-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TJ329GHMJXgvkSxAw8iIihtFjDBjByBlgdF7UElKxWO9IHdZ1QhfMoy7FWlfLoKX LrOph8VihV+W51QIetEkew== 0000912057-96-028395.txt : 19961206 0000912057-96-028395.hdr.sgml : 19961206 ACCESSION NUMBER: 0000912057-96-028395 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19961120 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961205 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERIDIAN MEDICAL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000095676 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 520898764 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05958 FILM NUMBER: 96676442 BUSINESS ADDRESS: STREET 1: 10240 OLD COLUMBIA ROAD CITY: COLUMBIA STATE: MD ZIP: 21046 BUSINESS PHONE: 4103096830 MAIL ADDRESS: STREET 1: 10240 OLD COLUMBIA ROAD CITY: COLUMBIA STATE: DE ZIP: 21046- FORMER COMPANY: FORMER CONFORMED NAME: SURVIVAL TECHNOLOGY INC DATE OF NAME CHANGE: 19920703 8-K 1 8K FORM SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 20, 1996 Meridian Medical Technologies, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 0-5958 52-0898764 ---------------------------- ----------- ------------------- (State or other jurisdiction (Commission (I.R.S. employer of incorporation) file number) identification no.) 10240 Old Columbia Road, Columbia, MD 21046 ---------------------------------------- ---------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (410) 309-6830 -------------- Survival Technology, Inc. 2275 Research Boulevard Rockville, MD 20850 ------------------------------------------------------------- (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets ------------------------------------ On November 20, 1996, Brunswick Biomedical Corporation ("Brunswick"), the holder of approximately 61.1% of the outstanding shares of the Registrant's common stock, merged with and into Survival Technology, Inc. ("STI" or the "Registrant") pursuant to an Agreement and Plan of Merger dated as of September 11, 1996 ("Agreement"). In the merger, each of Brunswick's 66,780 outstanding shares of common stock was converted into 2.1 shares of STI's common stock and cash in lieu of fractional shares. Each of Brunswick's 746,995 outstanding shares of preferred stock was converted into 2.1 shares of STI's common stock and cash in lieu of fractional shares as well as a warrant to purchase 0.4 of a share of STI's common stock at an exercise price of $11.00 per share exercisable for a period of five years following the merger. In addition, STI assumed Brunswick's obligations under outstanding options and warrants. These provisions of the Agreement resulted in approximately 1.7 million shares of STI common stock being issued in exchange for the Brunswick stock upon the consummation of the merger and may result in additional issuances of approximately 1.05 million shares of STI common stock if all options and warrants are exercised and the required consideration is paid. Each of the 1,888,126 shares of STI common stock formerly owned by Brunswick was retired in the merger. Stockholders of the Registrant and Brunswick approved the Agreement at the meetings held on November 20, 1996 and November 19, 1996, respectively. Following the effective time of the merger, STI also changed its name to Meridian Medical Technologies, Inc. On December 1, 1996, the Registrant relocated its executive offices to 10240 Old Columbia Road, Columbia, MD 21046, and changed its phone number to (410) 309-6830. Additional information regarding the background of the merger, the negotiations of the exchange ratio, and the relationships of certain officers and directors of the Registrant with Brunswick, as well as information regarding the business and assets of Brunswick is set forth in the Registrant's definitive proxy statement dated as of October 30, 1996. Although the Registrant is the surviving corporation in the merger as a legal matter, the merger is treated as a purchase of the Registrant for financial accounting purposes. As a result, the Registrant's assets and liabilities have been revalued to their respective fair values, and Brunswick's historical financial statements will reflect the combined - 2 - operations of the Registrant and Brunswick after November 20, 1996. The Registrant will retain July 31st as its fiscal year end. This will result in the separate reporting by Brunswick of unaudited interim financial statements for the months ended July 31, 1996 and 1995 to transition Brunswick's historical financial statements from a June 30th fiscal year end to a July 31st fiscal year end. The Agreement was previously filed as Exhibit 6(a) to Amendment No. 1 to Brunswick's Schedule 13D relating to its holdings of STI common stock and incorporated by reference as Exhibit 2 to the Registrant's Current Report on Form 8-K dated September 16, 1996. For information regarding certain of the terms of the merger, reference is made to the press release of the Registrant dated November 20, 1996 attached hereto as Exhibit 99.2. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits ----------------------------------------- (a) FINANCIAL STATEMENTS. (1) Audited consolidated financial statements of Brunswick as of June 30, 1996 and for the year then ended, together with the report of the independent accountants thereon, were previously included on pages F-1 through F-28 of the Registrant's definitive proxy statement dated October 30, 1996. (2) Audited consolidated financial statements of Brunswick as of June 30, 1995 and 1994 and for the two years ended June 30, 1995 and 1994, together with the report of the independent public accountants thereon, are filed herewith. (3) Unaudited Interim Financial Statements of Brunswick for the months ended July 31, 1996 and 1995 and as of October 31, 1996 and 1995 and for the quarters then ended are not yet available and will be filed as an amendment to this Form 8-K as soon as practicable, but not later than 60 days after the date hereof. - 3 - (b) PRO FORMA FINANCIAL INFORMATION. (1) Unaudited pro forma combined financial information as of July 31, 1996, giving effect to the merger, were previously included on pages 50-55 of the Registrant's Definitive Proxy Statement dated October 30, 1996. (c) EXHIBITS. 2.1 Agreement and Plan of Merger dated September 11, 1996 (incorporated by reference herein from Exhibit 6(a) to Amendment No. 1 to Schedule 13D filed by Brunswick Biomedical Corporation dated September 13, 1996). 4.1 Form of Warrant to be issued by the Registrant to holders of Brunswick preferred stock. 23.1 Consent of Price Waterhouse LLP. 23.2 Consent of Arthur Andersen LLP. 99.1 Audited consolidated financial statements of Brunswick as of June 30, 1995 and 1994 and for the two years ended June 30, 1995 and 1994, together with the report of the independent public accountants thereon. 99.2 Press Release dated November 20, 1996. - 4 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized MERIDIAN MEDICAL TECHNOLOGIES, INC. Date: December 5, 1996 By: /s/Jeffrey W. Church ------------------------------- Jeffrey W. Church Sr. Vice President-Finance and Chief Financial Officer (Principal Financial and Accounting Officer) - 5 - EXHIBIT INDEX
