-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wsfps7YDIXD8Bc4RIm0zl0zhQIenAwCjr1KUUsVRYhfmFOKBDQcvI6h0/2Rd2dkx Ohq/angB+zlP2ijlB3J8lA== /in/edgar/work/20000921/0001077357-00-000337/0001077357-00-000337.txt : 20000924 0001077357-00-000337.hdr.sgml : 20000924 ACCESSION NUMBER: 0001077357-00-000337 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000921 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SURGICAL SAFETY PRODUCTS INC CENTRAL INDEX KEY: 0001063530 STANDARD INDUSTRIAL CLASSIFICATION: [8090 ] IRS NUMBER: 650565144 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-24921 FILM NUMBER: 726535 BUSINESS ADDRESS: STREET 1: 2018 OAK TERRACE CITY: SARASOTA STATE: FL ZIP: 34231 BUSINESS PHONE: 9419277874 MAIL ADDRESS: STREET 1: 2018 OAK TERRACE CITY: SARASOTA STATE: FL ZIP: 34231 10QSB/A 1 0001.txt QUARTERLY REPORT U.S. Securities and Exchange Commission Washington, D.C. 20549 Amendment 3 to Form 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended: June 30, 2000 Commission file no. 0-24921 Surgical Safety Products, Inc. -------------------------------------------- (Name of small business issuer in its charter) New York 65-0565144 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2018 Oak Terrace Sarasota, Florida 34231 - --------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Issuer's telephone number (941) 927-7874 Securities registered under Section 12(b) of the Exchange Act: Name of each exchange on Title of each class which registered None - ----------------------------- ------------------------- Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.001 par value ----------------------------------- (Title of class) Copies of Communications Sent to: Mercedes Travis, Esq. Mintmire & Associates 265 Sunrise Avenue, Suite 204 Palm Beach, FL 33480 Tel: (561) 832-5696; Fax: (561) 659-5371 Indicate by 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 --- --- As of June 30, 2000, there are 14,515,373 shares of voting stock of the registrant issued and outstanding. PART I Item 1. Financial Statements Condensed Balance Sheets F-1 Condensed Statements of Operations F-3 Condensed Statements of Cash Flows F-4 Notes to the Financial Statements F-6 -1-
SURGICAL SAFETY PRODUCTS, INC CONDENSED BALANCE SHEETS (Unaudited) (Audited) June 30, December 31, 2000 1999 Assets Current Assets Cash $ 231,372 $ 516,799 Trade receivables 314,133 17,086 Prepaid expenses and deposits 66,855 118,569 ------------------ ------------------------ Total current assets 612,360 652,454 ------------------ ------------------------ Property and equipment, net 189,490 203,533 ------------------ ------------------------ Other Assets Intangible assets, net 506,088 270,487 Software development costs, net 235,040 139,382 Other assets 10,250 10,250 ------------------ ------------------------ Total other assets 751,378 420,119 ------------------ ------------------------ Total Assets $ 1,553,228 $ 1,276,106 ================== ========================
F-1
SURGICAL SAFETY PRODUCTS, INC CONDENSED BALANCE SHEETS (Unaudited) (Audited) June 30, December 31, 2000 1999 Liabilities and Stockholders' Equity Current Liabilities Line of Credit $ 100,000 $ 100,000 Notes Payable - related parties 37,500 52,500 Accounts payable and accrued expenses 199,136 438,057 Total current liabilities 336,636 590,557 Long-Term Liabilities Notes payable 1,110,905 650,000 Total Liabilities 1,447,541 1,240,557 Stockholders' Deficit Common stock, $.001 par value, 20,000,000 shares authorized; 14,515,373shares issued and outstanding in 2000 and 1999 respectively 14,516 14,516 Common stock held in escrow (2,187) (2,700) Additional paid-in capital 3,433,476 2,804,020 Accumulated deficit (3,340,118) (2,780,287) Total stockholders' deficit (194,313) 35,549 Total Liabilities and Stockholders' Equity $ 1,553,228 $ 1,276,106
The accompanying notes are an integral part of these financial statements. F-2
SURGICAL SAFETY PRODUCTS, INC CONDENSED STATEMENT OF OPERATIONS THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED) Six Months Ending Three Months Ending June 30, June 30, 2000 1999 2000 1999 Revenue $ 459,725 $ 52,734 324,069 $ 13,157 Costs and expenses Cost of revenues 23,372 8,135 7,339 7,874 Operating expenses 751,306 396,900 415,588 257,916 Research and development 33,181 20,085 18,837 13,418 expenses Interest expense 211,697 7,440 30,276 5,919 Total costs 1,019,556 432,560 472,040 285,127 Net loss before income taxes (559,831) (379,826) (147,971) (271,970) Provision for income taxes Net loss $ (559,831) $ (379,826) (147,971) $ (271,970) Net loss per share $ (0.047) $ (0.040) (0.012) $ (0.020)
The accompanying notes are an integral part of these financial statements. F-3
SURGICAL SAFETY PRODUCTS, INC. CONDENSED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED) 2000 1999 Cash Flows From Operating Activities Net loss $ (859,831) $ (379,826) Adjustments to reconcile net loss to cash used in operating activities Depreciation and amortization 125,698 58,013 Common stock and options issued for services and employee compensation - 41,303 Stock option compensation expense 4,682 (91,113) Accrued interest added to notes payable 37,663 Interest expense - convertible debt 167,143 Decrease (increase) in operating assets Receivables (297,047) (8,040) Inventory - 436 Prepaids and others 51,715 Increase (decrease) in operating liabilities Accounts payable and accrued expenses (238,920) 14,498 Total adjustments (149,066) 15,097 Net cash used in operating activities (708,897) (364,729) Cash Flows From Investing Activities Furniture and equipment purchased (21,549) (92,039) Software development additions (119,981) (48,923) Net cash used in investing activities (141,530) (140,962) Cash Flows From Financing Activities Proceeds/(repayments) -related party loans (15,000) 77,500 Advances/(repayments) on line of credit, net - 100,000 Loan costs (70,000) Proceeds from notes payable 650,000 Proceeds from issuance of common stock - 475,000 Net cash provided by financing activities 565,000 652,500 Net increase (decrease) in cash (285,427) 146,809 Cash at beginning of year 516,799 41,191 Cash at end of year $ 231,372 $ 188,000
The accompanying notes are an integral part of these financial statements. F-4 SURGICAL SAFETY PRODUCTS, INC. CONDENSED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED) 2000 1999 Supplemental Cash Flow Information: Cash paid for interest $ 5,783 $ 4,647 For purposes of the statement of cash flows, management considers all deposits and financial instruments with original maturities of less than three months to be cash and cash equivalents. Material non-cash transactions not reflected in the statement of cash flows include: For the Six Months Ended June 30, 2000 - - Deferred financing costs of $231,385 related to the issuance of warrants in conjunction with the issuance of notes payable in March 2000 - Common stock and additional paid in capital of $226,759 issued for conversion of notes payable For the Six Months Ended June 30, 1999 - The Company received fixed assets in the amount of $58,700 for which it had recorded deposits of such amount at December 31, 1998 The accompanying notes are an integral part of these financial statements. F-5 Note 1 - Accounting Policies Basis of Presentation The condensed financial statements of Surgical Safety Products, Inc. (Company) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999. The results of operations for the six month period ended June 30, 2000 are not necessarily indicative of the results to be expected for any other period or for the full year. In the opinion of Company's management, the accompanying unaudited financial statements contain all adjustments, consisting of only normally recurring adjustments, necessary to present fairly the financial positions of June 30, 2000, the results of operations and cash flows for the six months ended June 30, 2000 and June 30, 1999. Net Loss Per