred stock to Mr.
and Mrs. Farrell Jones as part of a renegotiation and settlement
of amounts due in connection with our purchase of ICTI back in
1998. Even though we wrote off that entire investment, we still
owed the Joneses a total of approximately $4,650,000. In
December 2001, we finalized an agreement with the Joneses to
decrease the amount owed to a total of $2,550,000. Of that
total, $2 million was applied when we issued them the 4,000
shares of series I preferred stock. The series I preferred is
convertible at any time into our common stock based on the 5-day
average of our closing bid price immediately prior to conversion.
None of the series I has been converted to date. We don't have
any other relationship with the Joneses other than these
remaining issues from the ICTI transaction.
Common Stock
Holders of our common stock are entitled to one vote per
share for each share held of record on all matters submitted to a
vote of stockholders. Holders of our common stock do not have
cumulative voting rights, and therefore the holders of a majority
of the shares of common stock voting for the election of
directors may elect all of the directors, and the holders of the
remaining common stock would not be able to elect any of the
directors. Subject to preferences that may be applicable to the
holders of our preferred stock, if any, the holders of our common
stock are entitled to receive dividends that may be declared by
our board of directors.
In the event of a liquidation, dissolution or winding up of
our operations, whether voluntary or involuntary, and subject to
the rights of any preferred stockholders, the holders of our
common stock would be entitled to receive, on a pro rata basis,
all of our remaining assets available for distribution to our
stockholders. The holders of our common stock have no
preemptive, redemption, conversion or subscription rights. As of
September 30, 2001, we had 2,450,631,119 shares of our common
stock outstanding.
Dividends
We have not paid cash dividends on our common stock, with the
exception of 1983, since our inception. We do not anticipate
paying any dividends at any time in the foreseeable future. We
expect to use any excess funds generated from our operations for
working capital and to continue to fund our various projects.
Our Articles of Incorporation restrict our ability to pay cash
dividends under certain circumstances. For example, our board
can only declare dividends subject to any prior right of our
preferred stockholders to receive any accrued but unpaid
dividends. In addition, our board can only declare a dividend to
our common stockholders from net assets that exceed any
liquidation preference on any outstanding preferred stock.
Employment Agreement Provisions Related to Changes in Control
We have employment agreements with change in control
provisions with the following officers: Fred E. Cooper, Anthony
J. Feola, Glenn Keeling, Michael P. Thompson, and one non-
executive officer. The agreements provide that in the event of a
"change of control," we must: issue to Mr. Cooper shares of
common stock equal to 5%; issue to Mr. Feola 4%; issue to Mr.
Keeling 3%; and issue to Mr. Thompson and the one non-executive
officer employee 2% each of our outstanding shares of common
stock. For purposes of these agreements, a change of control is
deemed to occur: when 20% or more of our outstanding voting stock
is acquired by any person; or when 1/3 or more of our directors
are not continuing directors, as defined in the agreements; or
when a controlling influence over our management or policies is
exercised by any person or by persons acting as a group within
the meaning of the federal securities laws.
Warrants
As of November 30, 2001, we had outstanding warrants - most
of which are not currently exercisable - to purchase 95,086,560
shares of our common stock. These warrants have exercise prices
ranging from $.015 to $3.20 per share and expiration dates
through August 10, 2006, and are held by members of our
scientific advisory board, certain employees, officers,
directors, loan guarantors, and consultants. As of November 30,
2001, many of our outstanding warrants were not currently
exercisable - 85,996,898 warrants were subject to a lock-up
arrangement where the warrant holders agreed not to exercise them
until January 2002.
Holders of warrants are not entitled to vote, to receive
dividends or to exercise any of the rights of the holders of
shares of our common stock for any purpose until the warrant
holder properly exercises the warrant and pays the exercise
price.
Transfer Agent
Mellon Investor Services in New York, New York acts as our
Registrar and Transfer Agent for our common stock. We act as our
own registrar and transfer agent for our preferred stock and
warrants.
