Tuesday, December 03, 2002 8:36:52 AM
Excerpts taken from the Annual Report filed 10/16/2002
State Registrant's revenues for its most recent fiscal year. $1,937,122
The number of shares outstanding of each of the Registrant's classes of common stock, as of September 26, 2002 is 77,702,292 shares, all of one class, no par value. Of this number 76,864,700 shares have an aggregate market value of $3,074,588 based on the closing price of Registrant's common stock of $.04 on October 14, 2002 as quoted on the Electronic Over-the-Counter Bulletin Board ("OTCBB") were held by non-affiliates of the Registrant.
Item 1. Description of Business
Background Summary
BioShield is committed to the discovery, development, marketing and sale of leading-edge antimicrobial and biostatic products. The Company's antimicrobial technology is a revolutionary alternative to conventional sanitizers, disinfectants, bleaches, biocides and preservatives. BioShield's proprietary antimicrobial products are much more durable, effective, and safe, and can make claims that no other products can.
BioShield intends to capture the market opportunity through a business strategy that encompasses superior research and development supporting our focus in the specialty chemical industry. This focus of specialty chemicals includes various industry specific technologies which apply in areas from pulp and paper, to household cleaning products, to paints and adhesives, and to others. This vertical market approach offers the Company lucrative business opportunities as well as significant revenue diversification. Management believes that the Company's superior technology will dominate the future antimicrobial market.
The primary core technology contains no heavy metals, formaldehyde treatment or phenol groups, and is the only essentially non-toxic antimicrobial. Unlike other antimicrobial materials, the Company's product has never been shown to allow or cause microbial adaptation, resistance, mutation, diffusion, or migration. It is significantly different from conventional sanitizers, disinfectants, or biocides that are extremely toxic and contaminate the environment with undesirable chemicals. Some of the differences are in its chemical nature, effectiveness, durability and safety. This technology has a unique advantage over all previously known methods and applications: the antimicrobial component material is bonded to the cell or surface. Microorganisms are then destroyed by simple contact with the surface. BioShield antimicrobial products bond to almost any surface, creating unlimited applications for the Company's breakthrough technology.
Unlike most other biocides, BioShield's antimicrobial is effective against single-celled organisms. Since it does not dissipate, it minimizes or eliminates the potential for microorganisms to adapt, build up tolerance, or become resistant. It acts by rupturing the cell membrane, not by poisoning the cell. By contrast, most other antimicrobials, sanitizers and disinfectants are designed to diffuse and be absorbed. Once absorbed, they act by poisoning the microorganisms or causing fatal mutations. However, as they diffuse, they lose strength, and adaptation can and usually does occur. Unlike conventional biocides and anti-viral drugs that are designed to volatilize and be absorbed by organisms, the BioShield antimicrobial is a durable, broad spectrum antimicrobial that chemically bonds to, and literally becomes part of, the application surface. Most surfaces remain antimicrobial for an extended period of time. BioShield's antimicrobial acts as microorganisms come into direct contact with it. Since the antimicrobial is not absorbed by organisms, but remains a part of each application surface, it, in effect, transforms conventional surfaces and materials into active antimicrobial surfaces. These
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surfaces will remain effective for extended periods, which will result in a significant reduction of some viruses and infections caused by air-borne microbial contaminants.
RECENT DEVELOPMENTS
BioShield is executing a signed licensing and distribution agreement with Megastar that calls for payments to BioShield in the amount of Thirty Five Million ($35,000,000) Dollars over an eight year period. BioShield's management believes gross margins will reach its targeted goals. The contract calls for purchase of product of not less than $700,000 for the one year period March 2001 through March 2002 to maintain the exclusivity agreement in the territory of South Asia. As of September 30, 2002, Megastar has purchased from BioShield products with a value of $1,100,000 of which we collected approximately $600,000.
BioShield also signed a licensing and distribution agreement for its "Pet Stop" line of products with "Direct America" in December 2001 that called for estimated revenues to BioShield in the amount of $2,500,000 million over a Three
(3) year period. "Direct America" planned to market the products through the advertising agency Fricks/Firestone, a firm that has done work for Papa John's, Protective Ins. and Suntory Water Group. However, BioShield, in August 2002, elected to cancel this contract and is looking for an alternative licensee(s) to sell the PetStop product line.
BioShield's management entered into an agreement in October 2001 with a New York Institution to provide up to $1,000,000 of conventional accounts receivable financing. BioShield has been able to draw down on the credit line to within 80% of the value of purchase orders. After signing this agreement, BioShield cancelled all lines of equity funding and has since cancelled the agreement referred to herein. The line of credit is payable on demand and is collateralized by substantially all of the Company's assets. As of June 30, 2002, the Company borrowed $1,000,016 under this line of credit and is currently in default.
After receiving inquiries from military departments and contractors -- Camber; Objective Individual Combat Weapon (OTCW); Objective Crew Served Weapon (OCSW); Sam Whitfield, Commander of U.S. Army Infantry Center ATSH-OTY; Hospitals; Laboratories; and the International corporation of Airport security in Germany and Ireland regarding the use of BioShield's antimicrobial agent against Anthrax, management proceeded with testing the effectiveness of its chemicals against Anthrax.
BioShield's microbiologists believe BioShield's products are effective against the Bacillus Anthracis, the bacteria that causes Anthrax. BioShield's in-house laboratories have tested BioShield products against a wide variety of Gram-positive and Gram-negative bacteria from the same family of Bacillus Anthracis, such as Bacillus Subtilis, with a 100% success rate of eliminating the bacteria.
BioShield has been in contact with the CDC in Atlanta, GA; Los Alamos National Laboratory in Los Alamos, New Mexico; and a military research organization to discuss the value, if any, of using BioShield's technology as a protective agent against Bacillus Anthracis. Outside testing is necessary because of the high risk and level of transmission of spores. Specialists in the field of
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Anthrax were sought out to determine if the unique attributes of BioShield's chemical molecule agent can contribute to stopping the dissemination of Anthrax and reducing the potential risk of Anthrax.
BioShield was invited to address the applicable senate committee (SCEPW) regarding BioShield's core technology and its unique ability to kill Anthrax spores and Bacillus Anthracis bacteria. The written report was included in the congressional hearings that recently addressed bio-hazards and bio-terrorism. A complete and thorough statement, detailing the effectiveness of the company's technology (and the work efforts being performed with a consortium, including Health Safe USA and TRIDIM Filter Corporation, with reference to government building and military solutions) has been submitted for inclusion in the Congressional Report.
On August 15, 2002, BioShield received notice of further testing requirements needed for EPA approval. At this time, we will not be, on our own, obtaining further registrations because the amount of projected product to be purchased is less than the overall additional costs required to complete the EPA testing requirements. However, we are continuing to pursue other alternatives in moving forward with the Anthrax approvals and are seeking an appropriate licensing partner to pursue this opportunity.
On November 8, 2001, BioShield announced that orders from an East Coast distributor, Tandem Technologies International, have increased. Management at both Tandem and BioShield believe there is an increased awareness and concern over protecting work environments from poor indoor air quality (IAQ) also known as "Sick Building Syndrome," a condition that can develop quickly in an unprotected building. Tandem's distribution channels cover the United States, Europe and Japan and include several sub-distributors with over 120 sales personnel that serve over 3,500 contractors around the United States.
