Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o
Preliminary Proxy Statement
þ
Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-11 (c) or Section 240.40 14a-12
SUTURA, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1.
Title of each class of securities to which transaction applies:
2.
Aggregate number of securities to which transaction applies:
3.
Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was
determined):
4.
Proposed maximum aggregate value of transaction:
5.
Total fee paid:
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Fee paid previously with preliminary materials:
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
The 2006 Annual Meeting of Shareholders of Sutura. Inc. will be
held on November 16, 2006, at 9:00 a.m. Pacific
Time at the Ayres Hotel and Suites, 325 Bristol, Costa Mesa,
California92626 for the following purposes:
1. To elect seven (7) directors, each to serve for a
one-year term;
2. To ratify the selection of Kabani & Company,
Inc. as our independent auditors to examine our consolidated
financial statements for the fiscal year ending
December 31, 2006; and
3. To transact such other business as may properly come
before the meeting.
Please refer to the accompanying proxy statement for a more
complete description of the matters to be considered at the
meeting. Only shareholders of record at the close of business on
November 3, 2006, will be entitled to notice of, and to
vote at, the 2006 Annual Meeting and any adjournment thereof.
Only persons with proof of share ownership, or persons
requested by the board of directors to attend the meeting, will
be admitted to the Annual Meeting. If you are a shareholder of
record, you will need to bring proof of share ownership with you
to the Annual Meeting, together with photo identification. If
your shares are not registered in your name, you must bring
proof of share ownership (such as a recent bank or brokerage
firm account statement, together with proper identification) in
order to be admitted to the Annual Meeting.
It is important that your shares be represented at the annual
meeting. Even if you plan to attend the annual meeting in
person, please sign, date and return your proxy form in the
enclosed envelope as promptly as possible. This will not prevent
you from voting your shares in person if you attend, but will
make sure that your shares are represented in the event that you
cannot attend.
Please sign, date and return the enclosed proxy promptly in
the envelope provided, which requires no United States
postage.
On behalf of the Sutura, Inc. board of directors (the
“Board”), we are soliciting the enclosed proxy for use
at the 2006 Annual Meeting of Shareholders. The meeting will be
held on Thursday, November 16, 2006 at
9:00 a.m. Pacific Time at at the Ayres Hotel and
Suites, 325 Bristol, Costa Mesa, California92626.
This proxy will be used at the meeting and at any and all
adjournments and postponements of the meeting for the following
purposes:
1. To elect seven (7) directors, each to serve for a
one-year term;
2. To ratify the selection of Kabani & Company,
Inc. as our independent auditors to examine our consolidated
financial statements for the fiscal year ending
December 31, 2006; and
3. To transact such other business as may properly come
before the meeting.
If you are a shareholder of record you may revoke your proxy and
change your vote at any time before the proxy is exercised by
giving written notice of revocation to our Secretary at our
principal executive office located at 17080 Newhope Street,
Fountain Valley, CA92708, USA. You may also revoke your proxy
and change your vote by voting in person at the meeting. Please
note that your attendance at the meeting will not constitute a
revocation of your proxy unless you actually vote at the meeting.
If you hold your shares in street name, in order to vote at the
meeting, you must use the legal proxy sent by your broker.
Holding shares in “street name” means your Sutura
shares are held in an account at a brokerage firm or bank or
other nominee holder and the stock certificates and record
ownership are not in your name. We encourage you to provide
instructions to your brokerage firm by completing the proxy that
it sends to you. This will ensure that your shares are voted at
the meeting. If your shares are held in the name of a broker,
bank or other nominee, you may change your vote by submitting
new voting instructions to your bank, broker or other record
holder. Please note that if your shares are held of record by a
broker, bank or other nominee, and you decide to attend and vote
at the meeting, your vote in person at the meeting will not be
effective unless you present a legal proxy, issued in your name
from the record holder.
The shares represented by proxies (in the form solicited by the
Board) received by us before or at the meeting will be voted at
the meeting. If a choice is specified on the proxy with respect
to a matter to be voted upon, the shares represented by the
proxy will be voted in accordance with that specification. If no
choice is specified, the shares represented by a properly
executed proxy will be voted: (i) FOR each of the seven
(7) nominees listed in this proxy statement; and
(ii) FOR ratification of the selection of Kabani &
Company, Inc. as our independent auditors.
We expect to first mail this proxy statement and the
accompanying form of proxy to our shareholders on or about
November 6, 2006. Our Annual Report to the Securities and
Exchange Commission (SEC) on
Form 10-KSB
is enclosed with this proxy statement which shall serve as our
Annual Report to Shareholders, but that report does not form a
part of the proxy soliciting material. The cost of soliciting
proxies will be borne by us. After the original mailing of the
proxy soliciting material, further solicitation of proxies may
be made by mail, telephone, facsimile, electronic mail, and
personal interview by our regular employees, who will not
receive additional compensation for such solicitation. We will
also request that brokerage firms and other nominees or
fiduciaries forward copies of the proxy soliciting material and
to beneficial owners of the stock held in their names, and we
will reimburse them for reasonable
out-of-pocket
expenses incurred in doing so. In accordance with Delaware law,
a list of shareholders entitled to vote at the meeting will be
available at the meeting, and for 10 days before the Annual
Meeting at the
offices of Sutura, Inc., located at 17080 Newhope Street,
Fountain Valley, California92708 between the hours of
9 a.m. and 4 p.m. local time.
Voting
Securities and Voting Rights
Only record holders of our common stock as of the close of
business on November 3, 2006 (the “record date”)
are entitled to receive notice of and to vote at the meeting. At
the record date we had 253,824,796 outstanding shares of common
stock, the holders of which are entitled to one vote per share.
Accordingly, an aggregate of 253,824,796 votes may be cast on
each matter to be considered at the meeting.
To constitute a quorum for the conduct of business at the
meeting, a majority of the outstanding shares entitled to vote
at the meeting must be represented at the meeting. Shares
represented by proxies that reflect abstentions or “broker
non-votes” (street name shares held by a broker or nominee
which are represented at the meeting, but with respect to which
the broker or nominee is not empowered to vote on a particular
proposal) will be counted as shares represented at the meeting
for purposes of determining a quorum.
