##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-Q/A








(Amendment No. 1)





|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005                                               
|          
|OR        
|          
|o          |  | 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: 001-15063


Endocare, Inc.


(Exact name of Registrant as Specified in Its Charter)


|                         |  |                           
|------------------------ |  | --------------------------
|DELAWARE                 |  | 33-0618093                
|(State of Incorporation) |  | (I.R.S. Employer I.D. No.)

201 TECHNOLOGY DRIVE, IRVINE, CALIFORNIA 92618


(Address of Principal Executive Office, Including Zip
Code)


(949) 450-5400


(Registrants Telephone Number, Including
Area Code)





þ o þ o





þ o












---










Endocare, Inc.


INDEX





|                                  |  |                                                                                                      |    |  |    | 
|--------------------------------- |  | ---------------------------------------------------------------------------------------------------- | -- |  | -- | 
|Explanatory Note                  |  |                                                                                                      | 3  | 
|                                 
|Part I. Financial
    Information
|Item 1.                           |  | Condensed Consolidated Financial Statements
    (Unaudited)                                          |    |  | 4  | 
|                                  |  | Condensed Consolidated Statements of
    Operations  Three months ended March 31, 2005
    and 2004 |    |  | 4  | 
|                                  |  | Condensed Consolidated Balance
    Sheets  March 31, 2005 and December 31,
    2004                 |    |  | 5  | 
|                                  |  | Condensed Consolidated Statements of Cash
    Flows  Three months ended March 31, 2005 and
    2004 |    |  | 6  | 
|                                  |  | Notes to Condensed Consolidated Financial
    Statements                                             |    |  | 7  | 
|Item 2.                           |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations            |    |  | 14 | 
|Item 4.                           |  | Controls and Procedures                                                                              |    |  | 18 | 
|Part II. Other Information       
|Item 6.                           |  | Exhibits                                                                                             |    |  | 19 | 
|Signatures                        |  |                                                                                                      | 21 | 
|EXHIBIT 31.1                     
|EXHIBIT 31.2                     
|EXHIBIT 32.1                     
|EXHIBIT 32.2                     






2



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EXPLANATORY NOTE










3



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PART I  FINANCIAL INFORMATION







|        |                                            
|------- | -------------------------------------------
|Item 1. | Condensed Consolidated Financial Statements

ENDOCARE, INC. AND SUBSIDIARIES





CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS





|                                                    |                                     |                       |        |       |      |   |        |        | 
|--------------------------------------------------- | ----------------------------------- | --------------------- | ------ | ----- | ---- | - | ------ | ------ | 
|                                                    |                                     | Three Months Ended    |       
|                                                    |                                     | March 31,             |       
|                                                    |                                     |                       |       
|                                                    |                                     | 2005                  |        |       | 2004 |  
|                                                    |                                     |                       |        |       |      |  
|                                                    |                                     | (Restated)            |        |       |     
|                                                    |                                     | (In thousands, except |       
|                                                    |                                     | per share data)       |       
|                                                    |                                     | (Unaudited)           |       
|Total revenues                                      |                                     | $                     | 9,126  |       |      | $ | 7,382  |       
|Costs and expenses:                                 |                                     |                       |        |       |      |   |        |       
|                                                    | Cost of revenues                    |                       |        | 5,067 |      |   |        | 4,234  | 
|                                                    | Research and development            |                       |        | 321   |      |   |        | 536    | 
|                                                    | Selling, general and administrative |                       |        | 8,288 |      |   |        | 11,180 | 
|                                                    | Impairment charge                   |                       |        | (583  | )    |   |        |       | 
|                                                    |                                     |                       |        |       |      |  
|Total costs and expenses                            |                                     |                       | 13,093 |       |      |   | 15,950 |       
|                                                    |                                     |                       |        |       |      |  
|Loss from operations                                |                                     |                       | (3,967 | )     |      |   | (8,568 | )     
|Interest income (expense), net                      |                                     |                       | (539   | )     |      |   | 45     |       
|                                                    |                                     |                       |        |       |      |  
|Loss before minority interests                      |                                     |                       | (4,506 | )     |      |   | (8,523 | )     
|Minority interests                                  |                                     |                       |       |       |      |   | (100   | )     
|                                                    |                                     |                       |        |       |      |  
|Net loss                                            |                                     | $                     | (4,506 | )     |      | $ | (8,623 | )     
|                                                    |                                     |                       |        |       |      |  
|Net loss per share  basic and diluted              |                                     | $                     | (0.18  | )     |      | $ | (0.36  | )     
|Weighted average shares of common stock outstanding |                                     |                       | 25,601 |       |      |   | 24,088 |       






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ENDOCARE, INC. AND SUBSIDIARIES