LOCATION IN SEQUENTIALLY NUMBERED COPY ------------- 2.1 Agreement and Plan of Merger dated September 11, 1996 (incorporated by reference herein from Exhibit 6(a) to Amendment No. 1 to Schedule 13D filed by Brunswick Biomedical Corporation dated September 13, 1996)...................... 4.1 Form of Warrant to be issued by the Registrant to holders of Brunswick preferred stock.......................... 7 23.1 Consent of Price Waterhouse LLP.......... 15 23.2 Consent of Arthur Andersen LLP........... 16 99.1 Audited consolidated financial statements of Brunswick as of June 30, 1995 and 1994 and for the two years ended June 30, 1995 and 1994, together with the report of the independent public accountants thereon.................................. 17 99.2 Press Release dated November 20, 1996.... 33
- 6 - EX-4.1 2 EXHIBIT 4.1 Exhibit 4.1 THE WARRANTS REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER NAMED HEREON FOR HIS OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR CAUSING TO BE MADE ANY PUBLIC DISTRIBUTION OF ALL OR ANY PORTION THEREOF; THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE LAWS IS NOT REQUIRED WARRANT TO PURCHASE COMMON STOCK OF MERIDIAN MEDICAL TECHNOLOGIES, INC. Warrant No. _______ ____________ Shares This certifies that, for value received, ___________________ (the "Holder") is entitled to subscribe for and purchase up to ______ shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock of MERIDIAN MEDICAL TECHNOLOGIES, INC., a Delaware corporation (the "Company"), at the Warrant Price (as defined in Section 2 hereof), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, the term "Common Stock" shall mean the Company's authorized common stock, $.10 par value per share. This Warrant is one of a series of substantially identical warrants (the "Warrants") issued pursuant to that certain Agreement and Plan of Merger between the Company and Brunswick Biomedical Corporation dated September 11, 1996 (the "Merger Agreement") as part of the Merger Consideration as defined therein. 1. Term of Warrant. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time during the period beginning on November 20, 1996 (the "Initial Exercise Date") and ending on November 19, 2001. 2. Warrant Price. The exercise price of this Warrant is $11.00 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof (the "Warrant Price"). 7 3. Method of Exercise; Payment; Issuance of New Warrant. Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by check or wire transfer, of an amount equal to the Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within such 15 day period. The issuance of any shares or other securities upon the exercise of this Warrant and the delivery of certificates or other instruments representing such shares or other securities shall be made without charge to the Holder for any tax or other charge (other than payment of the Warrant Price) in respect of such issuance. The Company shall not, however, be required to pay any tax that may be payable in respect of any transfer involved in the issue and delivery of any certificate in a name other than that of the Holder, and the Company shall not be required to issue or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established of the satisfaction of the Company that such tax has been paid. 4. Stock Fully Paid; Reservation of Shares. All Common Stock which may be issued upon the exercise or conversion of this Warrant will, upon issuance, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 5. Adjustments. (a) Reclassification, Consolidation or Merger. In case of any reorganization, reclassification or change of outstanding securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a reorganization or merger with another corporation in which the Company is a continuing corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, or in case of any sale of all or substantially all of the assets of the Company, there shall thereafter be deliverable upon exercise of this Warrant, in lieu of each share of Common Stock theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such 8 reorganization, reclassification, change, consolidation, merger or sale by a holder of one share of Common Stock. The Company shall not effect any such reorganization, reclassification, change, consolidation, merger or sale unless upon or before the consummation thereof the successor corporation (or if the Company shall be the surviving corporation in any such reorganization or merger and is not the issuer of the shares of stock or other securities or property to be delivered to holders of shares of the Common Stock outstanding at the effective time thereof, then such issuer) shall assume by written instrument the obligation to deliver to the Holder such shares of stock, securities, cash or other property as the Holder shall be entitled to purchase in accordance with the foregoing provisions. The provisions of this subsection (a) shall similarly apply to successive reclassification, changes, consolidations, mergers and transfers. (b) Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its Common Stock, the Warrant Price shall be proportionately decreased in the case of a subdivision or increased in the case of a combination. (c) Dividends in Cash or Property. If the Company shall distribute to all holders of Common Stock (including any such distribution made to the shareholders of the Company in connection with a consolidation or merger in which the Company is the continuing corporation) (i) evidences of its indebtedness, cash or assets (other than ordinary cash dividends paid out of the net profits of the Company for its most recent fiscal year), (ii) rights, options or warrants to subscribe for or purchase Common Stock, or (iii) any equity securities of the Company (other than Common Stock), including any securities convertible into or exchangeable for shares of Common Stock, then, in each case, the Warrant Price shall be adjusted by multiplying the Warrant Price in effect immediately before the record date for the determination of shareholders entitled to receive such distribution by a fraction, the numerator of which shall be the Current Market Price (as determined below) per share of Common Stock on such record date, less the fair market value (as determined in good faith by the board of directors of the Company, whose determination shall be conclusive absent manifest error) of the portion of the evidences of indebtedness or assets so to be distributed, or of such securities, rights, options, or warrants, or the amount of such cash, applicable to one share, and the denominator of which shall be such Current Market Price per share of Common Stock. Such adjustment shall become effective at the close of business on such record date. The Current Market Price per share of Common Stock as of any date shall be the average of the daily closing prices for the 20 consecutive trading days immediately preceding the date in question. The closing price for each day shall be the last reported sales price regular way or, in case no such reported sale takes place on such date, the closing bid price regular way, in either case on the principal national securities exchange (including, for purposes hereof, the Nasdaq National Market) on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on any national securities exchange, the highest reported bid price of the Common Stock as