Registration No. 333-_____
As filed with the Securities and Exchange Commission on August 15, 2001
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LASERSIGHT INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 3845 65-0273162
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
3300 University Boulevard, Suite 140
Winter Park, Florida 32792
(407) 678-9900
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
-----------------
Mr. Gregory L. Wilson Copy to:
Chief Financial Officer Paul J. Miller, Esq.
LaserSight Incorporated Sonnenschein Nath & Rosenthal
3300 University Boulevard, Suite 140 8000 Sears Tower
Winter Park, Florida 32792 Chicago, Illinois 60606
(407) 678-9900 (312) 876-8000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
-----------------
Approximate date of commencement of proposed sale to public: From time
to time after the Registration Statement is declared effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
If this Form is to be a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
registration statement of the earlier effective registration statement for
the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Each Class of Proposed Maximum Proposed Amount of
Securities to be Amount to be Offering Price per Maximum Aggregate Registration
Registered Registered (1) Share (2) Offering Price (2) Fee
--------------------------- -------------- ------------------ ------------------ ------------
Common Stock, $.001 par 2,115,501 $1.78 $3,765,592 $942
value(3)........... . shares
(1) Pursuant to Rule 416, the shares of common stock registered hereby also
includes such indeterminable number of shares issuable to prevent
dilution resulting from stock splits, stock dividends and similar
transactions and is deemed to include such additional shares.
(2) Estimated solely for purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
Based on the average high and low prices reported for the Common Stock
on The Nasdaq Stock Market on August 9, 2001.
(3) Includes the associated preferred stock purchase rights (the "Rights")
to purchase one one-thousandth of a share of Series E Junior
Participating Preferred Stock. The Rights initially are attached to and
trade with the Common Stock of the Registrant. The value attributable
to such Rights, if any, is reflected in the offering price of the
Common Stock.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
securities act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
--------------------------------------------------------------------------------
The information contained in this prospectus is not complete and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION DATED AUGUST 15, 2001
PROSPECTUS
2,115,501 Shares
LASERSIGHT INCORPORATED
Common Stock
This prospectus relates to 2,115,501 shares of common stock of
LaserSight Incorporated being offered for sale by the selling stockholders named
in this prospectus consisting of:
o 1,276,596 shares of LaserSight common stock that will be issued
upon the conversion of series F convertible participating
preferred stock that were issued to the selling stockholders in
connection with LaserSight's July 2001 private placement
transaction.
o 838,905 shares of LaserSight common stock that were issued to the
selling stockholders as a result of LaserSight's July 2001 private
placement transaction based on price protection provisions
included in LaserSight's September 2000 private placement
transaction.
We have agreed to pay certain expenses in connection with the
registration of the common stock by this prospectus and to indemnify the selling
stockholders named in this prospectus against certain liabilities, including
liabilities under the Securities Act.
We have been advised by the selling stockholders named in this
prospectus that there are no underwriting arrangements with respect to the sale
of the common stock being registered by this prospectus, and that the selling
stockholders may offer the shares in transactions on The Nasdaq Stock Market, in
negotiated transactions, or a combination of both at prices related to
prevailing market prices, or at negotiated prices. LaserSight common stock is
traded on The Nasdaq Stock Market under the symbol "LASE." On August 14, 2001,
the last reported sale price for LaserSight common stock was $1.30 per share.
Investing in these securities involve a high degree of risk. See "Risk
Factors" beginning on page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ________________, 2001.
TABLE OF CONTENTS
Overview of LaserSight Incorporated Selling Stockholders
Risk Factors Plan of Distribution
Forward-Looking Statements Legal Matters
Use of Proceeds Experts
Capitalization Where to Find More Information
Description of Capital Stock Documents Incorporated by Reference
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with information that is different. We are not making
an offer of the securities in any jurisdiction where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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OVERVIEW OF LASERSIGHT INCORPORATED
Operating Segment Information
LaserSight Incorporated operates in three major operating segments:
refractive products, patent services and health care services. Our refractive
products segment, that primarily includes the laser vision correction products
and services of LaserSight Technologies, develops, manufactures and markets
ophthalmic lasers with a galvanometric scanning system for use in performing
refractive surgery. The LaserScan LSX(R) uses a 0.8 millimeter scanning laser
beam to ablate microscopic layers of corneal tissue to reshape the cornea and to
correct the eye's point of focus in persons with myopia (nearsightedness),
hyperopia (farsightedness) and astigmatism.
Our patent services segment consists primarily of LaserSight Patents,
that owns and licenses various patents related to the use of excimer lasers to
ablate biological tissue. The health care services segment consists of The
Farris Group (TFG). TFG provides health care and vision care consulting services
to hospitals, managed care companies and physicians.
Organizational Information
We were incorporated in Delaware in 1987 but were inactive until 1991.
In April 1993, we acquired LaserSight Centers in a stock-for-stock exchange with
additional shares issued in March 1997 pursuant to an amended purchase
agreement. In February 1994, LaserSight acquired TFG. In July 1994, we were
reorganized as a holding company. In October 1995, we acquired MEC Healthcare,
Inc. (MEC). In July 1996, our LSI Acquisition, Inc. (LSIA) subsidiary acquired
the assets of the Northern New Jersey Eye Institute. In August 1997 we formed
LaserSight Patents which then acquired certain patents from International
Business Machines Corporation. In December 1997, we sold MEC and LSIA. In
April 1998, we acquired the assets of the medical products division of Schwartz
Electro-Optics, Inc. In March 2000, we acquired from Premier Laser Systems, Inc.
the intellectual property relating to a technology development project under
design to provide an integrated refractive diagnostic workstation that includes
front-to-back analysis of aberrations within the total eye. Late in 2000, we
abandoned the LaserSight Centers mobile laser strategy due to industry
conditions and our increased focus on development and commercialization of our
refractive products. In March 2001, we sold U.S. Patent No. 4,784,135 (the Blum
Patent) acquired from IBM in 1997, but retained our rights as licensor under a
license to the Blum Patent previously granted to Visx, Incorporated.