EXPERTS
Our consolidated financial statements as of December 31, 2000,
1999 and 1998, all of which included an explanatory paragraph
referring to an uncertainty regarding our ability to continue as
a going concern, incorporated by reference in this prospectus,
have been audited by Goff Backa Alfera & Company, LLC,
independent certified public accountants, as stated in their
report for the year ended December 31, 2000.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We may agree to the terms and conditions upon which any
director, officer, employee or agent accepts an office or
position with us and in our By-laws, by contract or in any other
manner we may agree to indemnify and protect our directors,
officers, employees or agents, or any person who serves at our
request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, to the fullest extent permitted by the
corporate laws of the Commonwealth of Pennsylvania (including,
without limitation, the statutes, case law and principles of
equity). If the laws (including without limitation, the statutes,
case law or principles of equity, as the case may be) of the
Commonwealth of Pennsylvania are amended or changed to permit or
authorize broader rights of indemnification to any of the persons
referred to in the immediately preceding sentence, then we shall
be automatically authorized to agree to indemnify such respective
persons to the fullest extent permitted or authorized by such
law, as so amended or changed, without the need for amendment or
modification of our articles of incorporation and without further
action by our directors or stockholders.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to our
directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission, this
indemnification is against public policy as expressed in the
securities laws, and is, therefore unenforceable.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference
The documents listed below are incorporated by reference in
the Registration Statement. All documents subsequently filed by
the Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and
to be part thereof from the date of filing of such documents.
The following documents filed by us with the Commission are
incorporated herein by reference and made a part hereof:
Our Annual Report on Form 10-K for the fiscal year ended
December 31, 2000.
Our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001.
Our Quarterly Report on Form 10-Q for the quarter ended June
30, 2001.
Our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2001
Our amendment to our Form 10-Q for September 30, 2001 filed
on Form 10-Q/A
Our Proxy Materials filed October 29, 2001.
Our Form 8-Ks filed on the following dates:
Form 8-K filed November 20, 2001 for the event
dated November 11, 2001
Form 8-K filed November 30, 2001 for the event
dated November 30, 2001
Form 8-K filed December 10, 2001 for the event
dated December 6, 2001
All reports and documents filed by us pursuant to Section
13, 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the respective date
of filing of such documents. Any statement incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of this prospectus to the extent that a statement
contained herein or in any other subsequently filed document,
which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any statement
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute part of this prospectus.
We hereby undertake to provide without charge to each
person, including any beneficial owner, to whom a copy of the
prospectus has been delivered, on the written request of any such
person, a copy of any or all of the documents referred to above
which have been or may be incorporated by reference in this
prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to: Shareholder
Relations Department, BICO, Inc., 2275 Swallow Hill Road,
Building 2500, 2nd Floor, Pittsburgh, PA 15220, by telephone at
412-429-0673 or by fax at 412-279-1367.
ITEM 4. Description of Securities
A description of BICO's securities is set forth in the
Prospectus incorporated as a part of this Registration Statement.
ITEM 5. Interests of Named Experts and Counsel
Sweeney & Associates, P.C. of Pittsburgh, PA, our securities
counsel, will pass on the validity of the shares in this
offering. M. Kathryn Sweeney owns warrants to purchase 3 million
shares of our common stock at $.05 per share until May 26, 2006;
and warrants to purchase 200,000 shares of Diasense, Inc., one of
our affiliates, at $.50 per share until April 23, 2006. Thomas
E. Sweeney, Jr., Esq., a former partner, currently holds
approximately 5,000 shares of our common stock and warrants to
purchase the following shares of Diasense, Inc., one of our
affiliates: 40,000 shares at $.50 per share until October 23,
2003 and 60,000 shares at $1.00 per share until January 6, 2003.
ITEM 6. Indemnification of Directors and Officers
We may agree to the terms and conditions upon which any
director, officer, employee or agent accepts an office or
position with the Company and in our By-laws, by contract or in
any other manner we may agree to indemnify and protect our
directors, officers, employees or agents, or any person who
serves at our request as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, to the fullest extent
permitted by the corporate laws of the Commonwealth of
Pennsylvania (including, without limitation, the statutes, case
law and principles of equity). If the laws (including without
limitation, the statutes, case law or principles of equity, as
the case may be) of the Commonwealth of Pennsylvania are amended
or changed to permit or authorize broader rights of
indemnification to any of the persons referred to in the
immediately preceding sentence, then we shall be automatically
authorized to agree to indemnify such respective persons to the
fullest extent permitted or authorized by such law, as so amended
or changed, without the need for amendment or modification of our
Articles of Incorporation and without further action by our
Directors or stockholders.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to our
directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission, this
indemnification is against public policy as expressed in the
securities laws, and is, therefore unenforceable.
ITEM 7. Exemption From Registration Claimed
Inasmuch as the recipients of the stock are knowledgeable
and sophisticated, and had access to relevant information
pertaining to the Company and had the ability to fend for
themselves, the issuance was exempt from registration under the
Securities Act of 1933 by reason of Section 4(2) of that act.
