1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20459 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For The Quarterly Period Ended December 31, 1995 Commission File Number 0-18170 ----------------- ------- CRYOMEDICAL SCIENCES, INC. -------------------------- (Exact name of registrant as specified in its charter) Delaware 94-3076866 -------- ---------- (State of Incorporation) (IRS Employer I.D. Number) 1300 Piccard Drive Suite 102 Rockville, Maryland 20850 -------------------------- (Address of principal executive offices) Registrant's telephone number, including area code (301) 417-7070 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- 24,886,806 shares of Cryomedical Sciences, Inc. Common Stock, par value $.001 per share, were outstanding as of January 30, 1996.
2 CRYOMEDICAL SCIENCES, INC. FORM 10-Q QUARTER ENDED DECEMBER 31, 1995 INDEX <TABLE> <CAPTION> Part I. Financial Information Page No. -------- <S> <C> <C> Item 1. Financial Statements Consolidated Balance Sheets at December 31, 1995 and June 30, 1995 3 Consolidated Statements of Operations for the Three Months and Six Months ended December 31, 1995 and 1994. 4 Consolidated Statements of Cash Flows for the Six Months ended December 31, 1995 and 1994. 5 Notes to Consolidated Condensed Financial Statements 6-9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10-13 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders 14 Item 6. Exhibits and Reports on Form 8-K 14 Signatures 15 </TABLE> 2
3 CRYOMEDICAL SCIENCES, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Unaudited) <TABLE> <CAPTION> December 31, June 30, 1995 1995 ------------------ ---------------- <S> <C> <C> ASSETS CURRENT ASSETS: Cash and cash equivalents $ 728,040 $ 1,117,383 Short-term investments 100,310 100,310 Receivables - net of allowance for doubtful accounts of 1,635,960 3,178,032 $78,209 Inventories 2,463,205 2,628,532 Prepaid expenses and other 258,252 297,984 ------------- ------------ Total current assets 5,185,767 7,322,241 EQUIPMENT AND LEASEHOLD IMPROVEMENTS - less accumulated depreciation and amortization of $1,227,516 and $1,010,209 882,970 1,061,935 OTHER ASSETS 18,727 18,727 ------------- ------------ $ 6,087,464 $ 8,402,903 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 1,332,429 $ 2,096,696 Accrued settlement of stockholder class action suit - 100,000 Accrued vacation 137,001 177,831 Customer deposits 50,000 50,000 Warranty reserves 149,800 248,000 Extended warranties - current 822,963 842,738 Current portion of capital lease obligations and notes payable 21,833 31,083 ------------- ------------ Total current liabilities 2,514,026 3,546,348 EXTENDED WARRANTIES 501,187 848,286 DEFERRED RENT 15,051 3,690 CAPITAL LEASE OBLIGATIONS AND NOTES PAYABLE, net of current portion 14,986 22,654 ------------- ------------ Total liabilities 3,045,250 4,420,978 ------------- ------------ COMMITMENTS AND CONTINGENCIES: 9% SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK, Par value $.001, liquidation value $.50 per share; authorized, 621,000 shares; issued and outstanding, none - - STOCKHOLDERS' EQUITY: Preferred stock, par value $.001; authorized, 9,379,000 shares; issued and outstanding, none - - Common Stock, par value $.001; authorized, 50,000,000 shares; issued and outstanding, 24,879,383 and 24,845,631 shares 24,879 24,846 Additional paid-in capital 26,313,294 26,248,915 Accumulated deficit (23,253,863) (22,250,365) Notes receivable from officers, including accrued interest (42,096) (41,471) ------------- ------------ Total stockholders' equity 3,042,214 3,981,925 ------------- ------------ $ 6,087,464 $ 8,402,903 ============= ============ </TABLE> See notes to consolidated condensed financial statements. 3
4 CRYOMEDICAL SCIENCES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) <TABLE> <CAPTION> Three months ended Six months ended December 31, December 31, -------------------------------- ----------------------------- 1995 1994 1995 1994 -------------- -------------- -------------- -------------- <S> <C> <C> <C> <C> SALES & OTHER REVENUES $ 1,662,728 $ 4,590,413 $ 3,682,150 $ 7,896,370 COST OF SALES 732,154 2,200,344 1,639,676 3,820,197 ----------- ----------- ------------ ----------- GROSS PROFIT 930,574 2,390,069 2,042,474 4,076,173 ----------- ----------- ------------ ----------- OPERATING EXPENSES: Research and development 343,853 728,166 705,905 1,606,247 Sales and marketing 634,459 1,065,940 1,266,436 1,808,721 General and administrative 585,534 903,600 1,077,910 1,463,170 ----------- ----------- ------------ ----------- TOTAL OPERATING EXPENSES 1,563,846 2,697,706 3,050,251 4,878,138 ----------- ----------- ------------ ----------- OPERATING LOSS (633,272) (307,637) (1,007,777) (801,965) INTEREST INCOME, net of interest expense 2,502 18,647 4,280 29,188 ----------- ----------- ------------ ----------- NET LOSS $ (630,770) $ (288,990) $ (1,003,497) $ (772,777) =========== =========== ============ =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 24,863,350 24,690,243 24,858,707 24,573,748 =========== =========== ============ =========== NET LOSS PER SHARE $ (0.03) $ (0.01) $ (0.04) $ (0.03) =========== =========== ============ =========== </TABLE> See notes to consolidated condensed financial statements. 4