CONDENSED CONSOLIDATED BALANCE SHEETS





|                                     |                                                                                                                                                                    |                           |          |        |              |  |          |        |        | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------- | -------- | ------ | ------------ |  | -------- | ------ | ------ | 
|                                     |                                                                                                                                                                    | March 31,                 |          |        | December 31, | 
|                                     |                                                                                                                                                                    | 2005                      |          |        | 2004         | 
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|                                     |                                                                                                                                                                    | (Unaudited)               |          |        |             
|                                     |                                                                                                                                                                    | (Restated)                |          |        |             
|                                     |                                                                                                                                                                    | (In thousands, except     |         
|                                     |                                                                                                                                                                    | per share data)           |         
|ASSETS                              
|Current assets:                      |                                                                                                                                                                    |                           |          |        |              |  |          |       
|                                     | Cash and cash equivalents                                                                                                                                          |                           | $        | 17,490 |              |  | $        | 7,985  |       
|                                     | Accounts receivable, net                                                                                                                                           |                           |          | 4,236  |              |  |          | 3,904  |       
|                                     | Inventories, net                                                                                                                                                   |                           |          | 3,253  |              |  |          | 3,175  |       
|                                     | Prepaid expenses and other current assets                                                                                                                          |                           |          | 1,199  |              |  |          | 1,651  |       
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|                                     |                                                                                                                                                                    | Total current assets      |          |        | 26,178       |  |          |        | 16,715 | 
|                                     | Property and equipment, net                                                                                                                                        |                           |          | 2,612  |              |  |          | 3,139  |       
|                                     | Goodwill                                                                                                                                                           |                           |          | 4,552  |              |  |          | 4,552  |       
|                                     | Intangibles, net                                                                                                                                                   |                           |          | 8,197  |              |  |          | 8,560  |       
|                                     | Investments and other assets                                                                                                                                       |                           |          | 1,039  |              |  |          | 1,409  |       
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|                                     |                                                                                                                                                                    | Total assets              |          | $      | 42,578       |  |          | $      | 34,375 | 
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY
|Current liabilities:                 |                                                                                                                                                                    |                           |          |        |              |  |          |       
|                                     | Accounts payable                                                                                                                                                   |                           | $        | 2,957  |              |  | $        | 2,636  |       
|                                     | Accrued compensation                                                                                                                                               |                           |          | 3,118  |              |  |          | 3,708  |       
|                                     | Other accrued liabilities                                                                                                                                          |                           |          | 8,190  |              |  |          | 10,391 |       
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|                                     |                                                                                                                                                                    | Total current liabilities |          |        | 14,265       |  |          |        | 16,735 | 
|Common stock warrants                |                                                                                                                                                                    |                           | 6,331    |        |              |  |         |       
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|                                     |                                                                                                                                                                    | Total liabilities         |          |        | 20,596       |  |          |        | 16,735 | 
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|Minority interests                   |                                                                                                                                                                    |                           |         |        |              |  | 214      |       
|Stockholders equity:                |                                                                                                                                                                    |                           |          |        |              |  |          |       
|                                     | Preferred stock, $.001 par value; 1,000 shares
    authorized; none issued and outstanding                                                                         |                           |          |       |              |  |          |       |       
|                                     | Common stock, $.001 par value; 50,000 shares
    authorized; 29,988 and 24,342 issued and outstanding as of
    March 31, 2005 and December 31, 2004, respectively |                           |          | 30     |              |  |          | 24     |       
|Additional paid-in capital           |                                                                                                                                                                    |                           | 178,456  |        |              |  | 169,400  |       
|Accumulated deficit                  |                                                                                                                                                                    |                           | (156,504 | )      |              |  | (151,998 | )     
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|                                     | Total stockholders equity                                                                                                                                         |                           |          | 21,982 |              |  |          | 17,426 |       
|                                     |                                                                                                                                                                    |                           |          |        |              | 
|                                     | Total liabilities and stockholders equity                                                                                                                         |                           | $        | 42,578 |              |  | $        | 34,375 |       
|                                     |                                                                                                                                                                    |                           |          |        |              | 






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ENDOCARE, INC. AND SUBSIDIARIES





CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS





|                                      |                                                                            |                    |        |        |      |   |         |        |  
|------------------------------------- | -------------------------------------------------------------------------- | ------------------ | ------ | ------ | ---- | - | ------- | ------ | -
|                                      |                                                                            | Three Months Ended |       
|                                      |                                                                            | March 31,          |       
|                                      |                                                                            |                    |       
|                                      |                                                                            | 2005               |        |        | 2004 |  
|                                      |                                                                            |                    |        |        |      |  
|                                      |                                                                            | (In thousands)     |       
|                                      |                                                                            | (Unaudited)        |       
|Net cash used in operating activities |                                                                            | $                  | (6,050 | )      |      | $ | (10,645 | )     
|Cash flows from investing activities: |                                                                            |                    |        |        |      |   |         |       
|                                      | Sales of property and equipment                                            |                    |        |       |      |   |         | 210    |  
|                                      | Purchases of property and equipment                                        |                    |        | (34    | )    |   |         | (160   | )
|                                      | Proceeds from divestitures                                                 |                    |        | 850    |      |   |         | 2,500  |  
|                                      | Partnership distributions to minority interests                            |                    |        |       |      |   |         | (195   | )
|                                      | Increase in other assets                                                   |                    |        |       |      |   |         | (71    | )
|                                      |                                                                            |                    |        |        |      |  
|                                      | Net cash provided by investing activities                                  |                    |        | 816    |      |   |         | 2,284  |  
|                                      |                                                                            |                    |        |        |      |  
|Cash flows from financing activities: |                                                                            |                    |        |        |      |   |         |       
|                                      | Stock options and warrants exercised                                       |                    |        | 22     |      |   |         |       |  
|                                      | Proceeds from sale of common stock and warrants, net of issuance
    costs |                    |        | 14,717 |      |   |         |       |  
|                                      | Treasury stock received in settlement                                      |                    |        |       |      |   |         | (504   | )
|                                      |                                                                            |                    |        |        |      |  
|                                      | Net cash provided by (used in) financing activities                        |                    |        | 14,739 |      |   |         | (504   | )
|                                      |                                                                            |                    |        |        |      |  
|                                      | Net increase (decrease) in cash and cash equivalents                       |                    |        | 9,505  |      |   |         | (8,865 | )
|                                      |                                                                            |                    |        |        |      |  
|                                      | Cash and cash equivalents, beginning of period                             |                    |        | 7,985  |      |   |         | 23,977 |  
|                                      |                                                                            |                    |        |        |      |  
|                                      | Cash and cash equivalents, end of period                                   |                    | $      | 17,490 |      |   | $       | 15,112 |  
|                                      |                                                                            |                    |        |        |      |  
|Non-cash activities:                  |                                                                            |                    |        |        |      |   |         |       
|                                      | Transfer of inventory to property and equipment                            |                    | $      | 289    |      |   | $       | 113    |  
|                                      | Retirement of treasury shares held                                         |                    |        |       |      |   |         | 2,593  |  
|                                      | Deferred compensation on options forfeited                                 |                    |        |       |      |   |         | 94     |  






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ENDOCARE, INC.





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Tabular numbers in thousands, except per share data)


(Unaudited)




|   |                                           
|-- | ------------------------------------------
|1. | Organization and Operations of the Company








|   |                                                                                                                                 
|-- | --------------------------------------------------------------------------------------------------------------------------------
|2. | Restatement of Unaudited Condensed Consolidated Financial
    Statements as of and for the three months ended March 31,
    2005







Accounting for Derivative
Financial Instruments Indexed To, and Potentially Settled In, a
Companys Own Stock










|   |                      
|-- | ---------------------
|3. | Basis of Presentation













|   |                                       
|-- | --------------------------------------
|4. | Changes to Plan of Sale  Timm Medical




Accounting for the
Impairment or Disposal of Long-Lived Assets










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ENDOCARE, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)











|   |                                               
|-- | ----------------------------------------------
|5. | Private Placement of Common Stock and Warrants








































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ENDOCARE, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





Accounting for Derivative Financial Instruments Indexed To,
and Potentially Settled In, a Companys Own Stock,







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | First, we used the Black-Scholes option-pricing model with the
    following assumptions: an expected life equal to the contractual
    term of the warrants (five years); no dividends; a risk free
    rate of 4.22%, which equals the five-year yield on Treasury
    bonds at constant (or fixed) maturity; and volatility of 90.5%.
    Under these assumptions, the Black-Scholes option-pricing model
    yielded a value of $2.09 for each of the Series A warrants
    and $2.03 for each of the Series B warrants, for an
    aggregate value of $8.1 million;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
|
|
| |  | Second, since the warrants are limited in the amount of
    realizable profit to the holders as a result of the call
    provision described above, we reduced the value of the warrants
    to account for the probability that the stock price will reach
    or exceed $6.50 and $7.50, respectively (i.e.,the prices
    above which we have the right to call the Series A and
    Series B warrants, effectively compelling the holders to
    exercise their warrants). We used a statistical formula to
    calculate the probability that our stock price will reach or
    exceed $6.50 and $7.50, respectively. Based on this formula, we
    calculated that, for the Series A warrants, the probability
    that the stock price of $6.50 will be reached or exceeded is
    approximately 28.2%. Similarly, we calculated that, for the
    Series B warrants, the probability that the stock price of
    $7.50 will be reached or exceeded is approximately 22.9%. Based
    on these probabilities, we reduced the valuation of each of the
    Series A warrants to $1.50 (which equals one minus 28.2%,
    multiplied by $2.09) and we reduced the valuation of each of the
    Series B warrants to $1.56 (which equals one minus 22.9%,
    multiplied by $2.03). This yields an aggregate value of the
    warrants equal to $6.0 million; and
|
|
|
| |  | Third, we further reduced the value of the warrants on the
    assumption that our stock price on the day that the warrants are
    exercised will be affected by dilution as a result of the
    additional stock introduced into the market. Given that we have
    approximately 30 million shares outstanding, we calculated
    that the exercise of the warrants will result in dilution of
    approximately 6%. Using the dilution figure of 6%, we reduced
    the value of each of the Series A warrants to $1.41 and the
    Series B warrants to $1.47. This yields an aggregate value
    of the warrants equal to $5.7 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|

















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ENDOCARE, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

















|   |                   
|-- | ------------------
|6. | Net Loss Per Share











|   |                         
|-- | ------------------------
|7. | Stock-Based Compensation




Accounting for Stock Issued
to Employees





Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods and Services.