Share Net loss per share has been computed in accordance with Statement of Financial Accounting Standards (FASB) No. 128, "Earnings Per Share," by dividing net loss by the weighted average number of shares outstanding during the period. Common stock equivalents have not been included in the computation of weighted average number of shares outstanding since the effect would have been anti-dilutive. Reclassifications Certain reclassifications have been made in the prior year's financial statements to conform to the current period presentation. Note 2 - Stock Compensation Expense During fiscal year 1998, the Company issued stock options with an exercise price that was below market price to certain of its employees. Accordingly, the Company recorded $91,113 of compensation expense related to the issuance for the year ended December 31, 1998. In the first quarter of 1999, the Company canceled these stock options and issued options with an exercise price above that of market. Accordingly, the Company decreased its payroll expense by $91,113 for the cancellation of these options for the quarter ended March 31, 1999. F-6 Note 3 -Conversions of Debt During the six months ended June 30, 2000, the investment banking firm that holds the notes payable related to the convertible line of credit, elected to convert $226,759 of principal and interest outstanding into 513,462 shares of common stock at prices ranging from $0.375 to $0.5625 per share. These shares were released from the shares held in escrow by the firm. On July 11, 2000, the firm converted another $41,683 of principal and interest into 111,155 shares of common stock at a price of $0.375 per share. F-7 Item 2. Management's Discussion and Analysis of Results of Operations. General The Company's (OTC BB: SURG) overall mission is the research, development, production and distribution of innovative products and services for healthcare. Consisting of both traditional products and innovative business-to-business e-solutions, the common goal is a safer and more efficient environment for healthcare workers, manufacturers and patients. Originally formed as a medical device company, Surgical shifted focus to being an e-company when the Company's management recognized an untapped market niche: responding to the critical need for immediate communication and access to information in healthcare. Now, the Company operates two divisions providing products and services to the medical industry. The Information Systems Division, formerly referred to as Oasis@work, through its Oasis Information Exchange product line provides business-to-business on-demand safety and efficiency driven e-business and information for healthcare workers. The Medical Products and Services Division develops, manufactures and distributes medical devices. About Oasis Information Exchange The Oasis Information Exchange strategy is healthcare e-business content aggregation and applications integration through a virtual private network. It links the entire healthcare continuum, which includes healthcare workers, administration, patients, and healthcare and pharmaceutical manufacturers. Oasis Information Exchange is a true healthcare data center with multiple access points. It is an Internet-based virtual private network consisting of points-of-access via intranets, the Internet, internet appliances, and through TouchPorts located throughout healthcare facilities across the country. Although the Company is now focusing on providing its services through the Internet, TouchPorts remain available as an alternative and are user-friendly touch-access internet appliances which allow healthcare professionals access to high quality clinical reference and agency mandated information services. During the second quarter of 2000, the Company realized that they were focusing too much attention to the installation of hardware rather than focusing its attention on its real product - information. In July 2000, the Company signed an agreement with the Association of periOperative Registered Nurses ("AORN"), one of the largest nursing organizations in the United States, to license their content - AORN Journal Online, OR Product Directory, Standards, Recommended Practices and Guidelines (SRPG) and other content. See "Corporate Developments". AORN has 43,000 members and other mailing lists comprising of an additional 100,000 people. As part of this initiative, the Company will be producing a CD-ROM that will be mailed to approximately 150,000 people. This CD-ROM will feature OASiS. The CD will be mailed in the AORN Journsal for members and as a separate mailing to others. Due to the increase and availability of PC's and Internet accessibility in the heathcare environment, the Company realizes that, while in some cases its OASiS network is needed in a particular environment, by an large, its larger market is for its content. Essentially the Company is -2- changing from a hardware network supplier to an information broker which will create an information exchange network for a defined healthcare community that links the end-users to the industry while adding value to both parties. This is essentially what the Company was doing all along; however, it had focused on the delivery system for its product rather than the product itself. Under the AORN arrangement, the Company's product will be delivered through the Internet via its website which will be called OasisOR.com. The data center will have the same type of content from device manufacturers, clinical associations and other relevant resources; however it will be for OR employees only, with the information relevant to them. Although the Company pays AORN a licensing fee, the Company expects to generate revenue from sponsorships of the CD and from user fees and advertising on its website. The Company has negotiated its first sponsorship agreement with US Surgical in lieu of the previous agreement which required massive expenditures for hardware installations. The Company plans to scale the concept for other niche markets by creating websites that cater to a particular speciality. The Company will focus on providing website and intranet development. Corporate Developments The Company entered into an agreement with IBM Global Services effective January 3, 2000 which included an IBM Customer Agreement and a Statement of Work (the "IBM Global Agreement"). Under the terms of the IBM Global Agreement IBM agreed to provide complete implementation and support service solutions for 1,200 OASiS terminals in an estimated 400 end user locations during the 12 month period commencing December 1, 1999. On February 3, 2000, IBM Global Services and the Company finalized the Statement of Work. The services to be provided under the agreement included project planning, site surveys, product acquisition, network design, web-site hosting services, premises wiring, OASiS TouchPort Implementation, help desk support and consulting services. The estimated cost for performing the work was approximately $10 million. In addition, IBM Global Services agreed to bill the Company a monthly service charge for pre and post installation support services, including 24-7 support, and for labor, travel and out of pocket expenses. The Company was to provide technical resources and oversee the IBM Global's activities. Due to the new Internet focus, the Company has chosen to pursue for the delivery of its product, there is no longer any need for the services to be provided by IBM. Effective July 14, 2000, this contract was terminated. In February 2000, the Company executed an Investment Banking Services Agreement with Dunwoody Brokerage Services Inc. d/b/a Swartz Institutional Finance ("Swartz"). Under the agreement, Swartz agreed to introduce entities to the Company for potential strategic partnerships, licensing arrangements, mergers, acquisitions, investments or funding. For such services, Swartz was to