##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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(State of Incorporation)
    
    33-0618093(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
 o þ




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Endocare, Inc.
 INDEX
 Part I. Financial InformationItem 1. Condensed Consolidated Financial Statements (Unaudited)
    
    
    3Condensed Consolidated Statements of Operations  Three and nine months ended September 30, 2005 and 2004
    
    
    3Condensed Consolidated Balance Sheets  September 30, 2005 and December 31, 2004
    
    
    4Condensed Consolidated Statements of Cash Flows  Nine months ended September 30, 2005 and 2004
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24Part II. Other InformationItem 1. Legal Proceedings
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 3. Defaults Upon Senior Securities
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    25Item 5. Other Information
    
    
    25Item 6. Exhibits
    
    
    26Signatures
    
    
    29EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
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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
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(Unaudited)(In thousands, except per share data)Total revenues
    
    $
    9,465
    
    
    $
    8,365
    
    
    $
    27,670
    
    
    $
    24,059Costs and expenses:Cost of revenues
    
    
    4,571
    
    
    
    4,274
    
    
    
    14,218
    
    
    
    12,821Research and development
    
    
    440
    
    
    
    422
    
    
    
    1,346
    
    
    
    1,410Selling and marketing
    
    
    4,100
    
    
    
    3,619
    
    
    
    12,294
    
    
    
    13,146General and administrative
    
    
    3,883
    
    
    
    3,375
    
    
    
    11,804
    
    
    
    14,116Impairment charge
    
    
    
    
    
    
    15,810
    
    
    
    (583
    )
    
    
    15,810Total costs and expenses
    
    
    12,994
    
    
    
    27,500
    
    
    
    39,079
    
    
    
    57,303Loss from operations
    
    
    (3,529
    )
    
    
    (19,135
    )
    
    
    (11,409
    )
    
    
    (33,244
    )Interest income (expense), net
    
    
    639
    
    
    
    73
    
    
    
    (182
    )
    
    
    194Loss before minority interests
    
    
    (2,890
    )
    
    
    (19,062
    )
    
    
    (11,591
    )
    
    
    (33,050
    )Minority interests
    
    
    
    
    
    
    (195
    )
    
    
    
    
    
    
    (450
    )Net loss
    
    $
    (2,890
    )
    
    $
    (19,257
    )
    
    $
    (11,591
    )
    
    $
    (33,500
    )Net loss per share  basic and diluted
    
    $
    (0.10
    )
    
    $
    (0.80
    )
    
    $
    (0.40
    )
    
    $
    (1.38
    )Weighted average shares of common stock outstanding
    
    
    30,069
    
    
    
    24,175
    
    
    
    28,975
    
    
    
    24,263
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ENDOCARE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2005
    
    
    2004(Unaudited)(In thousands, except pershare data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,127
    
    
    $
    7,985Accounts receivable, net
    
    
    4,088
    
    
    
    3,904Inventories, net
    
    
    3,125
    
    
    
    3,175Prepaid expenses and other current assets
    
    
    1,381
    
    
    
    1,651Total current assets
    
    
    19,721
    
    
    
    16,715Property and equipment, net
    
    
    1,914
    
    
    
    3,139Goodwill
    
    
    4,552
    
    
    
    4,552Intangibles, net
    
    
    8,098
    
    
    
    8,560Investments and other assets
    
    
    1,042
    
    
    
    1,409Total assets
    
    $
    35,327
    
    
    $
    34,375LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    2,860
    
    
    $
    2,636Accrued compensation
    
    
    3,557
    
    
    
    3,708Other accrued liabilities
    
    
    7,727
    
    
    
    10,391Total current liabilities
    
    
    14,144
    
    
    
    16,735Common stock warrants
    
    
    6,305
    
    
    
    Total liabilities
    
    
    20,449
    
    
    
    16,735Minority interests
    
    
    
    
    
    
    214Stockholders equity:Preferred stock, $.001 par value; 1,000
shares authorized; none issued and
outstanding
    
    
    
    
    
    
    Common stock, $.001 par value; 50,000
shares authorized; 30,074 and 24,342
issued and outstanding as of September
30, 2005 and December 31, 2004,
respectively
    
    
    30
    
    
    
    24Additional paid-in capital
    
    
    178,439
    
    
    
    169,400Accumulated deficit
    
    
    (163,591
    )
    
    
    (151,998
    )Total stockholders equity
    
    
    14,878
    
    
    
    17,426Total liabilities and stockholders equity
    
    $
    35,327
    
    
    $
    34,375
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ENDOCARE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,2005
    
    
    2004(Unaudited)(In thousands)Cash flows from operating activities:Net loss
    
    $
    (11,591
    )
    
    $
    (33,500
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    2,502
    
    
    
    2,755Impairment charge
    
    
    (583
    )
    