5 CRYOMEDICAL SCIENCES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) <TABLE> <CAPTION> Six months ended December 31, ---------------------------------------- 1995 1994 ----------------- ----------------- <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (1,003,497) $ (772,777) ------------- ------------ Adjustments to reconcile net loss to net cash used in operating activities: (Decrease) increase in warranty reserves (98,200) 43,600 Depreciation and amortization 217,307 206,202 Changes in assets and liabilities: Decrease (increase) in receivables 1,542,072 (417,379) Decrease in inventories 165,327 54,950 Decrease in prepaid expenses and other assets 39,731 64,035 Decrease in accounts payable, accrued expenses, and deferred rent (910,654) (36,584) (Decrease) increase in extended warranties (366,873) 259,875 Decrease in customer deposits - (10,000) ------------- ------------ Total Adjustments 588,710 164,699 ------------- ------------ NET CASH USED IN OPERATING ACTIVITIES (414,787) (608,078) ------------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of short-term investments - (100,310) Maturities of short-term investments - 97,424 Purchase of equipment (38,342) (173,268) ------------- ------------ NET CASH USED IN INVESTING ACTIVITIES (38,342) (176,154) ------------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Increase in notes receivable from officers (625) (938) Increase of notes payable - 41,372 Exercise of warrants - 81,860 Issuance of shares for Employee Stock Purchase Plan 20,311 - Exercise of Employee Stock Options 44,100 - Exercise of IPO Unit Purchase Options & underlying warrants - 429,990 -------------- ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 63,786 552,284 ------------- ------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (389,343) (231,948) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,117,383 2,426,467 ------------- ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 728,040 $ 2,194,519 ============= ============ SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 9,484 $ 4,435 ============= ============ </TABLE> See notes to consolidated condensed financial statements. 5
6 CRYOMEDICAL SCIENCES, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE PERIODS ENDED DECEMBER 31, 1995 AND 1994 A. GENERAL Cryomedical Sciences, Inc. ("CMS") and its wholly owned subsidiary Cryo Instruments, Inc. ("CII"), collectively referred to as the "Company," is engaged in the research, development, manufacturing and marketing of products for use in the field of hypothermic (low-temperature) medicine. The Consolidated Balance Sheet as of December 31, 1995, the Consolidated Statements of Operations for the three and six month periods ended December 31, 1995 and 1994, and the Consolidated Statements of Cash Flows for the six-month periods ended December 31, 1995 and 1994, 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 December 31, 1995, 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 consolidated financial statements be read in conjunction with the financial statements and notes thereto for the fiscal year ended June 30, 1995 included in the Company's Annual Report on Form 10-K for the year ended June 30, 1995. The results of operations for the periods ended December 31, 1995 are not necessarily indicative of the operating results anticipated for the fiscal year ending June 30, 1996. B. NET LOSS PER SHARE Net loss per share is based on the weighted average number of common shares outstanding during the three months and six months ended December 31, 1995 and 1994. No effect has been given to unexercised stock options or warrants because the effect would be antidilutive. 6
