UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
| x | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2004
OR
| ¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to .
Commission file number: 000–33001
NATUS MEDICAL INCORPORATED
(Exact name of Registrant as specified in its charter)
| Delaware | 77–0154833 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
1501 Industrial Road, San Carlos, California 94070
(Address of principal executive offices, including zip code)
(650) 802–0400
(Registrant’s Telephone Number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value
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 requirements for the past 90 days. Yes x No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ¨ No x
As of June 30, 2004, the last business day of Registrant’s most recently completed second fiscal quarter there were 16,752,117 shares of Registrant’s common stock outstanding, and the aggregate market value of such shares held by non-affiliates of Registrant (based upon the closing sale price of such shares on the Nasdaq National Market on June 30, 2004) was approximately $68,507,000. Shares of Registrant’s common stock held by each executive officer and director and by each entity that owns 5% or more of Registrant’s outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
On March 15, 2005, there were 17,170,612 shares of Registrant’s common stock, $0.001 par value, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The Registrant has incorporated by reference, into Part III of this Form 10-K, portions of its Proxy Statement for the 2005 Annual Meeting of Stockholders.
EXPLANATORY NOTE
We are amending our Form 10-K for the year ended December 31, 2004 (“Form 10-K”) to correct information contained in Item 10 with respect to Section 16(a) beneficial reporting compliance, which information was incorporated by reference to our Proxy Statement for the 2005 Annual Meeting of Stockholders and to correct several typographical errors in the certifications of the principal executive officer and principal financial officer of the Registrant as filed pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. The corrected certifications, filed as Exhibit 32.1 with this amendment, supersede Exhibit 32.1 as initially filed with the Form 10-K.
Except as discussed above, we have not modified or updated disclosures presented in the original annual report on Form 10-K in this Form 10-K/A. Accordingly, this Form 10-K/A does not reflect events occurring after the filing of our original Form 10-K or modify or update those disclosures affected by subsequent events. Information not affected by this amendment is unchanged and reflects the disclosures made at the time of the original filing of the Form 10-K on March 30, 2005. This Form 10-K/A should be read in conjunction with the original Form 10-K and the filings made with the Securities and Exchange Commission subsequent to the filing of the original Form 10-K, including any amendments to any such filings.
2
ITEM 10. Directors and Executive Officers
The information required by this item concerning our directors is incorporated by reference to our Proxy Statement including but not necessarily limited to the section entitledElection of Directors. Certain information required by this item concerning executive officers is set forth in Part I of this Report inBusiness—Executive Officers.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers, directors and persons who own more than 10% of the Company’s common stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). The Company recently undertook a review of the Section 16(a) reports filed on behalf of each individual who served as a director or executive officer of the Company during the fiscal year ended December 31, 2004 to determine whether all of their reportable transactions in the Company’s common stock were timely reported and to ensure reporting of all of their beneficial holdings. The review revealed that while all of the required transactions had been reported, the reports listed below were not timely filed. In most cases, the transactions were non-market transactions such as option grants by the Company or the cash exercise of previously granted stock options.
The following late reports were filed under Section 16(a) since the beginning of the fiscal year ended December 31, 2004:
Dr. D. Christopher Chung, a Vice President, filed one late Form 4 reporting the award of stock options.
Ms. Doris Engibous, a director, filed one late Form 4 reporting the award of stock options.
Mr. Mark Foster, a former Vice President, filed one late Form 4 reporting the award of stock options.
Mr. James Hawkins, President and Chief Executive Officer, filed one late Form 4 reporting the award of stock options.
Mr. Ken Ludlum, a director, filed two late Forms 4 each reporting cash exercises of stock options.
Mr. William Mince, a Vice President, filed one late Form 4 reporting the award of stock options.
Mr. William Moore, a director, filed three late Forms 4 each reporting the sale of shares of common stock.
Mr. Steven Murphy, a Vice President, filed one late Form 4 reporting the award of stock options.
Mr. George Ryan, a former Vice President, filed one late Form 4 reporting the award of stock options.
Mr. Kenneth Traverso, a Vice President, filed one late Form 4 reporting the award of stock options.
