10KSB/A 1 form_10ksba.txt FORM 10KSB/A ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------------------- FORM 10-KSB/A (MARK ONE) [ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2001 ----------------- OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-18170 ------------------------------ CRYOMEDICAL SCIENCES, INC. (Name of Small Business Issuer in its Charter) DELAWARE 94-3076866 -------- ---------- (State of Incorporation) (IRS Employer Identification Number) 100 COBB PLACE BLVD., BUILDING 200, SUITE 270, KENNESAW, GEORGIA 30144 ---------------------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) ------------------------------------ Issuer telephone number, including area code: (770) 426-0101 -------------- Securities registered under Section 12(b) of the Exchange Act: None ---- Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $.001 per share --------------------------------------- Title of Class Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 X No --- --- Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, 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-KSB or any amendment to this Form 10-KSB [X]. Issuer's revenues for the fiscal year ended December 31, 2001 were $1,344,016. As of April 10, 2002, the aggregate market value of voting stock held by nonaffiliates was $1,323,952. As of April 10, 2002, there were 12,413,209 shares of Common Stock (par value $.001 per share) outstanding. Documents Incorporated by Reference ----------------------------------- None ================================================================================ PART III ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ----------------------------------------------------------- The directors and executive officers of the Company are as follows: Position and Offices Name Age With the Company ---- --- -------------------- J. Andrew Greuling 49 President, Chief Executive Officer and Director John G. Baust, Ph.D. 59 Chief Scientific Officer and Director Howard S. Breslow 62 Director, Secretary Roderick de Greef 41 Director Set forth below is a biographical description of each of the directors and executive officers identified above based on information supplied by them. J. Andrew Greuling has been President and CEO and a director of Cryomedical Sciences Inc. since May 2001. Prior to joining the Company, Mr. Greuling was the General Manager of Karl Storz Lithotripsy-America, Inc. from 1994 to 2001, where he spearheaded the introduction of the Karl Storz MODULITH(TM) extracorporeal lithotripter into the U.S. market. From 1991 to 1994, Mr. Greuling was the Vice President of Sales and Marketing for Cryomedical Sciences, Inc. and directed the market launch of the original AccuProbe cryosurgical product line. Mr. Greuling also worked in upper level management with Candela Corporation, Johnson & Johnson, and Medical Electronics Corporation. Mr. Greuling has a Bachelor of Science degree in Animal Science from Purdue University, Indiana. John G. Baust, Ph.D., has been Senior Vice President of the Company since January 1995, Chief Scientific Officer since August 1993, served as Vice President, Research and Development, of the Company from July 1990 to January 1995, and served as a consultant to the Company from April 1990 to July 1990. Dr. Baust became a director of the Company on October 13, 2000. Since 1987, Dr. Baust has also been a Professor and the Director of the Center for Cryobiological Research at State University of New York at Binghamton, and since July 1994, Dr. Baust has also been Adjunct Professor of Surgery, Medical College of Pennsylvania. From 1984 to 1987, he was a Professor and the Director of the Institute of Low Temperature Biology at the University of Houston. 1 Howard S. Breslow has served as a director of the Company since July 1988. He has been a practicing attorney in New York City for more than 35 years and is a member of the law firm of Breslow & Walker, LLP, New York, New York, which firm serves as general counsel to the Company. Mr. Breslow currently serves as a director of Excel Technology, Inc., a publicly-held company engaged in the development and sale of laser products; FIND/SVP, Inc., a publicly-held company engaged in the development and marketing of information services and products; Vikonics, Inc., a publicly-held company engaged in the design and sale of computer-based security systems; and Lucille Farms, Inc., a publicly-held company engaged in the manufacture and marketing of dairy products. Roderick de Greef has served as a director of the Company since June 19, 2000. From March 2001 to present, Mr. de Greef has served as Executive Vice President, Chief Financial Officer and Secretary of Cardiac Sciences, Inc., a public company. Since 1995 Mr. de Greef has provided corporate finance advisory services to a number of early stage companies, including the Company, where he was instrumental in securing the Company's equity capital beginning in June 2000, and