Accounting for Stock-Based Compensation 
Transition and Disclosure







|                                  |                                                                                                                     |                    |        |      |       |   |        |      |       |  
|--------------------------------- | ------------------------------------------------------------------------------------------------------------------- | ------------------ | ------ | ---- | ----- | - | ------ | ---- | ----- | -
|                                  |                                                                                                                     | Three Months Ended |       
|                                  |                                                                                                                     | March 31,          |       
|                                  |                                                                                                                     |                    |       
|                                  |                                                                                                                     | 2005               |        |      | 2004  |  
|                                  |                                                                                                                     |                    |        |      |       |  
|                                  |                                                                                                                     | (Restated)         |        |      |      
|                                  |                                                                                                                     |                    |        |      |      
|Net loss, as reported             |                                                                                                                     | $                  | (4,506 | )    |       | $ | (8,623 | )   
|Reconciling items:                |                                                                                                                     |                    |        |      |       |   |        |     
|                                  | Add: Stock-based employee compensation expense determined under
    the intrinsic-value-based method for all awards |                    |        | 2    |       |   |        | 8    |      
|                                  | Less: Stock-based compensation expense determined under the
    fair-value-based method for all awards expense      |                    |        | (901 | )     |   |        | (654 | )    
|                                  |                                                                                                                     |                    |        |      |       |  
|Net adjustment                    |                                                                                                                     |                    | (899   | )    |       |   | (646   | )   
|                                  |                                                                                                                     |                    |        |      |       |  
|Net loss, as adjusted             |                                                                                                                     | $                  | (5,405 | )    |       | $ | (9,269 | )   
|                                  |                                                                                                                     |                    |        |      |       |  
|Basic and diluted loss per share: |                                                                                                                     |                    |        |      |       |   |        |     
|                                  |                                                                                                                     | As reported        |        | $    | (0.18 | ) |        | $    | (0.36 | )
|                                  |                                                                                                                     |                    |        |      |       |  
|                                  |                                                                                                                     | As adjusted        |        | $    | (0.21 | ) |        | $    | (0.38 | )
|                                  |                                                                                                                     |                    |        |      |       |  




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ENDOCARE, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Share-Based
Payment Accounting for Stock Based
Compensation













|   |            
|-- | -----------
|8. | Inventories






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ENDOCARE, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                       |                   |           |       |       |              |   |       |       | 
|---------------------- | ----------------- | --------- | ----- | ----- | ------------ | - | ----- | ----- | 
|                       |                   | March 31, |       |       | December 31, |  
|                       |                   | 2005      |       |       | 2004         |  
|                       |                   |           |       |       |              |  
|Raw materials          |                   | $         | 1,760 |       |              | $ | 1,727 |      
|Work in process        |                   |           | 287   |       |              |   | 446   |      
|Finished goods         |                   |           | 1,734 |       |              |   | 1,560 |      
|                       |                   |           |       |       |              |  
|                       | Total inventories |           |       | 3,781 |              |   |       | 3,733 | 
|Less inventory reserve |                   |           | (528  | )     |              |   | (558  | )    
|                       |                   |           |       |       |              |  
|                       | Inventories, net  |           | $     | 3,253 |              |   | $     | 3,175 | 
|                       |                   |           |       |       |              |  






|   |                              
|-- | -----------------------------
|9. | Commitments and Contingencies






| |              
| | -------------
| | Legal Matters







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ENDOCARE, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

















|    |             
|--- | ------------
|10. | Income Taxes












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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

The following discussion and analysis should be read in
conjunction with the unaudited condensed consolidated financial
statements and notes thereto included in
Part IItem 1 of this report, and the audited
consolidated financial statements and notes thereto, and
Managements Discussion and Analysis of Financial Condition
and Results of Operations contained in the Annual Report on
Form 10-K for the fiscal year ended December 31,
2004.


This discussion contains forward-looking statements based on
our current expectations. There are various factors 
many beyond our control  that could cause our actual
results or the occurrence or timing of expected events to differ
materially from those anticipated in these forward-looking
statements. Some of these factors are described below and other
factors are described elsewhere in this Quarterly Report on
Form 10-Q or in our Annual Report on Form 10-K
referred to above. In addition, there are factors not described
in this Quarterly Report on Form 10-Q or in our Annual
Report on Form 10-K that could cause our actual results or
the occurrence or timing of expected events to differ materially
from those anticipated in these forward-looking statements. All
forward-looking statements included in this Quarterly Report on
Form 10-Q are based on information available to us as of
the date hereof, and we assume no obligation to update any such
forward-looking statements.


