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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
AMENDMENT NO. 1 TO FORM 10-KSB
[ X ]Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended December 31, 1995
[ ]Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the transition period from ________________ to ________________
Commission file number: 2-85008-NY
MEDICAL STERILIZATION, INC.
(Exact name of Small Business Issuer as specified in its charter)
NEW YORK 11-2621408
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 UNDERHILL BOULEVARD, SYOSSET, NEW YORK 11791
(Address of principal executive offices) (Zip code)
(516) 496-8822
(Issuer's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act: NONE
Securities registered pursuant to Section 12(g) of the Exchange Act: NONE
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Check whether the Issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. [ X ]Yes [ ]No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will be contained, to the best of
the Issuer'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 ]
The Issuer's revenues for the fiscal year ended December 31, 1995 were
$8,772,430. As of September 25, 1996, the aggregate market value of the Issuer's
voting stock (including common stock, Series B Convertible Preferred Stock and
Series C Convertible Preferred Stock) held by non-affiliates was approximately
$2,773,548 based on the average bid and asked price of the Issuer's Common Stock
on September 25, 1996 as reported on the Nasdaq Bulletin Board System.
As of September 25, 1996, there were 3,005,496 shares of the Issuer's Common
Stock, par value $.01 per share, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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This Amendment No. 1 on Form 10-KSB/A to the Annual Report on Form 10-KSB, dated
March 29, 1996 (the "Report"), is being filed to refile the Agreement with
Pilling Weck included as Exhibit 10.24 to the Report in accordance with the
Company's amended request for confidential treatment of certain portions of the
Agreement with Piling Weck. Such Exhibit 10.24 is hereby amended and restated in
its entirety. The other exhibits to the Report are not being amended and have
been previously filed with the Securities and Exchange Commission.
-2-
EXHIBIT INDEX
The following exhibits are, as indicated below, either filed herewith or
have heretofore been filed with the Securities and Exchange Commission and are
referred to and incorporated by reference to such filings.
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
3.1* Restated Certificate of Incorporation
3.2* Certificate of Amendment of Certificate of Incorporation
3.3* Certificate of Amendment of Certificate of Incorporation
3.4* Amended and Restated By-Laws
10.1*** 1994 Stock Option Plan
10.2* 1996 Stock Plan
10.3** Agreement with Mercy Hospital dated November 14, 1988. This contract is substantially
similar to the other contracts entered into with hospitals. The basic differences relate
to the type of medical sets provided, the term of the contract and the compensation.
10.4* Lease Agreement with Barlich Realty, Inc.
10.5* Agreement with Oxford Venture Fund III, Limited Partnership, and Oxford Venture Fund III
Adjunct, Limited Partnership.
10.6* Agreement with Oxford Venture Fund II, Limited Partnership.
10.7*** Agreement with Precision Micron Powders, Inc. and Robert S. Luniewski.
10.8+++ Letter Agreement with Precision Micron Powders, Inc.
10.9++ Revised Agreement with Precision Micron Powders, Inc.
10.10*** Settlement Agreement with Shamrock Technologies, Inc. and Robert S. Luniewski.
10.11*** Toll Processing Agreement with Shamrock Technologies, Inc.
10.12* Extension of Toll Processing Agreement
10.13*** Release dated November 29, 1994.
10.14*** Satisfaction of Judgment
10.15*** Affidavit of Confession of Judgment
10.16* Agreement with Sumitomo Heavy Industries (USA)
10.17*** Financing Agreement with Rosenthal & Rosenthal, Inc.
10.18** Credit Line and Term Loan Agreements with Apple Bank for Savings
10.19* Letter amending Credit Line and Term Loan Agreements from Apple Bank for Savings
10.20+++ Letter confirming Term Loan Agreement from Apple Bank for Savings
10.21*** Amendment No. 1 to Credit Agreement with Apple Bank for Savings
10.22*** Loan Extension Agreement with Apple Bank for Savings
10.23* Agreement with Dr. Morganstern
10.24### ## Agreement with Pilling Weck
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23.1* Consent of Coopers & Lybrand L.L.P.
27.1* Financial Data Schedule
</TABLE>
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* Previously filed with the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1995.
** Previously filed as an exhibit to the Company's Amendment No. 1 to the
Registration Statement on Form S-1(File No. 33-28660) and incorporated
herein by reference.