advising on merger and acquisition activity. From 1989 to 1995, Mr. de Greef was Vice President and Chief Financial Officer of BioAnalogics, Inc. and International BioAnalogics, Inc., publicly held, development stage medical technology companies located in Portland, Oregon. From 1986 to 1989, Mr. de Greef was Controller and then Chief Financial Officer of Brentwood Instruments, Inc., a publicly held cardiology products distribution company based in Torrance, California. Mr. de Greef has a B.A. in Economics and International Relations from California State University at San Francisco and an M.BA. from the University of Oregon. All directors of the Company hold office until the next annual meeting of stockholders of the Company or until their successors are elected and qualified. Executive officers hold office until their successors are elected and qualified, subject to earlier removal by the Board of Directors. No family relationship exists between any director or executive officer and any other director or executive officer of the Company. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The Company's executive officers, directors, and beneficial owners of more than 10% of any class of its equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (collectively, the "Reporting Persons") are required to file reports of ownership and changes in beneficial ownership of the Company's equity securities with the Securities Exchange Commission. Copies of those reports also must be furnished to the Company. Based solely on a review of copies of the reports furnished to the Company, the Company believes that during the fiscal year ended December 31, 2001 all of these filing requirements have been satisfied. 2 ITEM 10. EXECUTIVE COMPENSATION -------------------------------- The following table sets forth certain information concerning the compensation paid by the Company to its Chief Executive Officer and to each of its executive officers (other than the Chief Executive Officer) who received salary and bonus payments in excess of $100,000 during the fiscal year ended December 31, 2001 (collectively the "Named Executive Officers"). SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation ------------------------------------------ -------------------------------------------------- Awards Payouts ------------------------ ------------------------ Restricted Name and Principal Fiscal Other Annual Stock Options/ LTIP All Other Positions Year Salary ($)(4) Bonus ($) Compensation ($) Award(s) SARs (#)(1) Payouts Compensation ------------------------ ---------- ---------- --------- ---------------- ----------- ----------- -------- ------------- J. Andrew Greuling 2001 133,754 95,000 3,570 -- 1,500,000 -- -- President, Chief 2000 -- -- -- -- -- -- -- Executive Officer and 1999 -- -- -- -- -- -- -- Director (2) Richard J. Reinhart, Ph.D. 2001 112,500 -- 6,983 -- -- -- -- Chairman, Chief 2000 195,000 -- 8,266 -- -- -- -- Executive Officer and 1999 100,000 -- 8,183 -- -- -- -- Director (3) John G. Baust, Ph.D. 2001 180,000 -- 7,846 -- 1,000,000 -- -- Chief Scientific Officer 2000 180,000 -- 6,454 -- 100,000 -- -- and Director 1999 100,000 -- 6,377 -- -- -- --
---------------------------- (1) Options to acquire shares of Common Stock. (2) Mr. Greuling became an officer and director of the Company effective May 30, 2001 (3) Dr. Reinhart resigned as an officer and director of the Company effective May 30, 2001 (4) Salaries for fiscal year 1999 reflect voluntary salary reductions by Dr. Reinhart and Dr. Baust. 3 OPTION/SAR GRANTS IN YEAR-ENDED DECEMBER 31, 2001 In 2001, the Company issued options to purchase shares of Common Stock to its executive officers as follows:
Number of Securities % of Total Options/ Name and Principal Underlying Options/ SARs granted to Exercise or Expiration Positions SARs granted(#)(1) Employees in Fiscal Year Base Price ($/sh) Date ------------------------------ ----------------------- -------------------------- ------------------- ----------------- J. Andrew Greuling 1,500,000 60% -- 8/7/2011 President, Chief Executive Officer and Director (2) Richard J. Reinhart, Ph.D. -- -- -- -- Chairman, Chief Executive Officer and Director (3) John G. Baust, Ph.D. 1,000,000 40% -- 8/7/2011 Chief Scientific Officer and Director
----------------------------- (1) Options to acquire shares of Common Stock. (2) Mr. Greuling became an officer and director of the Company effective May 30, 2001 (3) Dr. Reinhart resigned as an officer and director of the Company effective May 30, 2001 AGGREGATED OPTION/SAR EXERCISES DURING THE 2001 FISCAL YEAR AND THE 2001 FISCAL YEAR OPTION/SAR VALUES The following table provides information related to options exercised by each of the Named Executive Officers during the 2001 fiscal year and the number and value of options held at December 31, 2001. The Company does not have any outstanding stock appreciation rights. None of the options were in the money at year ended December 31, 2001.