    
    15,810Loss on disposals of fixed assets
    
    
    107
    
    
    
    Compensation expense related to issuance of options and warrants
    
    
    49
    
    
    
    134Minority interests
    
    
    (214
    )
    
    
    450Interest expense related to common stock warrants
    
    
    625
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (184
    )
    
    
    286Inventories
    
    
    (368
    )
    
    
    (1,755
    )Prepaid expenses and other current assets
    
    
    (239
    )
    
    
    (470
    )Accounts payable
    
    
    224
    
    
    
    (587
    )Accrued compensation
    
    
    (151
    )
    
    
    (112
    )Other accrued liabilities
    
    
    (1,986
    )
    
    
    1,770Net cash used in operating activities
    
    
    (11,809
    )
    
    
    (15,219
    )Cash flows from investing activities:Sales of property and equipment
    
    
    
    
    
    
    362Purchases of property and equipment
    
    
    (246
    )
    
    
    (522
    )Purchases of intangible assets
    
    
    (330
    )
    
    
    Proceeds from divestitures
    
    
    850
    
    
    
    2,604Partnership distributions to minority interests
    
    
    
    
    
    
    (599
    )Decrease in other assets
    
    
    
    
    
    
    275Net cash provided by investing activities
    
    
    274
    
    
    
    2,120Cash flows from financing activities:Stock options and warrants exercised
    
    
    81
    
    
    
    92Proceeds from sale of common stock and warrants, net of issuance costs
    
    
    14,596
    
    
    
    Treasury stock received in settlement
    
    
    
    
    
    
    (504
    )Net cash provided by (used in) financing activities
    
    
    14,677
    
    
    
    (412
    )Net increase (decrease) in cash and cash equivalents
    
    
    3,142
    
    
    
    (13,511
    )Cash and cash equivalents, beginning of period
    
    
    7,985
    
    
    
    23,977Cash and cash equivalents, end of period
    
    $
    11,127
    
    
    $
    10,466Non-cash activities:Transfer of inventory to property and equipment
    
    $
    418
    
    
    $
    508Retirement of treasury shares held
    
    
    
    
    
    
    2,596Deferred compensation on options forfeited
    
    
    
    
    
    
    94
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ENDOCARE, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  (Unaudited)
 1. Organization and Operations of the Company
  2. Basis of Presentation
   3. Recent Operating Results and Liquidity
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ENDOCARE, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  4. Changes to Plan of Sale  Timm Medical
 Accounting for the Impairment or Disposal of Long-Lived Assets
   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 remaining contractual term of the warrants (4.50 years); no
dividends; a risk free rate of 4.16%, which equals the yield on Treasury bonds at constant
(or fixed) maturity equal to the remaining contractual term of the warrants; and volatility
of 109.7 %. Under these assumptions, the Black-Scholes option-pricing model yielded a
value of $2.50 for each of the Series A warrants and $2.45 for each of the Series B
warrants, for an aggregate value of $9.8 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 33.4%. 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
28.7%. Based on these probabilities, we reduced the valuation of each of the Series A
warrants to $1.66 (which equals one minus 33.4%, multiplied by $2.50) and we reduced the
valuation of each of the Series B warrants to $1.74 (which equals one minus 28.7%,
multiplied by $2.45). This yields an aggregate value of the warrants equal to $6.7
million; and
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ENDOCARE, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 
    
    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 6.2%. Using the dilution figure of 6.2%, we reduced the value of
each of the Series A warrants to $1.56 and the Series B warrants to $1.64. This yields an
aggregate value of the warrants equal to $6.3 million.
    6. Capital Stock and 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.
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ENDOCARE, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Accounting for Stock-Based Compensation  Transition and Disclosure
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss, as reported
    
    $
    (2,890
    )
    
    $
    (19,257
    )
    
    $
    (11,591
    )
    
    $
    (33,500
    )Reconciling items:Add: Stock-based employee
compensation expense determined
under the intrinsic-value-based
method for all awards
    
    
    
    
    
    
    121
    
    
    
    
    
    
    
    134Less: Stock-based compensation
expense determined under the
fair-value-based method for all
awards expense
    
    
    (936
    )
    
    
    (795
    )
    
    
    (2,756
    )
    
    
    (2,151
    )Net adjustment
    
    
    (936
    )
    
    
    (674
    )
    
    
    (2,756
    )
    
    
    (2,017
    )Net loss, as adjusted
    
    $
    (3,826
    )
    
    $
    (19,931
    )
    
    $
    (14,347
    )
    
    $
    (35,517
    )Basic and diluted loss per share:As reported
    
    $
    (0.10
    )
    
    $
    (0.80
    )
    
    $
    (0.40
    )
    
    $
    (1.38
    )As adjusted
    
    $
    (0.13
    )
    
    $
    (0.82
    )
    