BioShield announced on December 4, 2001, that it is part of a project with the following companies: TRIDIM Filter Corporation ($65 million private company leader in the filtration industry, John C. Stanley, President); Pinnacle Environmental Corporation (specializing in asbestos and lead abatement services); Annabec Corporation (suppliers of Biochek 500T, BioShield's technology); and Ondeo Nalco (one of BioShield's global distributors). BioShield and these four leaders in their fields, worked together to eliminate the problems created in and around buildings that were affected as a result of the September 11th terrorist attacks against the World Trade Center. As of September 30, 2002, this work has been completed.
BioShield received a purchase order for an initial $500K purchase placed with BioShield in September 2001 from ONDEO-NALCO (Toronto: NLCO), a subsidiary of Suez (NYSE: SZE), a $30 billion company located in France. ONDEO-NALCO, a $4.2 billion dollar distributor of specialty chemicals, launched BioShield technology at the International Coating Exposition & Technology Conference 2001, and introduced the Biochek 500T with BioShield technology to over three hundred fifty companies showing their commitment to selling BioShield's products. Nalco continues to purchase product and has an outstanding purchase order in the amount of $500,000 through September 2002; however, it has not met the anticipated targets outlined in our proposed agreement.
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BioShield and AbTech Industries, Inc. (www.abtechindustries.com ) entered into a strategic alliance in December 2001 that will combine the companies' patented technologies to produce the first-ever anti- microbial solution to storm water run-off. Both companies said the new product has the potential to revolutionize storm water management practices to ensure clean water in communities throughout the country. BioShield continues to look for a solution with AbTech for incorporation of our technology with their products.
In January 2002, BioShield announced that a $4 Billion Worldwide chemical company that has manufacturing facilities in 26 countries and sales organizations in over 120 countries has reported they are close to gaining certification of BioShield's antimicrobial from a health board in Europe. Once the administrative process is complete the worldwide firm has stated they plan to target the pulp and paper industry and conduct trial tests for broad applications with polymers. The company is a leading worldwide supplier of additives to the polymer industry including antimicrobial compounds. In addition the firm is one of the largest suppliers of antimicrobial compounds for use in consumer products. The worldwide firm is currently under a confidentiality agreement with BioShield. BioShield continues to support this effort; however, we do not foresee closure in the near future.
In late January 2002, BioShield launched its new web site designed to carry out requests from companies around the world for information on BioShield's unique and patented antimicrobial compounds. Potential licensees have a choice of downloading all of our technical data, including material safety data sheets, spec data, master labels, EPA certificates, FDA/Medical applications, patents, product descriptions, global and specialty licenses, recent company developments and technical data by industry. In addition the Company is posting a wealth of material designed to assist firms that have been asking for enhanced marketing material for their particular industry. BioShield continues to make enhancements to the web site and plans to complete the addition of different languages in the coming year.
Also in late January 2002, BioShield and Wm. Zinsser and Co., Inc., a company in business since 1849 and a division of RPM, Inc. (NYSE: RPM - news), signed a proposed distribution agreement with BioShield. Both parties have agreed to keep confidential the terms of the proposal; however, both sides continue to pursue avenues in which the Company's technology can be used with Zinsser products.
BioShield received two letters of understanding from Aerus/Electrolux in May 2002; one was regarding a proposed merger and the second regarding a proposed license arrangement. During the 120 day due diligence period, there were several conference calls conducted, many requests for data and records resulting in several boxes of data provided, and many hours of R&D effort expended. The due diligence period ended on September 16, 2002 and as a result, Aerus and BioShield have determined that they will not move forward with the merger and an amended Form 8-K has been filed in support of this decision. BioShield is continuing talks with Aerus however, and we are continuing to review the license agreement opportunity.
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On September 25, 2002, BioShield announced that it received unanimous approval from its Board of Directors to change its corporate name from BioShield Technologies, Inc. to International BioChemical Industries, Inc. (IBC Industries). The corporate name change is being made to help promote the new direction of the company and reposition the company to better describe our business focus and model. A new trading symbol, IBCL, for the company's common stock was applied for with the NASD and SEC and we announced the new symbol in early October 2002.
PRODUCTS and EPA REGISTRATIONS
BioShield announced in late December 2001 that, after years of successful testing, the EPA under FIFRA, approved BioShield Technologies' new germ killer, disinfectant and antimicrobial against Salmonella cholerasuis, Staphylococcus aureus and other bacteria, fungus and algae. This new agent is effective against household germs and prevents the spread of harmful bacteria and cross contamination. Based on independent laboratory results, this new germ killer antimicrobial had shown 99.9999% efficacy against Salmonella cholerasuis, Staphylococcus aureus, Gram positive and negative bacteria, yeast and different types of fungus and algae at 2, 7, 14, 21, and 28 days post application. The Company believes that with this EPA/FIFRA approval, there is a very substantial market for the technology in different areas.
In addition, the EPA approved AM 3651 P, EPA Reg No. 70871-15. Disinfectant and Antimicrobial agent is a solvent based system that provides residual protection. Unlike conventional disinfectants, sanitizers and bleaches, AM 3651 P is water-soluble and provides long lasting bond to surfaces.
BioShield announced on June 5, 2002 that the EPA has granted approval for a new use application of BioShield's Antimicrobial line of products for the $17 billion paints and coatings industry. This New Use Approval significantly extends the use of BioShield's product line as a spray on latex paints, stains, coatings, films, laminates and finishes as well as directly added in can paints to control the growth of bacteria, mold, mildew and algae for both indoor and outdoor use.
BioShield announced on June 10, 2002 that the EPA has granted approval for a new use application of BioShield's Antimicrobial line of products for the Polymers industry. This New Use Approval significantly extends the use of BioShield's product line as an anti- static agent as well as to eliminate degradation of the polymer.
On June 12, 2002, BioShield received from the EPA the amendment, submitted in connection with registration under section 3(c) (7) (A) of the Federal, Insecticide, Fungicide, and Rodenticide Association (FIFRA), to add to its list of approval uses, the new use of the BioShield water-based active ingredient (AM 500) as a spray on latex paints, stains, coatings, films, laminates and finishes as well as directly added in can paints to control the growth of bacteria, mold, mildew and algae for indoor or outdoor use.
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BioShield announced on June 18, 2002 the development of a new molecular formulation of the trymethoxysilil family in a solid form, high concentrate active ingredient, designed to be used in the healthcare and medical sector. The Company has devoted several years to the development and refining of the new BST 1870. The development of 1870 as a medical-grade solid form antimicrobial/antibacterial has phenomenal potential to be utilized in various medical and healthcare applications and treatments and finally gives BioShield the opportunity to approach the $2 trillion medical industry with this revolutionary new biotechnology. In addition, BST 1870 in solid form also gives BioShield the ability to pursue markets that do not permit liquid applications, creating entirely new sources of potential revenue and licensee partners.
Summary Information Regarding Current BioShield Products
BioShield AM500, is a stable aqueous solution of a silicone quaternary ammonium salt, which can produce a durable micro biostatic coating on a broad range of surfaces. AM500 provides effective protection of treated surfaces against bacteria and fungi, including mold and mildew. BioShield Technologies has registered AM500 under FIFRA regulations and been given the EPA registration number 70871-1.
BioShield AM 3651P is an EPA registered antimicrobial agent effective against common household germs. This antimicrobial agent helps prevent the spread of harmful germs on treated hard, non-porous surfaces. 3651P is also effective in controlling mold and mildew by inhibiting the growth of mold and mildew and also resists stains and discoloration associated with the growth of such organisms. BioShield's 3651P also disinfects hard, non-porous surfaces and kills Salmonella choleraesuis and Staphylococcus aureus.