Recent Development
On May 29, 2001, we announced that we entered into a Settlement and
License Agreement with Visx. Under the terms of the agreement, we received a
license to patents held by Visx that relates to refractive excimer lasers,
including United States Patents Nos. 4,718,418 and B1 5,108,388 and agreed to
pay a royalty for each procedure performed in the U.S. using our refractive
lasers. As part of the agreement, we granted Visx a fully paid up license to the
Blum Patent.
In accordance with the terms of the Settlement and License Agreement,
the parties filed a stipulated order dismissing the patent infringement action
filed by Visx against us in November 1999 in the United States District Court
for the District of Delaware. This litigation was set for trial in June 2001.
Under the agreement, all economic terms and conditions are confidential.
Principal Office
Our principal office and mailing address are 3300 University Boulevard,
Suite 140, Winter Park, Florida 32792. Our telephone number at that address is
(407) 678-9900 and our address on the world wide web is www.lase.com.
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RISK FACTORS
In addition to the other information we provide or incorporate by
reference in this prospectus, you should carefully consider the following risks
before deciding whether to invest in our common stock. In evaluating the risks
of investing in our common stock, you should also evaluate the other information
set forth or incorporated by reference in this prospectus, including our
financial statements and the notes accompanying them.
INDUSTRY AND COMPETITIVE RISKS
WE CANNOT ASSURE YOU THAT OUR LASERSCAN LSX LASER SYSTEM WILL ACHIEVE
MARKET ACCEPTANCE IN THE U.S., AND OUR BUSINESS MODEL FOR SELLING OUR LASER
SYSTEM IN THE U.S. IS NEW AND UNPROVEN.
We received the FDA approval necessary for the commercial marketing and
sale of our LaserScan LSX excimer laser system in the U.S. in late 1999 and
commercial shipments to customers in the U.S. began in March 2000. Our previous
experience marketing and selling our LaserScan LSX excimer laser system in the
U.S. had been limited to cost-recovery sales to refractive surgeons
participating in our FDA clinical trials.
The required level of per procedure fees payable to us by refractive surgeons
upon receipt of anticipated FDA approval for treatment of myopia with
astigmatism may not be accepted by the marketplace or may exceed those charged
by our competitors. While we believe that gaining access to our scanning
microspot laser technology justifies the required per procedure fee levels, we
cannot assure you that this business model will be accepted by a large number of
refractive surgeons. If our competitors reduce or do not charge per procedure
fees to users of their systems, we could be forced to reduce or eliminate the
fees charged under this business model, which could significantly reduce our
revenues. For example, Nidek Co., Ltd., one of our competitors, has publicly
stated that it will not charge per procedure fees to users of its laser systems
in the U.S. and internationally. See also "--Company and Business
Risks--Required per procedure fees payable to Visx under our license agreement
may exceed per procedure fees collected by us."
Successful implementation of this business model is crucial to our
success in selling our LaserScan LSX laser system in the U.S. and may require
the expenditure of significant financial and other resources to create awareness
of the LaserScan LSX laser system and create demand by refractive surgeons. If
our laser system fails to achieve market acceptance in the U.S., we may not be
able to execute our business plan, which would have a material adverse effect on
our business, financial condition and results of operations.
WE CANNOT ASSURE YOU THAT OUR KERATOME PRODUCTS WILL ACHIEVE MARKET
ACCEPTANCE.
Keratomes are surgical devices used to create a corneal flap
immediately prior to LASIK laser vision correction procedures. We began to roll
out our MicroShape(TM) family of keratome products with the commercial launch of
our UltraEdge keratome blades in July 1999 and of our UniShaper single-use
keratomes and control consoles in December 1999. In August 2001, we expect to
authorize the commercial release of our UltraShaper durable keratomes after a
thorough process of engineering refinement and validity testing. Our UniShaper
single-use keratome was the first disposable keratome product to be commercially
marketed, and we cannot assure you that refractive surgeons, including in
particular refractive surgeons who perform a large volume of LASIK procedures,
will accept our UniShaper product as either a replacement for or a supplement to
the durable keratomes traditionally used to create corneal flaps. In our recent
experience, many surgeons are reluctant to use a disposable keratome product as
their primary keratome. Also, market acceptance of the UniShaper may be hindered
by surgeons needing to alter their surgical technique in order to achieve the
desired clinical results. Our UltraShaper durable keratome incorporates the
features found in the Automated Corneal Shaper (ACS) keratome previously
marketed by Bausch & Lomb, Inc. with new enhancements and features. However,
Bausch & Lomb has not aggressively marketed or serviced the ACS since 1997 when
we licensed the rights to commercially market keratomes based on the same
technology, and has successfully transitioned a large number of refractive
surgeons from the ACS to its Hansatome durable keratome product. We believe that
many refractive surgeons learned to perform the LASIK procedure using the ACS
and prefer the surgical technique required by the ACS, which is also used to
operate our UltraShaper durable keratome, to the surgical technique required to
operate the
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Hansatome keratome product. However, we cannot assure you that we will be
successful in commercially introducing or achieving broad market acceptance of
our UltraShaper durable keratome or our other keratome products.
We have previously indicated that the successful implementation of our
keratome product sales strategy is in part dependent upon our marketing and
distribution alliance with Becton Dickinson. Due to the delay in the commercial
launch of our UltraShaper durable keratome we initiated discussions with Becton
Dickinson in order to modify our manufacturing and marketing agreements. While
these discussions were ongoing we received notices from Becton Dickinson
claiming that they have the right to end our marketing arrangement in six months
and that they are not bound by the terms of our manufacturing agreement.
Following our receipt of these notices, Becton Dickinson indicated a willingness
to discuss modified terms for a marketing and manufacturing relationship. While
we do not agree that Becton Dickinson has the right to unilaterally end our
current agreements, we intend to discuss mutually beneficial modified
agreements. If we cannot successfully market and sell our keratome products or
if we are unable to successfully modify or replace our marketing and
distribution alliance with Becton Dickinson, we may not be able to execute our
business plan, which would have a material adverse effect on our business,
financial condition and results of operations. See also "--Company and Business
Risks--Required minimum payments under our keratome license agreement may exceed
our gross profits from sales of our keratome products."