Common
Stock Ownership of Principal Shareholders and
Management
Information with respect to beneficial ownership has been
furnished for each director, executive officer or beneficial
owner of more than 5% of our common stock. In computing the
number of shares beneficially owned by a person listed below and
the percentage ownership of such person, shares of common stock
underlying options, warrants or convertible securities held by
each such person that are exercisable or convertible within
60 days of October 15, 2006 are deemed outstanding for
purposes of computing such person’s percentage ownership,
but are not deemed outstanding for computing the percentage
ownership of any other person. Beneficial ownership including
the number and percentage of shares owned is determined in
accordance with
Rule 13d-3
and 13d-5
under the Securities Exchange Act of 1934 (the “Exchange
Act”) and is generally determined by voting power
and/or
investment power with respect to securities. The percentage of
beneficial ownership is based on 253,824,796 shares of
common stock outstanding as of October 15, 2006.
Except as otherwise noted below, and subject to applicable
community property laws, the persons named have sole voting and
investment power with respect to all shares of common stock
shown as beneficially owned by them. Unless otherwise indicated,
the address of the following stockholders is c/o Sutura,
Inc., 17080 Newhope Street, Fountain Valley, California92708.
Includes 9,687,954 shares held by Anthony Nobles;
6,508,680 shares held by The Anthony Nobles Family Limited
Partnership; 86,783 shares held by Rhonda Nobles;
68,040,874 shares held by Grootkasteel B.V.; and
17,814,090 shares issuable upon the exercise of options
held by Anthony Nobles. Anthony Nobles is an officer and
director of Grootkasteel B.V. and holds the power to vote all
shares held by The Anthony Nobles Family Limited Partnership.
Rhonda Nobles is the spouse of Mr. Nobles.
(2)
Includes 16,343,557 shares of held by Egbert Ratering;
2,169,560 shares held by Franck Ratering;
2,169,560 shares held by Alex Ratering;
2,169,560 shares held by Harry Ratering;
68,040,874 shares held by Grootkasteel B.V.; and
7,801,070 shares issuable upon conversion of options held
by Egbert Ratering. Egbert Ratering is an officer and director
of Grootkasteel B.V. Franck Ratering, Alex Ratering and Harry
Ratering are members of Mr. Ratering’s immediate
family.
(3)
Includes 13,494,664 shares held by Go Industries, Inc.;
21,696 shares held by Irwin Novak; 43,392 shares held
by Jessica Novak; 21,696 shares held by Judi Novak;
43,392 shares held by Ryan Powell; 43,392 shares held
by Taylor Powell; and 1,301,736 shares issuable upon
exercise of options held by Alfred Novak. Alfred Novak holds a
controlling interest in Go Industries, Inc. Irwin, Jessica and
Judi Novak and Ryan and Taylor Powell are members of
Mr. Novak’s immediate family.
(4)
Includes 10,253,124 shares issued to Synapse Fund I
LLC and 14,592,244 shares issued to Synapse Fund II
LLC. Synapse Capital Fund is the managing member of both Synapse
Fund I and Synapse Fund II.
(5)
Includes 67,186,806, shares beneficially owned and
127,709,166 shares issuable upon the conversion of loans
and exercise of warrants by Pandora Select Partners L.P., a
British Virgin Islands limited partnership; Whitebox Hedged High
Yield L.P., a British Virgin Islands limited partnership;
Whitebox Convertible Arbitrage Partners L.P. a British Virgin
Islands limited partnership; Gary S. Kohler and Scot W. Malloy.
(6)
Includes 750,000 shares issuable upon exercise of options.
(7)
Includes 450,000 shares of issuable upon exercise of
options.
(8)
Includes 1,600,868 shares issuable upon exercise of options
and 108,478 shares of issuable upon the exercise of
warrants.
(9)
Includes 108,478 shares beneficially owned and
500,000 shares issuable upon exercise of options.
(10)
Includes 250,000 shares issuable upon exercise of options.
(11)
Calculation includes all shares beneficially owned by Anthony
Nobles (as indicated in footnote 1 above); plus all shares
of beneficially owned by Egbert Ratering (as indicated in
footnote 2 above) less shares held by Grootkasteel B.V.
which were included once in the calculation of the Nobles
shares; plus all shares beneficially owned by David Teckman (as
indicated in footnote 6 above), Richard Bjorkman (as
indicated in footnote 7 above) John Crew, MD (as indicated
in footnote 8 above), Charles Terrell, Sr. (as
indicated in footnote 9 above), and Dr. Richard Moran
(as indicated in footnote 10 above).
David Teckman, 50, has been President and
CEO since September 21, 2006 and has served as a member of
the Board since May 15, 2006. Mr. Teckman was
previously a director of Minneapolis-based Whitebox Advisors,
LLC, a hedge fund headquartered in Minneapolis, MN with
$1.4 billion under management. Affiliates of Whitebox
Advisors, LLC have invested a total of $20,550,000 in Sutura in
exchange for Common Stock, Secured Convertible Notes and
Warrants for shares of Sutura Common Stock. Before that,
Mr. Teckman served as the President and CEO
of Vivius, Inc. from 2000 to 2005. Vivius was a venture capital
backed consumer driven healthcare company that developed,
patented and deployed the first healthcare program allowing
consumers to select healthcare benefits and providers on-line.
Prior to Vivius he served as the president of Disc Systems Inc.,
an ambulatory health care software and information technologies
company from 1997 to 1999. Mr. Teckman is Chairman of the
Board of Mendota Healthcare and is a member of the Board of
Visitors for the Pharmacy School at the University of Maryland.
Richard Bjorkman, 57, has served as the
Chief Financial Officer, Vice President, Finance and member of
our Board since September 21, 2006. Mr. Bjorkman was
previously an independent contractor providing CFO services to
venture backed start up companies and to companies in
turn-around situations. Before that, Mr. Bjorkman served as
CFO for Indicast.com from 2001 to 2002. Indicast was an internet
voice portal company that was ultimately acquired by Oracle,
Inc. Prior to Indicast, he served as CFO for SmithMicro
Software, Inc. (Nasdaq: SMSI), a developer of eCommerce
software, communication software and provider of professional
consulting services. Mr. Bjorkman received his CPA
certificate while working for KPMG in there Los Angeles office.
He is a past president of Financial Executives International
(FEI) Orange County California chapter.