furnished by the National Association of Securities Dealers, Inc. through Nasdaq, or a similar organization if Nasdaq is no longer reporting such information. If on any such date the Common Stock is not listed or admitted to trading on any national securities exchange and 9 is not quoted by Nasdaq or any similar organization, the fair value of a share of Common Stock on such date, as determined in good faith by the board of directors of the Company, whose determination shall be conclusive absent manifest error, shall be used. (d) Stock Dividends. If the Company at any time while this Warrant is outstanding and unexpired shall pay a dividend with respect to Common Stock payable in, or make any other distribution with respect to, Common Stock (except any distribution specifically provided for in the foregoing subparagraphs (a) or (b) then the Warrant Price shall be adjusted, from and after the record date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant Price in effect immediately prior to such date of determination by a fraction (a) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution and (b) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution. (e) No Adjustment. No adjustment in the Warrant Price pursuant to Section 5(a), (b), (c) or (d) shall be required unless such adjustment would require an increase of a decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments that by reason of this Section 5(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (f) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to Section 5(a), (b), (c) or (d), the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter. 6. Notice of Adjustments. Whenever any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the holder of this Warrant at the address specified in Section 10(d) hereof, or at such other address as may be provided to the Company in writing by the holder of this Warrant. 7. Fractional Shares. No fractional shares of Common Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis of the Warrant Price then in effect. 8. Compliance with the Act. The holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued upon exercise hereof are 10 being acquired for such holder's own account for investment with no intention of making or causing to be made any public distribution of all or any portion thereof; and such securities may not be pledged, sold or in any other way transferred in the absence of an effective registration statement for such securities under the Act and registration of such securities under applicable state securities laws or (i) registration under applicable state securities laws is not required and (ii) an opinion of counsel satisfactory to the Company is furnished to the Company to the effect that registration under the Act is not required. 9. Transfer and Exchange of Warrant. (a) Transfer. This Warrant may be transferred or succeeded to by any person; provided, however, that the Company is given written notice by the transferee at the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which such rights are being assigned. (b) Exchange. Subject to compliance with the terms hereof, this Warrant and all rights hereunder are transferable, in whole or in part, at the office of the Company by the Holder in person or by duly authorized attorney, upon surrender of this Warrant properly endorsed. Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that this Warrant, when endorsed in blank, shall be deemed negotiable; provided, that the last holder of this Warrant as registered on the books of the Company may be treated by the Company and all persons dealing with this Warrant as the absolute owner hereof for any purposes and as the person entitled to exercise the rights represented by this Warrant or to transfer hereof on the books of the Company, any notice to the contrary notwithstanding, unless and until such holder seeks to transfer registered ownership of this Warrant on the books of the Company and such transfer is effected. 10. Miscellaneous. (a) No Rights as Shareholder. No holder of the Warrant or Warrants shall be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant or Warrants shall have been exercised and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. (b) Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, 11 theft, or destruction, on delivery of an indemnity agreement, or bond reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. (c) Notice of Capital Changes. In case: (i) the Company shall declare any dividend or distribution payable to the holders of its Common Stock; (ii) there shall be any capital reorganization, reclassification or change of outstanding securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination) of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation or business organization; or (iii) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of said cases, the Company shall give the holder of this Warrant written notice, in the manner set forth in subparagraph (d) below, of the date on which a record shall be taken for such dividend, or distribution or for determining shareholders entitled to vote upon such reorganization, reclassification, change, consolidation, merger, sale, dissolution, liquidation or winding up and of the date when any such transaction shall take place, as the case may be. Such written notice shall be given at least 30 days prior to the transaction in question and not less than 20 days prior to the record date in respect thereof. (d) Notice. Any notice given to either party under this Warrant shall be in writing, and any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form of telecommunication or three (3) business days after the mailing thereof if sent registered mail with postage prepaid, addressed to the Company at its principal executive offices and to the holder at its address set forth in the Company's books and records or at such other address as the holder may have provided to the Company in writing. (e) No Impairment. The Company will not, by amendment of its Restated Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions in the Warrant. 12 (f) Registration Rights. The Common Stock issued upon exercise of this Warrant shall be entitled to registration under the Act as set forth in the Questionnaire and Registration Rights Agreement. (g) Governing Law. This Warrant shall be governed by and construed under the laws of the State of Delaware. IN WITNESS WHEREOF, this Warrant is executed as of this 20th day of November, 1996. MERIDIAN MEDICAL TECHNOLOGIES, INC. By: ______________________________________ Title: 13 EXHIBIT 1 NOTICE OF EXERCISE TO: MERIDIAN MEDICAL TECHNOLOGIES, INC. 1. The undersigned hereby elects to purchase ___ shares of Common Stock of MERIDIAN MEDICAL TECHNOLOGIES, INC. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 2. Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: ____________________________________ (Name) ____________________________________ ____________________________________ (Address) 3. THE UNDERSIGNED REPRESENTS THAT THE AFORESAID SHARES OF COMMON STOCK ARE BEING ACQUIRED FOR THE ACCOUNT OF THE UNDERSIGNED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, THE DISTRIBUTION THEREOF AND THAT THE UNDERSIGNED HAS NO PRESENT INTENTION OF DISTRIBUTING OR RESELLING SUCH SHARES EXCEPT AS PERMITTED BY THE TERMS OF SUCH WARRANT. ________________________ Signature 14 EX-23.1 3 EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference herein of our report dated October 25, 1996 appearing on page F-2 of the Registant's definitive proxy statement dated October 30, 1996 in this Form 8-K of Meridian Medical Techonologies, Inc. PRICE WATERHOUSE LLP Washington, DC December 4, 1996 15 EX-23.2 4 EXHIBIT 23.2 Exhibit 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the inclusion in this Form 8-K of our report on Brunswick Biomedical Corporation dated August 24, 1995. It should be noted that we have not audited any financial statements of the Company subsequent to June 30, 1995 or performed any audit procedures subsequent to the date of our report. ARTHUR ANDERSEN LLP Boston, Massachusetts December 4, 1996 16 EX-99.1 5 EXHIBIT 99.1 Exhibit 99.1 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Brunswick Biomedical Corporation: We have audited the accompanying consolidated balance sheets of Brunswick Biomedical Corporation (a Massachusetts corporation) and subsidiaries as of June 30, 1995 and 1994, and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of Brunswick Biomedical Limited, a subsidiary, which reflect total assets and total revenues of 11% and 3% in 1995 and 8% and 38% in 1994, respectively, of the consolidated totals. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Brunswick Biomedical Limited, is based solely on the report of the other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Brunswick Biomedical Corporation and subsidiaries as of June 30, 1995 and 1994, and the results of their operations and their cash flows for the years then ended, in conformity with generally accepted accounting principles. Boston, Massachusetts August 24, 1995 17 BRUNSWICK BIOMEDICAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets--June 30, 1995 and 1994
1995 1994 ------------ ------------ Assets Current Assets: Cash and cash equivalents......................................... $ 51,714 $ 3,288,165 Accounts receivable, net of allowance for doubtful accounts of approximately $66,000 in 1995 and $17,000 in 1994............... 579,274 310,361 Inventories....................................................... 305,502 265,182 Prepaid expenses.................................................. 44,099 65,910 ------------ ------------ Total current assets...................................... 980,589 3,929,618 ------------ ------------ Property and Equipment, net: Equipment and vehicles under capital leases....................... 202,785 168,143 Manufacturing equipment........................................... 168,206 98,685 Office equipment.................................................. 53,234 17,597 ------------ ------------ 424,225 284,425 Less--Accumulated depreciation.................................... 224,175 189,114 ------------ ------------ 200,050 95,311 ------------ ------------ Other Assets: Deposits and other assets......................................... 368,342 258,920 Goodwill, net..................................................... 1,639,195 -- ------------ ------------ 2,007,537 258,920 ------------ ------------ $ 3,188,176 $ 4,283,849 ------------ ------------ ------------ ------------ Liabilities and Stockholders' Equity (Deficit) Current Liabilities: Line of credit (Note 4(b))........................................ $ 225,950 $ 211,075 Demand notes payable to shareholder (Note 4(a))................... 200,000 -- Accounts payable.................................................. 557,308 245,070 Current maturities of capital lease obligations................... 15,312 30,990 Current maturities under noncompete obligations................... 56,342 165,278 Accrued expenses.................................................. 606,381 558,246 ------------ ------------ Total current liabilities...................................... 1,661,293 1,210,659 ------------ ------------ Capital Lease Obligations, net of current maturities................ 55,381 -- ------------ ------------ Commitments (Notes 5 and 7) Stockholders' Equity: Preferred stock, $.01 par value-- Authorized--1,400,000 shares Issued and outstanding, as follows-- Series A, 8% convertible redeemable preferred stock-- 64,665 shares (liquidation preference of $500,000).......... 647 647 Series B, 8% convertible redeemable preferred stock-- 29,144 shares (liquidation preference of $510,000).......... 291 291 Series C, 10% convertible redeemable preferred stock-- 374,462 shares (liquidation preference of $7,645,324)....... 3,744 3,744 Common stock, $.01 par value-- Authorized--1,075,000 shares Issued--68,417 shares in 1995 and 1994.......................... 684 684 Additional paid-in capital........................................ 8,311,396 8,098,167 Accumulated deficit............................................... (6,598,341) (4,998,274) Cumulative translation adjustment................................. 19,671 29,443 Deferred compensation............................................. (255,137) (104,854) ------------ ------------ 1,482,955 3,029,848 Treasury stock, at cost, 1,636 and 1,857 shares at December 31, 1995 and 1994..................................... (11,453) (13,000) ------------ ------------ Total stockholders' equity........................... 1,471,502 3,016,848 ------------ ------------ $ 3,188,176 $ 4,283,849 ------------ ------------ ------------ ------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 18 BRUNSWICK BIOMEDICAL CORPORATION AND SUBSIDIARY Consolidated Statements of Operations for the Years Ended June 30, 1995 and 1994
1995 1994 ------------- ------------- Net Sales....................................................... $ 2,903,532 $ 2,426,984 Cost of Goods Sold.............................................. 1,698,374 1,641,581 ------------- ------------- Gross profit................................................ 1,205,158 785,403 ------------- ------------- Operating Expenses: Engineering, research and development......................... 698,034 616,834 Selling, general and administrative........................... 2,088,614 1,795,917 ------------- ------------- 2,786,648 2,412,751 ------------- ------------- Loss from operations........................................ (1,581,490) (1,627,348) Interest Expense, net........................................... (18,577) (97,496) ------------- ------------- Net loss.................................................... $ (1,600,067) $ (1,724,844) ------------- ------------- ------------- ------------- Net Loss Per Share.............................................. $ (23.39) $ (24.69) ------------- ------------- ------------- ------------- Weighted Average Common Shares Outstanding (Note 2(i)).......... 68,417 69,870 ------------- ------------- ------------- -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 19 BRUNSWICK BIOMEDICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) FOR THE YEARS ENDED JUNE 30, 1995 AND 1994
