-----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, REIuQ9g6WTPq5vOPr6TAuFw7JyrAcWWjNzkyJ+7YamVfgMRthRsnGYWIiXiy0CzX C1VBYe02DGH2CiDs1LFdrg== 0001005150-02-001279.txt : 20021114 0001005150-02-001279.hdr.sgml : 20021114 20021114161829 ACCESSION NUMBER: 0001005150-02-001279 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRYOMEDICAL SCIENCES INC CENTRAL INDEX KEY: 0000834365 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 943076866 STATE OF INCORPORATION: DE FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-18170 FILM NUMBER: 02825320 BUSINESS ADDRESS: STREET 1: 1300 PICARD DR STE 102 CITY: ROCKVILLE STATE: MD ZIP: 20850 BUSINESS PHONE: 3014177070 MAIL ADDRESS: STREET 1: 1300 PICCARD DRIVE SUITE 102 CITY: ROCKVILLE STATE: MD ZIP: 20850 10QSB 1 form10qsb.txt FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended Commission file number 0-18170 September 30, 2002 ------- ------------------ BIOLIFE SOLUTIONS, INC. ----------------------- (Exact name of small business issuer as specified in its charter) Delaware 94-3076866 -------- ---------- (State of Incorporation) (IRS Employer I.D. Number) Suite 144 - Science III. SUNY Park Binghamton, NY 13902 -------------------- (Address of principal executive offices) Issuer's telephone number, including area code: (607) 777-4415 -------------- CRYOMEDICAL SCIENCES, INC. -------------------------- (Former name or former address, if changed since last report) 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 ---- ------- 12,413,209 SHARES OF BIOLIFE SOLUTIONS, INC. COMMON STOCK, PAR VALUE $.001 PER SHARE, WERE OUTSTANDING AS OF NOVEMBER 13, 2002. BIOLIFE SOLUTIONS, INC. FORM 10-QSB QUARTER ENDED SEPTEMBER 30, 2002 INDEX
Page No. Part I. Financial Information Item 1. Financial Statements: Balance Sheets at September 30, 2002 (unaudited) and December 31, 2001................................. 2 Unaudited Statements of Operations for the three-and nine-month periods ended September 30, 2002 and September 30, 2001........................................................................ 3 Unaudited Statements of Comprehensive Income (Loss) for the three-and nine-month periods ended September 30, 2002 and September 30, 2001................................................ 4 Unaudited Statements of Cash Flows for the nine-month periods ended September 30, 2002 and September 30, 2001................................................................................. 5 Notes to Financial Statements.......................................................................... 6-9 Item 2. Management's Discussion and Analysis................................................................ 10-12 Item 3. Controls and Procedures............................................................................. 13 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K.................................................................... 14 Signatures.................................................................................................. 15 Certification............................................................................................... 16
1 PART I FINANCIAL INFORMATION ITEM 1. UNAUDITED FINANCIAL STATEMENTS BIOLIFE SOLUTIONS, INC. BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 2002 2001 ------------ ------------ (Unaudited) ASSETS ------ Current assets: Cash and cash equivalents $ 273,076 $ 286,105 Marketable securities 1,717,515 -- Accounts receivable, net of allowance for doubtful accounts of $ 0 and $26,970, respectively 1,733 54,043 Inventories -- 487,858 Prepaid expenses and other current assets 8,460 23,192 ------------ ------------ Total current assets 2,000,784 851,198 ------------ ------------ Fixed assets, net of accumulated depreciation of $40,411 and $2,138,614, respectively 161,225 454,293 Intangible assets, net of accumulated amortization of $0 and $87,855, respectively -- 471,099 Deferred financing cost, net of accumulated amortization of $90,209 and $0, respectively 64,420 -- ------------ ------------ Total assets $ 2,226,429 $ 1,776,590 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $ 76,093 $ 1,000,027 Accrued expenses 337,047 465,797 Notes payable 369,841 -- ------------ ------------ Total current liabilities 782,981 1,465,824 ------------ ------------ Total liabilities 782,981 1,465,824 ------------ ------------ Stockholders' equity: Preferred stock, $0.001 par value per share, 1,000,000 shares authorized; 12,000 issued and outstanding 12 12 Common stock, $0.001 par value per share, 25,000,000 shares authorized; 12,413,209 issued and outstanding 12,413 12,413 Additional paid-in capital 38,352,195 38,009,325 Accumulated deficit (37,204,424) (37,710,984) Accumulated other comprehensive income 283,252 -- ------------ ------------ Total stockholders' equity 1,443,448 310,766 ------------ ------------ Total liabilities and stockholders' equity $ 2,226,429 $ 1,776,590 ============ ============
See notes to financial statements 2 BIOLIFE SOLUTIONS, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED NINE MONTH ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------ ------------------------------ 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Revenue: Product sales $ 1,975 $ -- $ 20,527 $ -- Grants 106,032 125,199 385,572 202,237 Services and other 30,000 25,000 110,720 25,000 ------------ ------------ ------------ ------------ Total revenue 138,007 150,199 516,819 227,237 Cost of product sales -- 1,089 25,646 2,455 ------------ ------------ ------------ ------------ Gross profit 138,007 149,110 491,173 224,782 ------------ ------------ ------------ ------------ Expenses: Research and development 209,434 115,299 441,684 254,926 Sales and marketing 4,126 715 4,146 29,561 General and administrative 134,520 25,853 417,068 110,599 ------------ ------------ ------------ ------------ Total expenses 348,080 141,867 862,898 395,086 ------------ ------------ ------------ ------------ Operating income (loss) (210,073) 7,243 (371,725) (170,304) Interest expense, net -- 749 -- 765 ------------ ------------ ------------ ------------ Income (loss) from continuing operations (210,073) 6,494 (371,725) (171,069) ------------ ------------ ------------ ------------ Discontinued operations: Loss from discontinued operations (92,934) (1,140,775) (1,547,824) (3,409,153) Gain on disposal of cryosurgical assets, net -- -- 2,426,109 -- ------------ ------------ ------------ ------------ Net income (loss) (303,007) (1,134,281) 506,560 (3,580,222) ============ ============ ============ ============ Basic earnings (loss) per share: Loss from continuing operations $ (0.02) $ -- $ (0.03) $ (0.01) Loss from operation of cryosurgical assets (0.01) (0.09) (0.12) (0.27) Gain on disposal of cryosurgical assets, net -- -- 0.20 -- ----------- ------------ ----------- ------------ Total $ (0.02) $ (0.09) $ 0.04 $ (0.29) ============ ============ ============ ============ Diluted earnings per share from continuing operations $ -- ============ Weighted average number of common shares outstanding: ----------- ------------ ----------- ------------ Basic 12,413,209 12,413,209 12,413,209 12,413,209 ----------- ------------ ----------- ------------ Diluted 17,213,209 ------------