7 CRYOMEDICAL SCIENCES, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE PERIODS ENDED DECEMBER 31, 1995 AND 1994 (continued) C. INVENTORIES Inventories consist of the following: <TABLE> <CAPTION> December 31, 1995 June 30, 1995 ----------------- ------------- <S> <C> <C> Raw materials and purchased parts $ 1,486,500 $ 1,296,445 Work in process 505,789 628,302 Finished goods 616,220 789,090 Consignment inventory 53,706 53,706 ----------- ----------- 2,662,215 2,767,543 Less reserves (199,010) (139,011) ----------- ----------- $ 2,463,205 $ 2,628,532 =========== =========== </TABLE> D. CONTINGENCIES On October 26, 1995, the Company received 510(k) marketing clearance from the FDA for its CMS Urethral Warmer System ("Warmer") clearing the product for marketing in the United States. Subsequent to the quarter ended March 31, 1994, in which quarter the Company announced receipt of the correspondence from the FDA denying an earlier application by the Company for 510(k) premarket clearance of the Warmer, CMS AccuProbe System sales in the urological field slowed significantly. The Company believes that this was due, in part, to uncertainty regarding the status of the Warmer and the availability of alternatives. The Company believes that the use of alternative warming methods resulted in reports of increased complications related to the urethral warming procedures. The Company believes that these anecdotal reports of increased complications may have affected the rate of sales of AccuProbe Systems during the period ended December 31, 1995. However, the Company believes that the lack of uniform medical insurance reimbursement policies, which policies have not yet been established, was the most significant factor affecting sales of AccuProbe Systems in recent months. In April 1994, present or former stockholders of the Company filed several suits against the Company, its President and CEO and two other directors in the United States District Court for the District of Maryland. The suits were subsequently consolidated under Case No. AW-94-873, and a consolidated amended complaint was 7
8 CRYOMEDICAL SCIENCES, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE PERIODS ENDED DECEMBER 31, 1995 AND 1994 (continued) D. CONTINGENCIES (continued) filed. The plaintiffs sought to have the consolidated action designated as a class action on behalf of all persons who purchased the Company's stock between September 13, 1991 and April 4, 1994. The plaintiffs claimed that, during that period, the defendants inflated the market price of the Company's stock in violation of the federal securities laws and the common law. On April 26, 1995, the Court dismissed a major portion of the action against the Company and dismissed the plaintiffs' claims against the individual defendants in their entirety. In September 1995, the parties reached an agreement to settle the case. The settlement is subject to approval by the Court, which is scheduled to hold a hearing to consider this issue on February 15, 1996. Currently, the deadline for submitting claims is June 25, 1996. Pursuant to the agreement, a class consisting of all persons who purchased the Company's stock between September 13, 1991 and April 4, 1994 has been certified solely for settlement purposes. The agreement provides that, in return for a general release of all claims which members of the class may have against the Company and its past and present officers, directors, employees and other agents, the Company will pay $100,000 in cash (which payment has already been paid) and will issue shares of common stock of the Company with a market value of $350,000, based on the average closing price on the ten trading days prior to district court approval of the settlement. The Company accrued the entire $450,000 settlement cost of the stockholder class action suit as of June 30, 1995. The $350,000 of common stock to be issued was recorded as additional paid in capital at June 30, 1995. The plaintiffs' counsel intend to apply to the Court for an award of fees equal to approximately one third of the gross amount of the settlement proceeds, as well as for reimbursement of the out of pocket expenses they incurred during the course of litigation. In the event that the settlement is approved by the Court, the settlement proceeds, minus any amounts paid to the plaintiffs' counsel and the costs of administering the settlement, including the costs of notice to the class, will be distributed to those members of the class who submit timely claims, in proportion to the investment losses they have suffered on shares they purchased during the class period. Members of the class who did not wish to participate in the settlement were permitted to opt out of the class if they gave written notice postmarked no later than February 1, 1996. To date, the Company has received such notices from persons who purchased approximately 430,000 shares of the Company's stock during the class period. The Company has settled the litigation solely to avoid the expenses that would be involved in defending the suit between now and its conclusion. Those expenses were expected to exceed the amount of the cash consideration being paid in the settlement. The defendants have admitted no liability and continue to believe that the suits are without merit. In the event that the 8