Anthony Nobles, 42, has served as the Chief
Science Officer since September 21, 2006, and continues to
serve as our Chairman of the Board. Prior to that
Mr. Nobles served as the Chief Executive Officer, President
and Chairman of the Board of the Company since the consummation
of the merger of the Company with Sutura, Inc. (“Prior
Sutura”) on August 19, 2005. Mr. Nobles
co-founded Prior Sutura in 1996 with Mr. Ratering and
served as Prior Sutura’s Chairman of the Board from the
inception of Prior Sutura until consummation of the merger. He
also served as Prior Sutura’s President and Chief Executive
Officer since the inception of Prior Sutura until consummation
of the merger, except for a brief period from January 2000 to
October 2001 during which time he held the title of Chief
Technology Officer. In addition, Mr. Nobles has founded
other medical device companies with Mr. Ratering, for which
he serves as an officer and director. He has been awarded
various patents for medical devices for use in cardiovascular
surgery, neurosurgery, obstetrics/gynecology, and
vascular & general surgery.
Egbert Ratering, 58, serves as an Executive Vice
President, and continues to serve as a member of our Board.
Prior to that, he served as the Chief Financial Officer,
Executive Vice President and a director of the Company since the
consummation of the merger of the Company and Prior Sutura on
August 19, 2005. Mr. Ratering co-founded Prior Sutura
in 1996 with Mr. Nobles. He served as a director of Prior
Sutura and as Executive Vice President and Managing Director of
Prior Sutura’s European subsidiaries since Prior
Sutura’s inception until consummation of the merger, and
served as Prior Sutura’s Chief Financial Officer from
January, 2003 until consummation of the merger. In addition,
Mr. Ratering has founded other medical device
start-up
companies with Mr. Nobles, for which he serves as an
officer and director. Prior to co-founding Prior Sutura,
Mr. Ratering was employed by Cordis Corporation, a
JOHNSON-JOHNSON company from 1976 to 1996 and was responsible
for worldwide manufacturing for Cordis from 1995 to 1996.
Executive
Compensation
Executive
Employment Agreements
NOBLES
EMPLOYMENT AGREEMENT
Mr. Nobles’ existing Employment Agreement with Sutura
was assumed by the Company upon consummation of the merger of
the Company with Prior Sutura. Mr. Nobles is currently
employed by the Company as its Chief Science Officer and
Chairman of the Board. The term of Mr. Nobles employment
agreement extends from January 1, 2003 until
December 31, 2007. Pursuant to his employment agreement,
Mr. Nobles receives annual base salary of $250,000, subject
to a minimum annual increase of no less than the increase in the
average cost of living index. Mr. Nobles has founded, and
for which he generally serves as an officer and director,
various other medical device companies outside of the arterial
vessel closure area. Mr. Nobles’ employment agreement
requires that he devote at least 50% of his employable time,
attention, skill and efforts to the faithful performance of his
duties with the Company. Mr. Nobles’ employment
agreement specifically prohibits him from participating in a
business that competes with Sutura’s business during his
employment.
Mr. Ratering’s Employment Agreement with Sutura was
assumed by the Company upon consummation of the merger of the
Company with Prior Sutura. Mr. Ratering is currently
employed by Sutura as its Executive Vice President European
Operations. Mr. Ratering’s employment is at will and
provides for an annual salary of Euro 120,000 approximately
($150,000 U.S. dollars) and an additional Euro 20,000
(approximately $25,000 U.S. dollars) in annual benefit
allowance.
BJORKMAN
EMPLOYMENT AGREEMENT
Mr. Bjorkman entered into his Employment Agreement with
Sutura on September 21, 2006. The agreement with
Mr. Bjorkman provides, among other things, that
Mr. Bjorkman will receive an annual salary of $90,000 in
exchange for serving as the Company’s Chief Financial
Officer and Vice President, Finance for at least twenty
(20) hours per week, and that he will be reimbursed for his
COBRA expenses. Mr. Bjorkman is an at-will employee.
TECKMAN
EMPLOYMENT AGREEMENT
Mr. Teckman entered into his Employment Agreement with
Sutura on September 21, 2006 The agreement with
Mr. Teckman provides that he will receive annual
compensation of $1.00 in exchange for serving as the
Company’s President and Chief Executive Officer.
Mr. Teckman is an at-will employee.
Compensation
of Executive Officers
The following table presents, for each of the last three fiscal
years, the annual compensation earned by the chief executive
officer and the most highly compensated executive officers of
the Company for the three fiscal years ended December 31,2005:
SUMMARY
COMPENSATION TABLE
ANNUAL COMPENSATION
Other Annual
Name and Principal Position
Year
Salary
Bonus
Compensation
Anthony Nobles
2005
$
92,877
$
0
$
3,250
(10)
Chief executive officer and
President(1)
Egbert Ratering
2005
$
54,000
$
0
$
5,400
(10)
Chief Financial Officer and
Executive
Vice President(2)
James B. Lahey
2005
$
145,000
(5)(8)
CEO, President(3)
2004
$
150,000
(5)(6)(7)
2003
$
150,000
(5)(6)(7)
James A, Giansiracusa
2005
$
145,000
(5)(9)
COO, CFO, Secretary(4)
2004
$
150,000
(5)(6)(7)
2003
$
150,000
(5)(6)(7)
(1)
Mr. Nobles became an executive officer and employee of the
Company on August 19, 2005 as a result of the merger of the
Company with Prior Sutura. Accordingly, the table sets forth the
compensation that Mr. Nobles received since becoming an
executive officer of the Company. Mr. Nobles’ annual
salary is $250,000. The amounts shown paid in 2005 reflect the
amounts paid since becoming an officer on August 19, 2005
following the Merger Transaction with Prior Sutura.
(2)
Mr. Ratering became an executive officer and employee of
the Company on August 19, 2005 as a result of the merger of
the Company with Prior Sutura. Accordingly, the table sets forth
the compensation that Mr. Ratering received since becoming
an executive officer of the Company. Mr. Ratering’s
annual salary is Euro 120,000, which is approximately
U.S. $150,000. The amounts shown paid in 2005 reflect the
amounts paid since becoming an officer on August 19, 2005
following the Merger Transaction with Prior Sutura.
Mr. Lahey served as the Chief Executive Officer and
President of the Company for 2003, 2004 and from January 1,2005 until consummation of the merger of the Company and prior
Sutura. August 19, 2005. After August 19, 2005, he has
served as the Chief Executive Officer and President of
Technology Visions, Inc., a subsidiary of the Company.
(4)
Mr. Gianciracusa served as the Chief Operations Officer and
Chief Financial Officer of the Company for 2003, 2004 and from
January 1, 2005 until consummation of the merger of the
Company and prior Sutura. August 19, 2005. After
August 19, 2005, he has served as the Chief Operations
Officer and Chief Financial Officer of Technology Visions, Inc.,
a subsidiary of the Company.
