-----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, SSYM4Ks1qPs9nEs7/DrepI421DVDLEZ1VafJ0wxaczu4jN8jRkgzWjqpHYGoz3UA /Z1sq+dmWdoYm/VOUppw1g== 0000950144-07-008534.txt : 20070912 0000950144-07-008534.hdr.sgml : 20070912 20070912151838 ACCESSION NUMBER: 0000950144-07-008534 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20070912 DATE AS OF CHANGE: 20070912 GROUP MEMBERS: FROST GAMMA INVESTMENTS TRUST FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FROST PHILLIP MD ET AL CENTRAL INDEX KEY: 0000898860 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 3055756001 MAIL ADDRESS: STREET 1: 4400 BISCAYNE BLVD CITY: MIAMI STATE: FL ZIP: 33137-3227 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CELLULAR TECHNICAL SERVICES CO INC CENTRAL INDEX KEY: 0000876378 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 112962080 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42262 FILM NUMBER: 071113177 BUSINESS ADDRESS: STREET 1: 20 EAST SUNRISE HIGHWAY STREET 2: SUITE 200 CITY: VALLEY STREAM STATE: NY ZIP: 11581 BUSINESS PHONE: 516-568-0100 MAIL ADDRESS: STREET 1: 20 EAST SUNRISE HIGHWAY STREET 2: SUITE 200 CITY: VALLEY STREAM STATE: NY ZIP: 11581 SC 13D/A 1 g09442sc13dza.htm CELLULAR TECHNICAL SERVICES COMPANY, INC. Cellular Technical Services Company, Inc.
 

     
 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 1)*

CELLULAR TECHNICAL SERVICES COMPANY, INC.
(Name of Issuer)
Common Stock, par value $.001 per share
(Title of Class of Securities)
151167103
(CUSIP Number)
Steven D. Rubin
4400 Biscayne Boulevard
Maimi, Florida 33137
Telephone: (305) 575-6015
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
September 4, 2007
(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 
 

 

                     
CUSIP No.
  
151167103 
   Page  
2 
   of   
8 

 

           
1   NAMES OF REPORTING PERSONS

Phillip Frost, M.D.
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   þ 
  (b)   o 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  OO
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  United States of America
       
  7   SOLE VOTING POWER
     
NUMBER OF   4,013,965(1)
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   785,383(2)
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   4,013,965(1)
       
WITH 10   SHARED DISPOSITIVE POWER
     
    785,383(2)
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  4,799,348(1)(2)
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  28.5%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  IN

(1)   Includes 4,013,965 shares of Common Stock held by Frost Gamma Investments Trust. Dr. Phillip Frost is the trustee and Frost Gamma Limited Partnership is the sole and exclusive beneficiary of Frost Gamma Investments Trust. Dr. Frost is one of two limited partners of Frost Gamma Limited Partnership. The general partner of Frost Gamma Limited Partnership is Frost Gamma, Inc. and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation.
(2)   Includes warrants to purchase 785,383 shares of Common Stock owned directly by The Frost Group, LLC. Frost Gamma Investments Trust is a principal member of The Frost Group, LLC. Dr. Frost and the Frost Gamma Investments Trust disclaim beneficial ownership of these warrants to purchase common stock, except to the extent of any pecuniary interest therein.

 

                     
CUSIP No.
  
151167103 
   Page  
3 
   of   
8 

 

           
1   NAMES OF REPORTING PERSONS

Frost Gamma Investments Trust
IRS I.D. #46-0464745
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   þ 
  (b)   o 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  OO
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  State of Florida
       
  7   SOLE VOTING POWER
     
NUMBER OF   0
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   4,799,348(1)
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   0
       
WITH 10   SHARED DISPOSITIVE POWER
     
    4,799,348(1)
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  4,799,348(1)
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  28.5%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  OO
(1)   Frost Gamma Investments Trust holds 4,013,965 shares of Common Stock. Dr. Phillip Frost is the trustee and Frost Gamma Limited Partnership is the sole and exclusive beneficiary of Frost Gamma Investments Trust. Dr. Frost is one of two limited partners of Frost Gamma Limited Partnership. The general partner of Frost Gamma Limited Partnership is Frost Gamma, Inc. and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation. The number of shares included above also includes warrants to purchase 785,383 shares of Common Stock owned directly by The Frost Group, LLC. Frost Gamma Investments Trust is a principal member of The Frost Group, LLC. Dr. Frost and the Frost Gamma Investments Trust disclaim beneficial ownership of these warrants to purchase common stock, except to the extent of any pecuniary interest therein.

 

                     
CUSIP No.
  