    $
    (0.50
    )
    
    $
    (1.46
    )
 Share-Based Payment Accounting for Stock Based Compensation
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ENDOCARE, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  8. Inventories
   September 30,
    
    
    December 31,2005
    
    
    2004Raw materials
    
    $
    1,751
    
    
    $
    1,727Work in process
    
    
    214
    
    
    
    446Finished goods
    
    
    1,680
    
    
    
    1,560Total inventories
    
    
    3,645
    
    
    
    3,733Less inventory reserve
    
    
    (520
    )
    
    
    (558
    )Inventories, net
    
    $
    3,125
    
    
    $
    3,175
 9. Commitments and Contingencies
 Legal Matters
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ENDOCARE, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
      12




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ENDOCARE, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  10. Income Taxes
  11. Results of Operations
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues:Cryocare Surgical Systems
    
    $
    132
    
    
    $
    320
    
    
    $
    404
    
    
    $
    570Cryoablation disposable products and procedure fees
    
    
    6,653
    
    
    
    5,743
    
    
    
    19,690
    
    
    
    16,752Cardiac royalties (CryoCath)
    
    
    203
    
    
    
    150
    
    
    
    645
    
    
    
    441Erectile dysfunction products (Timm Medical)
    
    
    2,477
    
    
    
    2,152
    
    
    
    6,931
    
    
    
    6,296$
    9,465
    
    
    $
    8,365
    
    
    $
    27,670
    
    
    $
    24,059Cost of Revenues:Cryocare Surgical Systems
    
    $
    107
    
    
    $
    26
    
    
    $
    405
    
    
    $
    108Cryoablation disposable products and procedure fees
    
    
    3,701
    
    
    
    3,509
    
    
    
    11,513
    
    
    
    10,035Cardiac royalties (CryoCath)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Erectile dysfunction products (Timm Medical)
    
    
    763
    
    
    
    739
    
    
    
    2,300
    
    
    
    2,678$
    4,571
    
    
    $
    4,274
    
    
    $
    14,218
    
    
    $
    12,821
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Disposable products
    
    $
    1,927
    
    
    $
    811
    
    
    $
    4,727
    
    
    $
    3,500Procedure fees
    
    
    4,726
    
    
    
    4,932
    
    
    
    14,963
    
    
    
    13,252$
    6,653
    
    
    $
    5,743
    
    
    $
    19,690
    
    
    $
    16,752
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ENDOCARE, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 12. Recent Accounting Pronouncements
 Accounting Changes and Error Corrections Accounting
Changes Reporting Changes in Interim Financial Statements
  13.
Subsequent Event  Revolving Line of Credit
    14




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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, as amended.
 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.
 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, South Carolina;
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
    
    increased awareness among patients of cryoablation and the minimally invasive nature of
cryablation treatment and the comparable outcome as compared to radical prostatectomy;
    
    the pricing of our treatment is comparable to other modalities (e.g., radical
prostatectomy) and is approximately half the cost of brachytherapy;
    
    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
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues:Cryocare Surgical Systems
    
    $
    132
    
    
    $
    320
    
    
    $
    404
    
    
    $
    570Cryoablation disposable products and procedure fees
    
    
    6,653
    
    
    
    5,743
    
    
    
    19,690
    
    
    
    16,752Cardiac royalties (CryoCath)
    
    
    203
    
    
    
    150
    
    
    
    645
    
    
    
    441Erectile dysfunction products (Timm Medical)
    
    
    2,477
    
    
    
    2,152
    
    
    
    6,931
    
    
    
    6,296$
    9,465
    
    
    $
    8,365
    
    
    $
    27,670
    
    
    $
    24,059Cost of Revenues:Cryocare Surgical Systems
    
    $
    107
    
    
    $
    26
    
    
    $
    405
    
    
    $
    108Cryoablation disposable products and procedure fees
    
    
    3,701
    
    
    
    3,509
    
    
    
    11,513
    
    
    
    10,035Cardiac royalties (CryoCath)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Erectile dysfunction products (Timm Medical)
    
    
    763
    
    
    
    739
    
    
    
    2,300
    
    
    
    2,678$
    4,571
    
    
    $
    4,274
    
    
    $
    14,218
    
    
    $
    12,821
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Disposable products
    
    $
    1,927
    
    
    $
    811
    
    
    $
    4,727
    
    
    $
    3,500Procedure fees
    
    
    4,726
    
    
    
    4,932
    
    
    
    14,963
    
    
    
    13,252$
    6,653
    
    
    $
    5,743
    
    
    $
    19,690
    
    
    $
    16,752
   16




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Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004
 Revenues.
   17




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Cost of Revenues.
 Gross Margins.
 Research and Development Expenses.
 Sales and Marketing Expenses.
 General and Administrative Expenses.
 Interest
Income (Expense), Net.
 Net Loss.
 18