receive a scaled fee based upon the value of any completed transaction. Said fee was payable in cash or stock at Swartz's option and by the issuance of warrants, the number of which were to be based upon the fee divided by the market price of the Company's Common Stock. There was no obligation on the part of the Company to accept any transaction offered by the Swartz to the Company. Since no funding was provided, pursuant to the terms of the contract, the Company sent notice of cancellation effective July 31, 2000. -3- In February 2000, the Company executed a Consulting Agreement with Global Development Advisors, Inc. ("GDA")); however, shortly thereafter, further negotiations ensued and the agreement never became effective. Under the agreement, GDA was to provide business and marketing consulting services, assist in the implementation of a strategic plan and assist, coordinate and monitor the Company's investor relations program. The agreement was for a term of six (6) months and could have been extended by the Company. In lieu of cash payments for services, GDA agreed to accept 50,000 shares of the Company's Common Stock under the Company's 2000 Stock Plan approved by its shareholders on February 28, 2000 and options to purchase an additional 50,000 shares at an exercise price of $1.09. Due to the further negotiations, the issuance was never made. The parties have canceled this Agreement. On February 29, 2000, the Company entered into a contract with Steel Beach Productions, Inc. ("Steel Beach") to design, develop, implement and test the OASiS Version 3.0 web based application. The contract is for a total of $160,100 and is to be paid $80,500 in cash and $80,500 in stock options. The Company paid a deposit of $20,012.50 and the balance is to be paid upon delivery of the prototype, preliminary product and final product. The options are due at the time of delivery of the final product. The common stock option number will be calculated based on the average closing share price ("ACSP") in the twenty (20) days of trading prior to deliver of the final product. The exercise price will be 50% of the twenty (20) day average closing price as quoted on the OTC BB. The number of options issued will be calculated by multiplying $80,050 times two (2) and dividing by the ACSP. The options are to have a term of five (5) years and are to conform to Company's consultant option policy as far as additional terms and details. This agreement with Steel Beach replaces two earlier agreements; specifically, one agreement for Version 2.0 dated December 30, 1999 in the amount of $37,800 in cash and $37,800 in stock options, and one agreement for Version 3.0 dated December 30, 1999 in the amount of $42,250 in cash and $42,250 in stock options. All efforts expended by Steel Beach Productions under these two earlier contracts are compensated under the terms of this agreement. The Company retains all propriety rights in the application. Steel Beach is responsible for its own costs and expenses. The agreement may be canceled by either party on thirty (30) days written notice. The product was delivered and the parties are in the process of reconciling amounts owed between them. On May 16, 2000, the Company entered into a contract with Horizon Marketing Group ("Horizon") for the strategic planning, design and development for sales and marketing presentations by the Company and for the Company's website. The contract was amended on June 30, 2000. The initial contract was for $18,300 which was increased in the amendment by $14,405, for a total contract price of $32,705 of which the Company has thus far paid approximately one-third. The contract is for a designated schedule of work which is paid under a fee schedule and by a reward bonus. Under the reward bonus, Horizon will, as the last payment, receive the greater of 2% of the value of each contract with a partner secured by virtue of the work performed or $17,705 by December 1, 2000. Further, Horizon can be engaged to provide ongoing development services at the rate of $1000 per month. The contract terminates when the project is completed. On May 25, 2000, the Company entered a staff leasing agreement with EPIX IV, Inc. ("EPIX") as a replacement for comparable services previously provided by Staff Leasing. Like the Staff Leasing arrangement, the EPIX arrangment creates a co-employment relationship between EPIX and the Company relative to the employees who work at the Company. -4- Effective June 7, 2000, the Company's line of credit with SouthTrust renewed through August 12, 2000, with an option to extend the maturity until October 15, 2000 if the Company pledges a certificate of deposit in the amount of $25,000. The interest rate is prime plus 1.5% and the line is secured by the Company's equipment, receivables and inventory. The line is guaranteed personally by Dr. Swor. Effective July 1, 2000, the Company entered into an agreement with AORN under which AORN will provide certain of its proprietary content on a non-exclusive license basis to the Company. Under the agreement, AORN will deliver to the Company certain of its content for which it grants the Company a non-exclusive license to market and promote. The Company receives a substantial credit toward advertising in the AORN Journal and other AORN publications. The Company is required to provide the software and hardware to promote and market the AORN content. The Company is required to pay AORN $117,000 as the license fee and contact hours fee for the first year of the agreement. AORN will reimburse the Company for certain conversion costs and to pay the cost of web enabling Home Study Courses sponsored by AORN. The agreement is for a term of three (3) years and it may be terminated by either party on 180 day notice. If terminated without cause, the Company is entitled to a refund of any unused license and user fees. AORN retains ownership of its intellectual property while the Company retains the ownership of its OASiS intellectual property. On July 6, 2000, the Company entered into an agreement with Carver Cross Securities Corp. ("CCSC") for investment banking services, including financial advisory services and efforts to secure equity or debt financing. TK has given verbal approval for this arrangement, subject to final approval of any financing package. The CCSC agreement is exclusive for a term of 120 days commencing the later of September 6, 2000 or the date a placement memorandum is ready for distribution. Under the agreement, CCSC receives a retainer of $6,000, plus a warrant to purchase 40,000 shares of the Company's common stock for a period of 5 years at an exercise price of $0.625 per share and monthly payments of $2,5000 plus warrants for 40,000 shares of common stock.. In any case, under the agreement, CCSC will not receive warrants to purchase more than 120,000 shares. CCSC will receive compensation for equity financing arranged by CCSC, the sale of assets or a public offering placement. In the case equity financing is arranged, CCSC will receive complete warrants exercisable for 5 years at an exercise price equal to 101% of the amount paid by the investors. In addition, CCSC receives approved expenses. The Company negotiated a new contract with US Surgical. This agreement supercedes all prior agreements between the parties. Under the terms of the new agreement, US Surgical will pay through June 30, 2000 the Company $300,000 in settlement for all amounts owed to the Company under the previous agreements and will pay the Company an additional sum of $200,000 for future services under the OasisOR.com initiative. This new arrangement is principally due to the ineffective introduction by US Surgical of OASiS into the healthcare environment through hardware installations. Both companies realize that the value of OASiS is the content and product it delivers. This new content agreement emphasizes US Surgical's continued