See notes to financial statements 3 BIOLIFE SOLUTIONS, INC. STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------ ---------------------------- 2002 2001 2002 2001 ---------- ------------ --------- ------------ Net income (loss) $ (303,007) $ (1,134,281) $ 506,560 $ (3,580,222) Unrealized gain on marketable securities 132,024 -- 283,252 -- ---------- ------------ --------- ------------ Comprehensive income (loss) $ (170,983) $ (1,134,281) $ 789,812 $ (3,580,222) ========== ============ ========= ============
See notes to financial statements 4 BIOLIFE SOLUTIONS, INC. STATEMENTS OF CASH FLOW (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, -------------------------------- 2002 2001 ----------- ----------- Cash flows from operating activities: Net income (loss) $ 506,560 $(3,580,222) Adjustments to reconcile net income (loss) to net cash used in operating activities: Gain on sale of cryosurgical assets, net (2,426,109) -- Loss from discontinued operations 1,547,823 3,409,153 Depreciation 29,032 5,025 Amortization of deferred financing costs 90,209 -- Write-down of inventory 25,685 -- Allowance for doubtful accounts -- (4,600) Issuance of warrants for non-cash consideration 188,241 -- Changes in operating assets and liabilities net of effects from sale of cryosurgical assets: (Increase) decrease in accounts receivable 9,650 13,018 Decrease (increase) in inventories 49,252 (25,684) Decrease (increase) in prepaids and other current assets (12,552) -- Increase (decrease) in accounts payable (923,934) 13,903 Increase (decrease) in accrued expenses (128,750) 14,146 ----------- ----------- Cash provided (used) by continuing operations (1,044,893) (155,261) Cash used in discontinued operations (1,292,748) (2,311,158) ----------- ----------- Net cash used in operations (2,337,641) (2,466,419) ----------- ----------- Cash flows from investing activities: Purchase of equipment, net (89,405) (75,207) Purchase of equipment by discontinued operations -- (177,469) Proceeds from sale of cryosurgical assets 2,200,000 -- ----------- ----------- Net cash provided (used) by investing activities 2,110,595 (252,676) ----------- ----------- Cash flows from financing activities: Proceeds from notes payable 434,780 931,341 Payments on notes payable (220,763) -- Decrease in capital leases -- (8,870) ----------- ----------- Net cash provided by financing activities 214,017 922,471 ----------- ----------- Net increase/(decrease) in cash and cash equivalents (13,029) (1,796,624) Cash and cash equivalents at beginning of period 286,105 2,150,112 ----------- ----------- Cash and cash equivalents at end of period $ 273,076 $ 353,488 =========== ===========
See notes to financial statements 5 BIOLIFE SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS A. General Incorporated in 1998 as a wholly owned subsidiary of Cryomedical Sciences, Inc.("Cryomedical"), BioLife Solutions, Inc. ("BioLife" or the "Company") develops, manufactures and markets low temperature technologies for use in preserving and prolonging the viability of cellular and genetic material for use in cell therapy and tissue engineering. The Company's patented HypoThermosol(R) platform technology is used to provide customized preservation solutions which significantly prolong cell, tissue and organ viability, which could, in turn, improve clinical outcomes for new and existing cell and tissue therapy applications, as well as for organ transplantation. The Company currently markets its HypoThermosol(R) line of solutions directly and through a distributor to companies and labs engaged in pre-clinical research, and to academic institutions. In May 2002, Cryomedical implemented a restructuring and recapitalization program designed to shift its focus away from cryosurgery towards addressing preservation and transportation needs of the biomedical marketplace, an arena in which the Company is currently selling its products and in which it holds important proprietary assets and intellectual property. In conjunction with the sale of Cryomedical's cryosurgical assets on June 25, 2002, Cryomedical's Board of Directors also approved merging BioLife into Cryomedical and changing its name to BioLife Solutions, Inc. During the quarter ended September 30, 2002, Cryomedical changed its name to BioLife Solutions, Inc. and began to trade under the new symbol, "BLFS" on the OTCBB. The Balance Sheet as of September 30, 2002, the Statements of Operations for the three-and nine-month periods ended September 30, 2002 and 2001, and the Statements of Cash Flows for the nine-month periods ended September 30, 2002 and 2001, have been prepared without audit. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2002, and for all periods then ended, have been recorded. All adjustments recorded were of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2001 included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2001. The results of operations for the three-and nine-month periods ended September 30, 2002 is not necessarily indicative of the operating results anticipated for the full year. B. Continued Existence Additional capital is needed to fulfill the Company's current marketing, research and product development goals and to sustain and ensure its viability. Recovery of the Company's assets is dependent upon future events, the outcome of which is indeterminable. Additionally, successful completion of the Company's product development program and its transition to attain profitable operations is dependent upon achieving a level of revenues adequate to support the Company's cost structure. The Company anticipates that its current cash balance will be sufficient to meet its cash requirements into the first quarter of 2003. This does not include the effect of any sale of the Company's marketable securities (see Note D in the Company's Notes to Financial Statements). There can be no assurance that the Company will be successful in accessing additional capital, or that any financing transaction will be available at terms acceptable to the Company, if at all, that any financing transactions will not be dilutive to current stockholders, or that the Company will have sufficient working capital to fund future operations. If the Company does not have access to additional funds, it may be required to significantly curtail or cease its operating activities. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. 