UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

For the fiscal year ended December 31, 2016

☐            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

For the transition period from _______ to ______

 

Commission file number: 001-33675

 

Securities registered under Section 12(g) of the Act:   None

Indicate by check mark if the registrant is a well-known, seasoned issuer, as defined in Rule 405 of the Securities Act:    

Yes ☐    No ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).        

Yes  ☒    No  ☐

 

 

Yes ☐    No ☒

 

The aggregate market value of Common Stock held by non-affiliates of the registrant as of June 30, 2016, computed by reference to the closing price on that date was $13,602,000. 

 

The number of shares outstanding of the registrant's common stock at April 20, 2017, was 4,903,971.

None

 

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 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain statements contained in this Form 10-K/A that are not historical facts constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created by that Act. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which may cause actual results, performance, or achievements to differ materially from those expressed or implied. Any forward-looking statement speaks only as of the date made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which they are made.

 

These forward-looking statements are not guarantees of the future as there are a number of meaningful factors that could cause Bioptix Inc.'s actual results to vary materially from those indicated by such forward-looking statements.  These statements are based on certain assumptions made based on experience, expected future developments and other factors Bioptix believes are appropriate in the circumstances. Factors which could cause actual results to differ from expectations, many of which are beyond the control of Bioptix, include, but are not limited to, our ability to: successfully identify a new strategic opportunity following the decision to exit the BiOptix Diagnostics, Inc., business, including negotiating a definitive agreement with such alternative target and, if applicable, obtain all necessary approvals, including shareholder approval, retain the necessary management team to advance the Company's strategic process, complete the orderly disposition of the BiOptix Diagnostics, Inc., assets and  business, including settling any disputes or liabilities as they may arise, overcome adverse changes in market conditions, maintain, obtain and enforce intellectual property rights, realize value of intangible assets  and deal with general business conditions; and other factors referenced under the heading "Risk Factors" in the Original Filing. 

 

 

PART III

 

ITEM 10.  DIRECTORS, NAMED EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

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Michael M. Beeghley was appointed to the Board of Directors in November 2016, elected Chairman of the Board of Directors in January 2017 and as Chief Executive Officer of the Company on April 6, 2017.  Mr. Beeghley is also the President of Applied Economics LLC, a national corporate finance and financial advisory services firm he founded in 1998.  As President of Applied Economics, Mr. Beeghley has initiated, managed and closed over $1 billion in corporate finance transactions and has managed and completed over 2,000 consulting engagements.  Mr. Beeghley has been a member of the Board of Directors of PolarityTE, a publicly-traded biotechnology company, (NASDAQ-COOL) since 2015 and is on the Audit, Compensation and Nominating and Governance committees.  Mr. Beeghley began his career working in the Corporate Finance Group of Ernst & Young and PWC.  He received his Master of Public Health from the University of North Carolina at Chapel Hill and his Master of Accountancy from the University of Georgia.  Mr. Beeghley is qualified to be a director of the Company based on his prior public company board experience and his 25 years working in healthcare, corporate finance and accounting.

John O'Rourke was appointed to the Board of Directors in January 2017. Mr. O’Rourke is an analyst and investor who currently serves as Managing Member of ATG Capital LLC, an investment fund focused on small and mid-cap growth companies possessing distinct competitive advantages and superior management teams.  Mr. O'Rourke currently serves on the Board of Directors of Customer Acquisition Network Inc., a leading global performance based marketing company that reaches more than two billion users per month.  Mr. O'Rourke formerly served on the Board of Directors of Rant, Inc., an innovator in U.S. digital media, prior to its sale to a Nasdaq listed company. He was formerly CFO of Fidelity Property Group, a real estate development company with a focus in California. He received his Bachelor of Science in Accounting with an Honors Citation from the University of Maryland, College Park. Mr. O’Rourke is qualified to be a director of the Company based on his experience with financial and accounting matters. 

Mike Dai was appointed to the Board of Directors in January 2017. Mr. Dai has been an associate with ALOE Finance Inc., a financial consulting and transaction advisory firm since 2012. Prior to his involvement with ALOE Finance, Mr. Dai held various roles at Grant Thornton LLP, an audit, tax and advisory firm between 2007 and 2012. Mr. Dai served as chief financial officer and director of Santa Maria Petroleum Inc. (TSXV:SMQ.H) from May 2014 to December 2016. He was also formerly chief financial officer and director of BFK Capital Corp. (TSXV:BFK.P) from October 2014 to March 2017. Mr. Dai is qualified to be a director of the Company based on his experience financial and accounting matters.