belief in the information exchange network which the Company now had embarked upon as its focus. -5- In December 1999, the Company executed a Loan Agreement with Thomson Kernaghan & Co., Ltd. ("TK"), as Agent and Lender, whereby TK agreed to make loans to the Company of up to $5,000,000 in installments for a period commencing with the date of the agreement and ending on November 30, 2002 (the "TK Loan Commitment"). Under the terms of the TK Loan Commitment, each installment is supported by a convertible note and security agreement and the Agent and Lender are granted warrants to purchase shares of the Company's Common Stock. Further, 2,700,000 shares are held by TK in escrow for the potential conversion under the notes or exercise of the warrants. Under the terms of the TK Loan Agreement, an initial loan of $650,000 was made on December 30, 1999. On March 31, 2000 the Company received a second installment under the TK Commitment in the amount of $650,000. On April 28, 2000, TK elected to convert $100,000 of outstanding principal and $2,630 of the accrued interest into shares of Common Stock at a price of $0.5625 per share which represents 182,453 shares. On June 9, 2000, TK elected to convert $120,000 of outstanding principal and $4,129 of the accrued interest into shares of Common Stock at a price of $0.375 per share which represents 331,010 shares. On July 11, 2000, TK elected to convert $40,000 of outstanding principal and $1,683.13 of the accrued interest into shares of Common Stock at a price of $0.375 per share which represents 111,155 shares. The Company granted TK registration rights and was obligated to file a Form S-3 within sixty (60) days of the agreement. The Company filed a registration statement on Form S-3 on March 2, 2000 covering initially 20,038,097 shares of its Common Stock. The issuance of the securities was made pursuant to Regulation S of the Act. The Form S-3 registration statement was declared effective on April 11, 2000. Since the Company did not meet financial projections which were an integral part of the transaction, TK and the Company are re-negotiating an arrangement which it is anticipated will be in the form of an amendment to the TK Loan Commitment relative to future installments. The TK Loan Commitment, as draw downs are taken and as interest accrues, will increase the long term debt of the Company. The Company has entered into a consulting agreement with CCSC for other potential funding; however, to date, has not concluded terms for any financing under such agreements. With the TK Loan Commitment and in the event additional debt is raised, the Companyn will incur future interest expense. The TK Loan Commitment, if fully converted and all warrants are exercised will dilute the interest of existing shareholders and in the event additional equity is raised, management may be required to dilute the interest of existing shareholders further or forego a substantial interest in revenues, if any. In the event that the Company is successful in securing additional debt financing, the amount of such financing, depending upon its terms, would increase either the short or long term debt of the Company or both. Discussion and Analysis The Company was founded in 1992 to combat the potential spread of bloodborne pathogenic infections such as HIV and hepatitis. It has broadened its mission to research, develop, manufacturing, marketing and selling medical products and services to the healthcare community. -6- The Company was in the development stage until 1993 when it began commercial shipments of SutureMate(R), its first product. From inception in June, 1992 through December 31, 1999, the Company generated revenues of approximately $1,275,000 from a limited number of customers. Since inception through December 31, 1999, the Company has generated cumulative losses of approximately $2,780,000. Although the Company has experienced a significant percentage growth in revenues from fiscal 1992 to fiscal 1999, the Company does not believe prior growth rates are indicative of future operating results, especially in light of the contract with AORN and its new Internet-based site, OASiSOR.com and the anticipated contract with US Surgical. Due to the Company's operating history and limited resources, among other factors, there can be no assurance that profitability or significant revenues on a quarterly or annual basis will occur in the future. Moreover, the Company expects to continue to incur operating losses through at least the first three quarters of 2000, and there can be no assurance that losses will not continue after such date. As of the date hereof the Company has completed installations of fifteen (15) units in seven (7) hospitals. As discussed in the independent auditors' report, the operating losses incurred by the Company raise doubt about its ability to continue as a going concern. In addition, with the implementation of its agreement with AORN, and its new arrangement with US Surgical and/or with the establishment of one or more strategic alliances in addition to AORN and US Surgical, the Company expects to experience a period of growth, which requires it to significantly increase the scale of its operations. This will result in significantly higher operating expenses. The increase in operating expenses is expected to be partially funded by an increase in revenues. However, the Company's net loss may continue to increase. Expansion of the Company's operations may cause a significant strain on the Company's management, financial and other resources. The Company's ability to manage recent and any possible future growth, should it occur, will depend upon a significant expansion of its sales and marketing, research and development, accounting and other internal management systems and the implementation and subsequent improvement of a variety of systems, procedures and controls. There can be no assurance that significant problems in these areas will not occur. Any failure to expand these areas and implement and improve such systems, procedures and controls in an efficient manner at a pace consistent with the Company's business could have a material adverse effect on the Company's business, financial condition and results of operations. As a result of such expected expansion and the anticipated increase in its operating expenses, as well as the difficulty in forecasting revenue levels, the Company expects to continue to experience significant fluctuations in its revenues, costs and gross margins, and therefore its results of operations. The Company's plan of operations for the next twelve months is to focus on building revenue from development of its website and registered user base. The Company also is aggressively seeking strategic alliances with targeted industry partners such as manufacturers of devices, manufacturers of pharmaceuticals, professional organizations such as nursing associations and hospital group purchasing organizations and integrated health networks along the lines created with the AORN contract. -7- The Company estimates that revenues will be sufficient to fund ongoing operations at the current level when the website is functional and registered users reach levels of 10,000 or more. In the short term, to fund operations through the first three quarters of 2000, the Company will seek to draw upon the funds available under the TK Commitment, to seek additional funds from strategic alliances with potential clients, its shareholders, from additional third party financing or seek third party debt or equity financing other than those planned by the current anticipated agreements. Currently, the Company has available its existing lines of credit. The Company has increased its staff from six (6) at fiscal 1999 year end to eleven (11) as of June 30, 2000. Provided that the TK Commitment and other funding is available when needed, the Company believes that it