151167103 
   Page  
4 
   of   
8 
ITEM 1. Security and Issuer
     This Amendment No. 1 to Schedule 13D (this “Amendment”) amends certain Items of the Schedule 13D (the “Original 13D”) filed with the Securities and Exchange Commission (the “SEC”) on April 12, 2005, by furnishing the information set forth below. Unless set forth below, all previous Items are unchanged.
     This Amendment is filed by Phillip Frost, M.D. (“Dr. Frost”) and Frost Gamma Investments Trust (the “Gamma Trust” and, together with Dr. Frost, the “Reporting Persons”) with respect to the Common Stock, $.001 par value (the “Shares”), of Cellular Technical Services Company, Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at 4400 Biscayne Boulevard, Suite 1500, Miami, Florida 33137.
     Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Original 13D.
ITEM 2. Identity and Background
     Item 2 is amended as follows:
     Dr. Frost’s principal occupation is Chairman and Chief Executive officer of Opko Health, Inc., a Delaware corporation.
ITEM 3. Source and Amount of Funds or Other Consideration.
     Item 3 is hereby amended to add the following:
     On September 4, 2007 (the “Closing Date”), the Reporting Persons acquired 2,588,965 Shares (the “Exchange Shares”) upon the consummation of the transactions (the “Transactions”) contemplated by that certain Share Contribution and Exchange Agreement (the “Exchange Agreement”), dated as of July 25, 2007, by and among the Issuer, SafeStitch LLC (“SafeStitch”) and the members of SafeStitch LLC (the “SafeStitch Members”), pursuant to which the Issuer acquired 100% of the SafeStitch Members’ membership interests in SafeStitch. The Reporting Persons received the Exchange Shares in exchange for the Gamma Trust’s 23% membership interest in SafeStitch.
     Additionally, the Gamma Trust acquired an aggregate of 10,000 Shares in four broker transactions executed on the over-the-counter bulletin board as follows: (A) on August 13, 2007 (i) 3,000 Shares were purchased for $2.25 per share and (ii) 2,000 Shares were purchased for $2.29 per share; and (B) on August 22, 2007, (i) 3,264 Shares were purchased for $2.25 per share and (ii) 1,736 Shares were purchased for $2.38 per share. The Gamma Trust paid for such Shares from the working capital of the Gamma Trust.
     On August 24, 2007, the Issuer granted 15,000 Shares to the Gamma Trust in consideration for Dr. Frost’s service as a director on the Issuer’s board of directors and for services performed in connection with the Transactions and for prior merger and acquisition services performed by Dr. Frost over the past several years.
     Also on the Closing Date, The Frost Group, LLC (the “Frost Group”), a Florida limited liability company, agreed to fund an aggregate of up to $3,900,000 of the Issuer’s new $4,000,000 line of credit. In exchange therefor, the Issuer granted the Frost Group warrants to acquire 785,383 Shares. The Gamma Trust is a principal member of The Frost Group, LLC. The Reporting Persons disclaim beneficial ownership of these warrants to purchase Common Stock, except to the extent of any pecuniary interest therein.

 

 

                     
CUSIP No.
  
151167103 
   Page  
5 
   of   
8 
ITEM 4. Purpose of Transaction.
     Item 4 is hereby amended to add the following:
     The Reporting Persons acquired 2,588,965 Shares, and the Frost Group received warrants to acquire 785,383 Shares in connection with the Transactions described in Item 3 of this Amendment, which is incorporated herein by reference.
     On December 11, 2002, the Issuer adopted a plan to wind down and cease all operations related to its historical telecommunications business, which process it completed in December 2005. Upon consummation of the Transactions, the Issuer adopted the business plan of SafeStitch, which is now a wholly-owned subsidiary of the Issuer. The Issuer is now a developmental stage medical device company focused on the development of medical devices that manipulate tissues for obesity, gastroesophageal reflux disease (“GERD”), Barrett’s Esophagus, esophageal obstructions, upper gastrointestinal bleeding, hernia formation and other intraperitoneal abnormalities through endoscopic and minimally invasive surgery. To better reflect its new business, the Issuer presently plans to change its name to Swan Medical Devices, Inc.
     Additionally, pursuant to a corporate action signed by holders of more than two-thirds of the issued and outstanding Shares, the structure of the Issuer’s board of directors (the “Board”) will change. Presently, the Board is divided into three distinct classes, and the terms of the directors in each such class expire in three consecutive years. At each annual meeting of stockholders, the successors to the class of directors whose terms then expire are elected to hold office for new three-year terms and until their successors have been elected and qualified. The Issuer plans to eliminate this staggered arrangement with the effect that all directors on the Board comprise a single class; therefore, all positions on the Board may be subject to an election in any given year. Also, one new seat will be added to the Board.
     Effective on the Closing Date, Stephen Katz, Lawrence Schoenberg, Joshua J. Angel and Dr. Frost resigned as members of the Board, and the following persons were appointed by the remaining members of the Board to serve as directors until the next meeting of stockholders, or until their earlier removal, resignation or death: Dr. Kenneth Heithoff and Kevin Wayne as Class I directors; Steven D. Rubin as a Class II director; and Jeffrey G. Spragens and Dr. Charles Filipi as Class III directors.
     Also in connection with the Transactions and pursuant to the stockholder action described above, the Issuer’s Restated Certificate of Incorporation will be amended to increase the aggregate number of shares of all classes of capital stock that the Issuer may issue from 35,000,000 to 250,000,000, which shall be composed of 225,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock, par value $0.01 per share.
     The stockholder action referred to above will be effective 20 calendar days after the mailing of an information statement on Schedule 14C to the Issuer’s stockholders.
ITEM 5. Interest in Securities of the Issuer.
     Item 5 is hereby amended in its entirety to read as follows:
                 
