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Integrated Surgical Systems Inc – ‘10KSB/A’ for 12/31/99

On:  Friday, 4/28/00, at 2:10pm ET   ·   For:  12/31/99   ·   Accession #:  950123-0-4135   ·   File #:  1-12471

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/28/00  Integrated Surgical Systems Inc   10KSB/A    12/31/99    1:18K                                    RR Donnelley/FA

Amendment to Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB/A     Ingegrated Surgical Systems Inc                       10     41K 


Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
3Item 9. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
4Item 10. Executive Compensation
6Item 11. Security Ownership of Certain Beneficial Owners and Management
8Item 12. Certain Transactions
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U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB/A (Amendment No. 1) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 1-12471 INTEGRATED SURGICAL SYSTEMS, INC. (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER) DELAWARE 68-0232575 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1850 RESEARCH PARK DRIVE, DAVIS, CA 95616-4884 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (530) 792-2600 (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE) SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: NAME OF EACH EXCHANGE ON WHICH TITLE OF EACH CLASS EACH CLASS IS REGISTERED ------------------------------ --------------------------------- COMMON STOCK, $.01 PAR VALUE THE PACIFIC EXCHANGE INCORPORATED COMMON STOCK PURCHASE WARRANTS THE PACIFIC EXCHANGE INCORPORATED SECURITIES REGISTERED UNDER SECTION 12(g) OF THE ACT: NOT APPLICABLE (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 past 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 no disclosure will 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. [ ] Revenues for the issuer's most recent fiscal year were $6,240,842. The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the closing price of the common stock on March 24, 2000 was $63,330,180. ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] APPLICABLE ONLY TO CORPORATE REGISTRANTS As of March 24, 2000, the issuer had 16,888,048 shares of common stock, $.01 par value, outstanding. Transitional Small Business Disclosure Format: Yes [ ] No [X] DOCUMENTS INCORPORATED BY REFERENCE None
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Explanatory Note This Amendment No. 1 to the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999 has been filed to include the information required by Part III.
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PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. The following is a list of the Directors and Executive Officers of the Company: [Enlarge/Download Table] Director Name Age Principal Occupation and Related Information Since Ramesh C. Trivedi 60 Chief Executive Officer of the Company since November 1995; consultant to the Company from November February 1995 until November 1995; Principal of California Biomedical Consultants (an 1995 international consulting firm) since 1987; President and Chief Executive Officer of DigiRad Corporation (a medical imaging company) from 1985 to 1986. Falah Al-Kadi 50 Chairman of the Board of Directors since January 2000. Vice Chairman of the Dogmoch Group December of Companies since 1994. 1999 John N. Kapoor 56 President of EJ Financial Enterprises, Inc. (a healthcare consulting and investment December company); Chairman of Option Care, Inc. (a franchiser of home infusion therapy businesses) 1995 since October 1990; Chairman of Unimed Pharmaceuticals, Inc. (a specialty pharmaceutical company) since 1990; Chief Executive Officer and Chairman of Akorn, Inc. (a manufacturer and distributor of ophthalmic products) since May 1996; Chairman of NeoPharm, Inc. (cancer drug research and development company). Bernd Herrmann 32 Private investor since 1997; Asset Manager, Commerzbank AG, Frankfurt/Main, Germany from December 1995 to 1997 and Deutsche Bank AG, Mannheim Kaiserslautern, Germany from 1986 to 1995. 1999 Urs Wettstein 44 Private investor; independent tax and accounting consultant in Zurich, Switzerland since December 1983; Financial and Tax consultant, Coopers and Lybrand, Zurich, Switzerland from 1977 to 1999 1982. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires the Company's Officers, Directors and persons who own more than ten percent of a registered class of the Company's equity securities within specified time periods to file certain reports of ownership and changes in ownership with the Securities and Exchange Commission (the "Commission"). Officers, Directors and ten-percent stockholders are required by regulation to furnish the Company with copies of all Section 16(a) forms they file. Messrs. Al-Kadi, Herrmann and Wettstein have not filed Form 3's reporting their ownership of shares and warrants. Based solely on a review of copies of such reports received by the Company and written representations from such persons concerning the necessity to file such reports, the Company is not aware of any other failures to file reports or report transactions in a timely manner during the fiscal year ended December 31, 1999.