Private Placement




Strategy, Key Metrics and Developments












| |   |                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increased awareness and acceptance of cryoablation by industry
    thought leaders;                                                                                                                                                 
|
| |  | continued publication of clinical follow up data on the
    effectiveness of cryoablation, including recently published
    10-year data resulting from a study conducted by an affiliate of
    Roper Hospital in Charleston, S.C.;

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| |   |                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------
| |  | increased awareness among patients of cryoablation and its
    preferred outcomes as compared to other modalities;
|
| |  | the effectiveness of our dedicated cryoablation sales
    force; and                                              
|
| |  | our continued expenditure of funds on patient education and
    advocacy.                                         

Results of Operations




| |                                                                                
| | -------------------------------------------------------------------------------
| | Three Months Ended March 31, 2005 Compared to Three
    Months Ended March 2004

Revenues.






Cost of Revenues.


Gross Margins.


Research and Development Expenses.


Selling, General and Administrative Expenses.


15



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Impairment Charge.





Interest Income (Expense), Net.





Minority Interests.





Net Loss.





Liquidity and Capital Resources


















16



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##### Table of Contents







Risks Related to Our Business


The risks and uncertainties described below are not the only
ones we face. For information regarding other risks related to
our business, please see Risks Related to Our
Business in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2004. Furthermore,
additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our
operations. The occurrence of any of these risks could harm our
business. In that case, the trading price of our common stock
could decline, and you may lose all or part of your
investment.




| |                                                                
| | ---------------------------------------------------------------
| | We face risks related to investigations by the SEC and
    DOJ.







| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | Our management members have spent considerable time and
    effort dealing with internal and external investigations.





| |                                                                                
| | -------------------------------------------------------------------------------
| | Our success will depend on our ability to attract and
    retain key personnel.



17



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| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Future sales of shares of our common stock may negatively
    affect our stock price.











|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures







Evaluation of Disclosure Controls and Procedures.
























Changes in Internal Controls.





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PART II  OTHER INFORMATION










|        |          
|------- | ---------
|Item 6. | Exhibits.