(5)
While serving as Executive Officers, Mr. Lahey and
Mr. Giansiracusa had agreed to defer their compensation in
favor of the company’s operations and progress. As
described in note 9 below, accrued but unpaid salary, debt
and interest was converted into common stock. Since
August 19, 2006, each of Messrs. Lahey and
Gianciracusa have received cash compensation as employees of the
subsidiary based on an annual salary of $125,000.
(6)
In October 2004, $228,049 of accrued but unpaid salary in favor
of Mr. Lahey was converted into 4,560,988 shares of
common stock (pre
12-for-1
reverse stock split)of the Company and $293,049 of accrued but
unpaid salary of Mr. Giansiracusa was converted into
5,860,988 (pre
12-for-1
reverse stock split) shares of common stock of the Company. The
accrued but unpaid salary was converted in common stock at the
rate of $0.05 per share, reflecting the average of the
trading price of the common stock for the ten day period from
October 11, 2004 through October 22, 2004.
(7)
As of December 31, 2004, $548,512 of accrued but unpaid
salary in favor of Mr. Lahey was converted into 7,412,319
(pre
12-for-1
reverse stock split) shares of common stock of the Company. As
of December 29, 2004, $548,512 of accrued but unpaid salary
in favor of Mr. Giansiracusa was converted into 7,412,319
(pre
12-for-1
reverse stock split) shares of common stock of the company. The
accrued but unpaid salary was converted in common stock at the
rate of $0.074 per share, reflecting the average of the
trading price of the common stock for the ten day period of
November 23, 2004 through December 7, 2004, reflecting
the price of the common stock following the initial announcement
of the Merger.
(8)
As of August 19, 2005, the closing date of the merger of
the Company and Prior Sutura, $531,102 of accrued but unpaid
salary in favor of Mr. Lahey was converted into
598,088 shares of common stock of the Company. The accrued
but unpaid salary was converted in common stock at the rate of
$0.888 per share. All compensation due Mr. Lahey prior
to August 19, 2005 was converted to shares of common stock
of the Company. Mr. Lahey has received $45,138 of cash
compensation in 2005 as an employee of the subsidiary.
(9)
As of August 19, 2005, the closing date of the merger of
the Company and Prior Sutura, $192,196 of accrued but unpaid
salary in favor of Mr. Gianciracusa was converted into
216,437 shares of common stock of the Company. The accrued
but unpaid salary was converted in common stock at the rate of
$0.888 per share. All compensation due
Mr. Gianciracusa prior to August 19, 2005 was
converted to shares of common stock of the Company.
Mr. Gianciracusa has received $45,138 of cash compensation
in 2005 as an employee of the subsidiary.
(10)
These amounts represent automobile allowances from August 19
through December 31, 2005.
Certain
Relationships and Related Transactions
The Company, as successor to Prior Sutura, currently owes
Mr. Ratering, an officer and director the principal amounts
of $393,000 and $293,618 pursuant to two promissory notes, each
bearing simple interest at 8% and each becoming due and payable
on December 31, 2006. These promissory Notes were assumed
by the Company upon consummation of the merger of the Company
with Prior Sutura (the “Merger Transaction”). The
accrued interest on such notes as of December 31, 2005 was
approximately $85,000 and $86,000 respectively.
The Company, as successor to Prior Sutura, currently owes Gauss
N.V. the principal amount of €80,000 (approximately
$100,000 U.S. Dollars) pursuant to a promissory note
bearing simple interest at 8% and becoming due and payable on
December 31, 2006. This promissory Note was assumed by the
Company upon consummation of the Merger Transaction. The accrued
interest on the note as of December 31, 2005 was
approximately €23,000 (approximately $28,000
U.S. Dollars). Gauss N.V. is jointly owned by
Mr. Ratering and Mr. Nobles.
Mr. Ratering converted the principal amount of an 8%
promissory note, plus accrued but unpaid interest, into shares
of Sutura’s common stock effective immediately prior to
consummation of the Merger Transaction. The principal amount of
such note was $1.0 million and the unpaid accrued interest
as of August 19, 2005 was approximately $387,000. The
principal amount and unpaid accrued interest on the note
converted into 477,312 shares of Sutura’s common stock
immediately prior to the Merger Transaction.
Mr. Nobles converted the principal amount of an 8%
promissory note, plus accrued but unpaid interest, into shares
of Sutura’s common stock effective immediately prior to
consummation of the Merger Transaction. The principal amount of
such note was $500,000 and the unpaid accrued interest as of
August 19, 2005 was approximately $141,000. The principal
amount and unpaid accrued interest on the note converted into
220,540 shares of Sutura’s common stock immediately
prior to the Merger Transaction.
Prior Sutura previously leased its facilities in Fountain
Valley, California (Newhope Street Property), from
Mr. Nobles. During fiscal years 2003 and 2002,
Mr. Nobles charged rental payments to Prior Sutura of
$300,000 and $270,813, respectively; however, Prior Sutura did
not actually pay any of the rent amounts due in 2003 and 2002
until April of 2004 when $300,000 was paid. A further $115,000
of back rent was paid directly to one of the lenders holding a
deed of trust on the property on behalf of Mr. Nobles in
May 2004. From January 1 through July 30, 2004,
Mr. Nobles charged rent amounts of $175,000, and a final
rent payment of $250,000 was made in September 2004. Prior
Sutura accrued additional late penalties incurred by
Mr. Nobles in 2003 and 2004 for failure to timely pay
interest in the amounts of $90,000 and $53,660 respectively. The
accrued penalty amounts remain due and owing to Mr. Nobles
and the liability therefore was assumed by the Company pursuant
to the Merger Transaction.
On August 2, 2004, Mr. Nobles sold the Newhope Street
Property to NV Properties LLC, a Nevada limited liability
company. At the same time, NV Properties entered into a new
lease with Prior Sutura on substantially the same economic terms
as the prior lease between Prior Sutura and Mr. Nobles. The
term is for a period of ten years, commencing on August 1,2004. The base rent is $25,000 per month and is subject to
adjustment on an annual basis by the change, if any, in the
Consumer Price Index of the Bureau of Labor Statistics of the
U.S. Department of Labor for CPIW (Urban Wage Earners and
Clerical Workers) for Los Angeles, Riverside, Orange Counties).