BSTI 1860 may be used for incorporation into or treatment of various materials to impart bacteriostatic/fungistatic properties. This formula molecularly bonds to most surfaces utilizing a silanol group. It is this feature that provides a durable coating on items it is incorporated into or applied to post-production. This molecular bonding does not allow the product to diffuse into the surrounding environment. It does not wash out, and maintains its effectiveness over time. The quaternary ammonium portion of the active ingredient provides antimicrobial activity. This product exhibits a broad spectrum of antimicrobial activity, and is effective in controlling various microbes. BioShield 1860 adds value to products by imparting a durable and effective micro biostatic coating that lasts.
RTU 50 is a "ready to use" product providing a durable antimicrobial coating on most surfaces. It is a water-based solution for easy application to desired materials. The active ingredient in RTU 50 actually bonds to the objects in which it is applied. This means that once RTU 50 is applied to a surface, the mold and mildew protection lasts. It attacks malodor and cosmetic degradation at the source. Using RTU 50 provides effective protection against bacteria and fungi, and retards the formation of mold and mildew stains.
RTU 75 combines BioShield's proprietary technology into an aqueous system to provide a durable antimicrobial barrier. RTU 75 protects surfaces from foul smelling odors and staining caused by mold and mildew. This is a non- flammable product that provides quick, uniform dispersion for easy application onto pre-cleaned surfaces.
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CS Concentrate Protectant 15 is a convenient formula that is fast, easy to apply, and very effective. CS 15 incorporates Spatented technology into a convenient protectant spray. It provides lasting protection against mold and mildew. The protective coating is not destroyed by repeat cleanings, and offers a durable finish on most surfaces. CS 15 controls and retards the deterioration caused by most bacteria and fungi. It may also be used to prolong the life of fabrics and carpets.
In addition, BioShield has developed twelve new products ready for market and has initiated a campaign to put in place nationwide distribution. The Company has devoted considerable time and expense to create a suite of products to serve large multi-billion dollar industries and several market niches with the potential of becoming one of the nation's leading suppliers of antimicrobial and antiviral products.
o BST 1870: Medical-Grade antimicrobial/antibacterial compound. Market focus of BST 1870 is the $2 trillion worldwide healthcare and medical sector.
o AM REM: EPA Approved. Bio-Remediation antibacterial/antimicrobial compound. Market focus for this product is the bio-remediation industry.
o BST C503: EPA Approved. Product focus is used as a deodorizer, anti-static agent and antimicrobial barrier for application on carpets and rugs.
o BST H502: EPA Approved. Product's focus is to be utilized as a surfactant or coating on a diverse array of hard surfaces.
o BST F501: EPA Approved. BST F501 is designed to be utilized in filtration systems for both water and air purification.
o BST 022: Anti Corrosion product to be used on a wide variety of surfaces to be utilized in the specialty coatings industry.
o BST ANTISTAT: Antistatic Agent to be used as a surfactant on a diverse array of surfaces.
o BST LUBE-EX: Lubricant with antimicrobial properties to be utilized in environments where lubricants must be bacteria free. Applications typically sought in the oil and equipment industry.
o BST AS 048: EPA Approved Anti Slime agent to be used within the $800 million pulp and paper industry and other industries where slime is a problem in large production facilities that deal with pulp, paper, food, and natural resources.
o BST-7: Odor counteract and to be utilized in both consumer and industrial applications in a large variety of industries and applications.
o BST CD530: Antimicrobial agent specifically designed for concrete applications. Particularly focused in the building industry, which is estimated at $1 Billion.
o MB M100: De-Odorizing Clear Coating antibacterial/antimicrobial agent. Can be utilized across numerous industries and applications.
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GOVERNMENT REGULATIONS AND APPROVAL
Patents, Patent Applications & EPA Registrations
Granted United States Patents:
United States Patent Number 6,120,587 Abstract: The composition formed by mixing an organosilane, optionally having a nonhydrolizable organic group, but having one or more hydrolyzable groups, with a polyol containing at least two hydroxy groups, wherein at least any two of the hydroxy groups are separated by no more than two intervening atoms. Water-stabilized organosilane compounds. A water stable composition made from the polyol and organosilane or compound and water. A method of treating a substrate by mixing or contacting the substrate with the product compound, or composition of this invention for a period of time sufficient for treatment of the substrate. A treated substrate having adhered thereto the product, compound, or composition of this invention. A method of dyeing and treating a substrate. A method of antimicrobially treating a food article. A method of antimicrobially coating a fluid container. A method of antimicrobially coating a latex medical article. A method of making a siloxane in the presence of a stabilizer.
United States Patent Number 6,113,815 Abstract: The composition formed by mixing an organosilane with an ether. Water-stabilized organosilane compounds. A water stable composition made from the ether and organosilane composition and water. A method of treating a substrate by mixing or contacting the substrate with the product, compound, or composition of this invention for a period of time sufficient for treatment of the substrate. A treated substrate having adhered thereto the product, compound, or composition of this invention. A method of dyeing and treating a substrate. A method of antimicrobially treating a food article. A method of antimicrobially coating a fluid container. A method of antimicrobially coating a latex medical article.
United States Patent Number 5,954,869 Abstract: The composition formed by mixing an organosilane, optionally having a nonhydrolizable organic group, but having one or more hydrolyzable groups, with a polyol containing at least two hydroxy groups, wherein at least any two of the hydroxy groups are separated by no more than two intervening atoms. Water-stabilized organosilane compounds. A water stable composition made from the polyol and organosilane or compound and water. A method of treating a substrate by mixing or contacting the substrate with the product, compound, or composition of this invention for a period of time sufficient for treatment of the substrate. A treated substrate having adhered thereto the product, compound, or composition of this invention. A method of dyeing and treating a substrate. A method of antimicrobially treating a food article. A method of antimicrobially coating a fluid container. A method of antimicrobially coating a latex medical article. A method of making a siloxane in the presence of a stabilizer.
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US PATENTS PENDING:
Application
Docket Number Region Number Description
....................... .............. .................. ..................................................
BST-105 US 08/965,441 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. ..................................................
BST-100D4 US 09/590,493 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. ..................................................
BST-101D1 US 09/654,232 Ether-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. ..................................................
BSI-102D1 US 09/967,486 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
FOREIGN PATENTS ISSUED:
Docket Number Region Serial Number Description
....................... .............. .................. .................................................
BST-99NZ New Zealand 329397 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100NZ New Zealand 330379 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
FOREIGN PATENTS PENDING:
Application Description
Docket Number Region Number
....................... .............. .................. .................................................
BST-99 BZ Brazil PI 9702243-8 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-99 IL Israel 122,555 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-99 MX Mexico 980185 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 AR Argentina P 980102138 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 BR Brazil PI 9806344-8 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 CA Canada 2236893 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 EPO EC 98303600.5 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 IL Israel 124316 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 JP Japan 10-125119 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 MX Mexico 983600 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 Div1IL Israel 136872 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-101 BR Brazil PI9811509-0 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-101 CA Canada 2296397 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-101 EPO E.C. 98935768.6 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
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FOREIGN PATENTS PENDING (Continued):
BST-101 JP Japan 2000-503088 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-101 MX Mexico 627 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-102 BR Brazil PI9812102-4 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 CA Canada 2296395 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 EPO E.C. 98935832 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 JP Japan 2000-503089 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 MX Mexico 625 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 PCT PCT/US98/14985 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-105C1X CA Canada 2292005 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-105C1X JP Japan 11-355128 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-105C1X MX Mexico 9911802 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
Current EPA Registrations:
US EPA Registration Number 70871-1 Water stabilized organosilane antimicrobial compound / end use application.