9 settlement is not finally approved, or in the event that shareholders who elected to opt out of the class assert similar claims in a new action, the Company will continue to defend its position vigorously. On or about October 19, 1995, the Company was served with a complaint alleging gender bias which had been filed by a female former employee who claims that she was discriminated against with respect to her salary and also with respect to the decision to terminate her employment as part of a reduction in work force. The suit was filed in the Circuit Court for Montgomery County, Maryland and subsequently removed to the United States District Court for the District of Maryland. The claims are asserted under both Title VII of the Civil Rights Act of 1964 and the Equal Pay Act. The plaintiff is seeking reinstatement with back pay, as well as compensatory and punitive damages. The case is in the early stages of discovery. The Company intends to defend this case vigorously. E. TRANSACTIONS AFFECTING COMMON STOCK In November 1995 the Company issued 25,000 shares of Common Stock to a former officer of the Company in connection with the exercise of options from the Employee Stock Option Plan. F. SUBSEQUENT EVENT On January 17, 1996 the Company received $1,910,000 of net proceeds related to a convertible preferred stock sale to several foreign investors. According to the terms of the convertible preferred stock, investors may convert 50% of their shares into common stock forty days subsequent to the January 16, 1996 closing at a conversion rate determined by the average closing bid prices for five days immediately preceding the date the holder notifies the Company of their intention to convert preferred shares into common shares (the average of such closing bid prices being referred to as "average bid price"). If the average bid price is $2.00 or less, then the conversion price shall equal 82.5% of the average bid price. If the average bid price is $2.01 or more, the conversion price shall equal 80% of the average bid price. Investors may convert the balance of their preferred stock into common stock seventy-five days after the closing. Any shares of the convertible preferred stock outstanding on January 16, 1997, automatically shall be converted into Common Stock. 9
10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company is engaged in the research, development, manufacture and marketing of products for use in the field of hypothermic (low-temperature) medicine. The Company has developed a cryosurgical system, called the CMS AccuProbe(R) System (the "AccuProbe"), which is a sophisticated cryosurgical device designed to freeze and destroy unwanted (diseased) tissue. The initial clinical focus of physicians with respect to the AccuProbe has been in the fields of urology and general surgery, primarily to destroy tissue which cannot be removed surgically or in which typical surgery offers extensive adverse side effects. The Company plans to further test and market its AccuProbe in certain of the various fields for which the original 400 series device received clearance from the FDA in April 1991 and the 500 series received FDA clearance in December 1995. The CMS AccuProbe is cleared for marketing in the fields of dermatology, general surgery, neurosurgery, thoracic surgery, ENT, gynecology, oncology, proctology and urology. RESULTS OF OPERATIONS Sales and other operating revenues for the three and six months ended December 31, 1995 totaled $1,662,728 and $3,682,150, respectively, compared to $4,590,413 and $7,896,370, respectively, for the comparable periods of the prior fiscal year, representing decreases of 64% and 53%, respectively. The Company's operating revenues in the three months ended December 31, 1995 included sales of 3 CMS AccuProbe Systems, disposable probes and other accessories. Sales for the three months ended December 31, 1994 included 14 AccuProbe Systems, in addition to disposable probes and other accessory products. Operating revenues for the six months ended December 31, 1995 included sales of 9 AccuProbe Systems, disposable probes and other accessories compared to sales of 24 systems, disposable probes and other accessories in the comparable period of the prior fiscal year. The Company believes revenues in the three and six month periods ended December 31, 1995 reflect a decline in the number of AccuProbe systems sold due primarily to lack of formal Medicare reimbursement for urologic cryosurgery. Sales in each quarter are also subject to substantial variation, depending