CONVERTIBLE REDEEMABLE COMMON STOCK PREFERRED STOCK COMMON STOCK ------------------------ ------------------------ ADDITIONAL CUMULATIVE NUMBER $.01 NUMBER $.01 PAR PAID-IN ACCUMULATED TRANSLATION OF SHARES PAR VALUE OF SHARES VALUE CAPITAL DEFICIT ADJUSTMENT ----------- ----------- ----------- --------- ---------- ----------- ----------- Balance, June 30, 1993 93,809 $ 938 71,447 $ 714 $1,486,682 $(3,273,430) $ 46,218 Issuance of Series C preferred stock in retirement of notes payable 95,279 953 -- -- 1,666,488 -- -- Sale of Series C preferred stock, net of issuance costs of $41,634 279,183 2,791 -- -- 4,841,278 -- -- Issuance of nonqualified stock options -- -- -- -- 125,824 -- -- Amortization of deferred compensation -- -- -- -- -- -- -- Purchase of treasury stock -- -- -- -- -- -- -- Retirement of treasury stock -- -- (3,030) (30) (22,105) -- -- Cumulative translation adjustment -- -- -- -- -- -- (16,775) Net loss -- -- -- -- -- (1,724,844) -- ----------- ---------- ----------- ----- ---------- ------------ ----------- Balance, June 30, 1994 468,271 4,682 68,417 684 8,098,167 (4,998,274) 29,443 Issuance of nonqualified stock options -- -- -- -- 209,700 -- -- Amortization of deferred compensation -- -- -- -- -- -- -- Issuance of treasury stock for payment of services -- -- -- -- 3,529 -- -- Cumulative translation adjustment -- -- -- -- -- -- (9,772) Net loss -- -- -- -- -- (1,600,067) -- ----------- ---------- ----------- ----- --------- ------------ ----------- Balance, June 30, 1995 468,271 $ 4,682 68,417 $ 684 $8,311,396 $(6,598,341) $ 19,671 ----------- ---------- ----------- ----- ---------- ------------ ----------- ----------- ---------- ----------- ----- ---------- ------------ ----------- TREASURY STOCK ---------------------- STOCKHOLDERS' NUMBER DEFERRED EQUITY OF SHARES COST COMPENSATION (DEFICIT) ----------- --------- ------------- ------------ Balance, June 30, 1993 -- $ -- $ -- $(1,738,878) Issuance of Series C preferred stock in retirement of notes payable -- -- -- 1,667,441 Sale of Series C preferred stock, net of issuance costs of $41,634 -- -- -- 4,844,069 Issuance of nonqualified stock options -- -- (125,824) -- Amortization of deferred compensation -- -- 20,970 20,970 Purchase of treasury stock 4,887 (35,135) -- (35,135) Retirement of treasury stock (3,030) 22,135 -- -- Cumulative translation adjustment -- -- -- (16,775) Net loss -- -- -- (1,724,844) ----------- --------- ------------- ------------ Balance, June 30, 1994 1,857 (13,000) (104,854) 3,016,848 Issuance of nonqualified stock options -- -- (209,700) -- Amortization of deferred compensation -- -- 59,417 59,417 Issuance of treasury stock for payment of services (221) 1,547 -- 5,076 Cumulative translation adjustment -- -- -- (9,772) Net loss -- -- -- (1,600,067) ----------- --------- ------------- ------------ Balance, June 30, 1995 1,636 $ (11,453) $(255,137) $1,471,502 ----------- --------- ------------- ------------ ----------- --------- ------------- ------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 20 BRUNSWICK BIOMEDICAL CORPORATION AND SUBSIDIARY Consolidated Statements of Cash Flows for the Years Ended June 30, 1995 and 1994
1995 1994 ------------- ------------- Cash Flows from Operating Activities: Net loss...................................................... $ (1,600,067) $ (1,724,844) Adjustments to reconcile net loss to net cash used in operating activities-- Issuance of treasury stock for payment of services........... 5,076 -- Interest payable converted to preferred stock................ -- 60,700 Depreciation and amortization................................ 244,219 211,301 Amortization of deferred compensation........................ 59,417 20,970 Amortization of noncompete discount.......................... 14,722 36,999 Changes in assets and liabilities-- Accounts receivable.......................................... (264,150) (40,080) Inventories.................................................. 150,272 5,695 Prepaid expenses............................................. 22,871 (25,457) Accounts payable............................................. 303,931 (266,906) Accrued expenses............................................. 46,854 203,109 ------------ ------------ Net cash used in operating activities...................... (1,016,855) (1,518,513) ------------ ------------ Cash Flows from Investing Activities: Increases in other assets...................................... (109,422) (249,968) Purchase of Telemedicine Division.............................. (2,062,993) -- Purchases of property and equipment............................ (34,798) (41,781) ------------- ------------- Net cash used in investing activities...................... (2,207,213) (291,749) ------------- ------------- Cash Flows from Financing Activities: Purchase of treasury stock..................................... -- (22,135) Proceeds from demand notes payable, net........................ 200,000 -- Payments under capital lease obligations....................... (35,859) (23,415) Payments under noncompete agreements........................... (180,000) (258,905) Net proceeds from the sale of preferred stock.................. -- 4,844,068 Net (repayments) borrowings of line of credit.................. 7,901 (2,732) Decrease in deferred financing costs........................... -- 53,444 ------------- ------------- Net cash provided by (used in) financing activities......... (7,958) 4,590,325 ------------- ------------- Net Effect of Currency Fluctuations on Cash Flows................ (4,425) (9,267) ------------- ------------- Net Increase (Decrease) in Cash.................................. (3,236,451) 2,770,796 Cash, beginning of year......................................... 3,288,165 517,369 ------------- ------------- Cash, end of year............................................... $ 51,714 $ 3,288,165 ------------- ------------- ------------- ------------- Supplemental Disclosure of Cash Flow Information: Cash paid for interest........................................ $ 45,107 $ 29,063 ------------- ------------- ------------- ------------- Supplemental Schedule of Noncash Investing and Financing Activities: Conversion of notes payable to preferred stock................ $ -- 1,579,970 Retirement of treasury stock.................................. -- 22,135 Increase in deferred compensation in the issuance of nonqualified stock options................................... 209,700 125,824 Assets acquired under capital lease........................... 79,980 -- Collection of accounts receivable by tendering of common stock........................................................ -- 13,000 Conversion of interest payable to preferred stock............. -- 87,472 ------------- ------------- $ 289,680 $ 1,828,401 ------------- ------------- ------------- -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 21 BRUNSWICK BIOMEDICAL CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) OPERATIONS Brunswick Biomedical Corporation (the Company) is engaged in the development, manufacture and sale of emergency life saving and less/noninvasive arrhythmia management devices. Since inception, the Company has incurred cumulative net losses of approximately $6,598,000 in an industry characterized by intense competition from a number of larger, more established companies with significantly greater financial resources. The Company is subject to risks common among companies in similar stages of development, including the ability to achieve profitable operations, to successfully market its products and to obtain additional financing. The Company's principal investor is a venture capital firm that has indicated that it will continue to support and fund the Company's operations as necessary. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements reflect the application of certain accounting policies described below and elsewhere in these notes to consolidated financial statements. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (a) BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries; Brunswick Biomedical Technologies, Inc. (BBT), a Massachusetts corporation; Brunswick Biomedical Limited (BBL) (formerly NIRAD Limited), a Northern Ireland corporation; and Brunswick Biomedical Investment Corporation (BBI), a Massachusetts corporation. All significant intercompany accounts and transactions have been eliminated in consolidation. (b) CASH AND CASH EQUIVALENTS In accordance with Statement of Financial Accounting Standards (SFAS) No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES, the Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. At June 30, 1994, the Company had $2,633,992 invested in a commercial paper instrument that matured on July 6, 1994. There were no such investments at June 30, 1995. 22 (c) FOREIGN CURRENCY In accordance with SFAS No. 52, FOREIGN CURRENCY TRANSLATION, BBL's assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenue and expense accounts are translated using a weighted average of exchange rates in effect during the year. Cumulative translation gains and losses are shown in the accompanying consolidated balance sheets as a separate component of stockholders' equity. There were no material foreign currency transaction gains or losses during fiscal 1995 and 1994. (d) INVENTORIES Inventories are valued at the lower of cost (first-in, first-out) or market and consist of the following at June 30, 1995 and 1994:
1995 1994 ---------- ---------- Raw materials......................................... $ 208,556 $ 225,286 Work-in-process....................................... 36,020 29,506 Finished goods........................................ 60,926 10,390 ---------- --------- $ 305,502 $ 265,182 ---------- --------- ---------- ---------
Work-in-process and finished goods inventories include materials, labor and manufacturing overhead. (e) PROPERTY AND EQUIPMENT Property and equipment are stated at cost and are depreciated using the straight-line method by charges to operations in amounts estimated to allocate the cost of the assets over estimated useful lives of three to five years. (f) REVENUE RECOGNITION Revenue from product sales is recognized at the time of shipment. 23 (g) CONCENTRATION OF CREDIT RISK SFAS No. 105, DISCLOSURE OF INFORMATION ABOUT FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK, requires disclosures of any significant off-balance sheet and credit risk concentrations. The Company has no significant off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. The Company's accounts receivable credit risk is not concentrated within any geographic area and no customer represented a significant credit risk to the Company. (h) FINANCIAL INSTRUMENTS The estimated fair value of the Company's financial instruments, which include cash and cash equivalents, accounts receivable, line of credit, demand note payable to shareholder and capital lease obligations, approximates their carrying value. (i) NET LOSS DATA AND EARNINGS PER SHARE Net loss per share is computed by dividing net loss by the number of shares of common stock outstanding during the period. Preferred stock and common stock equivalents have not been considered in the calculation of net loss per share, as their effect would be antidilutive. Fully diluted net loss per share has not been separately presented, as the amounts are not materially different from primary pro forma net loss per share. (j) POSTRETIREMENT BENEFITS The Company has not obligations for postretirement benefits under SFAS No. 106, EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT BENEFITS OTHER THAN PENSIONS, or postemployment benefits under SFAS No. 112, EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT BENEFITS, as it does not currently offer such benefits. (K) RECENTLY ISSUED ACCOUNTING STANDARD Effective July 1, 1995, the Company adopted SFAS No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF. SFAS No. 121 requires the Company to continually evaluate whether events and circumstances have occurred that indicate that the estimated remaining useful life of long-lived assets and such intangibles as goodwill may warrant revision or that the carrying value of these assets may be impaired. To compute whether 24 assets have been impaired, the estimated gross cash flows for the estimated remaining useful life of the asset are compared to the carrying value. To the extent that the gross cash flows are less than the carrying value, the assets are written down to the estimated fair value of the asset. The adoption of this standard did not have a material effect on the Company's financial position of results of operations. (3) ACQUISITIONS In October 1991, the Company entered into an agreement to purchase up to 100% of the outstanding stock of BBL, the principal location of which is Antrim, Northern Ireland. The purchase, completed in December 1993, involved the issuance of 36,113 shares of the Company's common stock. The acquisition has been accounted for as a purchase. The value of shares and cash issued exceeded the fair value of BBL's net assets by $878,319. The excess was expensed as research and development in fiscal 1993 and 1992. On July 31, 1994, the Company acquired substantially all of the assets of the Telemedicine Division of Survival Technology, Inc. (Telemedicine Division), a business engaged in developing, manufacturing and selling electronic heart-monitoring medical devices and services and breathing-monitoring devices and services. As consideration, the Company paid $2,026,580 in cash and the transaction was accounted for as a purchase. In addition, the Company must pay future royalties of up to $1,000,000 based on product sales over five years. During fiscal 1995 and 1994, royalty expense of approximately $119,000 and $0, respectively, was charged to operations. The aggregate purchase price of $2,062,993 (which included $36,413 of direct acquisition costs) was allocated based on the fair value of the tangible and intangible assets acquired as follows: Equipment $ 71,795 Inventory 186,580 Goodwill and intangible assets 1,804,618 ---------- $2,062,993 ---------- ---------- The goodwill and intangible assets are amortized on a straight-line basis over 10 years. 