Mr. Nobles is a member with a 42.3266% interest in NV
Properties and serves as one of its three managers. The
provisions of the NV Properties’ Operating Agreement
provide that actions are taken by majority vote of the managers
and that no manager may vote on actions in which he has a direct
or indirect financial interest other than as a member or manager
of NV Properties. The Operating Agreement specifically prohibits
Mr. Nobles from voting on any matter pertaining to the
lease of the building by NV Properties to Prior Sutura. The
Lease was assumed by the Company pursuant to the Merger
Transaction.
In September 1999, Prior Sutura entered into a Patent License
Agreement with Sterilis, Inc., a California corporation.
Sterilis is a medical device company focused on developing
business in the obstetrical and gynecological fields and
markets. Both Mr. Nobles and Mr. Ratering are
officers, directors, and stockholders of Sterilis. Pursuant to
the Patent License Agreement, Prior Sutura granted Sterilis an
exclusive, worldwide license to manufacture and sell certain
suturing devices within the obstetrical, gynecological and
urological fields of use, specifically reserving the patent
rights for developing products in the cardiological field of
use. In exchange for this license, Sterilis paid Prior Sutura a
one-time fee of $250,000. The license agreement specifies that,
unless terminated sooner under an event of default as defined in
the Agreement, the license granted would terminate on the
expiration date of the last of the licensed patents. The Patent
License Agreement was assumed by the Company pursuant to the
Merger Transaction.
On October 1, 2000, Prior Sutura and Sucor, Inc., a
California corporation, entered into a License Agreement. Sucor
is a medical device company focused on developing business for
suturing devices solely used for venous occlusion, including
varicose vein closure. Both Mr. Nobles and
Mr. Ratering are officers, directors, and shareholders of
Sucor. Pursuant to the License Agreement, Prior Sutura granted
Sucor an exclusive, worldwide license to manufacture and sell
certain suturing devices that would be used solely in the venous
occlusion, and vein closure fields of use, specifically
reserving the patent rights for developing products in the
cardiological field of use. In exchange for this license, Sucor
paid to Prior Sutura a non-refundable license fee of $100,000,
and issued to Sutura 117,647 shares of its common stock;
which stock is now held by the Company as successor to Sutura.
The
license agreement will expire on the expiration date of the last
of the licensed patents. The License Agreement has been assumed
by the Company pursuant to the Merger Transaction.
Mr. Nobles has served as an advisor to Catalina Capital
Advisors, a consulting firm, since February 2004. He holds no
ownership interest in Catalina Capital Advisors, but has
received compensation for consulting services provided to that
firm. Sutura has paid advisory fees to Catalina Capital Advisors
in connection with the Whitebox I, Whitebox II and
Whitebox III financings. Mr. Nobles did not receive
any portion of the fees paid by Sutura to Catalina Capital
Advisors in connection with any of the Whitebox financings.
During the quarter ended December 31, 2004, accrued but
unpaid salary in the amount of $776,561 owing to James Lahey, a
prior officer of the Company, was converted into 11,973,307 (pre
12-for-1
reverse stock split) shares of common stock. Accrued but unpaid
salary in the amount of $841,561 owing to James Giansiracusa, a
prior officer of the Company, was converted into 13,273,307 (pre
12-for-1
reverse stock split) shares of common stock. The conversion rate
for the forgoing issuances ranged between $0.05 and
$0.074 per share.
On August 19, 2005, the date of the consummation of the
merger of Prior Sutura with the Company, loans advanced to the
company by James Lahey in the amount of $420,854 were converted
into 473,935 shares of common stock. Loans owed to James
Giansiracusa in the amount of $52,682 were converted into
59,326 shares of common stock. The conversion rate for the
forgoing issuances was $0.888 per share
On August 19, 2005, the date of the consummation of the
merger of Prior Sutura with the Company, accrued but unpaid
salary in the amount of $531,102 owing to James Lahey was
converted into 598,087 shares of common stock. Accrued but
unpaid salary in the amount of $192,196 owing to James
Giansiracusa was converted into 216,437 shares of common
stock. The conversion rate for the forgoing issuances was
$0.888 per share.
On July 17, 2005the Company repaid a $150,000 note payable
to Mr. Nobles as well as $28,500 accumulated interest on
that note. The Company also paid $25,808 principal amount
against $103,037 owing to Mr. Nobles for advances made by
him to the Company.
Audit
Committee, Nominating Committee and Compensation
Committee
Audit
Committee and Audit Committee Financial Expert
In August, 2005, the Company was merged with Prior Sutura which
resulted in a change of the members of the Board of Directors
and management of the Company. The Company currently does not
have a separate Audit Committee, and the functions of such a
committee are performed by the entire Board. During the most
recent completed fiscal year, Egbert Ratering served as the
Company’s audit committee financial expert; however,
Mr. Ratering was also serving as the Chief Financial
Officer and was not independent of management.
The Board reviewed and discussed the audited financial
statements for fiscal year 2005 with management, and members of
the Board have discussed with the Company’ auditors the
matters required by SAS 61. Members of the Board have reviewed
and discussed the independence of the Company’s auditors
and, based on that review, the Board recommended that the
financial statements be included in the Company’s Annual
report on
10-KSB for
the fiscal year ended December 31, 2005.
Nominating
Committee
In August, 2005, the Company was merged with Prior Sutura which
resulted in a change of the members of the Board of Directors
and management of the Company. We do not have a standing
nominating committee or a charter with respect to the nominating
process. Our Board believes that it is not necessary to have
such a committee because its size and composition allow it to
adequately identify and evaluate qualified candidates for
directors. The entire Board participates in the consideration of
director nominees, of which three members are independent. The
Board has not adopted a policy with regard to consideration of
candidates recommended by security holders due to the closely
held nature of the Company.
In August, 2005, the Company was merged with Prior Sutura which
resulted in a change of the members of the Board of Directors
and management of the Company. The Company does not have a
standing compensation committee, and did not believe it
necessary, since until recently the Board consisted of only four
members. The entire Board participates in the consideration of
compensation matters.