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ITEM 10. EXECUTIVE COMPENSATION The following table sets forth the compensation awarded to, earned by or paid to the Company's Chief Executive Officer and each other executive officer of the Company whose salary and bonus exceeded $100,000 for the year ended December 31, 1999 , 1998 and 1997. Summary Compensation Table [Enlarge/Download Table] LONG-TERM ANNUAL COMPENSATION COMPENSATION ----------------------------------------- ------------- OTHER SECURITIES ANNUAL UNDERLYING NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION(1) OPTIONS -------------------------------------- --------- --------- --------------- ------------ Ramesh C. Trivedi 1999 $ 279,840 $ 75,725 6,210 Chief Executive Officer and President 1998 $ 279,840 $ 42,501 120,000 1997 $ 264,000 $ 50,400 20,000 Mark W. Winn 1999 $ 126,500 $ -- -- Chief Financial Officer 1998 $ 118,833 $ -- -- 1997 (2) $ 38,333 $ -- 45,000 -------------------------- (1) Represents cash incentive bonus (2) Mr. Winn's employment commenced with the Company on September 2, 1997 and ended on December 31, 1999. EMPLOYMENT AGREEMENT Dr. Ramesh Trivedi serves as the Company's Chief Executive Officer and President pursuant to an employment agreement terminable at will by either party. Dr. Trivedi's annual salary is $279,840 ($23,320 per month). Upon termination by the Company, other than for cause (as defined in the employment agreement), Dr. Trivedi is entitled to receive his monthly salary for a period of eighteen months following the date of termination.
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STOCK OPTIONS The following table contains information concerning the grant of stock options under the Company's 1998 Stock Option Plan to Dr. Trivedi and Mr. Winn (collectively, the "Named Executive Officers") during the fiscal year ended December 31, 1999. OPTION GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS) [Download Table] PERCENT OF NUMBER OF TOTAL SHARES OPTIONS UNDERLYING GRANTED TO EXERCISE OPTIONS EMPLOYEES IN PRICE PER EXPIRATION NAME GRANTED(1) FISCAL YEAR SHARE(2) DATE ---- ---------- ------------ -------- ---------- Ramesh C. Trivedi 6,210 3.7% .10 8/16/09 Mark W. Winn - - - ---------- (1) Stock options are granted at the discretion of the Compensation Committee of the Company's Board of Directors. Stock options have a 10-year term and vest periodically over a period not to exceed five years. (2) The Compensation Committee of the Company's Board of Directors may elect to reduce the exercise price of any option to the current fair market value of the Common Stock if the value of the Common Stock has declined from the date of grant.
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The following table summarizes for each of the Named Executive Officers the total number of unexercised options, if any, held at December 31, 1999, and the aggregate dollar value of in-the-money, unexercised options, held at December 31, 1999. The value of the unexercised, in-the-money options at December 31, 1999, is the difference between their exercise or base price and the value of the underlying Common Stock on December 31, 1999. The closing sale price of the Common Stock on the Nasdaq SmallCap Market on December 31, 1999 was $1.6562 per share. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY END OPTION VALUES [Enlarge/Download Table] SHARES ACQUIRED UPON EXERCISE NUMBER OF SECURITIES VALUE OF UNEXERCISED OF OPTIONS UNDERLYING IN-THE-MONEY DURING FISCAL UNEXERCISED OPTIONS OPTIONS AT 1999 AT DECEMBER 31, 1999 DECEMBER 31, 1999 ---------------------- ------------------------------ -------------------------------- VALUE NAME NUMBER REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ------ -------- ----------- ------------- ----------- ------------- Ramesh C. Trivedi None None 374,852 68,265 $512,431(1) 0 Mark W. Winn None None 15,000 30,000 0 0 ---------- (1) Represents value of options to purchase 316,907 shares at an exercise price of $0.07 per share and options to purchase 6,210 shares at an exercise price of $0.10 per share. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following table sets forth certain information concerning the beneficial ownership of the Company's Common Stock at March 21, 2000 by (i) each stockholder known by the Company to be a beneficial owner of more than five percent of the outstanding Common Stock, (ii) each director of the Company, (iii) each executive officer of the Company listed in the Summary Compensation Table and (iv) all directors and officers as a group. [Download Table] AMOUNT AND NATURE OF PERCENTAGE OF BENEFICIAL COMMON STOCK NAME OWNERSHIP(1) BENEFICIALLY OWNED(2) ---- ------------ --------------------- International Business Machines Corporation Old Orchard Road, Armonk, N.Y. 10504 2,274,066 (3) 11.87% EJ Financial Investments V, L.P. 225 East Deer Path Road, Suite 250 Lake Forest, IL 60045 1,039,792 6.16% ILTAG International Licensing Holding 7,311,198 (4) 32.15% 1
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[Download Table] S.A.L., a subsidiary of The Dogmoch Group of Companies, Adnan Al Hakim Street Assaf Bldg. P.O. Box 135660 Beirut, Lebanon Ramesh C. Trivedi(5) 378,852 (6) 2.19% John N. Kapoor(7) 1,039,792 (8) 6.16% Falah Al-Kadi (9) 7,311,198 (10) 32.15% Urs Wettstein (11) 3,655,599(12) 18.45% Bernd Herrmann (13) 3,655,599 (12) 18.45% All directors and officers as a group (5 persons) 16,041,040 55.38% ---------------------- (1) Unless otherwise indicated, each person has sole investment and voting power with respect to the shares indicated, subject to community property laws, where applicable. (2) For purposes of computing the percentage of outstanding shares held by each person or group of persons named above on March 21, 2000, any security which such person or group of persons has the right to acquire within 60 days after such date is deemed to be outstanding for the purpose of computing the percentage ownership for such person or persons, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. (3) Includes