Audit Committee and Audit Committee Financial Expert
The Audit Committee of our Board of Directors is an “audit committee” for purposes of Section 3(a)(58) of the Exchange Act. The members of the Audit Committee are Ken Ludlum, Robert A. Gunst, and Mark D. Michael. Our Board of Directors has determined that Ken Ludlum is our designated audit committee financial expert. All of the members of our audit committee are considered “independent” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.
Code of Conduct and Ethics
We have a code of conduct and ethics that applies to all of our employees, including our principal executive officer, principal financial officer, and principal accounting officer or controller. This code of conduct and ethics is posted on our internet website. The internet address for our website iswww.natus.com, and the code of conduct and ethics may be found in the “Governance” section of our “Investor” webpage.
We intend to satisfy the disclosure requirement under Item 10 of Form 8-K regarding certain amendments to, or waivers from, provisions of this code of conduct and ethics by posting such information on our website, at the address and location specified above, or as otherwise required by The NASDAQ Stock Market.
3
ITEM 15. Exhibits, Financial Statement Schedules, and Reports On Form 8–K
(a)(1) Financial Statements
The following consolidated financial statements are filed as part of this Report:
| Page | ||
Reports of Independent Registered Public Accounting Firm | F-2 | |
Consolidated Balance Sheets | F-4 | |
Consolidated Statements of Operations | F-5 | |
Consolidated Statements of Stockholders’ Equity (Deficit) and Comprehensive Income (Loss) | F-6 | |
Consolidated Statements of Cash Flows | F-7 | |
Notes to Consolidated Financial Statements | F-8 |
(a)(2) Financial Statement Schedules
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31, 2004, 2003 and 2002
(in thousands)
| Balance at Beginning of Period | Additions Charged to Expense | Deductions | Balance at End of Period | ||||||||||
Year ended December 31, 2004 | |||||||||||||
Allowance for doubtful accounts | $ | 395 | $ | 82 | $ | (5 | ) | $ | 472 | ||||
Inventory reserve | 830 | 529 | (816 | ) | 543 | ||||||||
Accrued warranty costs | 298 | 83 | (128 | ) | 253 | ||||||||
Year ended December 31, 2003 | |||||||||||||
Allowance for doubtful accounts | 250 | 201 | (56 | ) | 395 | ||||||||
Inventory reserve | 695 | 179 | (44 | ) | 830 | ||||||||
Accrued warranty costs | 200 | 192 | (94 | ) | 298 | ||||||||
Year ended December 31, 2002 | |||||||||||||
Allowance for doubtful accounts | 239 | 64 | (53 | ) | 250 | ||||||||
Inventory reserve | 155 | 540 | — | 695 | |||||||||
Accrued warranty costs | 542 | 38 | (380 | ) | 200 | ||||||||
(a)(3) Exhibits
| Exhibit No. | Exhibit Title | ||
| 3.1.1 | (b) | Certificate of Incorporation | |
| 3.1.2 | (c) | Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock of the Registrant | |
| 3.2 | (b) | Bylaws of the Registrant | |
| 4.2 | (d) | Preferred Stock Rights Agreement, dated as of October 8, 2002, between Registrant and Equiserve Trust Company, N.A., including the form of Rights Certificate and Summary of Rights attached thereto as Exhibits B and C, respectively | |
| 4.2.1 | (e) | Amendment No. 1 to Preferred Stock Rights Agreement dated as of February 14, 2003 between the Registrant and Equiserve Trust Company, N.A. | |
4
| Exhibit No. | Exhibit Title | ||
| 4.3 | (e) | Voting Agreement dated February 14, 2003 between the Registrant and Perry Corp. | |
| 10.1 | (b) | Form of Indemnification Agreement between the Registrant and each of its directors and officers | |
| 10.2 | (b) | Amended and Restated 1991 Stock Option Plan | |
| 10.2.1 | (b) | Form of Option Agreement under the 1991 Stock Option Plan | |
| 10.3 | (b) | 2000 Stock Option Plan | |
| 10.3.1 | (b) | Form of Option Agreement under the 2000 Stock Option Plan | |
| 10.4 | (b) | 2000 Director Option Plan | |
| 10.4.1 | (b) | Form of Option Agreement under 2000 Director Option Plan | |
| 10.5 | (b) | 2000 Employee Stock Purchase Plan and form of subscription agreement thereunder | |
| 10.7 | (b)† | Patent License Agreement dated June 30, 1998 between Registrant and The Leland Stanford Junior University | |
| 10.8 | (b) | Lease Agreement dated August 24, 1998 between Registrant and San Carlos Co-Tenancy | |
| 10.8.1 | (f) | Amendment to Lease Agreement dated August 24, 1998 between Registrant and San Carlos Co-Tenancy | |
| 10.9 | (b) | Promissory Note dated March 24, 1999 between Scott Valley Bank and Tim C. Johnson | |