6 BIOLIFE SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS C. Sale of Cryosurgical Assets On June 25, 2002 the Company completed the sale of its cryosurgery product line and related intellectual property assets to Irvine, CA-based Endocare, Inc. (NASDAQ: ENDO). In the transaction, which was originally announced on May 29, 2002, the Company transferred ownership of all of its cryosurgical installed base, inventory, and related intellectual property, in exchange for $2.2 million in cash and 120,022 shares of Endocare common stock (valued at $1,434,263 on June 25, 2002). Operating results of the cryosurgical operations for the nine months ended September 30, 2002 are shown separately in the accompanying statement of operations. The Company recorded a gain on sale of cryosurgical assets of $2,426,109 for the nine months ended September 30, 2002. Net sales of discontinued operations for the three and the nine months ended September 30, 2002 were $0 and $128,419, respectively. These amounts are included in the loss from discontinued operations in the accompanying statement of operations. Cryosurgical assets sold in the transaction with Endocare consisted of the following (all assets are shown at the lower of cost or market): JUNE 25, 2002 ----------- Accounts receivable, net $ 42,660 Inventory 438,606 Other current assets 27,284 Fixed assets, net 245,680 Intangible assets, net 453,923 ----------- Net assets sold $ 1,208,153 =========== D. Marketable Securities We have classified our marketable securities as "available-for-sale" as defined under Financial Accounting Standard No. 115, "Accounting for Certain Investments in Debt and Equity Securities." At September 30, 2002, our marketable securities consisted of 120,022 shares of Endocare common stock. Fair value has been determined based on the quoted market price for Endocare common stock as of the date of the balance sheet. As of November 13, 2002 the aggregate fair value of our marketable securities decreased to $354,065. Pursuant to the terms of the sale of Cryomedical's cryosurgical assets, Endocare was required to have filed a registration statement with the SEC covering the sale of the shares by September 22, 2002. To date, no such registration statement has been filed. The Company intends to seek the legal remedies available to it in connection with such failure to file the registration statement. 7 BIOLIFE SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS E. Earnings (Loss) per Share Basic earnings (loss) per share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing income from continuing operations by the weighted average number of shares outstanding, including potentially dilutive securities such as preferred stock, stock options and warrants. Potential common shares totaling 4,800,000 were included in the dilluted earnings per share amount for the three months ended September 30, 2001 due to their dilutive effect, but were not included for the three months ended September 30, 2002 and nine month periods ending September 30, 2002 and September 30, 2001 as their effect would have been anti-dilutive. F. Notes Payable and Issuance of Company Warrants In March 2002, in consideration for a loan in the amount of $250,000, the Company issued (i) a 12-month promissory note in the principal amount of $250,000, bearing interest at 10% per annum, and (ii) a five year warrant to purchase 1,000,000 shares of the Company's common stock at $0.25 per share. The Company recorded additional-paid-in-capital on the balance sheet of $154,629 to reflect the fair market value of the warrants issued in conjunction with the loan and recorded a corresponding deferred financing cost which is being amortized on a straight line basis over the life of the loan. At September 30, 2002, the Company owed $250,000 on this promissory note. In March 2002, the Company entered into a promissory note with a vendor of the Company in the amount of $200,824 payable in $10,000 monthly installments, without interest, until the principal amount is paid in full. At September 30, 2002, the Company owed $115,824 on this promissory note. In May 2002, in consideration for loans in the amount of $115,000, the Company issued (i) three separate 12-month promissory notes in the aggregate principal amount of $115,000, bearing interest at 10% per annum, and (ii) three separate five year warrants to purchase an aggregate of 460,000 shares of the Company's common stock at $0.25 per share. The Company recorded additional-paid-in-capital on the balance sheet of $48,564 to reflect the fair market value of the warrants issued in conjunction with the loans and recorded a corresponding expense in the Company's statement of operations. The Company subsequently paid these notes in full during June and July of 2002. In connection with the sale of the Company's cryosurgical assets, as partial consideration for services rendered, the Company issued to each of Breslow & Walker, LLP, the Company's general counsel, and de Greef & Partners, LLC, a consultant for the Company, a 10-year warrant to purchase 500,000 shares of the Company's common stock at $0.25 per share. The Company recorded additional-paid-in-capital on the balance sheet of $139,677 to reflect the fair market value of the warrants issued and recorded a corresponding expense in the Company's statement of operations. 8 BIOLIFE SOLUTIONS, INC. NOTES TO FINANCIAL STATEMENTS G. Employment Agreements In July, 2002, the Company entered into a two year employment agreement with John G. Baust, PhD, pursuant to which Dr. Baust is employed as the Company's President and Chief Executive Office. Also in July, 2002, the Company entered into a one year employment agreement with Robert Van Buskirk, PhD, pursuant to which Dr. Van Buskirk is employed as the Company's Vice President of Business Development. H. Recent Accounting Pronouncements None 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The following discussion should be read in conjunction with the Company's financial statements and notes thereto set forth elsewhere herein. The discussion of the results from operations includes only the Company's continuing operations. BioLife Solutions, Inc. ("BioLife" or the "Company") has pioneered the next generation of preservation solutions designed to maintain the viability and health of cellular matter and tissues during freezing, transportation and storage. Based on the Company's proprietary bio-packaging technology and a patented understanding of the mechanism of cellular damage and death, these products enable the biotechnology and medical community to address a growing problem that exists today. The expanding practice of cell and gene therapy has created a need for products that ensure the biological viability of mammalian cell and tissue material during transportation and storage. The HypoThermosol(R) and CryoStor(TM) products that the Company is selling today are a significant step forward in meeting these needs. The Company's line of preservation solutions is composed of complex synthetic, aqueous solutions containing, in part, minerals and other elements found in human blood which are necessary to maintain fluids and chemical balances throughout the body at near freezing temperatures. The solutions preserve cells and tissue in low temperature environments for extended periods after removal of the cells through minimally invasive biopsy or surgical extraction, as well as in shipping the propagated material for the application of cell or gene therapy or tissue engineering. BioLife has entered into research agreements with several emerging biotechnology companies engaged in the research and commercialization of cell and gene therapy technology and has received several government research grants in partnership with academic institutions to conduct basic research, which could lead to further commercialization of technology to preserve human cells, tissues and organs. The Company currently markets its HypoThermosol(R) line of solutions directly and through a distributor to companies and labs engaged in pre-clinical