THE VISION CORRECTION INDUSTRY CURRENTLY CONSISTS OF A FEW ESTABLISHED
PROVIDERS WITH SIGNIFICANT MARKET SHARES AND WE MAY ENCOUNTER DIFFICULTIES
COMPETING IN THIS HIGHLY COMPETITIVE ENVIRONMENT.
The vision correction industry is subject to intense, increasing
competition, and we do not know if we will be able to compete successfully
against our current and future competitors. Many of our competitors have
established products, distribution capabilities and customer service networks in
the U.S. marketplace, are substantially larger and have greater brand
recognition and greater financial and other resources than we do. Visx, the
historical industry leader for excimer laser system sales in the U.S., sold
laser systems that performed a significant majority of the laser vision
correction procedures performed in the U.S. in 1999 and 2000. Similarly, Bausch
& Lomb sold a significant majority of the keratomes used by refractive surgeons
in the U.S. in 1999 and 2000. In 2000, Alcon acquired Summit Autonomous Inc. The
merger resulted in a combined entity with enhanced market presence, technology
base and distribution capabilities and provided Alcon with a narrow beam laser
technology platform that will compete more directly with our precision beam
scanning microspot LaserScan LSX excimer laser system. In addition, as a result
of the acquisition, the combined entity will be able to sell narrow beam laser
systems under a royalty-free license to certain Visx patents without incurring
the expense and uncertainty associated with intellectual property litigation
with Visx. We anticipate that Alcon will leverage the sale of its laser systems
with its other ophthalmic products.
MANY OF OUR COMPETITORS RECEIVED EARLIER REGULATORY APPROVALS THAN US
AND MAY HAVE A COMPETITIVE ADVANTAGE OVER US DUE TO THE SUBSEQUENT EXPANSION OF
THEIR REGULATORY APPROVALS AND THEIR SUBSTANTIAL EXPERIENCE IN THE U.S. MARKET.
We received the FDA approval necessary for the commercial sale of our
LaserScan LSX excimer laser system in the U.S. in November 1999 and commercial
shipments to customers in the U.S. began in March 2000. Our direct competitors
include large corporations such as Visx and Alcon, each of whom received FDA
approval of excimer laser systems more than three years prior to our approval
and has substantial experience manufacturing, marketing and servicing laser
systems in the U.S. In addition to Visx and Alcon, Nidek and Bausch & Lomb have
also received FDA approval for their laser systems.
In the U.S., a manufacturer of excimer laser vision correction systems
gains a competitive advantage by having its systems approved by the FDA for a
wider range of treatments. Initial FDA approvals of excimer laser vision
correction systems historically have been limited to PRK treatment of low to
moderate nearsightedness, with additional approvals for other and broader
treatments granted only as a result of subsequent FDA applications and clinical
trials. Our LaserScan LSX is currently approved only for the PRK treatment of
low to moderate nearsightedness (up to -6.0 diopters) without astigmatism. In
August 2000, we received FDA approval to operate our laser systems at a 200 Hz
pulse repetition rate, twice the originally approved rate. Currently, excimer
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laser vision correction systems manufactured by Visx, Alcon, Bausch & Lomb and
Nidek have been approved for higher levels of nearsightedness than the LaserScan
LSX and are also approved for the treatment of nearsightedness with astigmatism
for which the LaserScan LSX currently does not have approval. The Visx and Alcon
excimer laser systems are also approved for the treatment of moderate
farsightedness.
We have submitted a PMA supplement to the FDA for approval to utilize
LASIK for the treatment of nearsightedness with astigmatism and have responded
to FDA requests for additional patient data related to our submission. We
anticipate FDA approval of this application during the third quarter of 2001,
though we cannot ensure when the approval will be received. In addition, we have
submitted PMA supplements to the FDA to permit our laser systems sold to
customers in the U.S. to utilize LASIK to treat hyperopia, hyperopic astigmatism
and mixed astigmatism. FDA approval of these applications is anticipated in the
first half of 2002, though we cannot ensure when the approval will be received.
Our ability to sell our laser systems in the U.S. may be severely impaired if
the FDA does not give timely approval of our application for our LaserScan LSX
to treat nearsightedness with astigmatism, our application to permit our laser
systems sold to customers in the U.S. to include our latest eye tracking
technology, or our application to permit our laser systems sold to customers in
the U.S. to utilize LASIK to treat myopic astigmatism, hyperopic astigmatism and
mixed astigmatism.
Alcon's Apex Plus and Ladarvision Excimer Laser Workstations, Visx's
Star S2 Excimer Laser System and Nidek's EC-5000 Excimer Laser System have
received FDA approval for the LASIK treatment of myopia (nearsightedness) with
or without astigmatism. The approvals for most of the systems are for the
correction of myopia in the range of 0 diopters to -14.0 diopters and myopia
with astigmatism generally in the range of -0.5 diopters to -5.0 diopters.
Bausch & Lomb's Technolas 217 excimer laser has also received FDA approval for
the treatment of myopia up to -7.0 diopters with up to -3.0 diopters of
astigmatism. These laser systems are currently the only laser systems
commercially available in the U.S. with FDA approval for use in LASIK. A
physician may decide, as part of the practice of medicine, to use a medical
device outside of its FDA-approved indications for an unapproved or "off-label"
use. Prior to these laser approvals, all LASIK procedures performed in the U.S.
with commercially available lasers were performed as the practice of medicine.
In September 2000, the FDA approved Alcon's Ladarvision system for the
correction using LASIK of farsightedness of up to +6.0 diopters and an
astigmatism range of up to 6.0 diopters. In October 2000, the FDA approved
Visx's Star S2 and S3 systems for the correction using PRK of farsightedness of
up to +5.0 diopters and an astigmatism range of up to 4.0 diopters. Competitors'
receipt of LASIK-specific FDA regulatory approvals could give them a significant
competitive advantage that could impede our ability to successfully sell our
LaserScan LSX system in the U.S. or discourage physicians from using our or
other manufacturers' lasers off-label. Our failure to successfully market our
product could have a material adverse effect on our business, financial
condition and results of operations.