Jeffrey G. McGonegal became Chief Financial Officer of the Company in June 2003, was appointed Corporate Secretary in January 2010 and served as interim President in December 2004 and January 2005. Mr. McGonegal served from 2003 to January 1, 2011 as Chief Financial Officer of PepperBall Technologies, Inc. Until his resignation in September 2013, Mr. McGonegal served on a limited part-time basis as Senior Vice President — Finance of Cambridge Holdings, Ltd., a small publicly held company with limited business activities. Mr. McGonegal served as Chief Financial Officer of Bactolac Pharmaceutical, Inc. and had been associated with its predecessors through October 2006, a company (publicly held until September 2006) engaged in manufacturing and marketing of vitamins and nutritional supplements. From 1974 to 1997, Mr. McGonegal was an accountant with BDO Seidman LLP. While at BDO Seidman LLP, Mr. McGonegal served as Managing Partner of the Denver, Colorado office. Until his resignation in March 2012, Mr. McGonegal was elected in 2005 to serve on the board of Imagenetix, Inc., a publicly held company in the nutritional supplements industry. He received a B.A. degree in accounting from Florida State University.

Richard J. Whitcomb became Senior Vice President, Corporate Development of the Company in September 2016.  From April 2009 until its acquisition by the Company in September 2016, Mr. Whitcomb served as Chief Executive Officer, President and a director of BiOptix Diagnostics, Inc.  Prior thereto, from December 2004 until July 2008, Mr. Whitcomb served as the Senior Manager of the Global Solutions Business Unit of Agilent Technologies' Electronic Measurement Group.  From May 2002 until November 2004, he was the Operational CFO for a Communications Network Solutions Group business unit based in Germany, prior to which he was a Business Development Manager in Corporate Development in Palo Alto, California. From September 1989 until January 2000, Mr. Whitcomb held senior management positions with Hewlett-Packard Co. in northern Colorado, Palo Alto, California and Boblingen, Germany. Mr. Whitcomb holds a BSc. Degree in economics from the University of Minnesota, Minneapolis, and an MSc. in finance and econometrics from the Leeds School of Business in Boulder, Colorado.

Qualifications, Attributes and Skills of our Board of Directors

The Nominating and Corporate Governance Committee (the "Nominating Committee") screens director candidates and evaluates the qualification and skills applicable to the Company of the existing members of the Board.  In overseeing the nomination of candidates for election, and the qualifications and skills of incumbent directors, the Nominating Committee, and subsequently the Board, seeks qualified individuals with outstanding records of success in their chosen careers, the skills to perform the role of director, and the time and motivation to perform as a director.  Directors are expected to bring specialized talents to the Board that add value to the Board's deliberative process and advance the business goals of the Company.  The Board has determined that experience in the life sciences industries, financial and investment experience, publicly held company experience and governmental experience are generally useful qualifications for directors, and the composition of the Board reflects such assessment.  In 2012, in connection with a re-branding of the Company, the Nominating Committee and the Board assessed the skills and qualifications of the members of the Board and determined it would be helpful to recruit additional Board members with scientific, regulatory and life sciences management skills.  The appointment of Dr. Evans and Dr. Williams to the Board arose as part of those actions.  All of the incumbent director's exhibit outstanding records of success in their chosen careers and have demonstrated their ability to devote the time and energy necessary to serve on the Board and to advance the business goals and strategies of the Company.  

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Independence of the Board of Directors

The Board of Directors as of December 31, 2016 consisted of Stephen T. Lundy, Gail S. Schoettler, Michael M. Beeghley, Susan A. Evans, Michael W. Routh and David E. Welch.  Ms. Schoettler, Dr. Evans and Messrs. Beeghley, Welch and Routh qualified as independent directors under Rule 5605(a)(2) of The NASDAQ Stock Market LLC and none of them had any material relationship with the Company that might interfere with his or her exercise of independent judgment. 

