SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE |
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For the fiscal year ended: May 31, 2003 |
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TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE |
Commission file number 0-12395
ALCIDE CORPORATION |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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22-2445061 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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8561 154th Avenue NE, Redmond, Washington 98052 |
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(Address of principal executive offices) |
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Registrant’s telephone number, including Area Code (425) 882-2555 |
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Securities Registered Pursuant to Section 12(b) of the Act: None |
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Securities registered pursuant to Section 12(g) of the Act: |
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Common Stock - $.01 par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES ý NO o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
Yes o No ý
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant on November 29, 2002 was approximately $35,703,000, net of Treasury Stock. On August 22, 2003, there were 2,654,638 shares of common stock outstanding, net of Treasury Stock.
Certain information required by Part III hereof is incorporated by reference from the Registrant’s definitive Proxy Statement for its 2003 Annual Meeting of Stockholders.
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This report contains forward looking statements. These statements relate to future events or future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “believes” “anticipates,” “expects” “intends,” “estimates,” “predicts,” and similar expressions, the negatives of these terms, or other terminology. These statements are only predictions. They reflect management’s current opinion and are designed to help readers understand management’s thinking. By their very nature, however, such statements are subject to certain risks and uncertainties that could cause actual events or results to differ materially from those projected. Some of the risks and uncertainties that could affect the Company’s operating results and performance are described throughout this report, such as in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. You should review and consider these and other risks carefully. Readers are cautioned not to place undue reliance on such forward-looking statements which speak only as of the date of this report. We undertake no obligation to update publicly any forward looking statements to reflect new information, events or circumstances after the date of this Report, or to reflect the occurrence of unanticipated events.
ITEM 1. Business
A. Introduction
Alcide® Corporation (the “Company”) is a Delaware corporation organized in 1983 which has its executive offices and research laboratories at 8561 154th Avenue NE, Redmond, Washington 98052.
Alcide is engaged in the research, development and commercialization of unique chemical compounds having intense microbiocidal activity. The Company holds substantial worldwide rights to its discoveries through various patents, patent applications, trademarks and other intellectual property, technology, and know-how.
B. Sales Development
The Company sells antimicrobial products to the dairy, health care and food processing industries. Its products include: UDDERgold® 5-Star, UDDERgold® Plus, UDDERgold Platinum® and UDDERgold® Germicidal Barrier Teat Dips, Pre-Gold® Germicidal Pre-Milking Teat Dip and 4XLA® Pre- and Post-Milking Teat Dip to the dairy industry; Exspor® Sterilant-Disinfectant and LD® Disinfectant to the health care industry; and SANOVA® antimicrobial intervention to the food processing industry. The Company’s sales to date have primarily been derived from the UDDERgold family of teat dips and SANOVA food processing antimicrobial.
Total revenue for the fiscal year ended May 31, 2003 was $21,924,454 of which $897,177 was license revenue. Export sales to international distributors accounted for $4,437,037, 20% of total revenue.
1. Dairy Industry
Worldwide revenue from dairy line products during fiscal year 2003 was $7,875,840 (including $897,177 license revenue) as compared with $9,265,736 in fiscal year 2002. In fiscal 2003, sales to the dairy industry accounted for 36% of the Company’s total revenue. Loss of the sales generated by dairy line products, could have a material adverse effect on the Company.
U.S. Dairy Industry
In fiscal 2003, dairy industry revenue in the United States was $3,438,803 (including $897,177 license revenue), 44% of Alcide’s total dairy industry revenue.
International Dairy Industry
Alcide products are sold to the dairy industry in Canada, Latin America, Europe and selected Asian markets through a network of distributors. Sales to the international dairy industry were $4,437,037 in fiscal 2003, or 56% of total dairy industry revenue.
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Distributor Arrangements
Alcide sales to the dairy industry are primarily to distributors who have contracted with the Company to distribute the Company’s products. In each case the distributor purchases product from Alcide for resale to the end user. Loss of any of the Company’s distributors could have a material impact on the Company’s sales and earnings.
On April 26, 2002, Alcide entered into an agreement licensing its technology know-how and trademarks associated with its dairy industry products to IBA, Inc. (“IBA”) of Millbury, MA, one of its domestic distributors, in a five year agreement beginning June 1, 2002. Under the agreement, IBA manufactures products using Alcide’s technology and carrying Alcide’s trademarks for direct, nonexclusive distribution through IBA’s extensive United States distribution network, and pays Alcide licensing revenue. Alcide revenue on products licensed to and manufactured by IBA in fiscal year 2003 was approximately 43% lower than if such products had been manufactured and sold by Alcide.