All of our principal competitors in the keratome business, including
current market leader Bausch & Lomb, received FDA clearance prior to the
commercialization of our keratome products and have substantial experience
marketing their keratome products. The established market presence in the U.S.
of previously approved laser systems and keratome products, as well as the entry
of new competitors into the market upon receipt of new or expanded regulatory
approvals, could impede our ability to successfully introduce our LaserScan LSX
system in the U.S. and our keratome products worldwide and may have a material
adverse effect on our business, financial condition and results of operations.
WE DEPEND UPON OUR ABILITY TO ESTABLISH AND MAINTAIN STRATEGIC
RELATIONSHIPS.
We believe that our ability to establish and maintain strategic
relationships will have a significant impact on our ability to meet our business
objectives. These strategic relationships are critical to our future success
because we believe that these relationships will help us to:
o extend the reach of our products to a larger number of refractive
surgeons;
o develop and deploy new products;
o further enhance the LaserSight brand; and
o generate additional revenue.
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Entering into strategic relationships is complicated because some of
our current and future strategic partners may decide to compete with us in some
or all of our markets. In addition, we may not be able to establish
relationships with key participants in our industry if they have relationships
with our competitors, or if we have relationships with their competitors.
Moreover, some potential strategic partners have resisted, and may continue to
resist, working with us until our products and services have achieved widespread
market acceptance. Once we have established strategic relationships, we will
depend on our partners' ability to generate increased acceptance and use of our
products and services. To date, we have established only a limited number of
strategic relationships, and many of these relationships are in the early stages
of development. There can be no assurance as to the terms, timing or
consummation of any future strategic relationships. If we lose any of these
strategic relationships or fail to establish additional relationships, or if our
strategic relationships fail to benefit us as expected, we may not be able to
execute our business plan, and our business will suffer.
BECAUSE THE SALE OF OUR PRODUCTS IS DEPENDENT ON THE CONTINUED MARKET
ACCEPTANCE OF LASER-BASED REFRACTIVE EYE SURGERY USING THE LASIK PROCEDURE, THE
LACK OF BROAD MARKET ACCEPTANCE WOULD HURT OUR BUSINESS.
We believe that whether we achieve profitability and growth will
depend, in part, upon the continued acceptance of laser vision correction using
the LASIK procedure in the U.S. and other countries. We cannot be certain that
laser vision correction will continue to be accepted by either the refractive
surgeons or the public at large as an alternative to existing methods of
treating refractive vision disorders. The acceptance of laser vision correction
and, specifically, the LASIK procedure may be adversely affected by:
o possible concerns relating to safety and efficacy, including the
predictability, stability and quality of results;
o the public's general resistance to surgery;
o the effectiveness and lower cost of alternative methods of
correcting refractive vision disorders;
o the lack of long-term follow-up data;
o the possibility of unknown side effects;
o the lack of third-party reimbursement for the procedures;
o the cost of the procedure; and
o unfavorable publicity involving patient outcomes from the use of
laser vision correction.
Unfavorable side effects and potential complications that may result
from the use of laser vision correction systems manufactured by any manufacturer
may broadly affect market acceptance of laser-based vision correction surgery.
Potential patients may not distinguish between our precision beam scanning spot
technology and the laser technology incorporated by our competitors in their
laser systems, and customers may not differentiate laser systems and procedures
that have not received FDA approval from FDA-approved systems and procedures.
Any adverse consequences resulting from procedures performed with a competitor's
systems or an unapproved laser system could adversely affect consumer acceptance
of laser vision correction in general. In addition, because laser vision
correction is an elective procedure that is not typically covered by insurance
and that involves more significant immediate expense than eyeglasses or contact
lenses, adverse changes in the U.S. or international economy may cause consumers
to reassess their spending choices and to select lower-cost alternatives for
their vision correction needs. Any such shift in spending patterns could reduce
the volume of LASIK procedures performed that would, in turn, reduce our
revenues from per procedure fees and sales of single-use products such as our
UniShaper keratome and our UltraEdge keratome blades.
The failure of laser vision correction to achieve continued market
acceptance could have a material adverse effect on our business prospects. Even
if laser vision correction achieves and sustains market acceptance, sales of our
keratome products could be adversely impacted if a laser procedure that does not
require the creation of a corneal flap were to emerge as the procedure of
choice.
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NEW PRODUCTS OR TECHNOLOGIES COULD ERODE DEMAND FOR OUR PRODUCTS OR
MAKE THEM OBSOLETE, AND OUR BUSINESS COULD BE HARMED IF WE CANNOT KEEP PACE WITH
ADVANCES IN TECHNOLOGY.
In addition to competing with eyeglasses and contact lenses, excimer
laser vision correction competes or may compete with newer technologies such as
intraocular lenses, corneal rings and surgical techniques using different or
more advanced types of lasers. Two products that may become competitive within
the near term are implantable contact lenses, which are pending FDA approval,
and corneal rings, which have been approved by the FDA. Both of these products
require procedures with lens implants, and their ultimate market acceptance is
unknown at this time. To the extent that any of these or other new technologies
are perceived to be clinically superior or economically more attractive than
currently marketed excimer laser vision correction procedures or techniques,
they could erode demand for our excimer laser and keratome products, cause a
reduction in selling prices of such products or render such products obsolete.
In addition, if one or more competing technologies achieves broader market
acceptance or renders laser vision correction procedures obsolete, it would have
a material adverse effect on our business, financial condition and results of
operations.
As is typical in the case of new and rapidly evolving industries, the
demand and market for recently introduced products and technologies is
uncertain, and we cannot be certain that our LaserScan LSX laser system,
UltraShaper durable keratome, UltraEdge keratome blades, UniShaper single-use
keratome or future new products and enhancements will be accepted in the
marketplace. In addition, announcements or the anticipation of announcements of
new products, whether for sale in the near future or at some later date, may
cause customers to defer purchasing our existing products.
If we cannot adapt to changing technologies, our products may become
obsolete, and our business could suffer. Our success will depend, in part, on
our ability to continue to enhance our existing products, develop new technology
that addresses the increasingly sophisticated needs of our customers, license
leading technologies and respond to technological advances and emerging industry
standards and practices on a timely and cost-effective basis. The development of
our proprietary technology entails significant technical and business risks. We
may not be successful in using new technologies effectively or adapting our
proprietary technology to evolving customer requirements or emerging industry
standards.