US EPA Registration Number 70871-2 Water stabilized organosilane antimicrobial compound / manufacturers' use.
US EPA Registration Number 70871-13 Antimicrobial, disinfectant, germ kill, organosilane compound.
US EPA Registration Number 70871-12 Solvent based organosilane antimicrobial compound.
US EPA Registration Number 70871-4 Water stabilized organosilane antimicrobial compound/ end use application.
US EPA Registration Number 70871-15 Disinfectant and Antimicrobial agent.
Future Filings
The Company plans to seek approval on a modified version of its core active ingredient. The modification of the product involves the elimination of the highly toxic solvent (methanol). This modified active ingredient is highly soluble and less toxic to the user during application and still delivers the micro-biostatic properties. This would be an alternate source of active ingredient manufactured by the Company.
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Research and Development
The Company's core technologies are in both aqueous and non-aqueous reactive silanes and antimicrobial products. Combinations of both technologies are producing compounds with new properties and are setting new standards. The Company's new product releases in the near future will be based on these core technologies. Research on silane based and non-silane based antimicrobial will expand application of antimicrobial Company products from pesticides to medications and treatments to preventive care. Research on silane based durable products will provide the applicator with the opportunity to give surfaces new desired properties.
Products range from antimicrobial absorbents to cleaning solutions and disinfectants and household products. Products in this category include materials treated by the manufacturer, for example socks, shower curtains and carpets. Product development in this category is anticipated on a market-need basis in collaboration with the manufacturers. In addition, a number of new applications based on the uniqueness of the Company's products are anticipated. There can be no assurance that the Company will be successful in developing these or other products.
During the fiscal years ended June 30, 2002, and 2001, the Company incurred expenses of approximately $196,000 and $339,000, respectively, resulting from Company-sponsored research and development activities. Research and development is expected to remain a significant component of the Company's business. However, the Company may abandon or de-emphasize its research and development activities with respect to the primary development projects and expand research and development of other products as circumstances warrant. The Company has contracted out a substantial part of its research and intends to continue to do so while utilizing its staff for monitoring such research.
ANTIMICROBIAL BUSINESS
BioShield's primary focus is to exploit its proprietary technology to become the leader in antimicrobials and biocides for consumers, Original Equipment Manufacturing, industrial, institutional, environmental services, and various biochemical related industries. BioShield products are an easily applied reactive technology that modifies surfaces of all types, by creating an invisible covalent bond between surfaces and a variety of chemical agents. Through the cross linking technology, these antimicrobial properties and other chemical agents can impart many performance-enhancing characteristics, such as residual antimicrobial activity, removal of surface-borne and air-borne allergens which may cause respiratory discomfort or asthma, infection resistance, anti-inflammation, lubricity and drug delivery onto many surfaces without changing the dimensions or physical properties of the modified surfaces. In addition, the Company has added various vertical product lines (see summary information regarding current BioShield products) in many sectors of the industries.
BioShield believes that its antimicrobial technologies and other related biochemicals have properties that make its products significantly more durable, effective and safer than those currently available conventional antimicrobials, non-antibiotics, preservatives or biocides. BioShield also believes that certain manufacturers who utilize its technologies will significantly
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improve the performance of their products and in some situations differentiate their products in a highly competitive marketplace.
BioChemical Industries
BioShield is currently engaged in testing multiple applications of its core technology and products with leading manufacturers, many of whom are Fortune 500 companies. The Company is committed to a value-added strategy to have our antimicrobial technology incorporated into the products of these leading manufacturers. It is BioShield's intention to produce co-branded products in the future.
In addition, BioShield intends to follow a path taken by many other proprietary specialty chemical Research and Development Companies and has targeted leading specialty chemical distributors representing many vertical markets such as the Industrial and Institutional Industry, paints, coatings and adhesives, plastics, textiles, and pulp and paper. The Company aligns with distributors that sell BioShield products on either an exclusive or non-exclusive basis to specific customers, for specific customer applications, or into specific vertical industry markets.
BioShield manages this program so that, where possible, the distributor can take product and stock in their locations. The stocking program, potential sales opportunities and outlook for future sales are key requirements BioShield requires prior to entering into an agreement with a distributor. The Company knows our products have long sales cycles, however, we are interested in making long term agreements with distributors that can expend appropriate time marketing and selling our product and moving quantities into the marketplace.
In addition, the marketing of BioShield products within the institutional and industrial segments and other key vertical industries will be consistent, as all products that contain the BioShield technology will be clearly labeled. Advertising for the Company, its technology, and its products will consist of traditional media, printed material in high distribution trade journals, direct mail, and active, visible participation in all appropriate industry conventions.
And as a result of the distribution agreements, BioShield works very closely with distributors providing leads and opportunities and we are committed to supporting our distributors with strong technical personnel, sales and marketing support, and training. BioShield works with distributors regularly (monthly sales calls, quarterly/annual meetings, etc.) to understand product pipeline and forecasting, key opportunities, and problem accounts, with a focus on ensuring goals are being met, appropriate levels of inventory are on hand to support sales effort, and growth opportunities are targeted and executed.
Sub registrations
The Company currently allows companies to sub register our technology and registrations and we coordinate with distributors where applicable. As new products are developed some will be made available for private label distribution, particularly those that make non-pesticidal claims.
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The expansion of sub registered label sales will only be executed in situations where both the anticipated volume and pricing are such that positive profitability is available.
Licensing Value Added Technology
Utilization of BioShield's patented technology in leading consumer goods offered by other organizations represents potentially lucrative licensing revenues for the Company. The unique attributes of BioShield's technology permit incorporation into existing products as a value-added ingredient that imparts anti-microbial properties to the base product.
Marketing programs for value-added products are designed to support the global licensing strategy of BioShield. The Company intends to pursue additional licensing agreements with manufacturers that the Company anticipates will contain a marketing portion that outlines the requirements that each joint product will bear a notification of "Protected By BioShield" or other similar awareness building program. This extension of the Company's trademarks into categories, products, and geographies will enhance the long term branding campaign.
Establishment and Spin-off of Business - Healthcare Network Solutions, Inc. ("HNS") Subsidiary
BioShield founded HNS in April 2001 for the purpose of providing non-medical services to physician practices. It initially owned approximately 52% of all outstanding HNS common stock and thereafter owned approximately 35% post spin-off with the difference of 17% owned by BioShield shareholders in accordance with BioShield's September 24, 2001 press release wherein it indicated that it intended to spin-off, to its stockholders and on a 1 for 10 basis, a portion of those shares owned by it in HNS. As of September 30, 2002, BioShield owns approximately 19.96% of all outstanding HNS common stock.
HNS filed a Form 10-SB Registration Statement with the Securities and Exchange Commission ("SEC") which provided certain information about HNS, its current and proposed business activities and its management team. The Form 10-SB was filed on September 27, 2001. All information contained in the Form 10-SB and 10-KSB may be obtained at the SEC's web site at http:\\www.sec.gov.
The best weapon against "fear" is "facts"!!