ITEM 8. Exhibits
5.1 Opinion of Counsel*
10.1 2001 Equity Compensation Plan*
10.2 Consulting Agreement with Rick Swafford*
23.1 Consent of Independent Certified Public Accountant*
*Filed herewith
ITEM 9. Undertakings
1. To file, during any period in which offers or sales are
being made, a post effective amendment to this registration
statement:
(a) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range (if any) may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(c) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers,
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act against such liabilities (other than the
payment by the registrant in the successful defense of an action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel, the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused this registration Statement to be
signed on its behalf by the undersigned on December 20, 2001.0
BICO, INC.
By: /s/ Fred E. Cooper
Fred. E. Cooper, director, CEO,
(principal executive officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose
signature appears below constitutes and appoints Fred E. Cooper
his true and lawful attorney-in-fact and agent with full power of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration Statement, and to
file the same with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this registration Statement has been signed by the
following persons in the capacities indicated on the dates
indicated.
Signature Title Date
/s/ Anthony J. Feola senior vice president, December 20, 2001
Anthony J. Feola director
/s/ Michael P. Thompson principal accounting officer, December 20, 2001
Michael P. Thompson principal financial officer
/s/ Glenn Keeling director December 20, 2001
Glenn Keeling
/s/ Stan Cottrell director December 20, 2001
Stan Cottrell
/s/ Paul W. Stagg director December 20, 2001
Paul W. Stagg
EXHIBIT 5.1
SWEENEY & ASSOCIATES, P.C.
7300 Penn Avenue
Pittsburgh, PA 15208
(412) 731-1000
Facsimile: (412) 731-9190
December 20, 2001
BICO, Inc.
2275 Swallow Hill Road
Building 2500
Pittsburgh, Pennsylvania 15220
Re: BICO (the "Company") Registration Statement on Form S-8
Gentlemen:
This opinion is submitted pursuant to the applicable rules
of the Securities and Exchange Commission with respect to the
registration for public sale of up to 125,000,000 shares of
common stock, $.10 par value ("Common Stock") to be issued by the
Company pursuant to the 2001 Equity Compensation Plan or pursuant
to the Consulting Services Agreement with Rick Swafford.
In connection therewith, we have examined and relied upon
original, certified, conformed, photostat or other copies of (a)
the Articles of Incorporation, as amended, and Bylaws of the
Company; (b) resolutions of the Board of Directors of the Company
authorizing the various issuances; (c) the Registration Statement
and the exhibits thereto; and (d) such other matters of law as we
have deemed necessary for the expression of the opinion herein
contained. In all such examinations, we have assumed the
genuineness of all signatures on original documents, and the
conformity to originals or certified documents of all copies
submitted to us as conformed, photostat or other copies. In
passing upon certain corporate records and documents of the
Company, we have necessarily assumed the correctness and
completeness of the statements made or included therein by the
Company, and we express no opinion thereon. As to the various
questions of fact material to this opinion, we have relied, to
the extent we deemed reasonably appropriate, upon representations
or certificates of officers or directors of the Company and upon
documents, records and instruments furnished to us by the
Company, without independently checking or verifying the accuracy
of such documents, records and instruments.
Based upon and in reliance of the foregoing, we are of the
opinion that the shares of Common Stock, when issued in
accordance with the terms of the Company's 2001 Equity
Compensation Plan and the Consulting Services Agreement with Mr.
Swafford, will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.
Sincerely,
/s/ Sweeney & Associates, P.C.
SWEENEY & ASSOCIATES P.C.
EXHIBIT 10.1
BICO, Inc.
2001 Equity Compensation Plan
Dated December 18, 2001
The purpose of this BICO, Inc. Equity Compensation Plan
(the "Plan") is to enable BICO, Inc. (the "Company") to offer
and issue to certain employees, former employees, advisors and
consultants of the Company and its affiliates common stock of the
Company in payment of amounts owed by the Company to such third
parties.
1. The aggregate number of shares of common stock that may be
issued pursuant to the Plan shall not exceed 125 million shares.
2. The Company may from time to time issue to employees, former
employees, advisors and consultants to the Company or its
affiliates shares of common stock
of the Company in payment or exchange for or in settlement or
compromise of
Amounts due by the Company to such persons for goods sold and
delivered or to be
delivered or services rendered or to be rendered.
3. Shares of common stock issued pursuant to the Plan shall be
issued at a price
Per share of not less than the fair market value per share on the
date of issuance, as measured by its closing bid price, and on
such other terms and conditions as
determined by the Company.