research, and to academic institutions. On June 25, 2002, the Company completed the sale of its cryosurgery product line and related intellectual property assets to Irvine, CA-based Endocare, Inc. In the transaction, the Company transferred ownership of all of its cryosurgical installed base, inventory and related intellectual property in exchange for $2.2 million in cash and 120,022 shares of Endocare Common Stock. RESULTS OF OPERATIONS FOR THE THREE-AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2001 Revenue. For the three-months ended September 30, 2002 revenue from continuing operations decreased $12,192, or 8%, to $138,007, compared to $150,199 for the three-months ended September 30, 2001. The decrease was due to slightly lower National Institutes of Health ("NIH") grant revenue, offset by slightly higher revenues from corporate consulting contracts. For the nine-months ended September 30, 2002, revenue increased $289,582, or 127% to $516,819, compared to $227,237 for the nine-months ended September 30, 2001. The increase was due to higher revenues across the board, including product sales revenue of $20,527, NIH grant revenue of $385,572 and corporate research contract revenue of 110,720. Cost of product sales. There were no expenses relating to cost of product sold for the three-months ended September 30, 2002. Cost of product sold for the three-months ended September 30, 2001 totaled $1,089. 10 This improvement in cost of product sales was due to a low level of product sales in both periods and the writedown of the Company's inventory in the previous quarter. For the nine-months ended September 30, 2002, cost of product sales increased to $25,646, compared to $2,455 for the nine-months ended September 30, 2001. This increase in cost of product sales was the result of product inventory that was written down by $25,685 to reflect a zero inventory balance at June 30, 2002. Research and development. Expenses relating to research and development for the three-months ended September 30, 2002 increased $94,135, or 82%, to $209,434, compared to $115,299 for the three-months ended September 30, 2001. The increase in research and development expense was due primarily to higher expenses relating to academic presentations made by the Company's engineers at scientific conferences and higher headcount. Expenses relating to research and development for the nine-months ended September 30, 2002 increased $186,758, or 73%, to $441,684, compared to $254,926 for the nine-months ended September 30, 2001. The increase in research and development expenditure for the nine month period was due to an overall higher level of product development activity reflected in higher salaries expense from the addition of research and development personnel, higher consulting fees, higher legal expenses relating to the Company's intellectual property portfolio and a higher level of expenditure on lab supplies and research facilities. Sales and marketing. For the three-months ended September 30, 2002, sales and marketing expense increased $3,411, or 470%, to $4,126, compared to $715 for the three-months ended September 30, 2001. The increase in sales and marketing expense was the direct result of the presence of the Company at a tradeshow during the period. For the nine-months ended September 30, 2002, sales and marketing expense decreased $25,415, or 86%, to $4,146, compared to $29,561 for the nine-months ended September 30, 2001. The decrease was principally due to a shift in the allocation of sales and marketing personnel related expenditure to product development. General and administrative expense. For the three-months ended September 30, 2002, general and administrative expense increased $108,667 to $134,520, compared to $25,853 for the three-months ended September 30, 2001. This increase in general and administrative expense was due to the shift in the burden of general and administrative expense to the Company's continuing operations from discontinued operations. As a result of this shift, the Company experienced higher salary, travel, legal and accounting expense. For the nine-months ended September 30, 2002, general and administrative expense increased $306,469 to $417,068, compared to $110,599 for the nine-months ended September 30, 2001. This increase was also due to the shift in the burden of general and administrative expense noted above. Discontinued operations. On June 25, 2002, all of the cryosurgical assets, including customer receivables, inventory, fixed assets and intangible assets related to the cryosurgical business, were sold to Endocare for a combination of cash and common stock of the purchaser. For the three-months ended September 30, 2002 loss from the operation of cryosurgical assets was $(92,934) compared to a loss of $(1,140,775) for the three-months ended September 30, 2001. For the nine-months ended September 30, 2002, loss from the operation of cryosurgical assets was $(1,547,824) compared to a loss of $(3,409,153) for the nine-months ended September 30, 2001. For the nine-months ended September 30, 2002, the gain on disposal of cryosurgical assets, net of assets sold at cost, was $2,426,109. Operating expenses and net income. For the three-months ended September 30, 2002, operating expenses increased $206,213 to $348,080, compared to $141,867 for the three-months ended September 30, 2001. For the nine-months ended September 30, 2002, operating expenses increased $467,812 to $862,898, compared to $395,086 for the nine-months ended September 30, 2001. The Company reported a net loss of $(303,007) for the three months ended September 30, 2002, compared to a net loss of $(1,134,281) for the three months ended September 30, 2001. The company reported net income of $506,560 for the nine- months ended 11 September 30, 2002, compared to a net loss of $(3,580,222) for the nine-months ended September 30, 2001. The Company's reported net income/(loss) for the three and nine months ended September 30, 2002 and 2001 includes results from discontinued operations. LIQUIDITY AND CAPITAL RESOURCES At September 30, 2002, the Company had cash and cash equivalents of $273,076 and marketable securities of $1,717,515, compared to cash and cash equivalents of $286,105 and no marketable securities at December 31, 2001. As of November 13, 2002 the aggregate fair value of our marketable securities declined to $354,065 (see Note D, in our Notes to Financial Statements). At September 30, 2002, the Company had a working capital surplus of $1,217,803, compared to a working capital deficit of $(614,626) at December 31, 2001. The increase in the Company's cash and working capital positions from December 31, 2001 was due to the sale of the Company's cryosurgical assets, and was partially offset by net losses during the three- and nine-month periods ending September 30, 2002. The Company anticipates that its current cash balance will be sufficient to meet the Company's operating cash requirements into the first quarter of 2003. This does not reflect the effect of any sale of the Company's marketable securities (see Note B in the Company's Notes to Financial Statements). Capital expenditures related to continuing operations, totaled $89,405 in the nine month period ended