COMPANY AND BUSINESS RISKS
WE WILL BE REQUIRED TO SIGNIFICANTLY EXPAND OUR U.S. MANUFACTURING
OPERATIONS TO MEET OUR BUSINESS PLAN AND MUST COMPLY WITH STRINGENT REGULATION
OF OUR MANUFACTURING OPERATIONS.
We manufacture our LaserScan LSX laser systems for sale in the U.S. at
our manufacturing facility in Winter Park, Florida, and continue to manufacture
our laser systems for sale in international markets at our manufacturing
facility in Costa Rica. Our U.S. personnel have limited experience manufacturing
laser systems. We cannot, therefore, assure you that we will not encounter
difficulties in increasing our production capacity for our laser systems at our
Florida facility, including problems involving production delays, quality
control or assurance, component supply and lack of qualified personnel. Any
products manufactured or distributed by us pursuant to FDA clearances or
approvals are subject to extensive regulation by the FDA, including
record-keeping requirements and reporting of adverse experience with the use of
the product. Our manufacturing facilities are subject to periodic inspection by
the FDA, certain state agencies and international regulatory agencies. We
require that our key suppliers comply with recognized standards as well as our
own quality standards, and we regularly test the components and sub-assemblies
supplied to us. Any failure by us or our suppliers to comply with applicable
regulatory requirements, including the FDA's quality systems/good manufacturing
practice (QSR/GMP) regulations, could cause production and distribution of our
products to be delayed or prohibited, either of which could have a material
adverse effect on our business, financial condition and results of operations.
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REQUIRED PER PROCEDURE FEES PAYABLE TO VISX UNDER OUR LICENSE AGREEMENT
MAY EXCEED PER PROCEDURE FEES COLLECTED BY US.
In addition to the risk that our refractive lasers will not be accepted
in the marketplace, we are required to pay Visx a royalty for each procedure
performed in the U.S. using our refractive lasers. The required per procedure
fees we are required to pay to Visx may exceed the per procedure fees we are
able to charge and/or collect from refractive surgeons.
REQUIRED MINIMUM PAYMENTS UNDER OUR KERATOME LICENSE AGREEMENT MAY
EXCEED OUR GROSS PROFITS FROM SALES OF OUR KERATOME PRODUCTS.
We are required to make certain minimum payments to the licensor under our
keratome license agreement that was amended and restated on January 4, 2001.
This amendment replaced a January 18, 2000 amendment in its entirety. Under the
terms of the amendment we issued 730,552 shares of common stock to the
licensors, valued at approximately $1.1 million, in partial payment for
royalties during the term of the license. The term of the license was extended
three years until July 31, 2005. In addition, remaining minimum royalty payments
totaling approximately $5.2 million as of August 14, 2001 will be due in
quarterly installments through the term of the amendment. As a result of our
obligations under this license arrangement, the minimum royalty payments we are
required to make to the licensors may exceed our gross profits from sales of our
UniShaper and UltraShaper keratome products. The amendment eliminated a
restriction on us manufacturing, marketing and selling other keratomes, but the
sale of other keratomes will be included in the gross profit to be shared with
the licensors. The licensor's share of the gross profit, as defined in the
agreement, decreased from 50% to 10%.
OUR FAILURE TO TIMELY OBTAIN OR EXPAND REGULATORY APPROVALS FOR OUR
PRODUCTS AND TO COMPLY WITH REGULATORY REQUIREMENTS COULD ADVERSELY AFFECT OUR
BUSINESS.
Our excimer laser systems and keratome products are subject to strict
governmental regulations that materially affect our ability to manufacture and
market these products and directly impact our overall business prospects. FDA
regulations impose design and performance standards, labeling and reporting
requirements, and submission conditions in advance of marketing for all medical
laser products in the U.S. New product introductions, expanded treatment types
and levels for approved products, and significant design or manufacturing
modifications require a premarket clearance or approval by the FDA prior to
commercialization in the U.S. The FDA approval process, which is lengthy and
uncertain, requires supporting clinical studies and substantial commitments of
financial and management resources. Failure to obtain or maintain regulatory
approvals and clearances in the U.S. and other countries, or significant delays
in obtaining these approvals and clearances, could prevent us from marketing our
products for either approved or expanded indications or treatments, which could
substantially decrease our future revenues. Additionally, product and procedure
labeling and all forms of promotional activities are subject to examination by
the FDA, and current FDA enforcement policy prohibits the marketing by
manufacturers of approved medical devices for unapproved uses. Noncompliance
with these requirements may result in warning letters, fines, injunctions,
recall or seizure of products, suspension of manufacturing, denial or withdrawal
of PMAs, and criminal prosecution. Laser products marketed in foreign countries
are often subject to local laws governing health product development processes,
which may impose additional costs for overseas product development. Future
legislative or administrative requirements, in the U.S. or elsewhere, may
adversely affect our ability to obtain or retain regulatory approval for our
products. The failure to obtain approvals for new or additional uses on a timely
basis could have a material adverse effect on our business, financial condition
and results of operations.
OUR BUSINESS DEPENDS ON OUR INTELLECTUAL PROPERTY RIGHTS, AND IF WE ARE
UNABLE TO PROTECT THEM, OUR COMPETITIVE POSITION MAY BE ADVERSELY AFFECTED.
Our business plan is predicated on our proprietary systems and
technology, including our precision beam scanning microspot technology laser
systems. We protect our proprietary rights through a combination of patent,
trademark, trade secret and copyright law, confidentiality agreements and
technical measures. We generally enter into non-disclosure agreements with our
employees and consultants and limit access to our trade secrets and technology.
We cannot assure you that the steps we have taken will prevent misappropriation
9
of our intellectual property. Misappropriation of our intellectual property
would have a material adverse effect on our competitive position. In addition,
we may have to engage in litigation or other legal proceedings in the future to
enforce or protect our intellectual property rights or to defend against claims
of invalidity. These legal proceedings may consume considerable resources,
including management time and attention, which would be diverted from the
operation of our business, and the outcome of any such legal proceeding is
inherently uncertain.