Subsequent to the end of fiscal 2003, Alcide entered into a license agreement with Ferdinand Eimermacher GmbH (“Eimermacher”) to manufacture and distribute teat dips using Alcide’s technology and trademarks in Austria, Germany and Switzerland. Eimermacher will pay Alcide licensing revenue on all sales utilizing the Company’s technology.
2. Food Processing Antimicrobials (SANOVA)
In May 1997, the Company entered into an agreement with Novus International, Inc. for Novus’ introduction and distribution of SANOVA antimicrobial to the poultry industry. Subsequently, effective December 1, 1998, Alcide assumed direct responsibility for distribution of SANOVA. In February 2001, the Company began to commercialize SANOVA in the red meat industry. During fiscal 2003, Alcide continued its expansion of SANOVA in both the red meat and poultry industries and entered the fruit and vegetable processing, sausage and comminuted (deli) meat industries.
Alcide’s fiscal 2003 SANOVA sales totaled $13,587,212, an increase of 11% over the $12,229,362 SANOVA sales in fiscal 2002. It is expected that SANOVA will continue to be an important and growing contributor to the Company’s sales and income expansion. A loss or other reduction of sales to the food processing industries, or a failure or slowing of growth in those industries, could have a material adverse impact on the Company. In fiscal 2003, SANOVA sales accounted for 62% of total Company revenue.
On May 31, 2003, 42 poultry operations and 10 red meat operations were using SANOVA under contract with Alcide. As of July 31, 2003, two operations have been added and an additional seven installations were scheduled for start-up by November 2004.
3. Health Care Industry
The Company markets a line of hard surface sterilants and disinfectants which kills microorganisms and helps reduce the potential for disease transmission via contaminated surfaces. The Company’s LD disinfectant and Exspor Sterilant-Disinfectant offer users a combination of broad spectrum efficacy, speed and relative safety.
Fiscal year 2003 sales of hard surface sterilants and disinfectants were $461,402, or 2% of total sales, as compared with $493,592 in fiscal year 2002.
4. Industry Practices and Backlog Orders
The Company’s invoice terms for its dairy and health care industry products conform to those in the specialty chemical industry in general, which are: domestic-30 days, export-60 days.
Alcide had $184,341 of firm orders on May 31, 2003 for future delivery to dairy industry distributors as compared to orders for future delivery at May 31, 2002 of $602,673. The Company’s dairy industry distributors typically place orders one to four months in advance.
The Company’s invoice terms, product pricing and delivery for SANOVA food processing antimicrobials are based on contracts with each customer which typically cover one to four years. For large customers (those using more than 15,000 gallons of SANOVA per month), Alcide provides bulk shipments of inventory to the customer and the
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customer is invoiced at month-end based on the amount of product processed or gallons of SANOVA used. Smaller SANOVA customers are billed at the time SANOVA components are shipped to their facilities. Payment in either case is due fifteen to thirty days after billing.
C. Research and Product Development
Recognizing that Alcide’s long-term survival and growth is significantly dependent on the strength of its proprietary position, specific emphasis has been placed on enhancing the Company’s knowledge and understanding of key processes in the field of acidified sodium chlorite vis-à-vis the basis for the antimicrobial performance of the biocidal system, the development of new assay methodologies for anticipated future residue determination needs and the integration of this knowledge into the new product formulation development efforts. The key driver for this focus is the increasingly competitive marketplace arising from the presence of a number of newly approved technologies (Food Safety) and growing number of generic products (Animal Health). New patent submissions have emanated from this effort and more are expected in the future as the effort continues.
All of the research and product development activities funded by the Company during fiscal 2003 were conducted under the Company’s direct supervision at contract research facilities or in-house.
A second and significant component of our research and development program has focused on addressing the increasingly more stringent and sophisticated demands of the regulatory agencies that control introduction of our products to the market. While the Company typically depends on contract assistance to submit registrations in foreign markets, all submissions, support documentation and supportive data are generated and compiled in-house by Alcide’s own regulatory specialists.
While many of the research and development programs undertaken by the Company and described in this report, give evidence of possible success, the nature of research, coupled with the necessity for regulatory approval, is such that there can be no assurance of ultimate program success or that any resulting product may be commercially viable.