On January 6, 2017, Ms. Schoettler, Ms. Evans and Mr. Welch resigned as directors and John O'Rourke and Mike Dai were appointed as directors to fill the vacancies.  Mr. O'Rourke and Mr. Dai are considered independent directors under NASDAQ listing standards.  On February 7, 2017, Mr. Routh resigned as a director and on April 6, 2017, Mr. Lundy resigned as Chief Executive Officer and director of the Company.  On April 6, 2017, Mr. Beeghley was appointed Chief Executive Officer of the Company and is therefore no longer considered "independent" under NASDAQ listing standards as of such date.

Through December 31, 2016, the non-employee directors, with the exception of Ms. Schoettler, received cash compensation of $1,000 per month as compensation for service on the Board.  Ms. Schoettler, the non-executive Chair of the Board, receives compensation of $2,000 per month as compensation for service on the Board.  The independent directors typically received a stock option grant upon joining the Board and additional stock option grants, generally annually, for service on the Board.  Effective October 2010, Ms. Schoettler began receiving equity awards equal to 1.5 times the amount granted to other non-employee directors when such awards are issued. 

Commencing in January 2017, Mr. O'Rourke and Mr. Dai, the current non-employee directors, receive cash compensation of $1,000 per month for service on the Board.  Mr. Beeghley, the Chairman of the Board, receives compensation of $2,000 per month for service on the Board

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Nominating and Corporate Governance Committee.  As of December 31, 2016, the Nominating Committee consisted of Michael W. Routh (who served as Chair of the Nominating Committee), Gail S. Schoettler and Michael M. Beeghley, each of whom met the NASDAQ listing standards for independence.  Duties of the Nominating Committee include oversight of the process by which individuals may be nominated to our Board of Directors.  The Nominating Committee charter is available on our web site at www.venaxis.com.  There have been no material changes to the procedures by which security holders may recommend nominees to the Company's Board of Directors.  The specific process for evaluating new directors, including shareholder-recommended nominees, will vary based on an assessment of the then current needs of the Board and the Company.  The Nominating Committee will determine the desired profile of a new director, the competencies they are seeking, including experience in one or more of the following: highest personal and professional integrity, demonstrated exceptional ability and judgment and who shall be most effective in conjunction with the other nominees to the Board, in collectively serving the long-term interests of the shareholders.  Candidates will be evaluated in light of the target criteria chosen.  The Nominating Committee does not have a formal diversity policy; however, in addition to the foregoing, it considers race and gender diversity in selection of qualified candidates. As of January 6, 2017, the Nominating Committee members were re-constituted to consist of Michael M. Beeghley serving as Chair of the Nominating Committee, John O'Rourke and Mike Dai. As of April 6, 2017, Mr. Beeghley is no longer considered "independent" under NASDAQ listing standards.

Compensation Committee:  As of December 31, 2016, the Company's Compensation Committee was comprised of Susan A. Evans (who serveed as Chair of the Compensation Committee), Gail S. Schoettler, David E. Welch and Michael W. Routh, each of whom was an independent director.  The amended and restated Compensation Committee Charter is available on our website at www.venaxis.com. As of January 6, 2017, the Compensation Committee members were re-constituted to consist of Mike Dai serving as Chair of the Compensation Committee, Michael M. Beeghley and John O'Rourke. As of April 6, 2017, Mr. Beeghley is no longer considered "independent" under NASDAQ listing standards.

 

 

 

Duties of the Compensation Committee include reviewing and making recommendations regarding compensation of executive officers and determining the need for and the appropriateness of employment agreements for senior executives.  This includes the responsibility: (1) to determine, review and recommend to the Board for approval on an annual basis the corporate goals and objectives with respect to compensation for the senior executives, and (2) to evaluate at least once a year the performance of the senior executives in light of the established goals and objectives and, based upon these evaluations, to determine and recommend to the Board for approval the annual compensation for each, including salary, bonus, incentive and equity compensation.  When evaluating the compensation of our executive officers, the Compensation Committee evaluates factors including the executive's responsibilities, experience and the competitive marketplace.  The Compensation Committee may also invite the senior executives and other members of management to participate in their deliberations, or to provide information to the Compensation Committee for its consideration with respect to such deliberations, except that the chief executive officer may not be present for the deliberation of or the voting on compensation for the chief executive officer.  The chief executive officer may, however, be present for the deliberation of or the voting on compensation for any other officer.