September 30, 2002, compared to $75,207 in the nine month period ended September 30, 2001. In March 2002, the Company borrowed $250,000 under a 12-month promissory note agreement. In connection with this debt raise, the Company issued warrants to purchase one million shares of the Company's Common Stock at $0.25 per share. Also in March 2002, the Company entered into a promissory note with a vendor of the Company in the amount of $200,824 payable in $10,000 monthly installments, without interest, until the principal amount is paid in full. In May 2002, the Company borrowed an aggregate of $115,000 under 12-month promissory note agreements. In connection with this debt raise, the Company issued warrants to purchase 460,000 shares of the Company's common stock at $0.25 per share. The Company has paid down $200,000 of these notes. FORWARD LOOKING INFORMATION The information set forth in this Report (and other reports issued by the Company and its officers from time to time) contain certain statements concerning the Company's future results, future performance, intentions, objectives, plans and expectations that are or may be deemed to be "forward-looking statements." Such statements are made in reliance upon safe harbor provisions of the Private Securities Litigation Act of 1995. These forward-looking statements are based on current expectations that involve numerous risks and uncertainties, including those risks and uncertainties discussed in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2001. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company's control. Although the Company believes that its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, the Company cannot assure you that the results discussed or implied in such forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in such forward-looking statements, the inclusion of such statements should not be regarded as a representation by the Company or any other person that the Company's objectives and plans will be achieved. Words such as "believes," "anticipates," "expects," "intends," "may," and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. The Company undertakes no obligations to revise any of these forward-looking statements. 12 ITEM 3. CONTROLS AND PROCEDURES Under the supervision and with the participation of the Company's management, including the principal executive officer/principal financial officer, the Company has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures within 90 days of the filing date of this quarterly report, and, based on his evaluation, the Company's principal executive officer/principal financial officer has concluded that these controls and procedures are effective. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Disclosure controls and procedures are the Company's controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files under the Exchange Act is accumulated and communicated to the Company's management, including the principal executive officer/principal financial officer, as appropriate to allow timely decisions regarding required disclosure. 13 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 10.1 Employment Agreement dated July 1, 2002 between the Company and John G. Baust Exhibit 10.2 Employment Agreement dated July 1, 2002 between the Company and Robert Van Buskirk Exhibit 99.1 Certification of Periodic Report dated November 14, 2002 (b) Reports on Form 8-K Current Report on Form 8-K, filed July 10, 2002, relating to the sale of the Company's cryosurgical assets to Endocare. 14 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BioLife Solutions, Inc. ----------------------- (Registrant) Date: November 14, 2002 By: /s/ John G. Baust ------------------------------------ John G. Baust, PhD President and Chief Executive Officer (Principal Executive Officer) 15 CERTIFICATION I, John G. Baust, Chief Executive Officer and Chief Financial Officer of BioLife Solutions, Inc. (the "Registrant"), certify that: (1) I have reviewed this quarterly report on Form 10-QSB of the Registrant; (2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; (3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; (4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and I have: a. designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date; (5) I have disclosed, based on my most recent evaluation, to the registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and (6) I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: November 14, 2002 By: /s/ John G. Baust ----------------------------- John G. Baust, PhD Chief Executive Officer and Chief Financial Officer 16 EXHIBIT INDEX Exhibit Number Description of Exhibit - ------- ------------------------------------------------------------- 10.1* Employment Agreement dated July 1, 2002 between the Company and John G. Baust 10.2* Employment Agreement dated July 1, 2002 between the Company and Robert Van Buskirk 99.1* Certification of Periodic Report dated November 14, 2002 * Filed herewith EX-10.1 3 exh10-1.txt EXHIBIT 10.1 EXHIBIT 10.1 EMPLOYMENT AGREEMENT made as of the 1st day of July, 2002 by and between CRYOMEDICAL SCIENCES, INC., a Delaware corporation (hereinafter referred to as the "Company"), and John G. Baust, residing at c/o BioLife Solutions, Inc., Suite 144, SCI 3, SUNY Park, Binghamton, NY 13902 (hereinafter referred to as "Employee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company desires to employ Employee, and Employee is willing to accept such employment, all on the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, the parties hereto agree as follows: 1. Employment ---------- The Company hereby employs Employee, and Employee hereby accepts employment with the Company, as President and Chief Executive Officer, on the terms and conditions herein set forth. 2. Term of Agreement ----------------- Unless terminated sooner pursuant to the express provisions hereof, the term of employment hereunder shall commence on the date hereof (the "Commencement Date"), shall continue through June 30, 2004 (the "Original Term"), and shall be automatically extended for two additional one-year periods upon the terms and subject to the conditions contained herein, unless (a) the Original Term is terminated pursuant to Section 6 hereof (or otherwise), or (b) not less than 90 days prior to the commencement of any such one-year period the Company notifies Employee, in 1 writing, that the term of employment shall not be extended. The period commencing with the Commencement Date through the end of the term of Employee's employment hereunder is hereinafter referred to as the "Employment Period." 3. Duties ------ During the Employment Period, Employee shall perform such functions as are normally carried out by the President and Chief Executive Officer of a business of the type in which the Company is engaged, and such other functions as the Board of Directors of the Company (the "Board") shall from time to time reasonably determine. Employee shall devote his energies and abilities exclusively to the Company's business pursuant to, and in accordance with, reasonable business policies and procedures, as fixed from time to time by the Board; provided, however, that Employee may continue to devote his time, energies and abilities to his position at SUNY-Binghamton to the same extent as Employee is currently doing so. Employee covenants and agrees that he will faithfully adhere to and fulfill such policies as are established from time to time by the Board of Directors. Employee shall not be assigned, by the Board of Directors, responsibilities, in any material manner, inconsistent with his position as President and Chief Executive Officer. 