|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|        | 2  | .1(1)       |  | Agreement and Plan of Reorganization dated February 21,
    2002, by and among the Company, Technologies, Inc., TMT
    Acquisition Corporation and certain stockholders of Timm Medical
    Technologies, Inc. Certain schedules and other attachments to
    this exhibit were omitted. We agree to furnish supplementally a
    copy of any omitted schedules or attachments to the Commission
    upon request.                        
|       
|        | 2  | .2(2)       |  | Agreement and Plan of Merger dated June 30, 1999, by and
    among the Company, Advanced Medical Procedures, Inc., Advanced
    Medical Procedures, L.L.C., Gary M. Onik, M.D., Robert F.
    Byrnes and Jerry Anderson. Certain schedules and other
    attachments to this exhibit were omitted. We agree to furnish
    supplementally a copy of any omitted schedules or attachments to
    the Commission upon request.               
|       
|        | 2  | .3(3)       |  | Asset Purchase Agreement, dated February 6, 2002, by and
    between the Company and Gary M. Onik, M.D. Certain
    schedules and other attachments to this exhibit were omitted. We
    agree to furnish supplementally a copy of any omitted schedules
    or attachments to the Commission upon request.                                                                                                                                
|       
|        | 2  | .4(3)       |  | Asset Purchase Agreement dated May 28, 2002, by and among
    the Company and Cryomedical Sciences, Inc. Certain schedules and
    other attachments to this exhibit were omitted. We agree to
    furnish supplementally a copy of any omitted schedules or
    attachments to the Commission upon request.                                                                                                                               
|       
|        | 2  | .5(4)       |  | Partnership and Limited Liability Company Membership Interest
    Purchase Agreement, dated as of August 12, 2002, by and
    among Endocare, Inc. and U.S. Medical Development, Inc.,
    U.S.M.D., Ltd. and U.S.M.D. I, L.L.C. Certain schedules and
    exhibits referenced in this exhibit have been omitted. We agree
    to furnish supplementally a copy of any omitted schedules or
    attachments to the Commission upon request.
|       
|        | 2  | .6(5)       |  | Amendment No. 1 to Partnership and Limited Liability
    Company Membership Interest Purchase Agreement, dated as of
    August 12, 2002, by and among Endocare, Inc. and
    U.S. Medical Development, Inc., U.S.M.D., Ltd. and
    U.S.M.D. I, L.L.C.                                                                                                                                                                                    
|       
|        | 2  | .7(6)       |  | Agreement of Purchase and Sale, dated as of April 7, 2003,
    by and among American Medical Systems, Inc., the Company and
    Timm Medical Technologies, Inc.                                                                                                                                                                                                                                                                            
|       
|        | 2  | .8(7)       |  | Asset Purchase and Technology License Agreement, dated as of
    April 29, 2003, by and between the Company and
    CryoCathTechnologies Inc.                                                                                                                                                                                                                                                                                              
|       
|        | 2  | .9(8)       |  | Agreement of Purchase and Sale, dated as of October 15,
    2003, by and between SRS Medical Corp. and Timm Medical
    Technologies, Inc.                                                                                                                                                                                                                                                                                                 
|       
|        | 2  | .10(9)      |  | Amendment No. 2 to Partnership and Limited Liability
    Company Membership Interest Purchase Agreement, dated as of
    February 27, 2004, by and among Endocare, Inc. and
    U.S. Medical Development, Inc., U.S.M.D., Ltd. and
    U.S.M.D. I, L.L.C.                                                                                                                                                                                  
|       
|        | 2  | .11(9)      |  | Service Fee Agreement, dated as of February 26, 2004, by
    and among Endocare, Inc. and the Limited Partners of Mid-America
    Cryotherapy, L.P.                                                                                                                                                                                                                                                                                        
|       
|        | 2  | .12(9)      |  | First Amendment to Agreement of Purchase and Sale, dated as of
    March 25, 2004, by and between SRS Medical Corp. and Timm
    Medical Technologies, Inc.                                                                                                                                                                                                                                                                                
|       
|        | 2  | .13(10)     |  | First Amendment to Asset Purchase Agreement, dated as of
    August 18, 2004, by and between Endocare, Inc. and Gary
    Onik, M.D.                                                                                                                                                                                                                                                                                                        
|       
|        | 3  | .1(2)       |  | Certificate of Amendment of Restated Certificate of
    Incorporation of the Company.                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 3  | .2(2)       |  | Certificate of Designation of Series A Junior Participating
    Preferred Stock of the Company.                                                                                                                                                                                                                                                                                                                                            
|       
|        | 3  | .3(2)       |  | Restated Certificate of Incorporation.                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 3  | .4(11)      |  | Amended and Restated Bylaws of the Company.                                                                                                                                                                                                                                                                                                                                                                                                
|       
|        | 10 | .1(14)     |  | Description of William J. Nydam salary adjustment, effective
    February 2005.                                                                                                                                                                                                                                                                                                                                                            
|       
|        | 10 | .2(14)     |  | Description of Michael R. Rodriguez salary adjustment, effective
    February 2005.                                                                                                                                                                                                                                                                                                                                                        




19



---



##### Table of Contents






|        |    |             |  |                                                                                                                                                           
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|       
|        | 10 | .3(14)      |  | Confidential Settlement Agreement and Release, dated as of
    February 18, 2005, by and between the Company and Great
    American E&S Insurance Company.
|       
|        | 10 | .4(12)     |  | 2004 Management Incentive Compensation Program                                                                                                            
|       
|        | 10 | .5(12)     |  | 2005 Management Incentive Compensation Program                                                                                                            
|       
|        | 10 | .6(13)      |  | Purchase Agreement, dated as of March 10, 2005, by and
    between the Company and the Investors (as defined therein).                                    
|       
|        | 10 | .7(13)      |  | Registration Rights Agreement, dated as of March 10, 2005,
    by and between Endocare and the Investors (as defined therein).                            
|       
|        | 31 | .1          |  | Certification under Section 302 of the Sarbanes-Oxley Act
    of 2002 for Craig T. Davenport.                                                             
|       
|        | 31 | .2          |  | Certification under Section 302 of the Sarbanes-Oxley Act
    of 2002 for Michael R. Rodriguez.                                                           
|       
|        | 32 | .1          |  | Certification under Section 906 of the Sarbanes-Oxley Act
    of 2002 for Craig T. Davenport.                                                             
|       
|        | 32 | .2          |  | Certification under Section 906 of the Sarbanes-Oxley Act
    of 2002 for Michael R. Rodriguez.                                                           









| |   |                                                        
| | - | -------------------------------------------------------
| |  | Management contract or compensatory plan or arrangement



| |     |                                                                                                        
| | --- | -------------------------------------------------------------------------------------------------------
| | (1) | Previously filed as exhibits to our Form 8-K filed on
    March 5, 2002.                               
|
| | (2) | Previously filed as exhibits to our Registration Statement on
    Form S-3 filed on September 20, 2001.
|
| | (3) | Previously filed as exhibits to our Form 10-Q filed on
    August 14, 2002.                            
|
| | (4) | Previously filed as exhibits to our Form 8-K filed on
    August 16, 2002.                             
|
| | (5) | Previously filed as an exhibit to our Form 8-K filed on
    October 15, 2002.                          
|
| | (6) | Previously filed as an exhibit to our Form 8-K filed on
    April 22, 2003.                            
|
| | (7) | Previously filed as an exhibit to our Form 8-K filed on
    April 29, 2003.                            
|
| | (8) | Previously filed as an exhibit to our Form 8-K filed on
    October 20, 2003.                          
|
| | (9) | Previously filed as an exhibit to our Form 10-Q filed on
    May 10, 2004.                             