    Number of   Percentage of
    Outstanding Shares   Outstanding Shares
Name and Title of Beneficial Owner   Beneficially Owned   of Common Stock(1)
 
                
Phillip Frost, M.D.
    4,799,348 (2)     28.5 %
Frost Gamma Investments Trust
    4,799,348 (2)     28.5 %
 
(1)   The percentage of beneficial ownership is based upon 16,836,009 shares of Common Stock outstanding.
 
(2)   Frost Gamma Investments Trust holds 4,013,965 shares of the Company’s common stock. Dr. Phillip Frost is the trustee and Frost Gamma Limited Partnership is the sole and exclusive beneficiary of Frost Gamma Investments Trust. Dr. Frost is one of two limited partners of Frost Gamma Limited Partnership. The general partner of Frost Gamma Limited Partnership is Frost Gamma, Inc. and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation. The number of shares included above also includes warrants to purchase 785,383 shares of the Company’s common stock owned directly by The Frost Group, LLC. Frost Gamma Investments Trust is a principal member of The Frost Group, LLC. Dr. Frost and the Frost Gamma Investments Trust disclaim beneficial ownership of these warrants to purchase common stock, except to the extent of any pecuniary interest therein.

 

 

                     
CUSIP No.
  
151167103 
   Page  
6 
   of   
8 
     The Reporting Persons’ response to Item 3 to this Amendment is hereby incorporated by reference in this Item 5 to this Amendment.
ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
     Pursuant to the Exchange Agreement, the Gamma Trust entered into a lockup agreement with respect to the Exchange Shares. Without the consent of the Board, the Gamma Trust may not sell or otherwise transfer the Exchange Shares, directly or indirectly, during the period commencing on the Closing Date and ending on the date two years subsequent to the Closing Date.
     On the Closing Date, the Issuer granted the Frost Group warrants to acquire 785,383 Shares in accordance with that certain Note and Security Agreement, dated as of July 25, 2007, as amended, by and among the Issuer, SafeStitch, Jeffrey G. Spragens and the Frost Group, pursuant to which the Frost Group agreed to fund up to an aggregate of $3,900,000 of a new line of credit in the aggregate principal amount of $4,000,000. The Gamma Trust is a principal member of The Frost Group, LLC. The Reporting Persons disclaim beneficial ownership of these warrants to purchase Common Stock, except to the extent of any pecuniary interest therein.
ITEM 7. Material to be Filed as Exhibits
     
Exhibit    
Number   Description
 
    
99.1
  Share Transfer, Exchange and Contribution Agreement, dated July 25, 2007, by and among Cellular Technical Services Company, Inc., SafeStitch LLC and the members of SafeStitch LLC (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Issuer on July 31, 2007).
 
    
99.2
  Amendment to Share Transfer, Exchange and Contribution Agreement (incorporated herein by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by the Issuer on September 10, 2007).
 
    
99.3
  Form of Common Stock Warrant (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Issuer on September 10, 2007).
 
    
99.4
  Form of Lockup Agreement (incorporated herein by reference to Exhibit 2.4 to the Current Report on Form 8-K filed by the Issuer on July 31, 2007).

 

 

                     
CUSIP No.
  
151167103 
   Page  
7 
   of   
8 
SIGNATURES
     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
         
     
Dated: September 12, 2007  /s/ Phillip Frost, M.D.    
  Phillip Frost, M.D.    
     
 
         
Dated: September 12, 2007  FROST GAMMA INVESTMENTS TRUST
 		  
  By:   /s/ Phillip Frost, M.D.    
    Phillip Frost, M.D. Trustee    
       
 

 

 

                     
CUSIP No.
  
151167103 
   Page  
8 
   of   
8 
EXHIBIT INDEX
     
Exhibit    
Number   Description
 
    
99.1
  Share Transfer, Exchange and Contribution Agreement, dated July 25, 2007, by and among Cellular Technical Services Company, Inc., SafeStitch LLC and the members of SafeStitch LLC (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Issuer on July 31, 2007)
 
    
99.2
  Amendment to Share Transfer, Exchange and Contribution Agreement (incorporated herein by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by the Issuer on September 10, 2007).
 
    
99.3
  Form of Common Stock Warrant (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Issuer on September 10, 2007).
 
    
99.4
  Form of Lockup Agreement (incorporated herein by reference to Exhibit 2.4 to the Current Report on Form 8-K filed by the Issuer on July 31, 2007).

 

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