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Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004
 Revenues.
  Cost of Revenues.
 Gross Margins.
 Research and Development.
 Sales and Marketing.
 General and Administrative Expenses.
 19




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Impairment Charge.
 Interest
Income (Expense), Net.
 Minority Interests.
 Net Loss.
 Liquidity and Capital Resources
    20




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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, as amended. 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.
  21




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##### Table of Contents



Our management members have spent considerable time and effort dealing with internal and external
investigations.
  We face risks relating to our liquidity and we may never reach or maintain profitability
  
    
    incur costs related to legal proceedings, including ongoing government investigations;
    
    attempt to get our stock relisted on a national exchange;
    
    comply with changes in generally accepted accounting principles and include employee
based stock option charges in our consolidated statement of operations in 2006;
    
    comply with the increasing complexities and costs of being a public company, such as
Sarbanes-Oxley compliance
    
    expand our sales and marketing activities as we attempt to gain market share for our
Cryocare Surgical System; and
    
    continue our research and development efforts to improve our existing products and
develop newer products.
     22




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##### Table of Contents



Our success will depend on our ability to attract and retain key personnel.
  Future sales of shares of our common stock may negatively affect our stock price.
  Our common stock was delisted from the Nasdaq Stock Market and, as a result, trading of our common
stock has become more difficult.
   23




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##### Table of Contents



In order to qualify our stock for national exchange relisting, we may effectuate a reverse stock
split, which could adversely affect our stockholders.
  i.e.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
 24




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##### Table of Contents



Changes in Internal Controls.
 
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
   Number ofSharesFor
    
    
    21,182,264Against
    
    
    819,707Abstain
    
    
    66,570
 
 Item 5. Other Information
  
 25




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##### Table of Contents



Item 6. Exhibits
 ExhibitNo.
    
    Description2.1(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 September 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.
 26




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##### Table of Contents



ExhibitNo.
    
    Description3.2(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.4.1(12)
    
    Form of Stock Certificate.4.2(13)
    
    Form of Series A Warrant.4.3(13)
    
    Form of Series B Warrant.4.4(14)
    
    Rights Agreement, dated as of March 31, 1999, between the Company and U.S. Stock Transfer
Corporation, which includes the form of Certificate of Designation for the Series A Junior
Participating Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit B
and the Summary of Rights to Purchase Series A Preferred Shares as Exhibit C.4.5(15)
    
    Amendment No. 1 to Rights Agreement, dated as of September 24, 2005, between the Company
and U.S. Stock Transfer Corporation.10.1(16)
    
    Description of director compensation, as amended on September 14, 200531.1
    
    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.
 
 *
    
    Certain confidential portions of this exhibit were omitted and provided separately to the
SEC pursuant to a request for confidential treatment.
    
    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. 27




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##### Table of Contents



(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 10-K for the year ended December 31, 1995.(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 8-K filed on September 3, 1999.(15)
    
    Previously filed as an exhibit to our Form 8-K filed on September 28, 2005.(16)
    
    Previously filed as an exhibit to our Form 8-K/A filed on September 16, 2005. 28




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##### Table of Contents



SIGNATURES
  ENDOCARE, INC.By:
    
    /s/ CRAIG T. DAVENPORTCraig T. DavenportChief Executive Officer andChairman of the Board(Duly Authorized Officer)By:
    
    /s/ MICHAEL R. RODRIGUEZMichael R. RodriguezSenior Vice President, Finance andChief Financial Officer(Principal Financial andAccounting Officer)
  29




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description2.1(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 September 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.
 30




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##### Table of Contents



ExhibitNo.
    
    Description2.13(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.4.1(12)
    
    Form of Stock Certificate.4.2(13)
    
    Form of Series A Warrant.4.3(13)
    
    Form of Series B Warrant.4.4(14)
    
    Rights Agreement, dated as of March 31, 1999, between the Company and U.S. Stock Transfer
Corporation, which includes the form of Certificate of Designation for the Series A Junior
Participating Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit B
and the Summary of Rights to Purchase Series A Preferred Shares as Exhibit C.4.5(15)
    
    Amendment No. 1 to Rights Agreement, dated as of September 24, 2005, between the Company
and U.S. Stock Transfer Corporation.10.1(16)
    
    Description of director compensation, as amended on September 14, 2005.31.1
    
    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.
 
 *
    
    Certain confidential portions of this exhibit were omitted and provided separately to the
SEC pursuant to a request for confidential treatment.
    
    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. 31




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##### Table of Contents



(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 10-K for the year ended December 31, 1995.(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 8-K filed on September 3, 1999.(15)
    
    Previously filed as an exhibit to our Form 8-K filed on September 28, 2005.(16)
    
    Previously filed as an exhibit to our Form 8-K/A filed on September 16, 2005. 32