The Compensation Committee has authority to retain such compensation consultants, outside counsel and other advisors as the Compensation Committee in its sole discretion deems appropriate.  The Compensation Committee did not retain any such advisor for 2016.

The Compensation Committee also has the authority and responsibility: (1) to review the fees paid to non-employee directors for service on the Board of Directors and its committees, and make recommendations to the Board with respect thereto; and (2) to review the Company's incentive compensation and other stock-based plans and recommend changes in such plans to the Board as needed.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers and directors and persons who own more than 10% of the Company's outstanding Common Stock to file with the Securities and Exchange Commission ("SEC") initial reports of ownership and reports of changes in ownership of Common Stock and any other equity securities of the Company. Directors, officers, and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.  To the Company's knowledge, based solely on a review of Forms 3, 4 and 5, and amendments thereto furnished to the Company during and for the Company's year ended December 31, 2016, there were no directors, officers or more than 10% shareholders of the Company who failed to timely file a Form 3, 4 or 5.

Our Code of Ethics which applies to the Company's directors, executive officers and management employees generally is available on our website at www.venaxis.com.  We intend to post any material amendments to or waivers of, our Code of Ethics that apply to our executive officers, on this website.  In addition, our Whistle Blower Policy is available on our website at www.venaxis.com.

 

 

 

ITEM 11.  EXECUTIVE COMPENSATION.

 

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ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCK HOLDER MATTERS.

 

____________________

* Holds less than 1%

 

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There are no arrangements known to the Company which may result in a change in control of the Company.

 

The Company currently has one equity compensation plan. The Bioptix, Inc. Amended and Restated Equity Incentive Plan, as amended (the "Plan"), was approved by the Board of Directors and adopted by the stockholders in 2002 and is used for plan-based awards for officers, other employees, consultants, advisors and non-employee directors. The Plan was amended and restated on June 1, 2007 and further amended on June 9, 2008, November 20, 2009, November 22, 2010, July 8, 2011, May 22, 2012, December 11, 2012, June 11, 2013, June 25, 2014, September 1, 2015, and again amended and restated effective November 30, 2016, with the most recent increase to 895,000 shares, as approved by the shareholders.

   

 

 

 

The following table gives information about the Company's common stock that may be issued upon the exercise of options and rights under the Plan as of December 31, 2016:

 

Recent Sales of Unregistered Securities

 

None.

 

 

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

Information about the independence of our non-employee directors and the composition of the Audit Committee and Compensation Committee is set forth in Item 10, "Directors, Named Executive Officers, and Corporate Governance" herein.

  

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES. 

 

Audit Fees: Fees billed for professional services rendered by EisnerAmper LLP ("Eisner") for the audit of the Company's consolidated financial statements as of and for the fiscal year ended December 31, 2016 were billed in 2017. Fees billed for professional services rendered by GHP Horwath, P.C. ("GHP") for the audit of the Company's financial statements as of and for the fiscal year ended December 31, 2015 and the reviews of the interim condensed consolidated financial statements included in the Company's Form 10-Qs during such fiscal year and the first three quarters of 2016. Audit fees for professional services rendered by Eisner and GHP for 2016 totaled zero and $87,000, respectively.

 

Aggregate fees were billed or expected to be billed for services rendered by Eisner and GHP for the years 2016 and 2015 in the following categories and amounts:

 

 

 

Audit fees in 2016 and 2015 relate to the financial statement audits and the quarterly reviews. Audit fees in 2016 also include assistance with the filing of Forms 8-K and proxies.

Our principal accountant (through its full time employees) performed all work regarding the audit of our financial statements for the most recent fiscal year.

The Company's Audit Committee currently has a policy in place that requires its review and pre-approval of all audit and permissible non-audit services provided by its independent auditors.  These services requiring pre-approval by the Audit Committee may include audit services, audit related services, tax services and other services.  All of the services performed by the independent registered public accounting firm were approved by the Company's Audit Committee and prior to performance. The Audit Committee has determined that the payments made to its independent accountants for these services are compatible with maintaining such auditors' independence.

 

(a)  Exhibits

 

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