*** Previously filed as an exhibit to the Company's Annual Report for the
fiscal year ended December 31, 1993 on Form 10-K and incorporated herein
by reference.
+ Previously filed as an exhibit to the Company's Registration Statement on
Form SB-2 (File No. 33-96330) and incorporated herein by reference.
++ Previously filed as an exhibit to the Company's Annual Report for the
fiscal year ended December 31, 1992 on Form 10-K and incorporated herein
by reference.
+++ Previously filed as an exhibit to the Company's Annual Report for the
fiscal year ended December 31, 1991 on Form 10-K and incorporated herein
by reference.
# Previously filed as an exhibit to the Company's Annual Report for the
fiscal year ended December 31, 1990 on Form 10-K and incorporated herein
by reference.
## Confidential treatment requested as to certain portions.
### Filed herewith.
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SIGNATURES
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In accordance with Section 13 or 15 (d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
September 30, 1996 MEDICAL STERILIZATION, INC.
By: /s/ D. Michael Deignan
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Name: D. Michael Deignan
Title:President and Chief Executive
Officer
In accordance with 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.
<TABLE>
<CAPTION>
Name and Signature Title(s) Date
- ------------------ -------- ----
<S> <C> <C>
/s/ D. Michael Deignan President, Chief Executive September 30,
- ---------------------------------- Officer and Director (principal 1996
D. Michael Deignan executive officer)
/s/ Paul V. Rossi Treasurer and Chief Financial September 30,
- ---------------------------------- Officer (principal financial and 1996
Paul V. Rossi accounting officer)
/s/ Harvey Cohen Director and Secretary September 30,
- ---------------------------------- 1996
Harvey Cohen
/s/ John R. Hoover Director September 30,
- ---------------------------------- 1996
John R. Hoover
/s/ Kenneth W. Rind Director September 30,
- ---------------------------------- 1996
Kenneth W. Rind
/s/ Kennard H. Morganstern Director September 30,
- ---------------------------------- 1996
Kennard H. Morganstern
/s/ William R. Lonergan Director September 30,
- ---------------------------------- 1996
William R. Lonergan
/s/ Forrest Whittaker Director September 30,
- ---------------------------------- 1996
Forrest Whittaker
</TABLE>
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EXHIBIT 10.24
[ ] indicates material that has been omitted and for which confidential
treatment has been requested. All such omitted material has been filed with the
Commission pursuant to Rule 24b-2
AGREEMENT BETWEEN
PILLING WECK (PW) and MEDICAL STERILIZATION, INC. (MSI)
Pilling Weck agrees to represent and sell MSI's procedure specific
decontamination, reprocessing and/or sterilization services in selective high
population density urban centers and/or in cooperation with MSI to selective IHN
organizations according to the minimum guidelines in Exhibit A. MSI's current
market development efforts, as outlined in Exhibit B, will be excepted from the
terms of this agreement. MSI grants to Pilling Weck exclusive, except as to MSI,
sales and marketing rights in the United States for the next three years
effective 1/5/96.
* MSI will continue its current account development efforts in the L.I.
business Unit Area, but agrees to exclusive third-party representation
by PW in this area. MSI will train Pilling Weck Sales Representatives
in the L.I. Business Unit Area (90 mile radius). Pilling Weck will
receive a commission of new MSI net billings generated by its
representatives, excepting MSI's current active customer list or
accounts under active development, as indicated in Exhibit C, within 10
days after payment receipt from the customer.
The commission schedule is as follows:
* New Accounts [ ]%
* Endoscopy [ ]%
PW agrees that during the first year, [ ]% of the MSI commission
received and also, []% commission of any MSI purchases of PW
instruments will be paid to its representation in the L.I. Business
Unit Area.
* Pilling Weck and MSI (The parties are not partners or joint venturers,
but are independent contractors.) agree to cooperate exclusively to
commercialize MSI's procedure specific decontamination, reprocessing
and/or sterilization services throughout North America according to the
minimum guidelines outlined in Exhibit A. Pilling Weck will use its
corporate and national account contacts to identify potential customers
and MSI will support the sales process by making joint presentations
with Pilling Weck and coordinating proposals to the clients in a timely
basis.