We are aware that certain competitors are developing products that may
potentially infringe patents owned or licensed exclusively by us. In order to
protect our rights in these patents, we may find it necessary to assert and
pursue infringement claims against such third parties. We could incur
substantial costs and diversion of management resources litigating such
infringement claims and we cannot assure you that we will be successful in
resolving such claims or that the resolution of any such dispute will be on
terms that are favorable to us. See "--Patent infringement allegations may
impair our ability to manufacture and market our products."
PATENT INFRINGEMENT ALLEGATIONS MAY IMPAIR OUR ABILITY TO MANUFACTURE
AND MARKET OUR PRODUCTS.
There are a number of U.S. and foreign patents covering methods and
apparatus for performing corneal surgery that we do not own or have the right to
use. If we were found to infringe a patent in a particular market, we and our
customers may be enjoined from manufacturing, marketing, selling and using the
infringing product in the market and may be liable for damages for any past
infringement of such rights. In order to continue using such rights, we would be
required to obtain a license, which may require us to make royalty, per
procedure or other fee payments. We cannot be certain if we or our customers
will be successful in securing licenses, or that if we obtain licenses, such
licenses will be available on acceptable terms. Alternatively, we might be
required to redesign the infringing aspects of these products. Any redesign
efforts that we undertake could be expensive and might require regulatory
review. Furthermore, the redesign efforts could delay the reintroduction of
these products into certain markets, or may be so significant as to be
impractical. If redesign efforts were impractical, we could be prevented from
manufacturing and selling the infringing products, which would have a material
adverse effect on our business, financial condition and results of operations.
Litigation involving patents is common in our industry. While we do not
believe our laser systems or keratome products infringe any valid and
enforceable patents that we do not own or have a license to, we cannot assure
you that one or more of our other competitors or other persons will not assert
that our products infringe their intellectual property, or that we will not in
the future be deemed to infringe one or more patents owned by them or some other
party. We could incur substantial costs and diversion of management resources
defending any infringement claims. Furthermore, a party making a claim against
us could secure a judgment awarding substantial damages, as well as injunctive
or other equitable relief that could effectively block our ability to market one
or more of our products. In addition, we cannot assure you that licenses for any
intellectual property of third parties that might be required for our products
will be available on commercially reasonable terms, or at all.
WE ARE SUBJECT TO CERTAIN RISKS ASSOCIATED WITH OUR INTERNATIONAL
SALES.
Our international sales accounted for 69% and 45% of our total revenues
during the six months ended June 30, 2001 and year ended December 31, 2000,
respectively. In the future, we expect that sales to international accounts will
represent a lower percentage of our total sales as a result of our anticipated
additional regulatory approvals to market our LaserScan LSX laser system in the
U.S. and the recent commercial launch of our UltraShaper durable keratome in the
third quarter of 2001. See "--Industry and Competitive Risks--We cannot
assure you that our keratome products will achieve market acceptance."
International sales of our products may be limited or disrupted by:
o the imposition of government controls;
o export license requirements; o economic or political instability;
o trade restrictions;
o difficulties in obtaining or maintaining export licenses;
10
o changes in tariffs; and
o difficulties in staffing and managing international operations.
Our sales have historically been and are expected to continue to be
denominated in U.S. dollars. The European Economic Union's conversion to a
common currency, the euro, is not expected to have a material impact on our
business. However, due to our significant export sales, we are subject to
exchange rate fluctuations in the U.S. dollar, which could increase the
effective price in local currencies of our products. This could result in
reduced sales, longer payment cycles and greater difficulty in collecting
receivables relating to our international sales.
OUR SUPPLY OF CERTAIN CRITICAL COMPONENTS AND SYSTEMS MAY BE
INTERRUPTED BECAUSE OF OUR RELIANCE ON A LIMITED NUMBER OF SUPPLIERS.
We currently purchase certain components used in the production,
operation and maintenance of our laser systems and keratome products from a
limited number of suppliers, and certain key components are provided by a single
vendor. For example, all of our keratome blades are currently manufactured
exclusively by Becton Dickinson and the majority of our UltraShaper components
are manufactured exclusively by Owens Industries pursuant to our agreement with
them. We do not have long-term contracts with providers of some key laser system
components, including TUI Lasertechnik und Laserintegration GmbH, which
currently is a single source supplier for the laser heads used in our LaserScan
LSX excimer laser system. Currently, SensoMotoric Instruments GmbH, Teltow,
Germany, is a single source supplier for the eye tracker boards used in the
LaserScan LSX. Any interruption in the supply of critical laser or keratome
components could have a material adverse effect on our business, financial
condition and results of operations. If any of our key suppliers ceases
providing us with products of acceptable quality and quantity at a competitive
price and in a timely fashion, we would have to locate and contract with a
substitute supplier and, in some cases, such substitute supplier would need to
be qualified by the FDA. If substitute suppliers cannot be located and qualified
in a timely manner or could not provide required products on commercially
reasonable terms, it would have a material adverse effect on our business,
financial condition and results of operations.
UNLAWFUL TAMPERING OF OUR SYSTEM CONFIGURATIONS COULD RESULT IN REDUCED
REVENUES AND ADDITIONAL EXPENSES.
We include a procedure counting mechanism on LaserScan LSX lasers
manufactured for sale and use in the U.S. Users of our LaserScan LSX excimer
laser system could tamper with the software or hardware configuration of the
system so as to alter or eliminate the procedure counting mechanism that
facilitates the collection of per procedure fees. Unauthorized tampering with
our procedure counting mechanism by users could result in us being required to
pay per procedure fees to Visx that we were not able to collect from users. If
we are unable to prevent such tampering, our license agreement with Visx could
be terminated after all applicable notice and cure periods have expired.
THE LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS.
Our ability to maintain our competitive position depends in part upon
the continued contributions of our executive officers and other key employees,
especially Michael R. Farris, our president and chief executive officer. A loss
of one or more such officers or key employees could have a material adverse
effect on our business. We do not carry "key person" life insurance on any
officer or key employee.