Number of Securities Value of Unexercised Underlying Unexercised in the money Options/SAR Options/SAR At Fiscal Year End (#) At Fiscal Year End ($) (1) -------------------------- --------------------------- Shares Acquired Value Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable ---------- --------------- ------------ ----------- ------------- ----------- ------------- J. Andrew Greuling(2) -- -- 350,000 1,150,000 -- -- Richard J. Reinhart, Ph.D.(3) -- -- -- -- -- John G. Baust, Ph.D. -- -- 750,000 802,000 -- --
--------------------------------- (1) The closing price for the Common Stock as reported on the OTC Bulletin Board on December 31, 2001 was $0.21. Value is calculated on the basis of the difference between the option exercise price and $0.21 multiplied by the number of shares of Common Stock underlying the option. (2) Mr. Greuling became an executive officer and director of the Company effective May 30, 2001. (3) Dr. Reinhart resigned as an officer of the Company effective May 30, 2001. --------------------------------- 4 EMPLOYMENT AGREEMENTS On May 30, 2001, the Company entered into an employment agreement with J. Andrew Greuling to serve as President and Chief Executive Officer of the Company, pursuant to which he will receive, among other things, (a) a salary of $21,000 per month, (b) a target bonus of $200,000, (c) a $95,000 signing bonus, (d) stock options to purchase 1,000,000 shares of the Company's common stock, par value, $.001 per share, at a price equal to no less than the fair market value thereof on the date of grant, (e) an auto allowance of $500 per month, and (f) four weeks of vacation time. Mr. Greuling's term of employment shall continue through December 31, 2002, and be automatically renewed for successive 12-month periods, unless otherwise terminated pursuant to the terms and conditions of his employment agreement. Each officer has executed a Proprietary Information and Inventions Agreement pursuant to which each agreed, among other things, to keep the Company's information confidential and assigned all inventions to the Company, except for certain personal inventions not related to the Company's work, whether existing or later developed. CONSULTANTS At December 31, 2001, various consultants to the Company held exercisable warrants to purchase an aggregate of 61,000 shares of Common Stock. Consultants to the Company have either received warrants to purchase Common Stock or are entitled to cash compensation. No consultant has agreed to devote any specified amount of time to Company activities. Consultants to the Company may be employed by or have consulting agreements with entities other than the Company, some of which may conflict or compete with the Company, and the advisors and consultants are expected to devote only a small portion of their time to the Company. Most are not expected to actively participate in the Company's development. Certain of the institutions with which the advisors and consultants are affiliated may have regulations and policies which are unclear with respect to the ability of such personnel to act as part-time consultants or in other capacities for a commercial enterprise. Regulations or policies now in effect or adopted in the future might limit the ability of the advisors and consultants to consult with the Company. The loss of the services of certain of the advisors and consultants could adversely affect the Company. Furthermore, inventions or processes discovered by the advisors and consultants will not, unless otherwise agreed, become the property of the Company but will remain the property of such persons or of such persons' full-time employers. In addition, the institutions with which the advisors and consultants are affiliated may make available the research services of their scientific and other skilled personnel, including the advisors and consultants, to entities other than the Company. In rendering such services, such institutions may be obligated to assign or license to a competitor of the Company patents and other proprietary information which may result from such services, including research performed by an advisor or consultant for a competitor of the Company. COMPENSATION OF DIRECTORS Outside directors are compensated at the rate of $1,000 for attending board meetings and $500 for telephonic board meetings. Howard S. Breslow, a director of the Company, is a member of Breslow & Walker, LLP, general counsel to the Company. Mr. Breslow currently owns 53,600 shares of Common Stock of the Company and holds options to purchase an aggregate of 1,465,000 additional shares pursuant to stock options and warrants issued to him and/or affiliates. During the period ended December 2001, Breslow & Walker, LLP billed the Company approximately $94,000 for legal fees. 5 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ------------------------------------------------------------------------ The following table sets forth, as of March 31, 2002, certain information regarding the beneficial ownership of Common Stock and Series F Preferred Stock by (i) each stockholder known by the Company to be the beneficial owner of more than 5% of the outstanding shares thereof; (ii) each director of the Company; (iii) each named executive officer of the Company; and (iv) all of the Company's current directors and executive officers as a group.