State Registrant's revenues for its most recent fiscal year. $1,937,122
The number of shares outstanding of each of the Registrant's classes of common stock, as of September 26, 2002 is 77,702,292 shares, all of one class, no par value. Of this number 76,864,700 shares have an aggregate market value of $3,074,588 based on the closing price of Registrant's common stock of $.04 on October 14, 2002 as quoted on the Electronic Over-the-Counter Bulletin Board ("OTCBB") were held by non-affiliates of the Registrant.
Item 1. Description of Business
Background Summary
BioShield is committed to the discovery, development, marketing and sale of leading-edge antimicrobial and biostatic products. The Company's antimicrobial technology is a revolutionary alternative to conventional sanitizers, disinfectants, bleaches, biocides and preservatives. BioShield's proprietary antimicrobial products are much more durable, effective, and safe, and can make claims that no other products can.
BioShield intends to capture the market opportunity through a business strategy that encompasses superior research and development supporting our focus in the specialty chemical industry. This focus of specialty chemicals includes various industry specific technologies which apply in areas from pulp and paper, to household cleaning products, to paints and adhesives, and to others. This vertical market approach offers the Company lucrative business opportunities as well as significant revenue diversification. Management believes that the Company's superior technology will dominate the future antimicrobial market.
The primary core technology contains no heavy metals, formaldehyde treatment or phenol groups, and is the only essentially non-toxic antimicrobial. Unlike other antimicrobial materials, the Company's product has never been shown to allow or cause microbial adaptation, resistance, mutation, diffusion, or migration. It is significantly different from conventional sanitizers, disinfectants, or biocides that are extremely toxic and contaminate the environment with undesirable chemicals. Some of the differences are in its chemical nature, effectiveness, durability and safety. This technology has a unique advantage over all previously known methods and applications: the antimicrobial component material is bonded to the cell or surface. Microorganisms are then destroyed by simple contact with the surface. BioShield antimicrobial products bond to almost any surface, creating unlimited applications for the Company's breakthrough technology.
Unlike most other biocides, BioShield's antimicrobial is effective against single-celled organisms. Since it does not dissipate, it minimizes or eliminates the potential for microorganisms to adapt, build up tolerance, or become resistant. It acts by rupturing the cell membrane, not by poisoning the cell. By contrast, most other antimicrobials, sanitizers and disinfectants are designed to diffuse and be absorbed. Once absorbed, they act by poisoning the microorganisms or causing fatal mutations. However, as they diffuse, they lose strength, and adaptation can and usually does occur. Unlike conventional biocides and anti-viral drugs that are designed to volatilize and be absorbed by organisms, the BioShield antimicrobial is a durable, broad spectrum antimicrobial that chemically bonds to, and literally becomes part of, the application surface. Most surfaces remain antimicrobial for an extended period of time. BioShield's antimicrobial acts as microorganisms come into direct contact with it. Since the antimicrobial is not absorbed by organisms, but remains a part of each application surface, it, in effect, transforms conventional surfaces and materials into active antimicrobial surfaces. These
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surfaces will remain effective for extended periods, which will result in a significant reduction of some viruses and infections caused by air-borne microbial contaminants.
RECENT DEVELOPMENTS
BioShield is executing a signed licensing and distribution agreement with Megastar that calls for payments to BioShield in the amount of Thirty Five Million ($35,000,000) Dollars over an eight year period. BioShield's management believes gross margins will reach its targeted goals. The contract calls for purchase of product of not less than $700,000 for the one year period March 2001 through March 2002 to maintain the exclusivity agreement in the territory of South Asia. As of September 30, 2002, Megastar has purchased from BioShield products with a value of $1,100,000 of which we collected approximately $600,000.
BioShield also signed a licensing and distribution agreement for its "Pet Stop" line of products with "Direct America" in December 2001 that called for estimated revenues to BioShield in the amount of $2,500,000 million over a Three
(3) year period. "Direct America" planned to market the products through the advertising agency Fricks/Firestone, a firm that has done work for Papa John's, Protective Ins. and Suntory Water Group. However, BioShield, in August 2002, elected to cancel this contract and is looking for an alternative licensee(s) to sell the PetStop product line.
BioShield's management entered into an agreement in October 2001 with a New York Institution to provide up to $1,000,000 of conventional accounts receivable financing. BioShield has been able to draw down on the credit line to within 80% of the value of purchase orders. After signing this agreement, BioShield cancelled all lines of equity funding and has since cancelled the agreement referred to herein. The line of credit is payable on demand and is collateralized by substantially all of the Company's assets. As of June 30, 2002, the Company borrowed $1,000,016 under this line of credit and is currently in default.
After receiving inquiries from military departments and contractors -- Camber; Objective Individual Combat Weapon (OTCW); Objective Crew Served Weapon (OCSW); Sam Whitfield, Commander of U.S. Army Infantry Center ATSH-OTY; Hospitals; Laboratories; and the International corporation of Airport security in Germany and Ireland regarding the use of BioShield's antimicrobial agent against Anthrax, management proceeded with testing the effectiveness of its chemicals against Anthrax.
BioShield's microbiologists believe BioShield's products are effective against the Bacillus Anthracis, the bacteria that causes Anthrax. BioShield's in-house laboratories have tested BioShield products against a wide variety of Gram-positive and Gram-negative bacteria from the same family of Bacillus Anthracis, such as Bacillus Subtilis, with a 100% success rate of eliminating the bacteria.
BioShield has been in contact with the CDC in Atlanta, GA; Los Alamos National Laboratory in Los Alamos, New Mexico; and a military research organization to discuss the value, if any, of using BioShield's technology as a protective agent against Bacillus Anthracis. Outside testing is necessary because of the high risk and level of transmission of spores. Specialists in the field of
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Anthrax were sought out to determine if the unique attributes of BioShield's chemical molecule agent can contribute to stopping the dissemination of Anthrax and reducing the potential risk of Anthrax.
BioShield was invited to address the applicable senate committee (SCEPW) regarding BioShield's core technology and its unique ability to kill Anthrax spores and Bacillus Anthracis bacteria. The written report was included in the congressional hearings that recently addressed bio-hazards and bio-terrorism. A complete and thorough statement, detailing the effectiveness of the company's technology (and the work efforts being performed with a consortium, including Health Safe USA and TRIDIM Filter Corporation, with reference to government building and military solutions) has been submitted for inclusion in the Congressional Report.
On August 15, 2002, BioShield received notice of further testing requirements needed for EPA approval. At this time, we will not be, on our own, obtaining further registrations because the amount of projected product to be purchased is less than the overall additional costs required to complete the EPA testing requirements. However, we are continuing to pursue other alternatives in moving forward with the Anthrax approvals and are seeking an appropriate licensing partner to pursue this opportunity.
On November 8, 2001, BioShield announced that orders from an East Coast distributor, Tandem Technologies International, have increased. Management at both Tandem and BioShield believe there is an increased awareness and concern over protecting work environments from poor indoor air quality (IAQ) also known as "Sick Building Syndrome," a condition that can develop quickly in an unprotected building. Tandem's distribution channels cover the United States, Europe and Japan and include several sub-distributors with over 120 sales personnel that serve over 3,500 contractors around the United States.
BioShield announced on December 4, 2001, that it is part of a project with the following companies: TRIDIM Filter Corporation ($65 million private company leader in the filtration industry, John C. Stanley, President); Pinnacle Environmental Corporation (specializing in asbestos and lead abatement services); Annabec Corporation (suppliers of Biochek 500T, BioShield's technology); and Ondeo Nalco (one of BioShield's global distributors). BioShield and these four leaders in their fields, worked together to eliminate the problems created in and around buildings that were affected as a result of the September 11th terrorist attacks against the World Trade Center. As of September 30, 2002, this work has been completed.