If Alcide violates regulatory requirements at any stage, whether before or after marketing approval is obtained, Alcide may be fined, forced to remove a product from the market or experience other adverse consequences, including delay, which could materially harm our financial results. Additionally, the Company may not be able to obtain the labeling claims necessary or desirable for product promotion. We also may be required to undertake post-marketing testing. In addition, if Alcide or other parties identify side effects after any of our products are on the market, or if manufacturing problems occur, regulatory approval may be withdrawn and reformulation of our products, additional testing, changes in labeling of our products, and/or additional marketing applications may be required.
The requirements governing the conduct of testing, manufacturing and marketing of Alcide products outside the United States vary widely from country to country. Foreign approvals may take longer to obtain than domestic government approvals and can involve additional testing. Foreign regulatory approval processes include all of the risks associated with the US government approval processes. Also, approval of a product by US regulators does not ensure approval of the same product by the health authorities of other countries.
1. Food Safety
During fiscal 2003, Food Safety research and development activities continued to be heavily weighted toward process validation under commercial conditions. Teams of Alcide engineers accompanied by field research managers conducted a number of evaluations to determine the performance of the SANOVA process on red meats, produce, fish and poultry under a wide variety of commercial use conditions.
On the regulatory front, the Company initiated a number of new filings seeking approval of the SANOVA process outside of the United States. By fiscal year-end, submissions had been made and were under review in a number of key markets selected as representing substantial opportunities for the SANOVA process. Submissions were also made and final approvals granted in two additional countries – Chile and Mexico. The Company also filed a petition to the Food and Drug Administration (“FDA”) to amend the current approval for use of acidified sodium chlorite on seafood to permit the use of a higher dose range. Regulatory process management – for current and new filings – will continue to require a significant amount of effort in the next fiscal year.
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2. Animal Health Products
During fiscal 2003, new product development efforts continued to focus on the creation of new teat dip formulations that further improve performance, conditioning and other product characteristics of importance to the end user. Significant effort will continue to be placed in the regulatory area during fiscal 2004, as current submissions for UDDERgold Platinum are processed and new submissions are lodged.
D. Patents and Trademarks
The Company considers protection of its technologies by United States and foreign patents to be an important aspect of its business. No assurance can be given, however, as to the validity, enforceability or scope of its patent protection. Should the patents be held invalid, become ineffective against competition or expire prior to the Company’s successful development of a market for its products, there may be a material adverse impact on the Company’s business. Furthermore, the possibility of patent infringement by third parties cannot be entirely eliminated. In the event of such infringement by third parties, if the Company is not successful in terminating such infringement, the viability of the Company could be severely and adversely affected.
Conversely, no assurances can be given that the manufacture, use or sale of the Company’s products will not infringe the patent rights of others. The Company’s competitors or others may have or acquire patent rights that they could enforce against the Company. If they do so, Alcide may be required to alter its products, pay licensing fees or cease activities. If Alcide’s products conflict with patent rights of others, third parties could bring legal actions against Alcide claiming damages and seeking to enjoin manufacturing and marketing and sales of the affected products. If these legal actions are successful, in addition to any potential liability for damages, the Company could be required to obtain a license in order to continue to manufacture or market the affected products. The Company may not prevail in any legal action and a required license under the patent may not be available on acceptable terms or at all.
The cost to Alcide of any litigation or other proceedings relating to intellectual property rights, even if resolved in Alcide’s favor, could be substantial. Some of Alcide’s competitors may be better able to sustain the costs of complex patent litigation because they have substantially greater resources. If third parties file patent applications, or are issued patents claiming technology also claimed by the Company in pending applications, the Company may be required to participate in interference proceedings in the Patent Trademark Office, or opposition proceedings abroad, to determine priority of invention. Alcide may be required to participate in interference or opposition proceedings involving its issued patents and pending applications. The Company may be required to cease using the technology or license rights from prevailing third parties as a result of an unfavorable outcome in an interference proceeding. Such a prevailing party may not offer Alcide a license on commercially acceptable terms.