* MSI agrees to purchase its surgical instrument needs for current and
future sites from Pilling Weck, and Pilling Weck agrees to supply such
instruments upon request for the
duration of this agreement. Specific customer requests or preferences
for other brands of instruments, however, will be accommodated and
excepted from this exclusive arrangement. Pricing will be provided at
Pilling Weck's possible discount level reflected as VP level pricing.
MSI has the option to purchase such instruments on terms, 60 days from
date of invoice or on operating lease terms, utilizing PW's third party
financing facility, or through use of a MSI financing facility. In the
event of termination of this agreement, PW will not cause termination
of any leasing arrangement in effect.
* To start offering an endoscopic set to this trade, Pilling Weck agrees
to supply MSI with endoscopic sets at this pricing level.
* Pilling Weck and MSI agree to review options for contribution of
instruments to new centers, whereby Pilling Weck contributes
instruments as equity, and receives equity as a percentage of total
capitalization for that center.
* Pilling Weck also agrees to review options to supply instruments to MSI
on a capitated basis, whereby Pilling Weck is paid on a per use basis
for the instruments and ownership of the instruments remains with
Pilling Weck.
* Pilling Weck will provide on-site instrument repair services for MSI,
as requested by MSI, at VP level pricing at their Syosset, N.Y.
facility. MSI will provide adequate space to Pilling Weck personnel on
a rent free basis.
* Both parties agree to a legal "stand still" status whereby neither
party will enter into discussions or negotiations with other parties
regarding competing joint ventures or other activities which would be
competitive with the arrangements contemplated by this agreement. This
is in effect for the first [ ] of this agreement and can be extended
with consent of both parties. MSI will not enter into negotiations
regarding the sale of its business and Pilling Weck will not enter into
negotiations regarding purchase or organization of a business
competitive to MSI's sterilization business. However, it is recognized
that ESI is an existing Teleflex business and the existing lines of
business of ESI are excluded from this restriction.
The term of this agreement is three years. However, in the event of
change of ownership of the business, either party may cancel this agreement
provided one year's notice is given to the other party. After the first year,
either party, by giving thirty (30) days written notice prior to the end of the
year, may terminate the agreement if new MSI/PW generated contracts of at least
[ ] have not been signed or are pending, or MSI has not purchased or committed
to pending purchases of at least [ ] of PW instruments.
If Pilling Weck terminates this agreement for reasons other than breach
on MSI's part, Pilling Weck would be bound by an 18 month non-compete in the
geographic areas (180 mile radius) where MSI and Pilling Weck have concluded
contracts.
The non-compete would cover off-site decontamination, reprocessing, and
sterilization of surgical instruments for hospitals in the specific geographic
area covered.
If MSI terminates this agreement for reasons other than breach on
Pilling Weck's part, Pilling Weck would be unrestricted in any business
practices and not be bound by the above mentioned non-compete.
- --------------------------------- ---------------------------------
Ervin F. Portman D. Michael Deignan
President President
Pilling Weck Medical Sterilization, Inc.
EXHIBIT A
MEDICAL STERILIZATION, INC./PILLING WECK
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NATIONAL REPRESENTATION GUIDELINES
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This minimum criteria needed to expand MSI into high density population
urban locals is:
* [ ] (non-outsourced) surgical procedures in[ ] mile radius; and
* [ ] or more significant IHN groups controlling[ ] of market.
Medical Sterilization, Inc./ Pilling Weck Off-Site Implementation
Guidelines are:
* [ ] pre-contracted procedures; and
* MSI Ability, or MSI/PW Ability, or MSI/3rd Party Ability to Fund
In the event MSI declines to participate in a specific transaction, MSI
will negotiate in good faith to grant Pilling Weck a royalty bearing license to
carry out sterilization procedures for that transaction only.
EXHIBIT B
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NATIONAL ACCOUNT DEVELOPMENT LIST
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[
].
EXHIBIT C
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(Excludes Endoscopy)
L.I. BUSINESS UNIT AREA - ACTIVE ACCOUNT LIST:
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[ ].
EXHIBIT C (cont'd)
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(Excludes Endoscopy)
L.I. BUSINESS UNIT AREA - ACTIVE ACCOUNT DEVELOPMENT LIST:
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]
MSI will review, with Pilling Weck, its mutually agreed involvement in
closing selective account proposals. Commission will be paid according to the
agreed schedule.