can meet its capital needs through year end. There can be no assurance that the Company will be successful in these efforts. As discussed in Note 10 to the Financial Statements, if the financing referred to above is not secured, the recoverability of the recorded asset amounts may be impaired. In 2000, the Company will require between $3 and $5 million in additional capital in the form of debt or equity to fund the continued expansion of the Oasis system and its development to meet increased demand and to implement its plans for increased marketing of its medical device products. This reduction is due to the new initiative which is less hardward intensive and requires less maintenance. Under the TK Commitment, $3,700,000 remains available under the terms of the agreement. The Company has met with several venture capital firms, investment bankers, factoring companies and traditional lending sources, each of whom have expressed early interest and many of whom are awaiting the conclusion of the testing period. Other than the TK Commitment, the Company has accepted no definite offer from any other source although it has entered into an agreement with Carver Cross. There can be no assurance that such long-term financing will be available to the Company or that it will be on terms that the Company may seek. Results of Operations for the Thee and Six Months Ended June 30, 2000 and 1999 Overview From its inception, the Company has incurred losses from operations. As of June 30, 2000, the Company had cumulative net losses totaling approximately $3,640,000. During fiscal 1999, management shifted its focus to aggressively marketing its proprietary products, especially those associated with Oasis Information Exchange. Financial Position As of June 30, 2000, the Company had a deficit of working capital of $24,276, as compared to a deficit of working capital of $43,229 at June 30, 1999. This decrease in deficit is primarily due to additional borrowings on the TK Commitment and revenues received from US Surgical. Revenues For the six months ended June 30, 2000 and 1999, the Company had total revenues of $359,725 and $52, 734, respectively. For the six months ended June 30, 2000, revenues were comprised primarily of license and production fees provided to US Surgical pursuant to the contract dated July 1999. For the three months ended June 30, 2000 and 1999, the Company generated revenues of $324,069 and $13,157, respectively. The increase of $310,912 is the amount owed under the contract with US Surgical. -8- Selling, General, and Administrative Expenses For the six months ended June 30, 2000, operating expenses increased by $354,406 or 89% from $396,900 for the six months ended June 30, 1999. This increase is primarily related to marketing support expenditures to sustain the launch of the Company's Oasis Information Exchange. For the three months ended June 30, 2000 and 1999, operating expenses increased $157,672 from $257,916 in 1999 to $415,588 in 2000 due to increased personnel and marketing. In accordance with the Company's marketing plan for fiscal 2000, expenses related to promotion, trade shows, and conventions were increased to enhance the industry awareness of the company's products and services. In the past, the Company has focused on the design and development of proprietary products. For fiscal 2000, the Company has launched an aggressive marketing plan that is designed to increase worldwide sales of its products. Surgical believes that the increased operating expenses incurred during the six months ended June 30, 2000 will position the Company to generate increased revenue in the 2000 fiscal year. Liquidity and Capital Resources The financial condition, liquidity and capital resources of the Company should be assessed in context with the ability of the Company to continue as a going concern as discussed in the independent auditors' report. The Company's operations have been funded primarily from the $1,300,000 proceeds of draw downs under the TK Commitment completed in the fourth quarter 1999 and from cash flow of approximately $150,000 from licensing and production fees for Oasis during the six months ended June 30, 2000. This allowed the Company to enhance its Oasis software and data base and fund current operations. At June 30, 2000, the Company has a $231,372 cash position. In addition to the balance of $3,700,000 available under the TK Commitment, the Company has a line of credit in the amount of $100,000 that matures on October 15, 2000 and is guaranteed by Dr. Swor. In the past, the line of credit also has been used to fund operations on a short-term basis and $100,000 is currently outstanding. Net cash used for investing for the six months ended June 30, 2000 was approximately $142,000, representing primarily enhancements to the current version of Oasis. In the short term, to fund operations through the balance of fiscal 2000, the Company will be required to make additional draw downs under the TK Commitment, seek additional funds from strategic alliances with potential clients, its shareholders, from additional third party financing or seek third party debt or equity financing other than those planned by the current agreements. Additionally, the Company anticipates that revenues will begin to be generated in the third and fourth quarter of 2000 and that such revenues will help to fund operations. Provided that additional funding is secured, the Company believes that it can meet its capital needs through year end. There can be no assurance that the Company will be successful in these efforts. Forward-Looking Statements This Form 10-QSB includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of -9- 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-QSB which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), demand for the Company's products and services, expansion and growth of the Company's business and operations, and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, general economic market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this Form 10-QSB are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. PART II Item 1. Legal Proceedings. The Company knows of no legal proceedings to which it is a party or to which any of its property is the subject, which are pending, threatened or contemplated or any unsatisfied judgments against the Company. Item 2. Changes in Securities and Use of Proceeds At a meeting of the Board of Directors held on June 6, 2000, a resolution was passed to modify the Company's 2000 Stock Option and Awards Plan by providing of the 10,000,000 shares authorized under the plan, that in any calendar year, options and awards to acquire no more than 1,000,000 shares will be granted. Further, at the same meeting, the Board adopted a resolution regarding lock-up provisions on holders of existing options and approved a form of voluntary restriction agreement. Under this arrangement, certain holders of such options, particularly current and certain prior members of the Board and current and certain prior officers of the Company, have agreed to specific lock-up provisions which restrict resale and provide for the placement of a legend upon their shares acquired under the options granted under the plans in force in 1994, 1998, and 1999. Voluntary restriction agreements have been executed by the parties to which it applied. Item 3. Defaults in Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders. No matters were submitted to the Security Holders for a vote during the quarter ended June 30, 2000. -10- Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) The exhibits required to be filed herewith by Item 601 of Regulation S-B, as described in the following index of exhibits, are incorporated herein by reference, as follows: Exhibit No. Description - ------------- ------------------------------------------------------------------ 3.