As we commercially launch our laser system and keratome products in the
U.S., we will need to continue to implement and expand our operational, sales
and marketing, financial and management resources and controls. While to date we
have not experienced problems recruiting or retaining the personnel necessary to
expand our business, we cannot assure you that we will not have such problems in
the future. Our recent layoff may have a negative impact on our ability to
attact and retain personnel. If we fail to attract and retain qualified
individuals for necessary positions, and if we are unable to effectively manage
growth in our domestic or international operations, it could have a material
adverse effect on our business, financial condition and results of operations.
11
INADEQUACY OR UNAVAILABILITY OF INSURANCE MAY EXPOSE US TO SUBSTANTIAL
PRODUCT LIABILITY CLAIMS.
Our business exposes us to potential product liability risks and
possible adverse publicity that are inherent in the development, testing,
manufacture, marketing and sale of medical devices for human use. These risks
increase with respect to our products that receive regulatory approval for
commercialization. We have agreed in the past, and we will likely agree in the
future, to indemnify certain medical institutions and personnel who conduct and
participate in our clinical studies. While we maintain product liability
insurance, we cannot be certain that any such liability will be covered by our
insurance or that damages will not exceed the limits of our coverage. Even if a
claim is covered by insurance, the costs of defending a product liability,
malpractice, negligence or other action, and the assessment of damages in excess
of insurance coverage in the event of a successful product liability claim,
could have a material adverse effect on our business, financial condition and
results of operations. Further, product liability insurance may not continue to
be available, either at existing or increased levels of coverage, on
commercially reasonable terms.
FINANCIAL AND LIQUIDITY RISKS
WE HAVE EXPERIENCED SIGNIFICANT LOSSES AND OPERATING CASH FLOW DEFICITS
AND WE EXPECT THAT OPERATING CASH FLOW DEFICITS WILL CONTINUE THROUGH AT LEAST
THE REMAINDER OF 2001.
We experienced significant net losses and deficits in cash flow from
operations for the years ended December 31, 2000 and 1999 and the six months
ended June 30, 2001, as set forth in the following table. We cannot be certain
that we will be able to achieve or sustain profitability or positive operating
cash flow in the future.
Year Ended December 31, Six Months Ended
---------------------- ----------------
1999 2000 June 30, 2001
---- ---- -------------
Net loss................... $14.4 million $21.4 million $11.2 million
Deficit in cash flow from
operations.............. $11.7 million $15.7 million $12.6 million
As of June 30, 2001, we had an accumulated deficit of $70.8 million.
IF OUR UNCOLLECTIBLE RECEIVABLES EXCEED OUR RESERVES WE WILL INCUR
ADDITIONAL UNANTICIPATED EXPENSES, AND WE MAY EXPERIENCE DIFFICULTY COLLECTING
RESTRUCTURED RECEIVABLES WITH EXTENDED PAYMENT TERMS.
Although we monitor the status of our receivables and maintain a
reserve for estimated losses, we cannot be certain that our reserves for
estimated losses, which were approximately $5.0 million at June 30, 2001, will
be sufficient to cover the amount of our actual write-offs over time. At June
30, 2001, our net trade accounts and notes receivable totaled approximately
$15.5 million, and accrued commissions, the payment of which generally depends
on the collection of such net trade accounts and notes receivable, totaled
approximately $2.3 million. Actual write-offs that exceed amounts reserved could
have a material adverse effect on our consolidated financial condition and
results of operations. The amount of any loss that we may have to recognize in
connection with our inability to collect receivables is principally dependent on
our customers' ongoing financial condition, their ability to generate revenues
from our laser systems, and our ability to obtain and enforce legal judgments
against delinquent customers.
Our ability to evaluate the financial condition and revenue-generating
ability of our prospective customers located outside of the U.S., and our
ability to obtain and enforce legal judgments against customers located outside
of the U.S., is generally more limited than for our customers located in the
U.S. Our agreements with our international customers typically provide that the
contracts are governed by Florida law. We have not determined whether or to what
extent courts or administrative agencies located in foreign countries would
enforce our right to collect such receivables or to recover laser systems from
customers in the event of a customer's payment default. When a customer is not
paying according to established terms, we attempt to communicate and understand
the underlying causes and work with the customer to resolve any issues we can
control or influence. In most cases, we have been able to resolve the customer's
issues and continue to collect our receivable, either on the original schedule
12
or under restructured terms. If such issues are not resolved, we evaluate our
legal and other alternatives based on existing facts and circumstances. In most
such cases, we have concluded that the account should be written off as
uncollectible.
At June 30, 2001, we had extended the original payment terms of laser
customer accounts totaling approximately $1.3 million by periods ranging from 12
to 60 months. Such restructured receivables represent approximately 6.4% of our
gross receivables as of that date. Our liquidity and operating cash flow would
be adversely affected if additional extensions become necessary in the future.
In addition, it would be more difficult to collect laser system receivables if
the payment schedule extends beyond the expected or actual economic life of the
system, which we estimate to be approximately five to seven years. To date, we
do not believe any payment schedule extends beyond the economic life of the
applicable laser system.
WE COULD REQUIRE ADDITIONAL FINANCING, WHICH MIGHT NOT BE AVAILABLE IF
WE NEED IT.