BioShield received a purchase order for an initial $500K purchase placed with BioShield in September 2001 from ONDEO-NALCO (Toronto: NLCO), a subsidiary of Suez (NYSE: SZE), a $30 billion company located in France. ONDEO-NALCO, a $4.2 billion dollar distributor of specialty chemicals, launched BioShield technology at the International Coating Exposition & Technology Conference 2001, and introduced the Biochek 500T with BioShield technology to over three hundred fifty companies showing their commitment to selling BioShield's products. Nalco continues to purchase product and has an outstanding purchase order in the amount of $500,000 through September 2002; however, it has not met the anticipated targets outlined in our proposed agreement.
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BioShield and AbTech Industries, Inc. (www.abtechindustries.com ) entered into a strategic alliance in December 2001 that will combine the companies' patented technologies to produce the first-ever anti- microbial solution to storm water run-off. Both companies said the new product has the potential to revolutionize storm water management practices to ensure clean water in communities throughout the country. BioShield continues to look for a solution with AbTech for incorporation of our technology with their products.
In January 2002, BioShield announced that a $4 Billion Worldwide chemical company that has manufacturing facilities in 26 countries and sales organizations in over 120 countries has reported they are close to gaining certification of BioShield's antimicrobial from a health board in Europe. Once the administrative process is complete the worldwide firm has stated they plan to target the pulp and paper industry and conduct trial tests for broad applications with polymers. The company is a leading worldwide supplier of additives to the polymer industry including antimicrobial compounds. In addition the firm is one of the largest suppliers of antimicrobial compounds for use in consumer products. The worldwide firm is currently under a confidentiality agreement with BioShield. BioShield continues to support this effort; however, we do not foresee closure in the near future.
In late January 2002, BioShield launched its new web site designed to carry out requests from companies around the world for information on BioShield's unique and patented antimicrobial compounds. Potential licensees have a choice of downloading all of our technical data, including material safety data sheets, spec data, master labels, EPA certificates, FDA/Medical applications, patents, product descriptions, global and specialty licenses, recent company developments and technical data by industry. In addition the Company is posting a wealth of material designed to assist firms that have been asking for enhanced marketing material for their particular industry. BioShield continues to make enhancements to the web site and plans to complete the addition of different languages in the coming year.
Also in late January 2002, BioShield and Wm. Zinsser and Co., Inc., a company in business since 1849 and a division of RPM, Inc. (NYSE: RPM - news), signed a proposed distribution agreement with BioShield. Both parties have agreed to keep confidential the terms of the proposal; however, both sides continue to pursue avenues in which the Company's technology can be used with Zinsser products.
BioShield received two letters of understanding from Aerus/Electrolux in May 2002; one was regarding a proposed merger and the second regarding a proposed license arrangement. During the 120 day due diligence period, there were several conference calls conducted, many requests for data and records resulting in several boxes of data provided, and many hours of R&D effort expended. The due diligence period ended on September 16, 2002 and as a result, Aerus and BioShield have determined that they will not move forward with the merger and an amended Form 8-K has been filed in support of this decision. BioShield is continuing talks with Aerus however, and we are continuing to review the license agreement opportunity.
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On September 25, 2002, BioShield announced that it received unanimous approval from its Board of Directors to change its corporate name from BioShield Technologies, Inc. to International BioChemical Industries, Inc. (IBC Industries). The corporate name change is being made to help promote the new direction of the company and reposition the company to better describe our business focus and model. A new trading symbol, IBCL, for the company's common stock was applied for with the NASD and SEC and we announced the new symbol in early October 2002.
PRODUCTS and EPA REGISTRATIONS
BioShield announced in late December 2001 that, after years of successful testing, the EPA under FIFRA, approved BioShield Technologies' new germ killer, disinfectant and antimicrobial against Salmonella cholerasuis, Staphylococcus aureus and other bacteria, fungus and algae. This new agent is effective against household germs and prevents the spread of harmful bacteria and cross contamination. Based on independent laboratory results, this new germ killer antimicrobial had shown 99.9999% efficacy against Salmonella cholerasuis, Staphylococcus aureus, Gram positive and negative bacteria, yeast and different types of fungus and algae at 2, 7, 14, 21, and 28 days post application. The Company believes that with this EPA/FIFRA approval, there is a very substantial market for the technology in different areas.
In addition, the EPA approved AM 3651 P, EPA Reg No. 70871-15. Disinfectant and Antimicrobial agent is a solvent based system that provides residual protection. Unlike conventional disinfectants, sanitizers and bleaches, AM 3651 P is water-soluble and provides long lasting bond to surfaces.
BioShield announced on June 5, 2002 that the EPA has granted approval for a new use application of BioShield's Antimicrobial line of products for the $17 billion paints and coatings industry. This New Use Approval significantly extends the use of BioShield's product line as a spray on latex paints, stains, coatings, films, laminates and finishes as well as directly added in can paints to control the growth of bacteria, mold, mildew and algae for both indoor and outdoor use.
BioShield announced on June 10, 2002 that the EPA has granted approval for a new use application of BioShield's Antimicrobial line of products for the Polymers industry. This New Use Approval significantly extends the use of BioShield's product line as an anti- static agent as well as to eliminate degradation of the polymer.
On June 12, 2002, BioShield received from the EPA the amendment, submitted in connection with registration under section 3(c) (7) (A) of the Federal, Insecticide, Fungicide, and Rodenticide Association (FIFRA), to add to its list of approval uses, the new use of the BioShield water-based active ingredient (AM 500) as a spray on latex paints, stains, coatings, films, laminates and finishes as well as directly added in can paints to control the growth of bacteria, mold, mildew and algae for indoor or outdoor use.
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BioShield announced on June 18, 2002 the development of a new molecular formulation of the trymethoxysilil family in a solid form, high concentrate active ingredient, designed to be used in the healthcare and medical sector. The Company has devoted several years to the development and refining of the new BST 1870. The development of 1870 as a medical-grade solid form antimicrobial/antibacterial has phenomenal potential to be utilized in various medical and healthcare applications and treatments and finally gives BioShield the opportunity to approach the $2 trillion medical industry with this revolutionary new biotechnology. In addition, BST 1870 in solid form also gives BioShield the ability to pursue markets that do not permit liquid applications, creating entirely new sources of potential revenue and licensee partners.
Summary Information Regarding Current BioShield Products
BioShield AM500, is a stable aqueous solution of a silicone quaternary ammonium salt, which can produce a durable micro biostatic coating on a broad range of surfaces. AM500 provides effective protection of treated surfaces against bacteria and fungi, including mold and mildew. BioShield Technologies has registered AM500 under FIFRA regulations and been given the EPA registration number 70871-1.
BioShield AM 3651P is an EPA registered antimicrobial agent effective against common household germs. This antimicrobial agent helps prevent the spread of harmful germs on treated hard, non-porous surfaces. 3651P is also effective in controlling mold and mildew by inhibiting the growth of mold and mildew and also resists stains and discoloration associated with the growth of such organisms. BioShield's 3651P also disinfects hard, non-porous surfaces and kills Salmonella choleraesuis and Staphylococcus aureus.