25 (4) DEBT (a) DEMAND NOTES PAYABLE TO SHAREHOLDERS In 1995, the Company issued a $200,000 demand note payable to a shareholder. The note bears interest at the rate of 11%. (b) LINE OF CREDIT BBL had borrowings of $225,950 and $211,075 outstanding at June 30, 1995 and 1994, respectively, under a foreign bank line that carries a borrowing limitation of L145,000 ($231,000 at June 30, 1995). Borrowings under the line of credit are due on demand and bear interest at the bank's published rate (6.75% at June 30, 1995) plus 2%. The line expires on December 18, 1996 and is secured by an irrevocable letter of credit. The Company, as collateral for the line of credit on BBL's behalf, pledged $250,000, which is held in an interest-bearing account by a bank. This amount is included as restricted cash in deposits and other assets in the accompanying consolidated balance sheets at June 30, 1995 and 1994. (c) CAPITAL LEASE OBLIGATIONS The Company leases certain equipment and motor vehicles under agreements accounted for as capital leases. The future minimum lease payments under these leases are as follows: 1996 $ 22,844 1997 22,847 1998 40,214 -------- 85,905 Less--Amount representing interest 15,212 --------- Present value of minimum lease payments 70,693 Less--Current maturities 15,312 --------- $ 55,381 --------- --------- 26 (5) NONCOMPETE OBLIGATIONS The Company previously entered into separate noncompete agreements with two of the minority stockholders of BBT. These noncompete agreements prohibited these individuals from competing with the Company through June 30, 1994. During 1994, the Company extended the repayment term of one of the noncompete agreements beyond its original June 1994 maturity. As of June 30, 1995, the discounted present value of the remaining noncompete payments was $56,342, which matures in October 1995. The value of the noncompete agreement was amortized over the initial 48-month period. (6) INCOME TAXES The Company provides for federal and state income taxes in accordance with SFAS No. 109, ACCOUNTING FOR INCOME TAXES. Under the liability method specified by SFAS No. 109, a deferred tax asset or liability is determined based on the difference between the financial statement and tax bases of assets and liabilities, as measured by the enacted tax rates assumed to be in effect when these differences reverse. As of June 30, 1995 and 1994, the Company had net operating loss carryforwards, credit carryforwards and other temporary differences that could result in a potential tax benefit. The net operating loss carryforwards of approximately $3,894,000 and $3,249,000 at June 30, 1995 and 1994, respectively, expire through 2010 and are subject to review and possible adjustment by the Internal Revenue Service. In addition, the occurrence of certain events, including significant changes in ownership interests, may limit the amount of the net operating loss carryforwards available to be used in any given year. The components of the Company's income tax accounts and the approximate amount of each at June 30, 1995 and 1994 are as follows: 1995 1994 ------------ ------------ Net operating loss carryforwards $ 1,558,000 $ 1,299,000 Credit carryforwards 25,000 -- Temporary differences 378,000 195,000 ------------ ------------ 1,961,000 1,494,000 Valuation allowance (1,961,000) (1,494,000) ------------ ------------ $ -- $ -- ------------ ------------ ------------ ------------ A valuation allowance has been provided, as it is uncertain if the Company will realize the benefit of the deferred tax asset. 27 (7) COMMITMENTS The Company conducts its domestic manufacturing in facilities owned by the minority stockholders of BBT. The Company entered into an agreement with the minority stockholders to extend the lease through June 30, 1996. The aggregate minimum lease payments were $80,000 in year one and $55,000 in year two. The Company has been leasing on a tenant-at-will basis since June 30, 1996, at a rate of $4,783 per month. Rent expense of approximately $80,000 and $125,000 was charged to BBT operations during fiscal 1995 and 1994, respectively. (8) STOCKHOLDERS' EQUITY (a) COMMON STOCK In conjunction with raising working capital during the year ended June 30, 1994, the Company increased the number of shares of its authorized common stock from 500,000 to 1,075,000. The Company has reserved 477,911 shares of common stock for the conversion of the preferred stock and the issuance upon exercise of stock options and common stock warrants. (b) COMMON STOCK WARRANTS During 1993, in connection with the issuance of certain notes payable, the Company issued warrants to purchase 5,999 shares of common stock. These warrants vested at a rate of 20% per month beginning on July 22, 1993 until the Company met certain milestones. In November 1993, the milestones were achieved, and 3,600 of the 5,999 warrants vested. The remaining 2,399 warrants were canceled. In addition, the Company issued 4,000 warrants to two stockholders of the Company in March 1994. These warrants are exercisable through April 22, 2000 at a per share price of $17.50, adjustable for certain dilutive events, as defined. During 1993 and 1992, in connection with the issuance of certain notes payable, the Company issued warrants to purchase 656 shares and 984 shares, respectively, of common stock. These warrants were exercisable through August 10, 1995 at a per share price of $30.50, adjustable for certain dilutive events, as defined. During 1992, the Company also issued warrants to purchase 400 shares of common stock, at a per share price of $17.50, to a financial institution as additional consideration for borrowings received by the Company. (c) STOCK OPTION PLAN In November 1993, the Company adopted the 1993 Stock Option Plan (the Plan). Pursuant to the Plan, the Company may grant to any employee, director or consultant of the Company, stock options to purchase up to 155,493 shares of common stock. As of June 30, 1995, 137,220 options were outstanding and 18,273 options were available for issuance under the Plan. 28 (d) CONVERTIBLE REDEEMABLE PREFERRED STOCK The Company has authorized 500,000 shares of preferred stock, par value of $.01 per share, of which 65,000 shares have been designated Series A preferred stock, 30,000 shares have been designated series B preferred stock, 380,000 shares have been designated Series C preferred stock and 25,000 shares have not been designated. In November 1993, the Company issued 279,183 and 95,279 shares of Series C preferred stock in exchange for cash and the conversion of certain notes payable, respectively. The rights, privileges and preferences of the preferred stock are listed below. CONVERSION The preferred stock is convertible into common stock at the rate of one share of common stock for each share of preferred stock, adjusted for certain dilutive events. Conversion is at the option of the preferred stockholders but becomes automatic upon the closing of an initial public offering at a per share price of at least $52.50 for Series A, B and C, $82.65 for Series F and resulting in aggregate proceeds to the Company of at least $10,000,000. REDEMPTION Outstanding shares of Series A and B preferred stock may be redeemed over a five-year period upon a two-thirds vote of the stockholders, beginning no earlier than January 1, 1999, in the amount of $7.73 and $17.50 per share, respectively, plus any declared but unpaid dividends. Shares of Series C preferred stock may be redeemed over a three-year period upon a two-thirds vote of the stockholders, beginning no earlier than January 1, 1999, in the amount of $17.50 per share plus any declared but unpaid dividends. Preferred stockholders of each class may postpone or waive redemption by a two-thirds vote. DIVIDENDS The holders of the Series A and B preferred stock shall be entitled to receive, when and as declared by the Board of Directors, dividends out of funds legally available. The holders of the Series C preferred stock shall be entitled to receive, when and as declared by the Board of Directors, out of funds legally available, cumulative cash dividends equal to $1.75 per share. 