4. Compensation ------------ 4.1 Upon the Commencement Date, Employee will be paid a "signing" bonus of $50,000. 4.2 During the Employment Period, Employee's base salary shall be in the amount of $240,000 per annum, payable in accordance with the Company's normal payroll procedures. 4.3 During the Employment Period, in addition to Employee's base salary, Employee shall be entitled to annual bonuses of up to $100,000 based upon specific milestones 2 to be accomplished by the Company for the ensuing year as agreed to by the Board and Employee. 4.4 During the Employment Period, Employee shall be entitled to a non-accountable automobile allowance of $600.00 per month. 4.5 During the Employment Period, Employee shall be entitled to family coverage for Blue Cross/Blue Shield (or equivalent thereof) and major medical insurance coverage. 4.6 Employee shall also be eligible, to the extent he qualifies, to participate in such fringe benefit plans (including retirement, pension, life or other similar employee benefit plans), if any, which the Company may from time to time make available to its employees, provided that the Company shall have the right from time to time to modify, terminate or replace any and all of such plans. 4.7 The Company shall reimburse Employee for all reasonable business expenses incurred by Employee in connection with the performance of his duties hereunder , provided Employee submits supporting vouchers for such expenses. 4.8 Employee shall be entitled to a four-week paid vacation each year during the Employment Period, to be taken at such time as is consistent with the needs of the Company and the convenience of Employee. 5. Stock Options ------------- On the Commencement Date, Employee shall be granted a 10 year Stock Option, under the Company's 1998 Stock Option Plan, to purchase 1,000,000 shares of the Company's common stock, par value $.001 per share (the "Common Stock"), at a price of $.25 per share. The Stock Option shall be exercisable over a 10-year period to the extent of 200,000 shares commencing with the first anniversary date of the Commencement Date and an additional 200,000 shares commencing with each of the next four anniversary dates thereof. 3 6. Termination ----------- The Employment Period shall terminate upon the happening of any of the following events: 6.1 Automatically and without notice upon the death of Employee. 6.2 Employee leaves the employ of the Company. 6.3 Upon written notice of termination from the Board of the Company to Employee in the event that Employee becomes physically or mentally disabled ("Disability") during the Employment Period such that (a) in Board's good faith judgment, Employee is permanently incapable of properly performing the duties customarily performed by him hereunder, or (b) such Disability lasts for a period of 60 consecutive days or 90 days in any 150 day period and the Board elects to treat such Disability as being permanent in nature; 6.4 Upon discharge of Employee, on written notice, by the Board for cause. For purposes of this Agreement, "cause" shall mean the following: the commission of a felony or crime involving moral turpitude or other act causing material harm to the Corporation's standing and reputation, failure to carry out, after reasonable written notice of such failure, the reasonable policies of the Board as they may relate to Employee's duties hereunder (other than for reasons beyond his control), persistent absenteeism, a material default or breach of any of the covenants made by Employee in this Agreement, a breach of Employee's duty of loyalty to the Company or any act of dishonesty or fraud with respect to the Company, or the willful engaging by Employee in misconduct materially injurious to the Company. 6.5 In the event any one of the foregoing events referred to in Sections 6.1 through 6.4 hereof shall occur, the Company shall be obligated to pay to Employee the compensation due him under Section 4.2 hereof up to the date of termination only and Employee shall not be entitled to receive any additional compensation of any nature whatsoever. 4 6.6 In the event that Employee's employment with the Company is terminated by the Board during the Employment Period for a reason other than as is set forth above in Sections 6.1 through 6.4 hereof, the Company shall be required to continue to pay Employee the salary provided for in Section 4.2 hereof for a period of one (1) year. 7. Non-Competition --------------- 7.1 In view of the unique and valuable services that Employee has rendered and is expected to render to the Company, and Employee's knowledge of the business of the Company and proprietary information relating to the business of the Company and similar knowledge regarding the Company that Employee has obtained and is expected to obtain during the course of his employment with the Company and in consideration of the compensation to be received by Employee hereunder, Employee agrees that during the Employment Period and for a period of twenty four months immediately following the termination or expiration thereof (the Employment Period he will not compete with, or, directly or indirectly, own, manage, operate, control, loan money to, or participate in the ownership, operation or control of, or be connected with as a director, partner, consultant, agent, independent contractor or otherwise, or acquiesce in the use of his name in any other business or organization which is in competition with the Company in any geographical area in which the Company is then conducting business or any geographical area in which, to the knowledge of Employee at the time of cessation of employment, the Company plans to conduct business within twenty four months from the date thereof 7.2 Employee will not, during the twenty-four months following termination, solicit or interfere with, or endeavor to entice away from the Company, any of its employees or customers without the written consent of the Company or unless such employee is Employee's personal secretary. 5 7.3 Since a breach of the provisions of this Section 7 could not adequately be compensated by money damages and will cause irreparable injury to the Company, the Company shall be entitled, in addition to any other right or remedy available to it, to an injunction or restraining order restraining such breach or a threatened breach, and no bond or other security shall be required in connection therewith, and Employee hereby consents to the issuance of any such injunction or restraining order. Employee agrees that the provisions of this Section 7 are reasonable and necessary to protect the Company and its business. It is the desire and intent of the parties that the provisions of this Section 7 shall be enforced to the fullest extent permitted under the public policies and laws applied in each jurisdiction in which enforcement is sought. If any restriction contained in this Section 7 shall be deemed to be invalid, illegal or unenforceable by reason of the extent, duration or geographical scope thereof, or otherwise, then the court making such determination shall have the right to reduce such extent, duration, geographical scope or other provision hereof and in its reduced form such restriction shall then be enforceable in the manner contemplated hereby. 