| 10.9.1 | (b) | Assignment of Deposit Account dated March 24, 1999 between Registrant, Scott Valley Bank and Tim C. Johnson | |
| 10.9.2 | (b) | Security Agreement dated March 26, 1999 between Registrant and Tim C. Johnson | |
| 10.10 | (b)† | Capital Equipment Supplier Agreement dated June 25, 1999 between the Registrant and Novation, LLC | |
| 10.10.1 | (f)† | Letter Amendment dated January 8, 2003 to Capital Equipment Supplier Agreement dated June 25, 1999 between the Registrant and Novation, LLC | |
| 10.10.2 | (g)† | Letter Amendment dated February 5, 2004 to Capital Equipment Supplier Agreement dated June 25, 1999 between the Registrant and Novation, LLC | |
| 10.11 | Reserved | ||
| 10.14 | (b)† | Memorandum of Understanding dated December 7, 2000 between Registrant and the Ludlow Company LP | |
| 10.15 | (b) | 2000 Supplemental Stock Option Plan | |
| 10.15.1 | (b) | Form of Option Agreement for 2000 Supplemental Stock Option Plan | |
| 10.16 | Reserved | ||
| 10.18 | Reserved | ||
| 10.19 | Reserved | ||
| 10.20 | Reserved | ||
| 10.21 | Reserved | ||
| 10.22 | Reserved | ||
| 10.23 | (f) | Employment Agreement dated as of November 18, 2002 between Registrant and Tim C. Johnson | |
| 10.24 | (f) | Form of Employment Agreement between the Registrant and each of its executive officers | |
5
| Exhibit No. | Exhibit Title | ||
| 10.25 | (g) | Severance Agreement and Release dated May 30, 2003 between the Registrant and Glenn Bauer | |
| 10.26 | (g)† | Transition Agreement and Release dated January 30, 2004 between the Registrant and Tim C. Johnson | |
| 10.27 | (g) | Rent contract effective November 21, 2003 between Natus Japan and Maekawa Shikenki Seisakusho (Japanese to English translation) | |
| 10.28 | (h) | Employment Agreement between the Registrant and James B. Hawkins dated April 12, 2004 | |
| 10.29 | (i) | Agreement and General Release dated July 30, 2004 between the Registrant and George Ryan | |
| 10.30 | (i) | Agreement and General Release dated July 30, 2004 between the Registrant and Mark Foster | |
| 16.1 | (g) | Letter regarding change in certifying accountants | |
| 17.1 | (a) | Resignation letter of William New, Jr., M.D., Ph.D. to the Company dated December 1, 2004 | |
| 21.1 | (b) | Subsidiaries | |
| 23.1 | (a) | Consent of Independent Registered Public Accounting Firm | |
| 23.2 | (a) | Consent of Independent Registered Public Accounting Firm | |
| 24.1 | (a) | Power of Attorney (see page 58) | |
| 31.1 | (a) | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | (a) | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.3 | * | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.4 | * | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | * | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U. S. C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| * | Filed herewith. |
| † | Portions of this agreement have been omitted pursuant to a request for confidential treatment and the omitted portions have been filed with the Securities and Exchange Commission. |
| (a) | Filed with the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004 as filed with the Securities and Exchange Commission on March 30, 2005. |
| (b) | Incorporated by reference to the exhibit bearing the same number filed with the Registrant’s Registration Statement on Form S-1 (Registration Statement 333-39891), which the Securities and Exchange Commission declared effective on July 19, 2001. |
| (c) | Incorporated by reference to the exhibit bearing the same number filed with the Registrant’s Report on Form 8-A as declared effective by the Securities and Exchange Commission on February 25, 2003. |
| (d) | Incorporated by reference to the exhibit filed with the amendment to the Registrant’s Registration Statement on Form 8-A on October 8, 2002. |
| (e) | Incorporated by reference to the exhibit filed with the Registrant’s Report on Form 8-K as filed with the Securities and Exchange Commission on February 25, 2003. |
| (f) | Incorporated by reference to the exhibit filed with the Registrant’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 27, 2003. |
| (g) | Incorporated by reference to the exhibit filed with the Registrant’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 8, 2004. |
| (h) | Incorporated by reference to the exhibit filed with the Registrant’s Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on May 13, 2004. |
| (i) | Incorporated by reference to the exhibit filed with the Registrant’s Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on August 13, 2004. |
(c) Exhibits
See Item 15(a)(3) above.