1. Patents
The Company owns the following issued United States patents:
U.S. Patent No. 4,891,216
“Disinfecting Compositions and Methods Therefor”
U.S. Patent No. 4,956,184
“Topical Treatment of Genital Herpes Lesions”
U.S. Patent No. 4,986,990
“Disinfection Method and Composition Therefor”
U.S. Patent No. 5,019,402
“Composition and Procedure for Disinfecting Blood and Blood Components”
U.S. Patent No. 5,100,652
“Disinfecting Oral Hygiene Compositions and Process for Using the Same”
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U.S. Patent No. Re. 36,064
“Disinfection Method and Composition Therefor”
U.S. Patent No. 5,252,343
“Method and Composition for Preventing and Treatment of Bacterial Infections”
U.S. Patent No. 5,389,390
“Process for Removing Bacteria from Poultry and Other Meats”
U.S. Patent No. 5,597,561
“Adherent Disinfecting Compositions and Method of Use in Skin Disinfection”
U.S. Patent No. 5,628,959
“Composition and Method for Sterilizing Dialyzers”
U.S. Patent No. 5,651,977
“Adherent Disinfecting Compositions and Methods Related Thereto”
U.S. Patent No. 5,667,817
“Method and Composition for the Prevention and Treatment of Female Lower Genital Tract Microbial Infections”
U.S. Patent No. 5,772,985
“Composition and Methods for Treatment of Skin Lesions”
U.S. Patent No. 6,063,425
“Method for Optimizing the Efficacy of Chlorous Acid Disinfecting Sprays for Poultry and Other Meats”
U.S. Patent No. 6,096,350
“Compositions and Methods for Prevention and Treatment of Diseases Associated With Honey Bees”
U.S. Patent No. 6,120,731
U.S. Patent No. 6,123,966
“Stabilized Two-Part Disinfecting System and Compositions and Methods Related Thereto”
U.S. Patent No. 6,524,624
“Two-Part Disinfecting Systems and Compositions and Methods Related Thereto.”
U.S. Patent No. 6,328,909
“Frozen Chlorine Dioxide-Containing Composition and Methods Related Thereto.”
Two additional U.S. patent applications are pending. Numerous corresponding foreign applications are issued or pending.
The Company’s original patent, U.S. Patent No. Re. 31,779, expired in the United States on April 18, 1995. That patent was directed to disinfecting a substrate using a lactic acid/sodium chlorite composition. The Company’s second patent, U.S. Patent No. 4,330,531, expired in the United States on May 18, 1999, and was directed to a lactic acid/sodium chlorite gel formulation.
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2. Trademarks
The Company has sought to acquire trademark protection, primarily by the filing of applications for registration of its marks in a large number of countries. There can be no assurance that a filed application will result in a registration; that the issuance of a trademark registration to the Company or the acquisition of rights through use will provide the Company with adequate protection against infringement in a selected territory; that the Company will be able to expand its product line under a registered mark in some territories; or, that the Company’s trademark rights cannot be terminated in some territories such as by petition by others claiming superior rights.
No assurances can be given that the Company’s use of the marks and business name will not infringe the rights of others in some territories resulting in the exposure of the Company to liability to the holder of the rights and a possible obligation to terminate use in such territory.
The Company would be adversely impacted if rights to trademarks selected by the Company are unavailable in a territory, if a Company trademark registration were to become invalid, or if the Company’s business name or trademarks are found to infringe the rights of another in a territory.
In addition to the Company’s mark Alcide®, the other Company marks registered in the U.S. are SANOVA®, Exspor® LD®, UDDERgold®, 4XLA®, Pre-Gold®, DIPPINgold® and silverQUICK®.
These same marks, as well as UDDERgold Platinum®, have been registered outside of the U.S. in markets where the Company has determined that there is a commercial opportunity for the products. For translation reasons, the mark DIPPINguld® has been determined to be more appropriate than DIPPINgold® in certain foreign countries. Therefore, the spelling variant DIPPINguld® has been registered in Denmark, Norway, Finland and Sweden.
E. Raw Materials
Various Alcide products include in their formulations chemical components available from few (and in some cases only one) suppliers. Formulation alternatives exist for each single-sourced material; however, changing formulations could result in higher raw material costs and/or the necessity to obtain regulatory clearance for the changed formulation. There can be no assurance that Alcide’s reliance on these suppliers will not result in problems with product supply. Interruptions in the availability, or increases in costs, of products could have a material adverse effect on the Company’s results of operations.
F. Competition
The Company competes in substantially all of its markets on the basis of quality and technical innovation. A number of companies have announced their intention to introduce, or are believed to be in the process of developing, a variety of products designed to perform some of the functions of Alcide’s products. Additionally, there exist in the marketplace, products that are known to be competitive with the Company’s products. Alcide’s competitors have, or have access to substantially greater financial, technical and human resources than Alcide. In addition, many of these competitors have significantly greater experience and resources than Alcide in research and development and regulatory approval procedures, as well as in marketing and sales and achieving manufacturing efficiencies.