|     |                                                                               
|---- | ------------------------------------------------------------------------------
|(10) | Previously filed as an exhibit to our Form 10-Q filed on
    November 9, 2004.
|    
|(11) | Previously filed as an exhibit to our Form 10-K filed on
    March 15, 2004.  
|    
|(12) | Previously filed as an exhibit to our Form 8-K filed on
    March 1, 2005.    
|    
|(13) | Previously filed as an exhibit to our Form 8-K filed on
    March 16, 2005.   
|    
|    
|(14) | Previously filed as an exhibit to our Form 10-Q filed on
    May 10, 2005.    
|    

20



---



##### Table of Contents






SIGNATURES












| |               
| | --------------
| | ENDOCARE, INC.






| |     |                       
| | --- | ----------------------
| | By: | /s/ CRAIG T. DAVENPORT




| |                            
| | ---------------------------
| |                            
| | Craig T. Davenport         
| | Chief Executive Officer and
| | Chairman of the Board      
|
| | (Duly Authorized Officer)  
|









21



---



##### Table of Contents



EXHIBIT INDEX





|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|        | 2  | .1(1)       |  | Agreement and Plan of Reorganization dated February 21,
    2002, by and among the Company, Technologies, Inc., TMT
    Acquisition Corporation and certain stockholders of Timm Medical
    Technologies, Inc. Certain schedules and other attachments to
    this exhibit were omitted. We agree to furnish supplementally a
    copy of any omitted schedules or attachments to the Commission
    upon request.                        
|       
|        | 2  | .2(2)       |  | Agreement and Plan of Merger dated June 30, 1999, by and
    among the Company, Advanced Medical Procedures, Inc., Advanced
    Medical Procedures, L.L.C., Gary M. Onik, M.D., Robert F.
    Byrnes and Jerry Anderson. Certain schedules and other
    attachments to this exhibit were omitted. We agree to furnish
    supplementally a copy of any omitted schedules or attachments to
    the Commission upon request.               
|       
|        | 2  | .3(3)       |  | Asset Purchase Agreement, dated February 6, 2002, by and
    between the Company and Gary M. Onik, M.D. Certain
    schedules and other attachments to this exhibit were omitted. We
    agree to furnish supplementally a copy of any omitted schedules
    or attachments to the Commission upon request.                                                                                                                                
|       
|        | 2  | .4(3)       |  | Asset Purchase Agreement dated May 28, 2002, by and among
    the Company and Cryomedical Sciences, Inc. Certain schedules and
    other attachments to this exhibit were omitted. We agree to
    furnish supplementally a copy of any omitted schedules or
    attachments to the Commission upon request.                                                                                                                               
|       
|        | 2  | .5(4)       |  | Partnership and Limited Liability Company Membership Interest
    Purchase Agreement, dated as of August 12, 2002, by and
    among Endocare, Inc. and U.S. Medical Development, Inc.,
    U.S.M.D., Ltd. and U.S.M.D. I, L.L.C. Certain schedules and
    exhibits referenced in this exhibit have been omitted. We agree
    to furnish supplementally a copy of any omitted schedules or
    attachments to the Commission upon request.
|       
|        | 2  | .6(5)       |  | Amendment No. 1 to Partnership and Limited Liability
    Company Membership Interest Purchase Agreement, dated as of
    August 12, 2002, by and among Endocare, Inc. and
    U.S. Medical Development, Inc., U.S.M.D., Ltd. and
    U.S.M.D. I, L.L.C.                                                                                                                                                                                    
|       
|        | 2  | .7(6)       |  | Agreement of Purchase and Sale, dated as of April 7, 2003,
    by and among American Medical Systems, Inc., the Company and
    Timm Medical Technologies, Inc.                                                                                                                                                                                                                                                                            
|       
|        | 2  | .8(7)       |  | Asset Purchase and Technology License Agreement, dated as of
    April 29, 2003, by and between the Company and
    CryoCathTechnologies Inc.                                                                                                                                                                                                                                                                                              
|       
|        | 2  | .9(8)       |  | Agreement of Purchase and Sale, dated as of October 15,
    2003, by and between SRS Medical Corp. and Timm Medical
    Technologies, Inc.                                                                                                                                                                                                                                                                                                 
|       
|        | 2  | .10(9)      |  | Amendment No. 2 to Partnership and Limited Liability
    Company Membership Interest Purchase Agreement, dated as of
    February 27, 2004, by and among Endocare, Inc. and
    U.S. Medical Development, Inc., U.S.M.D., Ltd. and
    U.S.M.D. I, L.L.C.                                                                                                                                                                                  
|       
|        | 2  | .11(9)      |  | Service Fee Agreement, dated as of February 26, 2004, by
    and among Endocare, Inc. and the Limited Partners of Mid-America
    Cryotherapy, L.P.                                                                                                                                                                                                                                                                                        
|       
|        | 2  | .12(9)      |  | First Amendment to Agreement of Purchase and Sale, dated as of
    March 25, 2004, by and between SRS Medical Corp. and Timm
    Medical Technologies, Inc.                                                                                                                                                                                                                                                                                
|       
|        | 2  | .13(10)     |  | First Amendment to Asset Purchase Agreement, dated as of
    August 18, 2004, by and between Endocare, Inc. and Gary
    Onik, M.D.                                                                                                                                                                                                                                                                                                        
|       
|        | 3  | .1(2)       |  | Certificate of Amendment of Restated Certificate of
    Incorporation of the Company.                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 3  | .2(2)       |  | Certificate of Designation of Series A Junior Participating
    Preferred Stock of the Company.                                                                                                                                                                                                                                                                                                                                            
|       
|        | 3  | .3(2)       |  | Restated Certificate of Incorporation.                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 3  | .4(11)      |  | Amended and Restated Bylaws of the Company.                                                                                                                                                                                                                                                                                                                                                                                                
|       
|        | 10 | .1(14)     |  | Description of William J. Nydam salary adjustment, effective
    February 2005.                                                                                                                                                                                                                                                                                                                                                            
|       
|        | 10 | .2(14)     |  | Description of Michael R. Rodriguez salary adjustment, effective
    February 2005.                                                                                                                                                                                                                                                                                                                                                        
|       
|        | 10 | .3(14)      |  | Confidential Settlement Agreement and Release, dated as of
    February 18, 2005, by and between the Company and Great
    American E&S Insurance Company.                                                                                                                                                                                                                                                                                 