7.4 No provision of this Agreement shall be deemed to preclude Employee from serving as a director on the board of companies not in competition with the Company or of charitable organizations, provided, that any such directorship or consulting activities do not reduce Employee's ability to attend to his duties on behalf of the Company. 8. Entire Agreement ---------------- The provisions hereof and the agreements referred to herein constitute the entire agreement between the parties with respect to the subject matter hereof and supersede any prior oral understanding, and no modification, supplement or discharge hereof shall be effective unless in writing and executed on behalf of the Company and Employee. 6 9. Assignability ------------- This Agreement, and its rights and obligations may not be assigned by Employee. The Company may assign any of its rights and obligations hereunder to a successor or surviving corporation resulting from a merger or consolidation of the Company, the sale by the Company of all or substantially all of its assets or other similar corporate reorganization, upon condition that the assignee shall assume, either expressly or by operation of law, all of the Company's obligations hereunder. 10. Waiver ------ No waiver by either party of any condition, term or provision of this Agreement shall be deemed to be a waiver of any prior or succeeding breach of the same or of any other condition, term or provision thereof. 11. Notices ------- All notices required or permitted to be given by either party hereunder shall be in writing and mailed by registered mail, return receipt requested, to the other party at the address set forth above or such different address as may be given by notice as provided for herein. Any notice mailed as provided above shall be deemed given seven (7) days after the date of mailing or on the date of receipt, whichever is sooner. 12. Counterparts ------------ This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 13. Construction ------------ This Agreement shall be construed in accordance with the laws of the State of Delaware. 7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. /s/ John G. Baust ---------------------------------------- JOHN G. BAUST CRYOMEDICAL SCIENCES, INC. By:/s/ Robert Van Buskirk ------------------------------------- Authorized Signatory 8 EX-10.2 4 exh10-2.txt EXHIBIT 10.2 EXHIBIT 10.2 EMPLOYMENT AGREEMENT made as of the 1st day of July, 2002 by and between CRYOMEDICAL SCIENCES, INC., a Delaware corporation (hereinafter referred to as the "Company"), and Robert van Buskirk, residing at 13 West Glann Rd., Apalachin, NY 13732 (hereinafter referred to as "Employee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company desires to employ Employee, and Employee is willing to accept such employment, all on the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, the parties hereto agree as follows: 1. Employment ---------- The Company hereby employs Employee, and Employee hereby accepts employment with the Company, as Vice President of Business Development, on the terms and conditions herein set forth. 2. Term of Agreement ----------------- Unless terminated sooner pursuant to the express provisions hereof, the term of employment hereunder shall commence on the date hereof (the "Commencement Date"), shall continue through June 30, 2003 (the "Original Term. The period commencing with the Commencement Date through the end of the term of Employee's employment hereunder is hereinafter referred to as the "Employment Period." 1 3. Duties ------ During the Employment Period, Employee shall perform such functions as are normally carried out by the Vice President of Business Development of a business of the type in which the Company is engaged, and such other functions as the President and CEO of the Company shall from time to time reasonably determine. Employee shall devote his energies and abilities exclusively to the Company's business pursuant to, and in accordance with, reasonable business policies and procedures, as fixed from time to time by the President and CEO; provided, however, that Employee may continue to devote his time, energies and abilities to his position at SUNY-Binghamton to the same extent as Employee is currently doing so. Employee covenants and agrees that he will faithfully adhere to and fulfill such policies as are established from time to time by the Board of Directors. 4. Compensation ------------ 4.1 During the Employment Period, Employee's base salary shall be in the amount of $150,000 per annum, payable in accordance with the Company's normal payroll procedures. 4.2 Employee shall also be eligible, to the extent he qualifies, to participate in such fringe benefit plans (including retirement, pension, life or other similar employee benefit plans), if any, which the Company may from time to time make available to its employees, provided that the Company shall have the right from time to time to modify, terminate or replace any and all of such plans. 4.3 The Company shall reimburse Employee for all reasonable business expenses incurred by Employee in connection with the performance of his duties hereunder , provided Employee submits supporting vouchers for such expenses. 2 4.8 Employee shall be entitled to a four-week paid vacation each year during the Employment Period, to be taken at such time as is consistent with the needs of the Company and the convenience of Employee. 5. Stock Options ------------- On the Commencement Date, Employee shall be granted a 3 year Stock Option, under the Company's 1998 Stock Option Plan, to purchase 150,000 shares of the Company's common stock, par value $.001 per share (the "Common Stock"), at a price of $.25 per share. The Stock Option shall be exercisable over a 3-year period to the extent of 50,000 shares commencing with the first anniversary date of the Commencement Date and an additional 50,000 shares commencing with each of the next yearly anniversary dates thereof. 6. Termination ----------- The Employment Period shall terminate upon the happening of any of the following events: 6.1 Automatically and without notice upon the death of Employee. 6.2 Employee leaves the employ of the Company. 