(d) Financial Statement Schedules
See Item 15(a)(2) above.
6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to its Annual Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized on July 1, 2005.
| NATUS MEDICAL INCORPORATED | ||
| By | /S/ JAMES B. HAWKINS | |
James B. Hawkins Chief Executive Officer, President, and Director (Principal Executive Officer) | ||
| By | /S/ STEVEN J. MURPHY | |
Steven J. Murphy Vice President Finance (Principal Financial and Accounting Officer) | ||
7
EXHIBIT INDEX
| Exhibit No. | Exhibit Title | ||
| 3.1.1 | (b) | Certificate of Incorporation | |
| 3.1.2 | (c) | Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock of the Registrant | |
| 3.2 | (b) | Bylaws of the Registrant | |
| 4.2 | (d) | Preferred Stock Rights Agreement, dated as of October 8, 2002, between Registrant and Equiserve Trust Company, N.A., including the form of Rights Certificate and Summary of Rights attached thereto as Exhibits B and C, respectively | |
| 4.2.1 | (e) | Amendment No. 1 to Preferred Stock Rights Agreement dated as of February 14, 2003 between the Registrant and Equiserve Trust Company, N.A. | |
| 4.3 | (e) | Voting Agreement dated February 14, 2003 between the Registrant and Perry Corp. | |
| 10.1 | (b) | Form of Indemnification Agreement between the Registrant and each of its directors and officers | |
| 10.2 | (b) | Amended and Restated 1991 Stock Option Plan | |
| 10.2.1 | (b) | Form of Option Agreement under the 1991 Stock Option Plan | |
| 10.3 | (b) | 2000 Stock Option Plan | |
| 10.3.1 | (b) | Form of Option Agreement under the 2000 Stock Option Plan | |
| 10.4 | (b) | 2000 Director Option Plan | |
| 10.4.1 | (b) | Form of Option Agreement under 2000 Director Option Plan | |
| 10.5 | (b) | 2000 Employee Stock Purchase Plan and form of subscription agreement thereunder | |
| 10.7 | (b)† | Patent License Agreement dated June 30, 1998 between Registrant and The Leland Stanford Junior University | |
| 10.8 | (b) | Lease Agreement dated August 24, 1998 between Registrant and San Carlos Co-Tenancy | |
| 10.8.1 | (f) | Amendment to Lease Agreement dated August 24, 1998 between Registrant and San Carlos Co-Tenancy | |
| 10.9 | (b) | Promissory Note dated March 24, 1999 between Scott Valley Bank and Tim C. Johnson | |
| 10.9.1 | (b) | Assignment of Deposit Account dated March 24, 1999 between Registrant, Scott Valley Bank and Tim C. Johnson | |
| 10.9.2 | (b) | Security Agreement dated March 26, 1999 between Registrant and Tim C. Johnson | |
| 10.10 | (b)† | Capital Equipment Supplier Agreement dated June 25, 1999 between the Registrant and Novation, LLC | |
| 10.10.1 | (f)† | Letter Amendment dated January 8, 2003 to Capital Equipment Supplier Agreement dated June 25, 1999 between the Registrant and Novation, LLC | |
| 10.10.2 | (g)† | Letter Amendment dated February 5, 2004 to Capital Equipment Supplier Agreement dated June 25, 1999 between the Registrant and Novation, LLC | |
| 10.11 | Reserved | ||
| 10.14 | (b)† | Memorandum of Understanding dated December 7, 2000 between Registrant and the Ludlow Company LP | |
| 10.15 | (b) | 2000 Supplemental Stock Option Plan | |
8
| Exhibit No. | Exhibit Title | ||
| 10.15.1 | (b) | Form of Option Agreement for 2000 Supplemental Stock Option Plan | |
| 10.16 | Reserved | ||
| 10.18 | Reserved | ||
| 10.19 | Reserved | ||
| 10.20 | Reserved | ||
| 10.21 | Reserved | ||
| 10.22 | Reserved | ||