1. Dairy Industry
The market into which UDDERgold 5-Star, UDDERgold Platinum, UDDERgold, Pre-Gold and 4XLA teat dips are sold is a highly fragmented worldwide market in which major specialty chemical companies compete. The major classes of products sold in this market are iodophors and chlorhexidines. Domestically, where teat dips are not highly regulated, there are a large number of competitors but the top four who control over 60% of the market are West Agro/DeLaval, IBA, Westalia Surge and Ecolab. Globally, DeLaval and Ecolab are our key competitors. The expiration on May 18, 1999 of the Company’s U.S. patent 4,330,531, which covered Alcide’s UDDERgold formulation, allows competing lactic acid based acidified sodium chlorite products to enter the marketplace. ABS Global, Inc., the Company’s former distributor, Ecolab and Westalia Surge have introduced such products. Management believes, however, that the expired patent’s technology is inferior to that represented by Alcide’s more recent patents.
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2. Food Safety Antimicrobials
The market for disinfection of food products is dynamic and rapidly emerging as a result of consumer concern and U.S. Government regulatory activity. A number of technologies are directed at reduction of food borne pathogens. Of these, trisodium phosphate sold by Rhodia and peroxyacetic acid sold by Ecolab are used within the poultry processing industry in a manner similar to the Company’s product, SANOVA. Chlorine dioxide and ozone are used in poultry chiller waters, but have not been broadly accepted by the industry. Irradiation technology has been approved by USDA and FDA, but is not broadly used by the poultry or red meat industries and, where irradiation is used, the process may involve a secondary treatment outside the processing plant. Steam, hot water, organic acid and peroxyacetic acid rinses are broadly used in the red meat industry on carcasses prior to chilling for pathogen control. Ultra high pressure technology is being used in the fruit juice industry for juice pasteurization and potentially may be utilized in the future as an antimicrobial intervention for sausage and other processed food products. Cetylpyridinium chloride and other chemical intervention technologies may at some point in the future compete with SANOVA. The Company is not aware of any established, broadly accepted competing products for post-chill pathogen control application to either red meat or poultry products. However, market conditions within the food processing industry are such that additional competition is likely.
G. Government Regulation
1. Dairy Industry
The Company’s products sold to the dairy industry require registration for sale in a number of international markets. UDDERgold teat dip has been registered in Canada, the United Kingdom, Republic of Ireland, Denmark, The Netherlands, Spain, Portugal, New Zealand, Brazil, France, Italy, Chile, Colombia, Argentina, South Korea and India. The product is legally sold without formal registration in the United States, Greece, Hungary and Mexico.
4XLA teat dip has been registered in Canada, The Netherlands, Republic of Ireland, Switzerland, New Zealand, Chile, Denmark, Brazil, Portugal, Colombia and Argentina. The product is legally sold without formal registration in the United States, Mexico, Belgium, Italy, Spain and Cyprus.
UDDERgold Plus sales have been expanded to include Japan and Taiwan in addition to the United States, without formal registrations.
UDDERgold Platinum has received approval as a variation of UDDERgold in the United Kingdom, the Netherlands, and Italy. Similar applications are pending approval in other European markets and in Canada. The product is legally sold without formal registration in France.
2. Food Processing Industry
a. Poultry
The Company’s Food Additive Petition for pre-chill use of SANOVA was approved by FDA in April, 1996 and by USDA in January 1998. Additional approval for use of the product in Canada was received in September 1999. The product is now actively marketed and is being utilized by a number of major poultry processing companies.
In May 2001, the Company’s Food Additive Petition for post-chill use of SANOVA on poultry was approved by FDA and by USDA. The product is now being used for this purpose by six major processing plants.
b. Red Meat
The Company’s Food Additive Petition was approved by FDA in March 1998 and subsequently by USDA in February 2000. In February 2001, the Company resolved labeling issues with USDA, which determined that use of SANOVA as a post-chill application on beef would not require supplemental product labeling. This event enabled the Company to begin product commercialization and a number of customers are presently using SANOVA for red meat carcass disinfection prior to chilling as well as an antimicrobial intervention on beef parts and trim after chilling and boning. During fiscal 2002 and 2003, the Company conducted several process validation studies directed at mitigating the
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initial processing and organoleptic problems encountered with application to parts and trim. Management believes that the process validation trials have been successful and will lead to further expansion in this industry segment.