upon the success of marketing efforts and the timing of orders. The Company hopes that the separate FDA clearances of the CMS Urethral Warmer in October 1995 and of the AccuProbe 500 series in December 1995 will restore system, disposable probe and other accessory revenue to previous levels, although there can be no assurance of increased revenue from these sources. Through December 31, 1995, the Company has sold a total of 131 AccuProbe Systems since the product was introduced in June 1992. Included in sales and other operating revenues are ultrasound systems produced by third party manufacturers and sold in conjunction with certain AccuProbe Systems as a convenience to the customer. There was no ultrasound revenue for the three and six months ended December 31, 1995, compared to $552,488 and $672,288 respectively, for the comparable periods of the prior fiscal year. 10
11 Gross Profits for all products for the three months ended December 31, 1995 totaled $930,574, or 56% of sales, compared to gross profits of $2,390,069, or 52% of sales, for the three months ended December 31, 1994. For the six months ended December 31, 1995 gross profits totaled $2,042,474, or 55% of sales, compared to gross profits of $4,076,173, or 52% of sales, for the comparable period of the prior fiscal year. Gross profits as a percent of sales increased in the three and six months ended December 31, 1995 as compared to the comparable periods of the prior fiscal year as cost reductions were continued by the Company. Research and development expenses for the three months ended December 31, 1995 totaled $343,853, a decrease of 53% compared to $728,166 for the comparable period of the prior fiscal year. Research and development expenses decreased for the six months ended December 31, 1995 totaled $705,905, a decrease of 56% compared to $1,606,247, in the comparable period of the prior fiscal year. Research and development expenses decreased during the three and six month periods ended December 31, 1995 due to a reduction in staffing and a temporary reduction of research grants related to the development of the Company's hypothermic solutions, reflecting cost reduction measures effected by the Company. Sales and marketing expenses for the three months ended December 31, 1995 totaled $634,459, a decrease of 40% compared to $1,065,940 for the comparable period of the prior fiscal year. Sales and marketing expenses for the six months ended December 31,1995 totaled $1,266,436, a decrease of 30% compared to $1,808,721 in the comparable period of the prior fiscal year. Sales and marketing expenses decreased during these periods due to a reduction in staffing and reduced marketing activity. General and administrative expenses for three months ended December 31, 1995 totaled $585,534, a decrease of 35% compared to $903,600 for the comparable period of the prior fiscal year. General and administrative expenses for the six months ended December 31, 1995 totaled $1,077,910, a decrease of 26% compared to $1,463,170 for the comparable period of the prior fiscal year. General and administrative expenses decreased in the more recent periods due to a reduction in staffing and reduced professional fees. As a result of the foregoing decrease in operating expenses, which were offset by decreased gross profits from sales, the Company sustained net losses of $630,770 and $1,003,497, respectively, for the three and six months ended December 31, 1995 compared to net losses of $288,990 and $772,777, respectively, in the comparable periods of the prior fiscal year. Sales of the AccuProbe are effected by the level of reimbursement by public and private insurers in connection with procedures in which the AccuProbe is utilized. The availability of consistent, uniform insurance reimbursement guidelines for hospitals and physicians is an important factor often considered by some potential customers when making a decision regarding the purchase of any new medical device, including the AccuProbe System. Reimbursement of hospitals and urologists by public and private 11