(I).1 Articles of Incorporation of Surgical Safety Products, Inc., a Florida corporation filed May 15, 1992 [1] 3.(II).1 Bylaws of Sheffeld Acres, Inc., now known as Surgical Safety Products, Inc. [1] 3.(II).2 Amended Bylaws of Surgical Safety Products, Inc. [2] 4.1 * Voluntary Restriction Agreement between the Company and holders of Options under the 1994, 1998 and 1999 Stock Option Plan 10.1 Acquisition of Endex Systems, Inc. d/b/a/ InterActive PIE dated December 8, 1997 [1] 10.2 Prepaid Capital Lease Agreement with Community Health Corporation relative to Sarasota Medical Hospital OASiS Installation dated January 30, 1998 [1] 10.3 Letter of Intent with United States Surgical Corporation dated February 12, 1998 [1] 10.4 Form of Rockford Industries, Inc. Rental Agreement and Equipment Schedule to Master Lease Agreement [1] 10.5 Ad-Vantagenet Letter of Intent dated June 19, 1998 [1] 10.6 Distribution Agreement with Morrison International Inc. dated September 30, 1996 [1] 10.7 Distribution Agreement with Hospital News dated August 1, 1997 [1] 10.8 Clinical Products Testing Agreement with Sarasota Memorial Hospital dated January 30, 1998 [1] 10.9 Real Estate Lease for Executive Offices effective June 1, 1998 [1] 10.10 Employment Agreement with Donald K. Lawrence dated April 1, 1997 [1] 10.11 Employment Agreement with G. Michael Swor dated June 15, 1998 [1] 10.12 Employment Agreement with Frank M. Clark dated June 15, 1998 [1] 10.13 Agreement for Consulting Services with Stockstowatch.com Inc. dated March 30, 1988 [1] 10.14 Form of Employee Option Agreement dated July 1994 [1] 10.15 Form of Employee Option Agreement dated 1998 [1]
-11- 10.16 Form of Consultants Option Agreement dated July 1994 [1] 10.17 Form of Consultants Option Agreement dated 1998 [1] 10.18 Confidential Private Offering Memorandum dated May 30, 1995 [1] 10.19 Supplement to Private Offering Memorandum dated October 30, 1995 [1] 10.20 Stock Option Agreement with Bay Breeze Enterprises LLC dated April 9, 1998 [1] 10.21 Revolving Loan Agreement, Revolving Note, Security Agreement with SouthTrust Bank dated May 2, 1997 [1] 10.22 Agreement between the Company and T. T. Communications, Inc. dated October 15, 1998 [2] 10.23 Agreement between the Company and U.S. Surgical Corporation dated October 28, 1998. [2] 10.24 Collaborative Agreement between the Company and Dr. William B. Saye dated November 16, 1998. [2] 10.25 Kiosk Information System, Inc. Purchase Order dated November 3, 1998 [2] 10.26 Surgical Safety Products 1999 Stock Option Plan adopted January 1999 [2] 10.27 Form of the Employee Option Agreement under the Surgical Safety Products 1999 Stock Option Plan dated January 1999 [2] 10.28 Form of the Director, Consultant and Advisor Option Agreement under the Surgical Safety Products 1999 Stock Option Plan dated January 1999 [2] 10.29 Verio, Inc. Access Service Agreement dated February 16, 1999. [2] 10.30 Form of Investor Subscription Documents and Agreements relative to the April 1999 Self Directed Private Placement Offering under Rule 506 of Regulation D. [3] 10.31 Form of the Warrant issued pursuant to the April 1999 Self Directed Private Placement Offering under Rule 506 of Regulation D. [3] 10.32 Consulting Agreement dated April 1999 with Koritz Group, LLC. [3] 10.33 Agreement dated April 1999 with KJS Investment Corporation. [4] 10.34 Agreement dated May 1999 with Ten Peaks Capital Corp. [4] 10.35 Private Partner Network Agreement dated July 30, 1999 with US Surgical [5] 10.36 Staff/Client Leasing Agreement dated October 16, 1999, as amended September 15, 1999 [5] 10.37 Agreement dated July 15, 1999 with Triton Capital Inc.[6] 10.38 Effective December 30, 1999, Loan Agreement, Note, Security Agreement, Lender's Warrant, Agent's Warrant, Registration Rights Agreement and Escrow Agreement relative to the December 1999 transaction with Thomson Kernaghan & Co., Inc. and Amendment thereto. [7]
-12- 10.39 Effective January 3, 2000 IBM Customer Agreement and Statement of Work. [7] 10.40 Investment Banking Services Agreement dated February 2, 2000 with Dunwoody Brokerage Services Inc. [8] 10.41 Consulting Agreement dated February 15, 2000 with Global Development Advisors Inc. [8] 10.42 Surgical Safety Products 2000 Stock Option and Award Plan [8] 10.43 Agreement with Steel Beach Productions dated February 29, 2000 [9]. 10.44 Agreement with Horizon Marketing Group dated May 16, 2000 10.45 Agreement with EPIX dated May 25, 2000 10.46 Amendment to the Company's 2000 Stock Option and Awards Plan dated June 6, 2000 10.47 Revolving Loan Agreement, Revolving Note, Security Agreement with SouthTrust Bank dated June 7, 2000 10.48 Agreement with AORN effective July 1, 2000 10.49 Agreement with Carver Cross dated July 6, 2000 10.50 * Agreement with U.S. Surgical effective June 28, 2000 13.1 Definitive Proxy Statement filed February 28, 2000 [8] 27.1 * Financial Data Sheet
- ---------------- [1] Previously filed with the Company's Form 10SB [2] Previously filed with the Company's Amendment No. 1 to the Form 10SB [3] Previously filed with the Company's Form 10QSB for the Quarter ended March 30, 1999 [4] Previously filed with the Company's Form 10QSB for the Quarter ended June 30, 1999 [5] Previously filed with the Company's Amendment No. 2 to the Form 10SB [6] Previously filed with the Company's Form 10QSB for the Quarter ended September 30, 1999 [7] Previously filed with the Company's Form S-3 on March 2, 2000. [8] Previously filed with the Company's Form 10KSB for the fiscal year ended December 31, 1999. [9] Previously filed with the Company's Form 10QSB for the Quarter ended March 31, 2000. * Filed herewith (b) No Reports on Form 8-K were filed during the quarter ended March 31, 2000. -13- SIGNATURES In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized. Surgical Safety Products, Inc. (Registrant) Date: September 14, 2000 By:/s/ Pauline J. Parrish --------------------------------------- Pauline J. Parrish Chief Financial Officer -14- EX-10.50 2 0002.txt SPONSOR AGREEMENT EXHIBIT 10.50 Oasis@work Sponsor Agreement This Sponsor Agreement is made and entered into effective this 28th day of June, 2000 by and between Surgical Safety Products, Inc., a corporation organized under the laws of the State of New York and having it's principal office at 2018 Oak Terrace, Sarasota, FL 34231 (hereinafter referred to as SURG) and United States Surgical, a division of Tyco Healthcare Group LP, a limited partnership organized under the laws of the State of Delaware and having its principal office at 150 Glover Avenue, Norwalk, CT 06856 (hereinafter referred to as "Sponsor"). Witnesseth: Whereas, SURG is the creator and sole owner of the rights to Oasis@work which consists of a data center and network for clinical information; and Whereas, Oasis@mydesk is a software application designed to facilitate access to Oasis@work and which is designed to be installed on a client's personal computer from a CD-ROM or other means with live links to the Oasis@work data center; and Whereas, Oasis@mydesk may contain a limited amount of the actual Oasis@work applications, specific conversion tools designed to convert a hospital from Oasis@mydesk clients to Oasis@work network clients, and unspecified applications featuring licensed intellectual properties from AORN, Inc.; and Whereas, within any calendar quarter, any user or anyone accessing any content within Oasis@work will be recorded as a registered user for the purpose of determining user-fees referenced herein; and Now therefore, in consideration of the promises and covenants contained herein and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, SURG and Sponsor do hereby agree as follows: PROMOTIONAL CONSIDERATION For participation in the Oasis@mydesk program each Sponsor may receive promotional consideration in several formats. While it is likely, but not guaranteed, that the promotional benefits will exceed this list, the following