warrants to purchase 2,206,479 shares of Common Stock at an exercise price of $0.01 per share exercisable until December 31, 2005, warrants to purchase 67,587 shares of Common Stock at an exercise price of $0.07 per share exercisable until December 31, 2000 which warrants are presently exercisable. (4) Includes warrants to purchase 5,850,000 shares of common stock at an exercise price of $1.027 per share until December 14, 2002 (5) Address is c/o the Company, 1850 Research Park, Davis, California 95616-4884 (6) Includes 378,852 shares that Dr. Trivedi may acquire upon exercise of stock options exercisable within 60 days -- 316,907 shares at an exercise price of $0.07 per share, 51,735 shares at an exercise price of $3.00 per share and 6,210 shares at an exercise price of $0.10 per share. Dr. Trivedi may acquire additional 68,625 shares upon exercise of stock options that become exercisable over the remaining term of the options at an exercise price of $3.00 per share. 2
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(7) Address is c/o EJ Financial Enterprises, 225 E. Deer Path Road, Suite 250, Lake Forest, Illinois 60045. (8) Represents shares of Common Stock owned by EJ Financial Investments V, L.P., a limited partnership of which Mr. Kapoor is the managing general partner. Mr. Kapoor disclaims beneficial ownership of such shares. (9) Address is Adnan Al Hakim St., Assaf Bldg., P.O. Box 135660, Beirut, Lebanon (10) Represents shares and warrants owned by ILTAG, a subsidiary of The Dogmoch Group of Companies, of which he is Vice-Chairman. (11) Address is Gartenstrasse 33, 8002 Zurich, Switzerland (12) Includes 2,925,000 warrants to purchase shares of common stock at $1.027 per share exercisable until December 14, 2002. (13) Address is 37 Avenue des Papalins, MC-8000, Monaco ITEM 12. CERTAIN TRANSACTIONS The Company has entered into a distribution agreement, dated November 11,1999 with Spark 1st Vision GmbH & Co. KG, a German company, that gives the distributor the exclusive right to distribute the Company's products in Europe, the Middle East and Africa through 2003. The distributor is obligated to purchase a minimum of 24 ROBODOC systems and 4 NeuroMate systems during 2000 and 32 ROBODOC systems and 6 NeuroMate systems during 2001. The distributor is required to pay the Company advance payments of $200,000 per month for the first six months of 2000, $300,000 per month for the remainder of 2000, and $400,000 per month for 2001, offset by the purchase price of products purchased. However, the distributor has no minimum purchase or advance payment obligation after 2001, even through it will retain exclusive rights to distribute the Company's products in Europe, the Middle East and Africa through 2003. The distributor's only obligation to the Company after 2001 is to pay for products that it purchases. The distributor's liability to the Company under the distribution agreement is limited to $1 million, exclusive of the minimum purchase obligation. The Company will continue to receive service contract revenues and bear the cost of maintenance, training and customer support. The distribution agreement will eliminate marketing; sales and administrative expenses associated with the Company's European activities and provide the Company with a more predictable source of revenues based upon the minimum purchase commitments of the 3
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distributor. The distributor is controlled by Manfred Schmitt, a German venture capitalist. As of November 11, 1999, Mr. Schmitt beneficially owned slightly more than five percent of the then outstanding shares of Common Stock. The Company believes that the terms of the distribution agreement are as fair to the Company as those that could have been obtained from an unaffiliated party. As of April 24, 2000 the Company had received the minimum payment under the agreement for the month of January. 4
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SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this amendment to the report to be signed on its behalf by the undersigned, thereunto duly authorized. INTEGRATED SURGICAL SYSTEMS, INC. By: /s/ Ramesh C. Trivedi By: /s/ Louis J. Kirchner ---------------------------- ------------------------------------------- Ramesh C. Trivedi, President Louis J. Kirchner, Chief Financial Officer (Principal Executive Officer) (Principal Financial and Accounting Officer) Dated: April 27, 2000 In accordance with the Securities Exchange Act of 1934, this amendment to the report has been signed below by the following persons on behalf of the Registrant on April 27, 2000 in the capacities indicated. SIGNATURE TITLE --------- ----- /S/ Ramesh C. Trivedi Chief Executive Officer, President and a ------------------------------- Director (Principal Executive Officer) Ramesh C. Trivedi /s/ Louis J. Kirchner Chief Financial Officer (Principal ------------------------------- Financial and Accounting Officer) Louis J. Kirchner /s/ Falah Al-Kadi Chairman of the Board ------------------------------- Falah Al-Kadi /s/ John N. Kapoor ------------------------------- Director John N. Kapoor ------------------------------- Director Bernd Herrmann /s/ Urs Wettstein ------------------------------- Director Urs Wettstein 16

Dates Referenced Herein   and   Documents Incorporated by Reference

Referenced-On Page
This ‘10KSB/A’ Filing    Date First  Last      Other Filings
12/31/05710KSB
12/14/0278
12/31/00710KSB,  NT 10-K
Filed on:4/28/00
4/27/0010
4/24/009
3/24/001
3/21/0067
For Period End:12/31/991610KSB
11/11/999
9/2/974
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