SANOVA use on cooked ready-to-eat sausages, comminuted meats and ready-to-eat deli products was approved by FDA and USDA in June 2001. Subsequently, in October 2001, USDA raised issues concerning the degree to which SANOVA use would require supplemental labeling of treated product. In January 2002, USDA concluded that no labeling would be required. In March 2002, the Company began process validation studies under commercial conditions with several major processing companies. Commercialization of SANOVA use in this market category began in fiscal 2003.
c. Fruits and Vegetables
In December 1998, Alcide submitted a Food Additive Petition to the FDA for the use of SANOVA on raw agricultural commodities (fruits and vegetables). The petition was approved in September 1999. The EPA concurrently stated that it intended to exert its regulatory authority over this area. Subsequently, in March 2001 EPA granted its approval for use of SANOVA on intact fruits and vegetables in processing plants. Marketing an antimicrobial intervention under EPA authority requires supplemental registration by the EPA authorities in each of the fifty states. These registrations have now been obtained.
In April 2002, the use of SANOVA on cut, sliced and processed fruits and vegetables was granted by the FDA, which has sole regulatory authority over this market segment. This, combined with the earlier EPA approval for intact fruits and vegetables, allows for SANOVA commercialization within a limited part of the produce industry. Commercialization efforts began in fiscal 2003.
d. Seafood
In December 2002, Alcide submitted a food additive petition to the FDA proposing the same SANOVA concentration level as previously approved for poultry, red meat and produce. The petition is currently under review by FDA.
3. Sterilants/Disinfectants
The Company’s line of hard surface sterilants and disinfectants is regulated in the U.S. by EPA and FDA. Appropriate EPA and FDA approvals for sale and manufacturing have been obtained.
H. Employees
The corporate office and laboratory staff of 21 employees occupy a 6,751 square foot leased facility in Redmond, Washington. Alcide’s engineering, operations and maintenance staff of 15 employees occupies a 6,240 square foot leased office and warehouse facility in St. Louis, Missouri. In addition, the Company employs 8 field maintenance employees, 2 technical representatives and 4 sales management/marketing employees.
The Company also has relationships with, and from time to time engages the services of, university professors and other qualified consultants to assist it in technological research and development.
The Company is not a party to any collective bargaining agreement and considers its employee relations to be excellent.
I. Advertising and Promotion
The Company’s advertising and promotion activities consist of cooperative promotional activities with its distributors of Animal Health products and participation in trade shows and exhibits sponsored by the poultry, red meat and produce industries.
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J. Manufacturing
All manufacturing of the Company’s Animal Health and sterilant and disinfectant products is performed by contract manufacturers having appropriate FDA registration approval for such manufacturing. Product released for sale is dependent on quality control testing by Alcide. A change in contract manufacturers, however, would require qualification of the manufacturer (if not already qualified) by FDA and by some international FDA equivalent. Such change could adversely affect Company sales short-term. Many qualified manufacturers regularly compete in the contract packaging marketplace. Under the licensing arrangement with IBA, IBA is responsible for manufacturing its own products.
SANOVA is manufactured and diluted at each customer’s site, utilizing raw materials supplied by Alcide and mixed, diluted and pumped in micro-processor controlled equipment owned by Alcide.
ITEM 1A. Executive Officers of the Company
The persons listed in the following table are the current executive officers of the Company. Officers are elected annually. There is no family relationship among any of the directors or executive officers, and none of the persons has been involved during the past five years in any legal proceedings described in applicable Securities and Exchange Commission regulations.
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Executive |
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Joseph A. Sasenick |
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Chairman of the Board of the Company since April 2001; Director of the Company since 1991; Chief Executive Officer since 1992; President 1992 until April 2001; Chief Operating Officer of the Company from February 1991 to February 1992; Chief Executive Officer and Chairman of the Board of Alcide Food Safety, Inc., a wholly owned subsidiary of Alcide Corporation, since January 1999. Presently serves on the Board of Directors of the Washington Biotechnology and Biomedical Association, and the Technology Alliance, a special program of the Greater Seattle Chamber of Commerce. Previously held senior management positions at Abbott Laboratories and The Gillette Company. |
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1991 |
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John P. Richards |
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President since April 2001; Chief Financial Officer since August 1991; Secretary since 1995; Executive Vice President from 1991 until 2001. President Alcide Food Safety since January 1999. President of Tartan Marine Company from June 1983 to November 1990. Previously held various financial and operational management positions at Abbott Laboratories from 1968 to 1983. |
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