Section 16(a) of the Securities Exchange Act of 1934
requires the Company’s executive officers and directors,
and persons who beneficially own more than 10% of the
Company’s stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange
Commission. Executive officers, directors and greater than 10%
beneficial owners are required by applicable regulations to
furnish the Company with copies of all Section 16(a) forms
they file. Based solely upon a review of the copies of the forms
furnished to the Company and information involving securities
transactions of which the Company is aware, the Company is aware
of officers, directors and holders of more than 10% of the
outstanding common stock of the Company who failed to timely
file reports required by Section 16 (a) of the
Exchange Act during the year ended December 31, 2005. To
the Company’s knowledge, as of the completion of its most
recent fiscal year, Anthony Nobles, Egbert Ratering, John
Crew, M.D., Charles Terrell, Synapse Capital Fund and
Whitebox Advisors had not timely filed required Forms 3 or
5.
Audit
Fees
The following table presents fees for professional audit
services by Kabani & Company, Inc. for the audit of our
annual financial statements for fiscal 2005 and 2004, and fees
billed for other services rendered by Kabani & Company,
Inc.
Fees
2005
2004
Audit Fees(1)
$
45,500
$
39,050
Audit Related Fees
(0
)
(0
)
Total Audit and audit related fees
$
45,500
$
39,050
Tax Fees
(0
)
1,500
All Other Fees
(0
)
(0
)
Total Fees
$
45,500
$
40,550
(1)
Fees for audit services consisted of: (i) audit of the
Company’s annual financial statements; (ii) reviews of
the Company’s quarterly financial statements; and
(iii) consents and other services related to SEC matters.
The Board has reviewed the non-audit services provided by
Kabani & Company, Inc. and determined that the
provision of these services during fiscal 2005 is compatible
with maintaining Kabani & Company, Inc.’s
independence.
Changes
in Board Composition During 2006
On May 15, 2006, David Teckman was appointed to serve on
the Board. On September 21, 2006, Richard Bjorkman and
Dr. Richard Moran were appointed to serve on the Board.
Our bylaws authorize a board of directors of seven
(7) members.
The board is to be elected every year at the Annual Meeting of
Shareholders for a term of one (1) year. Accordingly, the
directors who are elected at the 2006 Annual Meeting of
Shareholders will hold office until the 2007 Annual Meeting of
Shareholders or until the director’s prior death,
disability, resignation or removal.
The board of directors has nominated each of David Teckman,
Richard Bjorkman, Dr. Richard Moran, Anthony Nobles, Egbert
Ratering, John Crew, M.D. and Charles Terrell, Sr. for
re-election as a director at the meeting. Proxies are solicited
in favor of these nominees and will be voted for them unless
otherwise specified. If any of David Teckman, Richard Bjorkman,
Dr. Richard Moran, Anthony Nobles, Egbert Ratering, John
Crew, M.D. or Charles Terrell, Sr. becomes unable or
unwilling to serve as a director, the proxies will be voted for
the election of such other person, if any, as the Board shall
designate.
Information concerning the nominees for director is set forth
below:
Term
Name
Expiration
Age
Position with Sutura
David Teckman(2)
2006
50
Chief Executive Officer, President
and Director, nominee for re-election
Richard Bjorkman(2)
2006
57
Chief Financial Officer, Vice
President Finance and Director, nominee for
re-election
Dr. Richard Moran
2006
56
Director, nominee for re-election
Anthony Nobles
2006
42
Chief Science Officer, Chairman of
the Board and Director, nominee for
re-election
Egbert Ratering
2006
58
Executive Vice President and
Director, nominee for re-election
John Crew, M.D(1)
2006
72
Director, nominee for re-election
Charles Terrell, Sr.(1)
2006
67
Director, nominee for re-election
(1)
Member of the First Special Litigation Committee
(2)
Member of the Second Special Litigation Committee
David Teckman, 50, has been President and
CEO since September 21, 2006 and has served as a member of
the Board since May 15, 2006. Mr. Teckman was
previously a director of Minneapolis-based Whitebox Advisors,
LLC, a hedge fund headquartered in Minneapolis, MN with
$1.4 billion under management. Affiliates of Whitebox
Advisors, LLC have invested a total of $20,550,000 in Sutura in
exchange for Common Stock, Secured Convertible Notes and
Warrants for shares of Sutura Common Stock. Before that,
Mr. Teckman served as the President and CEO of Vivius, Inc.
from 2000 to 2005. Vivius was a venture capital backed consumer
driven healthcare company that developed, patented and deployed
the first healthcare program allowing consumers to select
healthcare benefits and providers on-line. Prior to Vivius he
served as the president of Disc Systems Inc., an ambulatory
health care software and information technologies company from
1997 to 1999. Mr. Teckman is Chairman of the Board of
Mendota Healthcare and is a member of the Board of Visitors for
the Pharmacy School at the University of Maryland.
Richard Bjorkman, 56, has served as the
Chief Financial Officer, Vice President, Finance and member of
our Board since September 21, 2006. Mr. Bjorkman is a
financial professional with over 25 years of management
accomplishments in private and public companies working with
medical devices, software, wireless,
multi-unit
distribution and retail organizations. Mr. Bjorkman’s
professional experience includes working with venture capital
funded
start-up
companies as well as Fortune 500 companies as Chief
Financial Officer or Vice President, Finance. Mr. Bjorkman
has extensive senior management experience having been the CFO
for Indicast.com, Smith Micro Software, Inc. and Iovision, Inc.
Mr. Bjorkman began his career in finance as an auditor with
KPMG in Los Angeles.
Anthony Nobles, 42, has served as the Chief
Science Officer since September 21, 200, and continues to
serve as our Chairman of the Board. Prior to that
Mr. Nobles served as the Chief Executive Officer, President
and Chairman of the Board of the Company since the consummation
of the merger of the Company with Sutura, Inc. (“Prior
Sutura”) on August 19, 2005. Mr. Nobles
co-founded Prior Sutura in 1996 with Mr. Ratering and
served as Prior Sutura’s Chairman of the Board from the
inception of Prior Sutura until consummation of the merger. He
also served as Prior Sutura’s President and Chief Executive
Officer since the inception of Prior Sutura until consummation
of the merger, except for a brief period from January 2000 to
October 2001 during which time he held the title of Chief
Technology Officer. In addition, Mr. Nobles has founded
other medical device companies with Mr. Ratering, for which
he serves as an officer and director. He has been awarded
various patents for medical devices for use in cardiovascular
surgery, neurosurgery, obstetrics/gynecology, and
vascular & general surgery.
Egbert Ratering, 58, serves as an Executive Vice
President, and continues to serves as a member of our Board.