29 The dividends shall be payable only in the event of (i) a liquidation, dissolution or winding up of the Company, (ii) a consolidation or merger of the Company or a sale of all or substantially all of the assets of the Company or (iii) a redemption of the preferred stock. LIQUIDATION PREFERENCE The holders of the preferred stock have preference in the event of a liquidation, sale or dissolution of the Company to liquidation proceeds equal to the amount paid for such shares plus any declared but unpaid dividends. Series C preferred stock has preference in liquidation over Series A and B preferred stock. RIGHT OF FIRST REFUSAL The preferred stockholders, subject to the rights of certain common stockholders, have the right of first refusal to purchase a PRO RATA portion of any new securities, as defined, equal to their proportion of capital stock owned at the time of issuance of the new securities. VOTING RIGHTS The preferred stockholders are entitled to vote on all matters with the common stockholders as if they were one class of stock. The preferred stockholders are entitled to the number of votes equal to the number of shares of common stock into which each share of the preferred stock is then convertible. (9) DEPOSITS AND OTHER ASSETS Deposits and other assets consist of the following: JUNE 30, 1995 1994 Restricted cash $ 250,000 $ 255,593 Deposits 118,342 3,327 ---------- ---------- $ 368,342 $ 258,920 ---------- ---------- ---------- ---------- 30 (10) ACCRUED EXPENSES Accrued expenses consist of the following: JUNE 30, 1995 1994 Payroll and related $ 105,423 $ 90,626 Professional fees 72,301 87,301 --------- -------- Other 428,657 380,319 --------- -------- $ 606,381 $558,246 --------- -------- --------- -------- (11) FINANCIAL INFORMATION BY GEOGRAPHIC AREA Domestic and export sales as a percentage of total revenues are as follows: YEAR ENDED JUNE 30, 1995 1994 --------- --------- United States 96.6% 62.2% Europe 3.4 37.8 --------- --------- 100.0% 100.0% --------- --------- --------- --------- Revenues, income (loss) from operations and identifiable assets for the Company's United States and European operations are as follows. UNITED STATES EUROPE ELIMINATIONS CONSOLIDATED Year Ended June 30, 1995-- Revenues $ 2,804,726 $ 820,803 $ (721,997) $ 2,903,532 ----------- --------- ------------ ------------- ----------- --------- ------------ ------------- Income (loss) from operations $(1,181,538) $(459,843) $ 59,891 $(1,581,490) ----------- --------- ------------ ------------- ----------- --------- ------------ ------------- Identifiable assets $ 5,650,751 $ 352,523 $(2,815,098) $ 3,188,176 ----------- --------- ------------ ------------- ----------- --------- ------------ ------------- 31 UNITED STATES EUROPE ELIMINATIONS CONSOLIDATED Year Ended June 30, 1994-- Revenues $ 1,510,248 $ 916,736 $ -- $ 2,426,984 ------------ --------- ------------ ------------- ------------ --------- ------------ ------------- Loss from operations $(1,292,548) $(242,727) $ (92,073) $(1,627,348) ------------ --------- ------------ ------------- ------------ --------- ------------ ------------- Identifiable assets $ 8,880,765 $ 370,593 $(4,967,509) $ 4,283,849 ------------ --------- ------------ ------------- ------------ --------- ------------ ------------- (12) VALUATION AND QUALIFYING ACCOUNTS The following tables set forth activity in the Company's accounts receivable reserve account: BEGINNING COST AND END OF OF YEAR EXPENSE DEDUCTIONS YEAR For the Year Ended June 30, 1994 $ 17,000 $ -- $ -- $ 17,000 ----------- --------- ------- -------- ----------- --------- ------- -------- For the Year Ended June 30, 1995 $ 17,000 $ 49,000 $ -- $ 66,000 ----------- --------- ------- -------- ----------- --------- ------- -------- (13) SUBSEQUENT EVENTS On August 24, 1995, the Company issued 36,620 shares of Series D convertible preferred stock at a per share price of $27.55 and received net cash proceeds of $650,000 after the conversion of $359,000 in notes payable and accrued interest. 32 EX-99.2 6 EXHIBIT 99.2 Exhibit 99.2 STI/BBC Merger Creates New Medical Device Company `Meridian Medical Technologies' ROCKVILLE, Md., Nov. 21 /PR Newswire/ -- Survival Technology, Inc. (STI) (Nasdaq: STIQ) and Brunswick Biomedical Corporation (BBC) today announced they completed their previously announced merger to form Meridian Medical Technologies, Inc. The company's new Nasdaq ticker symbol is MTEC effective November 22, 1996 (Nasdaq: MTEC). "The mission of Meridian Medical Technologies is to be a global leader in early intervention home healthcare and emergency medical technologies," said James H. Miller, chairman, president and CEO. "The Meridian name reflects our commitment to reaching new heights in these key growth segments of the medical device industry." He noted that the combining of resources creates new opportunities for growth in both drug delivery systems and cardiopulmonary products and services, STI is the world leader in auto-injector drug delivery technology for pharmaceuticals, biotechnology products and the military. Brunswick develops, manufactures and markets emergency-care products and medical devices for the non-invasive monitoring, diagnosis and care of cardiac patients. "We are optimistic about the exciting prospects for growth, synergy and new technological advances in the years ahead," Mr. Miller said. During fiscal 1996 ended July 31, 1996, STIQ sales increased 23 percent over the previous year to $31.4 million, while earnings increased 177 percent to $1.3 million ($.41 per share). Meridian Medical Technologies' facilities will include the former STI manufacturing complex in St. Louis, offices in Rockville and international operations based in England as well as the former Brunswick facilities in Wareham, Mass. and Northern Ireland. Pursuant to the definitive agreement, each of Brunswick's outstanding shares of common stock was converted into 2.1 shares of the company's common stock. Each of Brunswick's outstanding shares of preferred stock was converted into 2.1 shares of the company's common stock and a warrant to purchase 0.4 of a share of the company's common stock at an exercise price of $11.00 per share, exercisable for a period of five years following the merger. 33 In addition, the company assumed Brunswick's obligations under outstanding options and warrants. These provisions of the agreement resulted in approximately 1.7 million shares of the company's common stock being issued in exchange for the Brunswick stock upon the consummation of the merger and could result in the issuance of an additional 1.05 million shares of the company's common stock if all options and warrants are exercised and the required consideration paid. Each of the 1,888,126 shares of the company's common stock formerly owned by Brunswick was retired in the merger. The transaction is being accounted for by the purchase method of accounting. SOURCE Survival Technology, Inc. -0- 11/21/96 /CONTACT: James H. Miller, Chairman, President and CEO or Jeffrey W. Church, Sr. Vice President, Finance and CFO, 800-638-8093, both of Survival Technology/ 34 -----END PRIVACY-ENHANCED MESSAGE-----