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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
4400 Biscayne Boulevard
Maimi, Florida 33137
Telephone: (305) 575-6015
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
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. |
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| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) |
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| (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 |
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| 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). |