Prior to that, he served as the Chief Financial Officer,
Executive Vice President and a director of the Company since the
consummation of the merger of the Company and Prior Sutura on
August 19, 2005. Mr. Ratering co-founded Prior Sutura
in 1996 with Mr. Nobles. He served as a director of Prior
Sutura and as Executive Vice President and Managing Director of
Prior Sutura’s European subsidiaries since Prior
Sutura’s inception until consummation of the merger, and
served as Prior Sutura’s Chief Financial Officer from
January, 2003 until consummation of the merger. In addition,
Mr. Ratering has founded other medical device
start-up
companies with Mr. Nobles, for which he serves as an
officer and director. Prior to co-founding Prior Sutura,
Mr. Ratering was employed by Cordis Corporation, a
JOHNSON-JOHNSON company from 1976 to 1996 and was responsible
for worldwide manufacturing for Cordis from 1995 to 1996.
John Crew, M.D., 72, has served as a director
of the Company since the consummation of the merger of the
Company and Prior Sutura August 19, 2005. Dr. Crew
served as a director of Prior Sutura from September, 2002, until
the consummation of the merger. Dr. Crew has been a
practicing physician in the San Francisco/Daly City,
California area since 1964. He is certified by the American
Board of Surgery, Vascular and the American Registry of
Diagnostic Medical Sonographers. Dr. Crew is currently
serving as the Director of Cardiovascular Surgical Research for
the San Francisco Heart Institute at Seton Medical Center
in Daly City, California and as the Medical Director for the
San Francisco Wound Care Center in Daly City, California.
He has authored and co-authored numerous published articles on
the vascular and cardiovascular related topics.
Charles Terrell, Sr., 67, has served as a
director of the Company since December 1, 2005. Charles
Terrell is the former chairman of the Greater Dallas Crime
Commission, the former chairman of the Texas Criminal Justice
Task Force, and the former chairman of the Mayor’s Advisory
Committee on Crime for Dallas, Texas. In 1987, he was appointed
by the Governor of Texas to chair the Texas Department of
Corrections, the second largest state prison system in the U.S.,
and the fifth largest prison system in the world. Currently, at
the request of Dallas Mayor Laura Miller, Mr. Terrell is
working with business leader Jack Hammack to organize the effort
to “Make Dallas the Safest City in America” that has
resulted in the formation of “Safer Dallas Better
Dallas” of which Mr. Terrell is now the President. In
1969, he founded the Unimark Agencies, for which has has served
as the President since its inception. The Unimark Agencies
operate in all phases of commercial insurance. Unimark operates
as both a wholesaler and retailer for special property and
casualty programs for convenience stores, financial
institutions, nursing homes, beverage companies, multi-family
housing, real estate portfolios, hospitals and insurance
programs to replace maintenance service agreements.
Dr. Richard Moran, 56, is the former
Chairman of the Board of Portal Software which was sold to
Oracle in 2006. He served also on the Board of r4gs which was
sold to Verisign in 2005. He is a former Partner at Accenture,
Inc. and a Ph.D. in organizational behavior. Dr. Moran is a
nationally recognized expert in implementing organizational
change through shaping high-performance work cultures and
harnessing the power of people and technology. He has
orchestrated and implemented major corporate methodologies
driving rapid growth for companies within technology and other
industries. Dr. Moran is also a respected author of
numerous national best-selling business books and a board member
of several educational and philanthropic organizations.
Certain
Legal Proceedings with Respect to Officers and
Directors
On June 30, 2005, certain stockholders of Prior Sutura
filed two separate, but related, complaints in the Superior
Court of the State of California, County of Orange -Central
Justice Center. The first complaint, Case
No. 05-CC00136,
is a shareholder derivative complaint making various claims
against Messrs. Nobles, Ratering and others asserting that
such persons have taken actions that have damaged the Company
and seeking, among other things, money damages and injunctive
relief to prevent the consummation of the then pending merger of
Prior Sutura with the Company (the “derivative
action”). The plaintiffs in this action are Synapse
Fund I, LLC, a California limited liability company and
Synapse Fund II, LLC, a California limited liability
company in their capacities as stockholders of Prior Sutura, and
now as stockholders of the Company. The plaintiffs in this
action filed with the court to seek a temporary restraining
order to prevent the merger of Prior Sutura and the Company
which was rejected by the court, but the remainder of the
complaint remains pending before the court.
The second complaint, Case
No. 05-CC00137,
seeks, among other things, to remove Messrs. Nobles and
Ratering from their respective positions as directors of the
Company, to dissolve the Company and for injunctive relief to
prevent the consummation of the then pending merger with
Technology Visions Group, Inc. The plaintiffs in this action are
Go Industries, Inc., a Florida corporation, Synapse Fund I,
LLC, a California limited liability company, Synapse
Fund II, LLC, a California limited liability company and 20
other stockholders of Sutura.
The Board of Directors of Sutura appointed a Special Litigation
Committee consisting of two independent directors,
Messrs. Crew and Terrell, to review the claims made in the
above referenced derivative action, and to report to the Board
its findings and decisions. On February 28, 2006, the
Special Litigation Committee submitted its final report
regarding the claims made in the derivative action and
determined that such action brought by the Synapse entities
would unlikely succeed on the merits and unlikely result in any
net monetary recovery to the Company, is wholly opposed to the
best interests of the Company, and that a motion to dismiss the
derivative action should be filed. Nonetheless, the plaintiffs
in the derivative action have continued to pursue their claims
in the derivative action which has been costly to the Company.
Recently, the Special Litigation Committee has been
reconstituted with two new directors, Messrs. Teckman and
Bjorkman, who will review the original claims made in the
derivative action, as well as the report of the first committee,
and will then make a recommendation to the Board as to which
course of action it believes to be in the bests interests of the
Company.
Board
Meetings and Compensation
The board of directors held 6meetings during fiscal year 2005.
During fiscal year 2005, no director attended less than 75% of
the aggregate of the total number of meetings of the board of
directors and of the committees of the board of directors.
The directors who are not employees of Sutura receive a cash fee
of $500 for attending each meeting. Each director was reimbursed
for expenses incurred in connection with attending meetings.
Directors also hold and receive stock options under our 2006
Stock Option Plan. On January 6, 2006, each of
Messrs. Nobles, Ratering, Crew and Terrell received 250,000
stock options at an exercise price per share of $0.30. Each of
Messrs Teckman, Bjorkman and Moran received a grant of 250,000
stock options on October 3, 2006 at an exercise price per
share of $0.06 The exercise prices represent the fair market
value of our common stock on the date of grant, and the options
vest over a period of four years
Shareholder
Communications with the Board of Directors
Shareholders may communicate with our Board members by written
mail addressed to the Company, care of Secretary, Sutura Inc,
17080 Newhope Street, Fountain Valley, California, 92708. We
encourage shareholders to include proof of ownership of our
stock in such communications. The Secretary will forward all
communications to the appropriate director.