BSTI 1860 may be used for incorporation into or treatment of various materials to impart bacteriostatic/fungistatic properties. This formula molecularly bonds to most surfaces utilizing a silanol group. It is this feature that provides a durable coating on items it is incorporated into or applied to post-production. This molecular bonding does not allow the product to diffuse into the surrounding environment. It does not wash out, and maintains its effectiveness over time. The quaternary ammonium portion of the active ingredient provides antimicrobial activity. This product exhibits a broad spectrum of antimicrobial activity, and is effective in controlling various microbes. BioShield 1860 adds value to products by imparting a durable and effective micro biostatic coating that lasts.
RTU 50 is a "ready to use" product providing a durable antimicrobial coating on most surfaces. It is a water-based solution for easy application to desired materials. The active ingredient in RTU 50 actually bonds to the objects in which it is applied. This means that once RTU 50 is applied to a surface, the mold and mildew protection lasts. It attacks malodor and cosmetic degradation at the source. Using RTU 50 provides effective protection against bacteria and fungi, and retards the formation of mold and mildew stains.
RTU 75 combines BioShield's proprietary technology into an aqueous system to provide a durable antimicrobial barrier. RTU 75 protects surfaces from foul smelling odors and staining caused by mold and mildew. This is a non- flammable product that provides quick, uniform dispersion for easy application onto pre-cleaned surfaces.
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CS Concentrate Protectant 15 is a convenient formula that is fast, easy to apply, and very effective. CS 15 incorporates Spatented technology into a convenient protectant spray. It provides lasting protection against mold and mildew. The protective coating is not destroyed by repeat cleanings, and offers a durable finish on most surfaces. CS 15 controls and retards the deterioration caused by most bacteria and fungi. It may also be used to prolong the life of fabrics and carpets.
In addition, BioShield has developed twelve new products ready for market and has initiated a campaign to put in place nationwide distribution. The Company has devoted considerable time and expense to create a suite of products to serve large multi-billion dollar industries and several market niches with the potential of becoming one of the nation's leading suppliers of antimicrobial and antiviral products.
o BST 1870: Medical-Grade antimicrobial/antibacterial compound. Market focus of BST 1870 is the $2 trillion worldwide healthcare and medical sector.
o AM REM: EPA Approved. Bio-Remediation antibacterial/antimicrobial compound. Market focus for this product is the bio-remediation industry.
o BST C503: EPA Approved. Product focus is used as a deodorizer, anti-static agent and antimicrobial barrier for application on carpets and rugs.
o BST H502: EPA Approved. Product's focus is to be utilized as a surfactant or coating on a diverse array of hard surfaces.
o BST F501: EPA Approved. BST F501 is designed to be utilized in filtration systems for both water and air purification.
o BST 022: Anti Corrosion product to be used on a wide variety of surfaces to be utilized in the specialty coatings industry.
o BST ANTISTAT: Antistatic Agent to be used as a surfactant on a diverse array of surfaces.
o BST LUBE-EX: Lubricant with antimicrobial properties to be utilized in environments where lubricants must be bacteria free. Applications typically sought in the oil and equipment industry.
o BST AS 048: EPA Approved Anti Slime agent to be used within the $800 million pulp and paper industry and other industries where slime is a problem in large production facilities that deal with pulp, paper, food, and natural resources.
o BST-7: Odor counteract and to be utilized in both consumer and industrial applications in a large variety of industries and applications.
o BST CD530: Antimicrobial agent specifically designed for concrete applications. Particularly focused in the building industry, which is estimated at $1 Billion.
o MB M100: De-Odorizing Clear Coating antibacterial/antimicrobial agent. Can be utilized across numerous industries and applications.
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GOVERNMENT REGULATIONS AND APPROVAL
Patents, Patent Applications & EPA Registrations
Granted United States Patents:
United States Patent Number 6,120,587 Abstract: The composition formed by mixing an organosilane, optionally having a nonhydrolizable organic group, but having one or more hydrolyzable groups, with a polyol containing at least two hydroxy groups, wherein at least any two of the hydroxy groups are separated by no more than two intervening atoms. Water-stabilized organosilane compounds. A water stable composition made from the polyol and organosilane or compound and water. A method of treating a substrate by mixing or contacting the substrate with the product compound, or composition of this invention for a period of time sufficient for treatment of the substrate. A treated substrate having adhered thereto the product, compound, or composition of this invention. A method of dyeing and treating a substrate. A method of antimicrobially treating a food article. A method of antimicrobially coating a fluid container. A method of antimicrobially coating a latex medical article. A method of making a siloxane in the presence of a stabilizer.
United States Patent Number 6,113,815 Abstract: The composition formed by mixing an organosilane with an ether. Water-stabilized organosilane compounds. A water stable composition made from the ether and organosilane composition and water. A method of treating a substrate by mixing or contacting the substrate with the product, compound, or composition of this invention for a period of time sufficient for treatment of the substrate. A treated substrate having adhered thereto the product, compound, or composition of this invention. A method of dyeing and treating a substrate. A method of antimicrobially treating a food article. A method of antimicrobially coating a fluid container. A method of antimicrobially coating a latex medical article.
United States Patent Number 5,954,869 Abstract: The composition formed by mixing an organosilane, optionally having a nonhydrolizable organic group, but having one or more hydrolyzable groups, with a polyol containing at least two hydroxy groups, wherein at least any two of the hydroxy groups are separated by no more than two intervening atoms. Water-stabilized organosilane compounds. A water stable composition made from the polyol and organosilane or compound and water. A method of treating a substrate by mixing or contacting the substrate with the product, compound, or composition of this invention for a period of time sufficient for treatment of the substrate. A treated substrate having adhered thereto the product, compound, or composition of this invention. A method of dyeing and treating a substrate. A method of antimicrobially treating a food article. A method of antimicrobially coating a fluid container. A method of antimicrobially coating a latex medical article. A method of making a siloxane in the presence of a stabilizer.
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US PATENTS PENDING:
Application
Docket Number Region Number Description
....................... .............. .................. ..................................................
BST-105 US 08/965,441 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. ..................................................
BST-100D4 US 09/590,493 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. ..................................................
BST-101D1 US 09/654,232 Ether-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. ..................................................
BSI-102D1 US 09/967,486 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
FOREIGN PATENTS ISSUED:
Docket Number Region Serial Number Description
....................... .............. .................. .................................................
BST-99NZ New Zealand 329397 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100NZ New Zealand 330379 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
FOREIGN PATENTS PENDING:
Application Description
Docket Number Region Number
....................... .............. .................. .................................................
BST-99 BZ Brazil PI 9702243-8 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-99 IL Israel 122,555 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-99 MX Mexico 980185 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 AR Argentina P 980102138 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 BR Brazil PI 9806344-8 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 CA Canada 2236893 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 EPO EC 98303600.5 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 IL Israel 124316 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 JP Japan 10-125119 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 MX Mexico 983600 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-100 Div1IL Israel 136872 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-101 BR Brazil PI9811509-0 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-101 CA Canada 2296397 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-101 EPO E.C. 98935768.6 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
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FOREIGN PATENTS PENDING (Continued):
BST-101 JP Japan 2000-503088 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-101 MX Mexico 627 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-102 BR Brazil PI9812102-4 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 CA Canada 2296395 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 EPO E.C. 98935832 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 JP Japan 2000-503089 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 MX Mexico 625 Water-Stabilized Organosilane Compounds and
Their Use
....................... .............. .................. .................................................