6.3 Upon written notice of termination from the Board of the Company to Employee in the event that Employee becomes physically or mentally disabled ("Disability") during the Employment Period such that (a) in Board's good faith judgment, Employee is permanently incapable of properly performing the duties customarily performed by him hereunder, or (b) such Disability lasts for a period of 60 consecutive days or 90 days in any 150 day period and the Board elects to treat such Disability as being permanent in nature; 6.4 Upon discharge of Employee, on written notice, by the Board for cause. For purposes of this Agreement, "cause" shall mean the following: the commission of a felony or crime involving moral turpitude or other act causing material harm to the Corporation's standing and 3 reputation, failure to carry out, after reasonable written notice of such failure, the reasonable policies of the Board as they may relate to Employee's duties hereunder (other than for reasons beyond his control), persistent absenteeism, a material default or breach of any of the covenants made by Employee in this Agreement, a breach of Employee's duty of loyalty to the Company or any act of dishonesty or fraud with respect to the Company, or the willful engaging by Employee in misconduct materially injurious to the Company. 6.5 In the event any one of the foregoing events referred to in Sections 6.1 through 6.4 hereof shall occur, the Company shall be obligated to pay to Employee the compensation due him under Section 4.2 hereof up to the date of termination only and Employee shall not be entitled to receive any additional compensation of any nature whatsoever. 6.6 In the event that Employee's employment with the Company is terminated by the Board during the Employment Period for a reason other than as is set forth above in Sections 6.1 through 6.4 hereof, the Company shall be required to continue to pay Employee the salary provided for in Section 4.2 hereof for a period of one (1) year. 7. Non-Competition --------------- 7.1 In view of the unique and valuable services that Employee has rendered and is expected to render to the Company, and Employee's knowledge of the business of the Company and proprietary information relating to the business of the Company and similar knowledge regarding the Company that Employee has obtained and is expected to obtain during the course of his employment with the Company and in consideration of the compensation to be received by Employee hereunder, Employee agrees that during the Employment Period and for a period of twenty four months immediately following the termination or expiration thereof (the Employment Period he will not compete with, or, directly or indirectly, own, manage, operate, control, loan 4 money to, or participate in the ownership, operation or control of, or be connected with as a director, partner, consultant, agent, independent contractor or otherwise, or acquiesce in the use of his name in any other business or organization which is in competition with the Company in any geographical area in which the Company is then conducting business or any geographical area in which, to the knowledge of Employee at the time of cessation of employment, the Company plans to conduct business within twenty four months from the date thereof 7.2 Employee will not, during the twenty-four months following termination, solicit or interfere with, or endeavor to entice away from the Company, any of its employees or customers without the written consent of the Company or unless such employee is Employee's personal secretary. 7.3 Since a breach of the provisions of this Section 7 could not adequately be compensated by money damages and will cause irreparable injury to the Company, the Company shall be entitled, in addition to any other right or remedy available to it, to an injunction or restraining order restraining such breach or a threatened breach, and no bond or other security shall be required in connection therewith, and Employee hereby consents to the issuance of any such injunction or restraining order. Employee agrees that the provisions of this Section 7 are reasonable and necessary to protect the Company and its business. It is the desire and intent of the parties that the provisions of this Section 7 shall be enforced to the fullest extent permitted under the public policies and laws applied in each jurisdiction in which enforcement is sought. If any restriction contained in this Section 7 shall be deemed to be invalid, illegal or unenforceable by reason of the extent, duration or geographical scope thereof, or otherwise, then the court making such determination shall have the right to reduce such extent, duration, geographical scope or other provision hereof and in its reduced form such restriction shall then be enforceable in the manner contemplated hereby. 5 7.4 No provision of this Agreement shall be deemed to preclude Employee from serving as a director on the board of companies not in competition with the Company or of charitable organizations, provided, that any such directorship or consulting activities do not reduce Employee's ability to attend to his duties on behalf of the Company. 8. Entire Agreement ---------------- The provisions hereof and the agreements referred to herein constitute the entire agreement between the parties with respect to the subject matter hereof and supersede any prior oral understanding, and no modification, supplement or discharge hereof shall be effective unless in writing and executed on behalf of the Company and Employee. 9. Assignability ------------- This Agreement, and its rights and obligations may not be assigned by Employee. The Company may assign any of its rights and obligations hereunder to a successor or surviving corporation resulting from a merger or consolidation of the Company, the sale by the Company of all or substantially all of its assets or other similar corporate reorganization, upon condition that the assignee shall assume, either expressly or by operation of law, all of the Company's obligations hereunder. 10. Waiver ------ No waiver by either party of any condition, term or provision of this Agreement shall be deemed to be a waiver of any prior or succeeding breach of the same or of any other condition, term or provision thereof. 11. Notices ------- All notices required or permitted to be given by either party hereunder shall be in writing and mailed by registered mail, return receipt requested, to the other party at the address set forth above or such different address as may be given by notice as provided for herein. Any notice 6 mailed as provided above shall be deemed given seven (7) days after the date of mailing or on the date of receipt, whichever is sooner. 12. Counterparts ------------ This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 13. Construction ------------ This Agreement shall be construed in accordance with the laws of the State of Delaware. 7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. By: /s/ Robert Van Buskirk --------------------------------- Robert Van Buskirk CRYOMEDICAL SCIENCES, INC. By: /s/ John G. Baust --------------------------------- John G. Baust President & CEO 8 EX-99.1 5 ex99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 CERTIFICATION OF PERIODIC REPORT I, John G. Baust, Chief Executive Officer and Chief Financial Officer of Cryomedical Sciences, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that: 1. the Quarterly Report on Form 10-QSB of the Company for the quarterly period ended June 30, 2002 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: November 14, 2002 By: /s/ John G. Baust ------------------------------- John G. Baust, PhD Chief Executive Officer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----