12 insurers such as Medicare and Blue Cross and Blue Shield is a necessary part of gaining general acceptance for use of the AccuProbe for urological cryosurgery. Currently Medicare considers urological cryosurgical procedures to be investigational and excludes such procedures from reimbursement, although Medicare carriers may pay for such procedures if the carriers decide that the use of the AccuProbe is appropriate for the patients involved. No national payment guidelines for such surgery have yet been established by either Medicare's Health Care Financing Administration ("HCFA") or by the National Blue Cross and Blue Shield Association. Therefore, insurer's reimbursement decisions are made on an insurer-by-insurer or case-by-case basis. While payments received by customers vary significantly by region and insurer, widespread formal reimbursement acceptance has yet to be achieved. When insurance coverage is not available, patients may either elect to pay for treatment themselves or undergo traditional therapies which are covered by their insurers. The Company cannot predict if or when national coverage guidelines for Medicare, Blue Cross and Blue Shield or any other insurance carriers will be instituted for this form of surgery. The Company believes the uncertainty and added efforts required for the Company's customers to secure payment is impacting sales growth and utilization of AccuProbe Systems to some degree and, if so, may continue to do so unless and until formal national coverage guidelines are established. In view of the operating losses suffered by the Company and the level of the Company's current liquid resources (see "Liquidity and Capital Resources" below), in May and October 1995 the Company undertook certain actions to reduce expense levels, as described above. LIQUIDITY AND CAPITAL RESOURCES At December 31, 1995, the Company had cash, cash equivalents, and short-term investments totaling $828,350 and working capital of $2,671,741, as compared to $1,217,693 and $3,775,893, respectively, at June 30, 1995. The Company's cash and working capital positions decreased from June 30, 1995 due primarily to the net loss of $1,003,497 sustained by the Company for the six months ended December 31, 1995. Subsequent to December 31, 1995, the Company received $1,910,000 of net proceeds from a convertible preferred stock sale to several foreign investors. The proceeds from this offering will be utilized for working capital and to finance the introduction of the Company's new AccuProbe 500 series. Capital expenditures for leasehold improvements, furniture and equipment totaled $38,342 in the six months ended December 31, 1995, compared to $173,268 in the comparable period of the prior fiscal year. The Company has budgeted $485,000 for additional equipment and furniture in the year ending June 30, 1996. The Company expects to incur substantial expenditures over the remainder of fiscal 1995 and in fiscal 1996 related to research, development, manufacturing and testing of its products and for sales and marketing efforts and other operating expenses. The Company's management believes that its current cash and working capital position will be sufficient to fund the operations of the Company for the next 12 months dependent, in part, on the level of sales revenues achieved, the level of sales and marketing activity engaged 12
13 in by the Company, and the amounts of research funded by the Company. However, the Company may pursue various forms of short term financing in addition to the recently completed equity financing. Except for the sale of its products, the Company has no other major sources of liquidity and has no commitments with regard to obtaining any additional funds. 13
14 CRYOMEDICAL SCIENCES, INC. PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders On January 8, 1996 the Company held its Annual Meeting of Stockholders. The Stockholders voted on and approved the following: 1. The election of the following individuals to serve as Directors until the next annual meeting and until their successors are duly elected and qualified: J. J. Finkelstein Howard S. Breslow Sam Carl Robert A. Schoellhorn Henry T. Pietraszek J. Donald Hill 2. The ratification of an amendment to the Company's 1988 Stock Option Plan to increase the number of shares issuable thereunder to 2,700,000. In this connection, 14,597,389 shares were voted for ratification, 1,856,013 shares were voted against ratification, and 246,024 abstained. 3. The ratification of the selection by the Board of Directors of Deloitte & Touche to serve as Independent Auditors for the fiscal year ended June 30, 1996. In this connection, 19,590,916 shares were voted for ratification, 122,066 shares were voted against ratification, and 149,485 shares abstained. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K Subsequent to December 31, 1995 the Company filed one current report on Form 8-K dated January 16, 1996. Item: Announcement of convertible preferred stock sale to several foreign investors. 14
15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Cryomedical Sciences, Inc. ---------------------------------------------- (Registrant) Date: February 9, 1996 /s/J. J. Finkelstein ---------------------------------------------- J. J. Finkelstein President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) 15