is a minimum guaranteed offering. PACKAGING: Sponsor will receive logo recognition on packaging or liner notes for at least 40,000 CD-ROMs targeted towards, but not limited to, members of AORN. Such CD- ROMS shall be delivered to the AORN members no later than April 1, 2001. LABELING: Sponsor will receive text recognition on the actual CD-Rom label for at least 40,000 CD-ROMs targeted towards, but not limited to, members of AORN. Page 1 of 7 DISPLAY ADVERTISING: Sponsor will receive recognition in display advertisements to appear in at least twelve monthly issues of the AORN Journal. ADDITIONAL CD-ROMS: Sponsor will receive 1000 additional copies of the Oasis@mydesk CD-ROM for distribution to its customers in any manner deemed appropriate. URL LINK: Sponsor may elect to allow an Internet link from the Oasis@mydesk application directly to Sponsor's web site. In the event the link is established, the appearance of Sponsor's website may follow either of two formats, the choice of which is solely that of SURG: (i) the link may create a new browser window within which the Sponsor's website information will be displayed, or (ii) the Sponsor's web site may appear within Oasis the program. EDUCATIONAL PARTICIPATION To establish a good and valuable application for providing educational opportunities to Oasis@mydesk users, Sponsor agrees to support this effort as follows: NETWORK INSERVICES: Sponsor may provide content, in digital format, for the creation of up to 140 device and/or product inservices, the final form and design of which is under the sole discretion of SURG. These basic inservices will reside on the Oasis@work data center for access from anywhere within the Oasis@work and Oasis@mydesk network, and each inservice shall be accessible over said network within thirty (30) days after delivery of such completed inservice to SURG by Sponsor. RESEARCH OPPORTUNITIES As a result of the direct link established between the Sponsor and the Oasis@mydesk end-user, it is likely, but not guaranteed, that supplemental opportunities will exist for Sponsor to communicate with the end-user for the purpose of conducting consumer research. Sponsor is guaranteed participation in at least the following: VIRTUAL SURVEYS: Sponsor may elect to utilize a virtual-survey research tool allowing the Sponsor to send electronic surveys directly to specific healthcare workers or groups of healthcare workers. The specifications of this virtual-survey tool shall be determined by SURG at its sole discretion. Sponsor understands that this is paid for on a transactional basis as outlined herein. FINANCIAL COMMITMENT AND TERMS The following fees, totaling $500,000, shall be due with respect to this and certain prior agreements, paid by wire transfer to the account designated by SURG or otherwise by cleared funds which shall be due on August 10, 2000 and deemed paid upon receipt by SURG: SERVICES PROVIDED UNDER PRIOR AGREEMENTS: In addition to any other prior agreement fees already paid to SURG by Sponsor, the sum of $300,000 is due in consideration for all services, both tangible and intangible, provided under the Prior Agreements (defined hereinbelow) through June 28, 2000. Page 2 of 7 ANNUAL LICENSE FEE: This represents a one-year commitment. Sponsor agrees to pay an annual license for participation in this program in the amount of $200,000. In the event this program, or one substantially similar to this program is extended by mutual agreement of the parties beyond one-year, at the option of SURG the Sponsor may elect to participate on a right of first refusal basis at the rate as determined at that time. SURG makes no representation or warranty to Sponsor with regard to the content to be contained on the CD- ROMs or its use by recipients. Nothing contained herein shall guarantee to Sponsor any rights to participate in any additional or future programs or distributions offered by SURG. INSERVICE PRODUCTION FEES: Sponsor agrees to provide all content for production in digital format, and as such, will be billed $1,000 per inservice module. SURG acknowledges receipt of $140,000 from Sponsor in full payment for 140 inservice modules, of which 110 have not yet been completed. Sponsor may complete said inservice modules or not at its discretion. If Sponsor elects to provide content for the remaining 110 inservices, then content must be delivered to SURG no later than May 1, 2001. The payment referenced herein, however, is non-refundable, irrespective of whether Sponsor provides less than 140 inservice modules. VIRTUAL SURVEY FEES: Sponsor agrees that, should Sponsor utilize the Virtual Survey product, a transactional fee of $5 per returned and completed survey will be assessed in addition to any other fees referenced herein. These fees will be calculated by SURG on a monthly basis and will be itemized by invoice submitted to Sponsor. Payment terms for SURG invoices to Sponsor are net 30. TERM This Agreement shall commence on the date hereof and shall terminate one year thereafter, unless extended by mutual agreement of the parties. Notwithstanding the foregoing, the provisions herein titled Termination of Prior Agreements, Mutual Release, Indemnification of SURG and Indemnification of Sponsor shall survive such termination. NOTICE All written notices required or permitted hereunder shall be deemed effective and duly given: (i) when personally delivered; (ii) when sent by telephone facsimile (the sender shall also send a "hard copy" following the facsimile, however, the notice shall be effective upon the transmission of the facsimile if confirmed by Sender with words "Confirming delivery of notice from ----------------"); (iii) one day after depositing in the custody of a nationally recognized receipted overnight delivery service; or (iv) at least three (3) days after posting in the United States first class, registered or certified mail; and, Page 3 of 7 in the case of (iii) or (iv) above with postage prepaid and addressed to the recipient at its address as set forth as follows: TO SURG: Surgical Safety Products, Inc. ("SURG") 2018 Oak Terrace, Suite 400 Sarasota, FL 34231 Telecopier Number: (954) 925-0515 With a copy to: Sam D. Norton, Esq. Norton, Gurley, Hammersley & Lopez 1819 Main Street, Suite 610 Sarasota, FL 34236 Telecopier Number: (941) 954-2128 To Sponsor: Legal Department United States Surgical 150 Glover Avenue Norwalk, CT 06856 Editorial Rights SURG reserves absolute right to determine size, placement and relational organization of all promotional considerations afforded all Sponsors. Usage The rate of installation and participation by anyone at all cannot be guaranteed. Relationship of the Parties. During the term hereof, the relationship between SURG and Sponsor is that of Licensor and Licensee. Sponsor, its agents and employees shall, under no circumstances, be deemed agents or representatives of SURG. Nothing contained herein shall be construed as a joint venture or partnership between SURG and Sponsor. Termination of Prior Agreements. This agreement terminates and supersedes all prior agreements, if any, between the parties and their affiliates, including the agreements dated October 28, 1998 and July 30, 1999 between SSP and Sponsor's affiliate, United States Surgical Corporation (collectively the "Prior Agreements"). With regard to this agreement, each party acknowledges that no representation or statement, and no understanding or agreement, has been made, or exists and that entering into this agreement, it has not relied upon anything done or said or upon any presumption in fact or in law, with respect to this agreement, or with respect to the relationship between the parties, other than as expressly set forth in this agreement. Mutual Release. Upon execution of this Agreement, with the exception of non-disclosure, confidentiality agreements, and restrictions on the use of proprietary information signed by Sponsor