Title of Name and Address Amount and Nature of Percent of Class of Beneficial Owner Beneficial Ownership(1) Class (1) --------------------- ----------------------------------------- ------------------------ -------------- Common Stock J. Andrew Greuling 350,000 (2) 2.7% c/o Cryomedical Sciences, Inc. 100 Cobb Pl. Blvd., Building 200 Kennesaw, GA 30144 Common Stock John G. Baust 779,000 (3) 5.9% c/o Cryomedical Sciences, Inc. 100 Cobb Pl. Blvd., Building 200 Kennesaw, GA 30144 Common Stock Howard S. Breslow, Esq. 1,508,600 (4) 10.9% c/o Breslow & Walker, LLP 767 Third Avenue New York, NY 10017 Common Stock Roderick de Greef 1,033,000 (5) 7.9% c/o Cryomedical Sciences, Inc. 100 Cobb Pl. Blvd., Building 200 Kennesaw, GA 30144 Series F Preferred Stock 1,000 8.3% Common Stock Richard J. Reinhart 0 (6) 0.0% 96 Garden Road Lawrenceville, NJ 08640 Common Stock Walter Villiger 3,400,000 (7) 22.1% Hurdnerstrasse 10 P.O. Box 1474 CH-8649 Hurden, Switzerland Series F Preferred Stock 5,000 41.7% Common Stock Clariden Bank 2,000,000 (8) 14.7% Claridenstrasse 26 Postfach 5080 CH-8022 Zurich, Switzerland Series F Preferred Stock 2,000 16.7% Common Stock Thomas Girschweiler 2,848,060 (9) 19.3% Wissmannstrasse 15 8057 Zurich, Switzerland Series F Preferred Stock 3,450 28.8% Common Stock All officers and directors as a group 3,746,600 (10) 23.5% (four persons)
6 Common Stock All beneficial owners of more than 5% 11,568,660 (11) 53.2% (six persons) Series F Preferred Stock All officers and directors as a group 1000 8.3% (one person) Series F Preferred Stock All beneficial owners of more than 5% 11,450 95.4% (four persons)
----------------------------------- (1) Shares of Common Stock subject to options and warrants currently exercisable or exercisable within 60 days are deemed outstanding for computing the number of shares and the percentage of the outstanding shares held by a person holding such options or warrants, but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the Company believes that the person named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them. (2) Includes 350,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company's 1998 Stock Option Plan. (3) Includes 750,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company's 1988 and 1998 Stock Option Plans and 25,000 shares of Common Stock issuable upon the exercise of outstanding warrants. (4) Includes 159,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company's 1988 and 1998 Stock Option Plans, and 1,296,000 shares of Common Stock issuable upon the exercise of outstanding warrants, which warrants are owned of record by Breslow & Walker, LLP (576,000) and B & W Investments (720,000), both of which are entities in which Mr. Breslow is a partner. (5) Includes 400,000 shares of Common Stock issuable upon the conversion of Series F Preferred Stock, and 200,000 shares of Common Stock issuable upon the exercise of outstanding warrants. Also, includes 80,000 shares of Common Stock owned of record by de Greef & Co., an entity in which Mr. de Greef is the sole shareholder and an officer and director. (6) Dr. Reinhart resigned from the Company effective May 30, 2001. All of his options have expired. (7) Includes 2,000,000 shares of Common Stock issuable upon the conversion of Series F Preferred Stock, and 1,000,000 shares of Common Stock issuable upon the exercise of outstanding warrants. (8) Includes 800,000 shares of Common Stock issuable upon the conversion of Series F Preferred Stock, and 400,000 shares of Common Stock issuable upon the exercise of outstanding warrants. (9) Includes 1,380,000 shares of Common Stock issuable upon the conversion of Series F Preferred Stock, and 930,000 shares of Common Stock issuable upon the exercise of outstanding warrants. (10) Includes 909,000 shares of Common Stock issuable upon the exercise of outstanding stock options, 1,521,000 shares of Common Stock issuable under outstanding warrants, and 400,000 shares of Common Stock issuable upon the conversion of Series F Preferred Stock. (11) Includes 909,000 shares of Common Stock issuable upon the exercise of outstanding stock options, 3,851,000 shares of Common Stock issuable under outstanding warrants, and 4,580,000 shares of Common Stock issuable upon the conversion of Series F Preferred Stock. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -------------------------------------------------------- Howard S. Breslow, a director of the Company, is a member of Breslow & Walker, LLP, general counsel to the Company. Mr. Breslow currently owns 53,600 shares of Common Stock of the Company and holds options to purchase an aggregate of 1,465,000 additional shares pursuant to stock options and warrants issued to him and/or affiliates. During the period ended December 2001, Breslow & Walker, LLP billed the Company approximately $94,000 for legal fees. 7 SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) 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. CRYOMEDICAL SCIENCES, INC. Date: April 30, 2002 By: /s/ J. Andrew Greuling ---------------------------------------- J. Andrew Greuling Chief Executive Officer (Principal Executive Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: April 30, 2002 /s/ J. Andrew Greuling ------------------------- Andrew Greuling Director Date: April 30, 2002 /s/ Roderick de Greef ------------------------ Roderick de Greef Director Date: April 30, 2002 /s/ John G. Baust -------------------- John G. Baust Director Date: April 30, 2002 /s/ Howard S. Breslow ------------------------ Howard S. Breslow Director 8