4. A committee comprised of the Chief Executive Officer and the
Chief Financial Officer of the Company, along with one of the
directors who is not the CEO shall be authorized to issue shares
pursuant to and in accordance with the terms of the Plan.
5. This Plan may be amended at any time by the Company.
EXHIBIT 10.2
CONSULTING SERVICES AGREEMENT
THIS CONSULTING SERVICES AGREEMENT (the "Agreement") is made
and entered into this 17th day of December, 2001, by and between
BICO, Inc., a Pennsylvania corporation (the "Company"), with its
principal place of business at 2275 Swallow Hill Road, Building
2500, Pittsburgh, PA 15220, and Rick Swafford (the "Consultant"),
an individual having his principal place of business at 1729
Midpark Road, Suite C-200, Knoxville, TN 37921.
R E C I T A L S:
WHEREAS, the Company desires to retain the Consultant to
provide certain consulting services as hereinafter specifically
set forth.
WHEREAS, the Consultant desires to provide certain
consulting services to the Company in accordance with the terms
and conditions contained hereinafter.
NOW, THEREFORE, in consideration of the mutual promises set
forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Consulting Services. During the term of this
Agreement, the Consultant is hereby retained by the Company to
provide consulting services to the Company regarding an initial,
phase one evaluation of the Company's overall business and
corporate structure and operations. The scope of this evaluation
shall include a comprehensive review of the Company's
organizational structure, a review and evaluation of the
Company's subsidiary operations, and an evaluation of additional
issues affecting the Company, as the Consultant may deem
relevant. The purpose of the evaluation is to gather data and
provide subsequent recommendations to the Company. Unless
otherwise agreed to by the Consultant, all services hereunder
shall be performed by the Consultant, in his sole discretion, at
his principal place of business or other offices.
Notwithstanding anything contained herein to the contrary, the
services to be performed by the Consultant hereunder may be
performed by any consultant to the Consultant, which is
reasonably qualified to perform such services.
2. Compensation. As full and complete consideration for
the performance of services hereunder, the Company shall issue
the Consultant 12,000,000 shares (the "Compensation Shares") of
the Company's common stock.
3. Registration of Compensation Shares. As a material
inducement to Consultant to accept the engagement hereunder, the
Company has agreed to register the Compensation Shares under the
Securities Act of 1933, as amended, so as to permit the public
resale thereof.
4. Representations and Warranties of the Company. The
Company represents and warrants hereunder that this Agreement and
the transactions contemplated hereunder have been duly and
validly authorized by all requisite corporate action; that the
Company has the full right, power and capacity to execute and
deliver this Agreement and perform its obligations hereunder;
that the execution and delivery of this Agreement and the
performance by the Company of its obligations pursuant to this
Agreement do not constitute a breach of or a default under any
agreement or instrument to which the Company is a party or by
which it or any of its assets are bound; and that this Agreement,
upon execution and delivery of the same by the Company, will
represent the valid and binding obligation of the Company
enforceable in accordance with its terms. The representations
and warranties set forth herein shall survive the termination of
this Agreement.
5. Representations and Warranties of the Consultant. The
Consultant represents and warrants hereunder that the Consultant
has the full right, power and capacity to execute and deliver
this Agreement and perform his obligations hereunder; that the
execution and delivery of this Agreement and the performance by
the Consultant of his obligations pursuant to this Agreement do
not constitute a breach of or a default under any agreement or
instrument to which the Consultant is a party; and that this
Agreement, upon execution and delivery of the same by the
Consultant, will represent the valid and binding obligation of
the Consultant enforceable in accordance with its terms. The
representations and warranties set forth herein shall survive the
termination of this Agreement.
6. Indemnification. The Company hereby agrees to
indemnify, defend and hold harmless the Consultant, his agents,
affiliates and consultants, and their successors and assigns from
and against any and all claims, damages, losses, liability,
deficiencies, actions, suits, proceedings, cost, or legal
expenses (collectively the "Losses") arising out of or resulting
from: (i) any breach of a representation, warranty or covenant by
the Company contained in this Agreement; or (ii) any activities
or services performed hereunder by the Consultant, unless such
Losses were the result of the intentional misconduct or gross
negligence of the Consultant; or (iii) any and all costs and
expenses (including reasonable attorneys' and paralegals' fees)
related to the foregoing.