and SURG, SURG hereby releases and forever discharges on behalf of Sponsor any and all claims, actions, causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments and demands whatsoever in law or equity, past or present, known or unknown, against Sponsor, its subsidiaries, affiliates, predecessors, successors, officers, directors, agents, attorneys, representatives, employees, past or present, or any of Page 4 of 7 them relating in any way to the Prior Agreements or transactions or liabilities in any way connected with the Prior Agreements. Likewise, Sponsor hereby releases and forever discharges on behalf of Sponsor any and all claims, actions, causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments and demands whatsoever in law or equity, past or present, known or unknown, against SURG, its subsidiaries, affiliates, predecessors, successors, officers, directors, agents, attorneys, representatives, employees, past or present, or any of them relating in any way to the Prior Agreements or transactions or liabilities in any way connected with the Prior Agreements. Indemnification of SURG. Sponsor hereby agrees to indemnify and hold SURG, its employees, officers, directors and agents harmless with respect to any losses, liability or costs incurred by SURG, its officers, employees, directors or agents arising out of any product liability or other malfunction of any products of Sponsor sold or displayed pursuant to the product inservices referenced herein. SURG shall be entitled to place disclaimers in a conspicuous manner on the network deemed acceptable to SURG. Indemnification of Sponsor. SURG hereby agrees to indemnify and hold Sponsor, its employees, officers, directors and agents harmless with respect to any losses, liability or costs incurred by Sponsor, its officers, employees, directors or agents arising out of any product liability or negligence of SURG relating to the services referenced herein. Assignment. This agreement may not be assigned, encumbered or transferred by either party without the prior written consent of the other party. This agreement shall be binding upon the successors of the parties. Entire Agreement. This Agreement constitutes the entire agreement between SURG and Sponsor respecting the subject matter hereof. It shall not be amended, altered, or changed except by a written agreement signed by the parties hereto. Governing Law. This agreement and the site sublicense agreements shall be governed by and construed in accordance with the laws of the State of Florida. The venue of any action brought to enforce this agreement or any site sublicense agreement shall be Sarasota County, Florida. Attorney's Fees. In the event of litigation arising out of this agreement the prevailing party shall be entitled to an award of its reasonable attorney's fees and costs incurred both at the trial and appellate levels. Confidentiality. SURG understands and acknowledges that Sponsor and Sponsor understands and acknowledges that SURG operates under the laws, statutes and regulations of various state and federal agencies, some of which are unique to the security-sensitive medical industry. Both SURG and Sponsor shall endeavor, to the extent permitted by law, make reasonable efforts to comply with the reasonable written instructions and reasonable written requests of the other regarding security and confidentiality pertaining to this Agreement and all other aspects of the relationship between the parties and information that is exchanged, shared or handled by either party to this Agreement. Both parties agree and Page 5 of 7 do hereby agree that all information which could reasonably be considered "Confidential" by the other will not be distributed to their employees, affiliates or to the general public, except on a "Need to Know Basis." For the purposes of this section only, Confidential Information shall include any non-public information that the disclosing party reasonably designates as confidential, or which under the circumstances surrounding disclosure, should reasonably be considered confidential. Confidential information includes, but is not limited to information relating to a Party's released or unreleased software and hardware products, business policies and practices including all tangible and intangible materials containing information that is not public or not known to the public whether or not it is in written or printed form or whether it is machine or user readable or not. Breach. In the event of a breach of this agreement, the parties shall have all rights and remedies provided for at law and in equity. The obligation to pay the fees referenced herein shall be the obligation of Sponsor. Miscellaneous. Nothing contained in this agreement shall be construed as conferring by implication, estoppel or otherwise upon Sponsor any license under any trade secrets or know- how of SURG and no such license or other rights shall arise from this agreement or from any acts, statements or dealings resulting in the execution of this agreement. SURG retains all ownership rights with respect to the Oasis@work system, its contents now existing or as may be developed in the future. No representation or warranty has been or is made by SURG with respect to any services or products sold or provided through the Oasis@work system by others, it being understood that SURG shall not be liable for any loss, damage or expense arising from any claim with respect to services or products provided via Oasis@work by those other than SURG. Accuracy and reliability of content on Oasis@work is the sole responsibility of the Content Provider posting the content or otherwise authorizing the posting of said content. IN WITNESS WHEREOF, the undersigned have executed this agreement effective the day and year set forth above. SURGICAL SAFETY PRODUCTS, INC. UNITED STATES SURGICAL By: /s/ Donald Lawrence By: /s/ Kevin Gould Title: President Title: President Date: Date: Page 6 of 7 Agreed to as to the Sections titled "Termination of Prior Agreements" and "Mutual Release". UNITED STATES SURGICAL CORPORATION By: /s/ Kevin Gould Title: President Date: Page 7 of 7 ADDENDUM TO OASIS@WORK SPONSOR AGREEMENT OTHER TYCO HEALTHCARE COMPANIES Additional Tyco companies, at their sole discretion, may elect to participate in this Oasis initiative or other similar Oasis programs from time to time. These additional participants will be addressed on an individual basis and under separate contract. CO-MARKETING OF OASIS/AORN INITIATIVE Promotional consideration is granted to the Oasis and AORN marketing initiative for the term of one year from the date of this agreement. Specifically, USS agrees to review possible inclusion of the Oasis logo and specific wording indicating USS's participation in this agreement within USS display advertising, the exact size, placement, and form of which shall be mutually agreed upon prior to publication of any such advertising. This promotional consideration may include, but is not limited to, AORN Journal advertisements, Surgical Services Management advertisements, Surgical Products Magazine advertisements, and the www.ussurg.com website. Camera-ready art shall for any such advertising shall be furnished by SURG. IN WITNESS WHEREOF, the undersigned have executed this addendum in conjunction with the Oasis@work Sponsor Agreement dated June 28, 2000. SURGICAL SAFETY PRODUCTS, INC. UNITED STATES SURGICAL By: /s/ Donald Lawrence By: /s/ Kevin Gould Title: President Title: President Date: _____________________________ Date: ________________________ EX-27 3 0003.txt FDS --
5 0001063530 Surgical Safety Products, Inc. 1 U.S. Currency 6-mos Dec-31-1999 Jan-1-2000 Jun-30-2000 1 231,372 0 314,133 0 0 612,360 189,490 0 1,553,228 336,636 0 0 0 14,516 (194,313) 1,553,228 0 459,725 23,372 1,019,556 751,306 0 211,697 (559,831) 0 0 0 0 0 (559,831) (0.047) 0
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