| 10.23 | (f) | Employment Agreement dated as of November 18, 2002 between Registrant and Tim C. Johnson | |
| 10.24 | (f) | Form of Employment Agreement between the Registrant and each of its executive officers | |
| 10.25 | (g) | Severance Agreement and Release dated May 30, 2003 between the Registrant and Glenn Bauer | |
| 10.26 | (g)† | Transition Agreement and Release dated January 30, 2004 between the Registrant and Tim C. Johnson | |
| 10.27 | (g) | Rent contract effective November 21, 2003 between Natus Japan and Maekawa Shikenki Seisakusho (Japanese to English translation) | |
| 10.28 | (h) | Employment Agreement between the Registrant and James B. Hawkins dated April 12, 2004 | |
| 10.29 | (i) | Agreement and General Release dated July 30, 2004 between the Registrant and George Ryan | |
| 10.30 | (i) | Agreement and General Release dated July 30, 2004 between the Registrant and Mark Foster | |
| 16.1 | (g) | Letter regarding change in certifying accountants | |
| 17.1 | (a) | Resignation letter of William New, Jr., M.D., Ph.D. to the Company dated December 1, 2004 | |
| 21.1 | (b) | Subsidiaries | |
| 23.1 | (a) | Consent of Independent Registered Public Accounting Firm | |
| 23.2 | (a) | Consent of Independent Registered Public Accounting Firm | |
| 24.1 | (a) | Power of Attorney (see page 58) | |
| 31.1 | (a) | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | (a) | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.3 | * | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.4 | * | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | * | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U. S. C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| * | Filed herewith. |
| † | Portions of this agreement have been omitted pursuant to a request for confidential treatment and the omitted portions have been filed with the Securities and Exchange Commission. |
| (a) | Filed with the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004 as filed with the Securities and Exchange Commission on March 30, 2005. |
| (b) | Incorporated by reference to the exhibit bearing the same number filed with the Registrant’s Registration Statement on Form S-1 (Registration Statement 333-39891), which the Securities and Exchange Commission declared effective on July 19, 2001. |
| (c) | Incorporated by reference to the exhibit bearing the same number filed with the Registrant’s Report on Form 8-A as declared effective by the Securities and Exchange Commission on February 25, 2003. |
| (d) | Incorporated by reference to the exhibit filed with the amendment to the Registrant’s Registration Statement on Form 8-A on October 8, 2002. |
9
| (e) | Incorporated by reference to the exhibit filed with the Registrant’s Report on Form 8-K as filed with the Securities and Exchange Commission on February 25, 2003. |
| (f) | Incorporated by reference to the exhibit filed with the Registrant’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 27, 2003. |
| (g) | Incorporated by reference to the exhibit filed with the Registrant’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 8, 2004. |
| (h) | Incorporated by reference to the exhibit filed with the Registrant’s Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on May 13, 2004. |
| (i) | Incorporated by reference to the exhibit filed with the Registrant’s Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on August 13, 2004 |
10