Code of
Ethics
We have a code of business conduct and ethics for directors and
officers, which can be found at www.suturaus.com and is
available to shareholders upon request made to the Secretary at
Sutura Inc, 17080 Newhope Street, Fountain
Valley, California, 92708. These codes summarize the compliance
and ethical standards and expectations we have for all of our
officers and directors, including our Chief Executive Officer
and senior financial officers, with respect to their conduct in
connection with our business. Our code of business conduct and
ethics constitutes our code of ethics within the meaning of
Section 406 of the Sarbanes Oxley Act of 2002. We will
disclose any future amendments to or waivers of certain
provisions of our code of business conduct and ethics applicable
to our principal executive officer, principal financial officer
principal accounting officer, controller and persons performing
similar functions on our website at www.suturaus.com within five
business days or as otherwise required by the SEC.
Advisory
Board
In addition to the committees of the board of directors, we have
an independent Advisory Board. The Advisory Board is comprised
of leading physicians and researchers with an interest in
vascular and cardio related medical devices; they advise
management with respect to our current and proposed products and
developments in the field of Sutura’s medical devices.
REQUIRED
VOTE AND BOARD RECOMMENDATION
Assuming a quorum is present, directors will be elected by a
favorable vote of a plurality of the aggregate votes cast, in
person or by proxy, at the meeting. Accordingly, the seven
nominees receiving the highest number of votes will be elected.
Abstentions will have no effect on the outcome of the election
of candidates for director. The election of directors is a
matter on which brokers are empowered to vote and, thus, broker
non-votes are not expected on the election of directors.
Unless instructed to the contrary, the shares represented by the
proxies will be voted FOR the election of the seven nominees
named above. Although it is anticipated that the nominees will
be able to serve as directors, should a nominee become
unavailable to serve, the proxies will be voted for such other
person or persons our Board may designate.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
“FOR”THE ELECTION OF EACH OF THE SEVEN
NOMINEES TO THE BOARD OF DIRECTORS.
Proposal 2.
Ratification of Selection of Auditors
The firm of Kabani & Company, Inc., our independent
auditors for the fiscal year ended December 31, 2005, was
selected by the Audit Committee to act in the same capacity for
the fiscal year ending December 31, 2006. Neither the firm
nor any of its members has any relationship with us or any of
our affiliates except in the firm’s capacity as our auditor.
VOTE
REQUIRED AND BOARD RECOMMENDATION
The proposal to ratify the selection of our independent auditors
requires the affirmative vote of a majority of the outstanding
shares of Common Stock present or represented and entitled to
vote at the 2006 Annual Meeting of Shareholders. Accordingly,
abstentions will have the effect of a vote against the
ratification of Kabani & Company, Inc. as our
independent auditors. This proposal is a matter on which brokers
are entitled to vote, and thus, Broker non votes are not
expected on this proposal.
Unless instructed to the contrary, properly executed proxies
will be voted FOR ratification of the selection of
Kabani & Company, Inc. as our independent auditors.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”APPROVAL OF THE RATIFICATION OF THE SELECTION OF
KABANI & COMPANY, INC. AS OUR INDEPENDENT AUDITORS.
The Board does not know of any other business to be presented to
the Annual Meeting of Shareholders. If any other matters
properly come before the meeting, however, the persons named in
the enclosed form of proxy will vote the proxy in accordance
with their best judgment.
SHAREHOLDER
PROPOSALS FOR 2007 ANNUAL MEETING
We expect to hold our 2007 Annual Meeting of Shareholders in
November, 2007. In order for shareholder proposals otherwise
satisfying the eligibility requirements of
Rule 14a-8
under the Exchange Act to be considered for inclusion in our
Proxy Statement for our 2007 Annual Meeting, we must receive
them at our principal office in Fountain Valley, California, on
or before July 10, 2007.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
SUTURA, INC.
The undersigned hereby appoints Richard Bjorkman and David Teckman, and each or
either of them, as proxies, with full power of substitution, and hereby authorizes them to vote, as
designated herein, all common shares, $0.001 par value per share, of Sutura, Inc. held of record by
the undersigned shareholder as of the close of business on November 3, 2006, at the annual meeting
of shareholders to be held on November 16, 2006, and at any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this proxy will be voted “FOR” the election of
the Director Nominees and “FOR” the ratification of the selection of Kabani & Company, Inc. as the
independent auditors for the fiscal year ending December 31, 2006.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Please complete, date and SIGN on the reverse side)
To Vote Your Proxy by Mail
Mark, sign and date your proxy card below, detach it and return it in the postage-paid envelope
provided.
6 FOLD AND DETACH HERE AND READ THE REVERSE SIDE 6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE DIRECTOR NOMINEES AND “FOR” THE RATIFICATION OF THE
SELECTION OF KABANI & COMPANY, INC. AS THE INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006.
Please mark
your votes
like this
x
WITHHOLD
FOR ALL
AUTHORITY
EXCEPT
FOR ALL
FOR ALL
(See instructions
1. ELECTION OF DIRECTOR NOMINEES:
NOMINEES
NOMINEES
below)
01.Richard Bjorkman
02. John Crew, M.D.
03. Anthony Nobles
04. Dr. Richard Moran
05.Egbert Ratering
06. David Teckman
07. Charles Terrell, Sr.
o
o
o
INSTRUCTION: To withhold authority to vote for any individual nominee, mark “FOR ALL EXCEPT” and
strike a line
through the name of any nominee from which you wish to withhold.
FOR
AGAINST
ABSTAIN
2.
RATIFICATION OF THE SELECTION OF
KABANI & COMPANY, INC. AS INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2006
o
o
o
3.
In their discretion, the proxies are authorized to vote upon such other business as
may properly come before the annual meeting of shareholders and any adjournments or postponements thereof.
COMPANY ID:
PROXY NUMBER:
ACCOUNT NUMBER:
Title
(Signature,
if held
Signature
jointly)
Dated:
, 2006.
NOTE: Please sign exactly as your name or names appear on the proxy card. When shares are held
jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full
title as such. If the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in the partnership name
by authorized person.
Dates Referenced Herein and Documents Incorporated by Reference