BST-102 PCT PCT/US98/14985 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-105C1X CA Canada 2292005 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-105C1X JP Japan 11-355128 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
....................... .............. .................. .................................................
BST-105C1X MX Mexico 9911802 Water-Stabilized Organosilane Compounds and
Methods for Using the Same
Current EPA Registrations:
US EPA Registration Number 70871-1 Water stabilized organosilane antimicrobial compound / end use application.
US EPA Registration Number 70871-2 Water stabilized organosilane antimicrobial compound / manufacturers' use.
US EPA Registration Number 70871-13 Antimicrobial, disinfectant, germ kill, organosilane compound.
US EPA Registration Number 70871-12 Solvent based organosilane antimicrobial compound.
US EPA Registration Number 70871-4 Water stabilized organosilane antimicrobial compound/ end use application.
US EPA Registration Number 70871-15 Disinfectant and Antimicrobial agent.
Future Filings
The Company plans to seek approval on a modified version of its core active ingredient. The modification of the product involves the elimination of the highly toxic solvent (methanol). This modified active ingredient is highly soluble and less toxic to the user during application and still delivers the micro-biostatic properties. This would be an alternate source of active ingredient manufactured by the Company.
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Research and Development
The Company's core technologies are in both aqueous and non-aqueous reactive silanes and antimicrobial products. Combinations of both technologies are producing compounds with new properties and are setting new standards. The Company's new product releases in the near future will be based on these core technologies. Research on silane based and non-silane based antimicrobial will expand application of antimicrobial Company products from pesticides to medications and treatments to preventive care. Research on silane based durable products will provide the applicator with the opportunity to give surfaces new desired properties.
Products range from antimicrobial absorbents to cleaning solutions and disinfectants and household products. Products in this category include materials treated by the manufacturer, for example socks, shower curtains and carpets. Product development in this category is anticipated on a market-need basis in collaboration with the manufacturers. In addition, a number of new applications based on the uniqueness of the Company's products are anticipated. There can be no assurance that the Company will be successful in developing these or other products.
During the fiscal years ended June 30, 2002, and 2001, the Company incurred expenses of approximately $196,000 and $339,000, respectively, resulting from Company-sponsored research and development activities. Research and development is expected to remain a significant component of the Company's business. However, the Company may abandon or de-emphasize its research and development activities with respect to the primary development projects and expand research and development of other products as circumstances warrant. The Company has contracted out a substantial part of its research and intends to continue to do so while utilizing its staff for monitoring such research.
ANTIMICROBIAL BUSINESS
BioShield's primary focus is to exploit its proprietary technology to become the leader in antimicrobials and biocides for consumers, Original Equipment Manufacturing, industrial, institutional, environmental services, and various biochemical related industries. BioShield products are an easily applied reactive technology that modifies surfaces of all types, by creating an invisible covalent bond between surfaces and a variety of chemical agents. Through the cross linking technology, these antimicrobial properties and other chemical agents can impart many performance-enhancing characteristics, such as residual antimicrobial activity, removal of surface-borne and air-borne allergens which may cause respiratory discomfort or asthma, infection resistance, anti-inflammation, lubricity and drug delivery onto many surfaces without changing the dimensions or physical properties of the modified surfaces. In addition, the Company has added various vertical product lines (see summary information regarding current BioShield products) in many sectors of the industries.
BioShield believes that its antimicrobial technologies and other related biochemicals have properties that make its products significantly more durable, effective and safer than those currently available conventional antimicrobials, non-antibiotics, preservatives or biocides. BioShield also believes that certain manufacturers who utilize its technologies will significantly
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improve the performance of their products and in some situations differentiate their products in a highly competitive marketplace.
BioChemical Industries
BioShield is currently engaged in testing multiple applications of its core technology and products with leading manufacturers, many of whom are Fortune 500 companies. The Company is committed to a value-added strategy to have our antimicrobial technology incorporated into the products of these leading manufacturers. It is BioShield's intention to produce co-branded products in the future.
In addition, BioShield intends to follow a path taken by many other proprietary specialty chemical Research and Development Companies and has targeted leading specialty chemical distributors representing many vertical markets such as the Industrial and Institutional Industry, paints, coatings and adhesives, plastics, textiles, and pulp and paper. The Company aligns with distributors that sell BioShield products on either an exclusive or non-exclusive basis to specific customers, for specific customer applications, or into specific vertical industry markets.
BioShield manages this program so that, where possible, the distributor can take product and stock in their locations. The stocking program, potential sales opportunities and outlook for future sales are key requirements BioShield requires prior to entering into an agreement with a distributor. The Company knows our products have long sales cycles, however, we are interested in making long term agreements with distributors that can expend appropriate time marketing and selling our product and moving quantities into the marketplace.
In addition, the marketing of BioShield products within the institutional and industrial segments and other key vertical industries will be consistent, as all products that contain the BioShield technology will be clearly labeled. Advertising for the Company, its technology, and its products will consist of traditional media, printed material in high distribution trade journals, direct mail, and active, visible participation in all appropriate industry conventions.
And as a result of the distribution agreements, BioShield works very closely with distributors providing leads and opportunities and we are committed to supporting our distributors with strong technical personnel, sales and marketing support, and training. BioShield works with distributors regularly (monthly sales calls, quarterly/annual meetings, etc.) to understand product pipeline and forecasting, key opportunities, and problem accounts, with a focus on ensuring goals are being met, appropriate levels of inventory are on hand to support sales effort, and growth opportunities are targeted and executed.
Sub registrations
The Company currently allows companies to sub register our technology and registrations and we coordinate with distributors where applicable. As new products are developed some will be made available for private label distribution, particularly those that make non-pesticidal claims.
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The expansion of sub registered label sales will only be executed in situations where both the anticipated volume and pricing are such that positive profitability is available.
Licensing Value Added Technology
Utilization of BioShield's patented technology in leading consumer goods offered by other organizations represents potentially lucrative licensing revenues for the Company. The unique attributes of BioShield's technology permit incorporation into existing products as a value-added ingredient that imparts anti-microbial properties to the base product.
Marketing programs for value-added products are designed to support the global licensing strategy of BioShield. The Company intends to pursue additional licensing agreements with manufacturers that the Company anticipates will contain a marketing portion that outlines the requirements that each joint product will bear a notification of "Protected By BioShield" or other similar awareness building program. This extension of the Company's trademarks into categories, products, and geographies will enhance the long term branding campaign.
Establishment and Spin-off of Business - Healthcare Network Solutions, Inc. ("HNS") Subsidiary
BioShield founded HNS in April 2001 for the purpose of providing non-medical services to physician practices. It initially owned approximately 52% of all outstanding HNS common stock and thereafter owned approximately 35% post spin-off with the difference of 17% owned by BioShield shareholders in accordance with BioShield's September 24, 2001 press release wherein it indicated that it intended to spin-off, to its stockholders and on a 1 for 10 basis, a portion of those shares owned by it in HNS. As of September 30, 2002, BioShield owns approximately 19.96% of all outstanding HNS common stock.
HNS filed a Form 10-SB Registration Statement with the Securities and Exchange Commission ("SEC") which provided certain information about HNS, its current and proposed business activities and its management team. The Form 10-SB was filed on September 27, 2001. All information contained in the Form 10-SB and 10-KSB may be obtained at the SEC's web site at http:\\www.sec.gov.
The best weapon against "fear" is "facts"!!
The best weapon against "fear" is "facts"!!
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