7. Confidentiality. The Consultant agrees that all non-
public information pertaining to the prior, current or
contemplated business of the Company constitutes valuable and
confidential assets of the Company. Such information shall
include, without limitation, information relating to customer
lists, bidding procedures, intellectual property, patents,
trademarks, trade secrets, financing techniques and sources and
such financial statements of the Company as are not available to
the public. Consultant shall hold all such information in trust
and confidence for the Company and shall not use or disclose any
such information for other than the Company's business and shall
be liable for damages incurred by the Company as a result of the
use or disclosure of such information by Consultant, his agents
or affiliates, for any purpose other than the Company's business,
except (i) where such information is publicly available or later
becomes publicly available other than through a breach of this
Agreement, or (ii) where such information is subsequently
lawfully obtained by Consultant from a third party or parties, or
(iii) if such information is known to Consultant prior to the
execution of this Agreement, or (iv) as may be required by law.
The Consultant acknowledges and agrees that the Company's remedy
at law for a breach or threatened breach of any of the provisions
of this paragraph would be inadequate and the breach shall be per
se deemed as causing irreparable harm to the Company.
8. Amendment or Assignment. No modification, waiver,
amendment, discharge or change of this Agreement shall be valid
unless the same is evidenced by a written instrument, executed by
the party against which such modification, waiver, amendment,
discharge, or change is sought. This Agreement is not assignable
by the Consultant without the prior written consent of the
Company, which such consent may not be forthcoming.
9. Notices. All notices, demands or other communications
given hereunder shall be in writing and shall be deemed to have
been duly given on the day when delivered in person or
transmitted by confirmed facsimile transmission or on the third
calendar day after being mailed by United States registered or
certified mail, return receipt requested, postage prepaid, to the
addresses herein above first mentioned or to such other address
as any party hereto shall designate to the other for such purpose
in the manner herein set forth.
10. Entire Agreement. This Agreement contains all of the
understandings and agreements of the parties with respect to the
subject matter discussed herein. All prior agreements, whether
written or oral, are merged herein and shall be of no force or
effect.
11. Severability. The invalidity, illegality or
unenforceability of any provision or provisions of this Agreement
will not affect any other provision of this Agreement, which will
remain in full force and effect, nor will the invalidity,
illegality or unenforceability of a portion of any provision of
this Agreement affect the balance of such provision. In the
event that any one or more of the provisions contained in this
Agreement or any portion thereof shall for any reason be held to
be invalid, illegal or unenforceable in any respect, this
Agreement shall be reformed, construed and enforced as if such
invalid, illegal or unenforceable provision had never been
contained herein.
12. Construction and Enforcement. This Agreement shall be
construed in accordance with the laws of the State of
Pennsylvania, without and application of the principles of
conflicts of laws. If it becomes necessary for any party to
institute legal action to enforce the terms and conditions of
this Agreement, and such legal action results in a final judgment
in favor of such party ("Prevailing Party"), then the party or
parties against whom said final judgment is obtained shall
reimburse the Prevailing Party for all direct, indirect or
incidental expenses incurred, including, but not limited to, all
attorney's fees, court costs and other expenses incurred
throughout all negotiations, trials or appeals undertaken in
order to enforce the Prevailing Party's rights hereunder.
13. Binding Nature, No Third Party Beneficiary. The terms
and provisions of this Agreement shall be binding upon and inure
to the benefit of the parties, and their respective successors
and assigns, and is made solely and specifically for their
benefit. No other person shall have any rights, interest or
claims hereunder or be entitled to any benefits under or on
account of this Agreement as a third-party beneficiary or
otherwise.
14. Counterparts. This Agreement may be executed in any
number of counterparts, including facsimile signatures, which
shall be deemed as original signatures. All executed
counterparts shall constitute one Agreement, notwithstanding that
all signatories are not signatories to the original or the same
counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
BICO, INC.
By: /s/ Fred E. Cooper
Fred E. Cooper, President
/s/ Rick Swafford
Rick Swafford
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
We have issued our report dated February 27, 2001 accompanying the
consolidated financial statements of BICO, Inc., formerly
Biocontrol Technology, Inc. and subsidiaries appearing in the
2000 Annual Report on Form 10-K for the year ended December 31,
2000. We consent to the incorporation by reference in this Registration
Statement of the aforementioned report and to the use of our name, as it
appears under the caption "EXPERTS". Our report on the
consolidated financial statements referred to above includes an
explanatory paragraph, which discusses going concern
considerations as to BICO, Inc.
/s/ Goff Backa Alfera & Company, LLC
Pittsburgh, Pennsylvania
December 20, 2001