22



---



##### Table of Contents






|        |    |             |  |                                                                                                                               
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|        | 10 | .4(12)     |  | 2004 Management Incentive Compensation Program                                                                                
|        | 10 | .5(12)     |  | 2005 Management Incentive Compensation Program                                                                                
|        | 10 | .6(13)      |  | Purchase Agreement, dated as of March 10, 2005, by and
    between the Company and the Investors (as defined therein).        
|       
|        | 10 | .7(13)      |  | Registration Rights Agreement, dated as of March 10, 2005,
    by and between Endocare and the Investors (as defined therein).
|       
|        | 31 | .1          |  | Certification under Section 302 of the Sarbanes-Oxley Act
    of 2002 for Craig T. Davenport.                                 
|       
|        | 31 | .2          |  | Certification under Section 302 of the Sarbanes-Oxley Act
    of 2002 for Michael R. Rodriguez.                               
|       
|        | 32 | .1          |  | Certification under Section 906 of the Sarbanes-Oxley Act
    of 2002 for Craig T. Davenport.                                 
|       
|        | 32 | .2          |  | Certification under Section 906 of the Sarbanes-Oxley Act
    of 2002 for Michael R. Rodriguez.                               









| |   |                                                        
| | - | -------------------------------------------------------
| |  | Management contract or compensatory plan or arrangement



| |     |                                                                                                        
| | --- | -------------------------------------------------------------------------------------------------------
| | (1) | Previously filed as exhibits to our Form 8-K filed on
    March 5, 2002.                               
|
| | (2) | Previously filed as exhibits to our Registration Statement on
    Form S-3 filed on September 20, 2001.
|
| | (3) | Previously filed as exhibits to our Form 10-Q filed on
    August 14, 2002.                            
|
| | (4) | Previously filed as exhibits to our Form 8-K filed on
    August 16, 2002.                             
|
| | (5) | Previously filed as an exhibit to our Form 8-K filed on
    October 15, 2002.                          
|
| | (6) | Previously filed as an exhibit to our Form 8-K filed on
    April 22, 2003.                            
|
| | (7) | Previously filed as an exhibit to our Form 8-K filed on
    April 29, 2003.                            
|
| | (8) | Previously filed as an exhibit to our Form 8-K filed on
    October 20, 2003.                          
|
| | (9) | Previously filed as an exhibit to our Form 10-Q filed on
    May 10, 2004.                             



|     |                                                                               
|---- | ------------------------------------------------------------------------------
|(10) | Previously filed as an exhibit to our Form 10-Q filed on
    November 9, 2004.
|    
|(11) | Previously filed as an exhibit to our Form 10-K filed on
    March 15, 2004.  
|    
|(12) | Previously filed as an exhibit to our Form 8-K filed on
    March 1, 2005.    
|    
|(13) | Previously filed as an exhibit to our Form 8-K filed on
    March 16, 2005.   
|    
|    
|(14) | Previously filed as an exhibit to our Form 10-Q filed on
    May 10, 2005.    
|    

23