During the six months ended June 30, 2001 and year ended December 31,
2000, we experienced deficits in cash flow from operations of $12.5 million and
$15.7 million, respectively. In July 2001, we completed a $3.0 million placement
of series F convertible participating preferred stock. An additional amount up
to $4.0 million may be raised before the end of the year if, on or prior to
October 1, 2001, we receive written notice from the FDA that our LaserScan LSX
has been approved or is approvable to treat myopic astigmatism. In that case, if
the three-day volume weighted average price of our common stock exceeds $2.75,
we may elect, during the 10-day period following the FDA approval, to sell
800,000 shares of our series G convertible participating preferred stock to the
same investors. The per share purchase price for the series G preferred stock
will be $2.50 (resulting in a $2.0 million investment in series G preferred
stock). If we receive the approval but do not elect to sell our series G
preferred stock as described above, the investors, for a period of 30 days
following the expiration of our election period, may elect to purchase shares of
series G preferred stock at a per share purchase price of 85% of the ten-day
volume weighted average price, limited to an aggregate purchase price of $4.0
million. We are exploring opportunities for additional equity financing through
a private placement of our common stock. If we experience unanticipated delays
in obtaining FDA approval for the treatment of astigmatism or the commercial
release of our UltraShaper durable keratome or AstraMax diagnostic workstation,
we will be required to seek additional debt or equity financing during the next
12 months. There can be no assurance that the assumptions underlying our
business plan will be met or that additional financing will not be needed or
that financing, if needed, would be available. Our belief regarding future
working capital requirements is based on various factors and assumptions
including: the successful reduction of a significant amount of expenses
currently being implemented, the uncertain timing of astigmatism and other
supplemental FDA approvals for our LaserScan LSX excimer laser system, which
could continue to negatively impact our sales during 2001, potential growth in
laser sales after receipt of further FDA approvals, increases in accounts
receivable and inventory purchases when sales increase, the potential for
borrowing under our revolving credit facility, the uncertain impact of the
market introduction of our UltraShaper durable keratomes, commercial acceptance
of our UltraEdge keratome blades and UniShaper single-use keratomes, which we
believe is partially dependent upon the successful introduction of the
UltraShaper, the anticipated timely collection of receivables, and the absence
of unanticipated product development and marketing costs. See "--Industry and
Competitive Risks--We cannot assure you that our keratome products will achieve
market acceptance" and "--We cannot assure you that our LaserScan LSX laser
system will achieve market acceptance in the U.S., and our business model for
selling our laser system in the U.S. is new and unproven." These factors and
assumptions are subject to certain contingencies and uncertainties, some of
which are beyond our control. If we do not collect a material portion of current
receivables in a timely manner, or experience less market demand for our
products than we anticipate, our liquidity could be materially and adversely
affected.
On March 12, 2001, we established a $3.0 million term loan and $10.0
million revolving credit facility with Heller. We borrowed $3.0 million under
the term loan at a rate per annum equal to two and one-half percent (2 1/2%)
above the prime rate. Interest is payable monthly and the loan must be repaid on
March 12, 2003. Under the credit facility, we have the option to borrow amounts
at a rate per annum equal to one and one-quarter percent (1 1/4%) above the
prime rate for short-term working capital needs or such other purposes as may be
approved by Heller. Borrowings are limited to 85% of qualified accounts
receivable related to U.S. sales. Borrowings under the loans are secured by
substantially all of the Company's assets. The term loan and credit facility
require us to meet certain covenants, including the maintenance of a minimum net
13
worth. The terms of the loans extend to March 12, 2003. In addition to the costs
and fees associated with the transaction, we issued to Heller a warrant to
purchase 243,750 shares of common stock at an exercise price of $3.15 per share.
The warrant expires on March 12, 2004. At August 14, 2001, we had no borrowings
under the revolving credit facility.
We may seek additional equity financing in the future to implement our
business plan or any changes thereto in response to future developments or
unanticipated contingencies. Other than the $10.0 million revolving credit
facility with Heller and the possible series G preferred stock issuance
described above, we currently do not have any commitments for additional
financing. We cannot be certain that additional financing will be available in
the future to the extent required or that, if available, it will be on
commercially acceptable terms. If we raise additional funds by issuing equity or
convertible debt securities, the terms of the new securities could have rights,
preferences and privileges senior to those of our common stock. If we raise
additional funds through debt financing, the terms of the debt could require a
substantial portion of our cash flow from operations to be dedicated to the
payment of principal and interest and may render us more vulnerable to
competitive pressures and economic downturns. If we are not able to obtain
financing necessary to meet our working capital needs, it could have a material
adverse effect on our financial condition and results of operations.
COMMON STOCK RISKS
VARIATIONS IN OUR SALES AND OPERATING RESULTS MAY CAUSE OUR STOCK PRICE
TO FLUCTUATE.
Our operating results have fluctuated in the past, and may continue to
fluctuate in the future, as a result of a variety of factors, many of which are
outside of our control. For example, historically a significant portion of our
laser system orders for a particular quarter have been received and shipped near
the end of the quarter. As a result, our operating results for any quarter often
depend on the timing of the receipt of orders and the subsequent shipment of our
laser systems. Other factors that may cause our operating results to fluctuate
include:
o timing of regulatory approvals and the introduction or delays in
shipment of new products;
o reductions, cancellations or fulfillment of major orders;
o the addition or loss of significant customers;
o the relative mix of our business;
o changes in pricing by us or our competitors;
o costs related to expansion of our business; and
o increased competition.
As a result of these fluctuations, we believe that period-to-period
comparisons of our operating results cannot be relied upon as indicators of
future performance. In some quarters our operating results may fall below the
expectations of securities analysts and investors due to any of the factors
described above or other uncertainties.
THE MARKET PRICE OF OUR COMMON STOCK MAY CONTINUE TO EXPERIENCE EXTREME
FLUCTUATIONS DUE TO MARKET CONDITIONS THAT ARE UNRELATED TO OUR OPERATING
PERFORMANCE.
The stock market, and in particular the securities of technology
companies like us, could experience extreme price and volume fluctuations
unrelated to our operating performance. Our stock price has historically been
volatile. Factors such as announcements of technological innovations or new
products by us or our competitors, changes in domestic or foreign governmental
regulations or regulatory approval processes, developments or disputes relating
to patent or proprietary rights, public concern as to the safety and efficacy of
refractive vision correction procedures, and changes in reports and
recommendations of securities analysts, have and may continue to have a
significant impact on the market price of our common stock.
14
THE SIGNIFICANT NUMBER OF SHARES ELIGIBLE FOR FUTURE SALE AND DILUTIVE
STOCK ISSUANCES MAY ADVERSELY AFFECT OUR STOCK PRICE.
Sales, or the possibility of sales, of substantial amounts of our
common stock in the public market could adversely affect the market price of our
common stock. Substantially all of our 26,437,895 shares of common stock
outstanding at August 14, 2001 were freely tradable without restriction or
further registration under the Securities Act of 1933, except to the extent such
shares are held by "affiliates" as that term is defined in Rule 144 under the
Securities Act or subject only to the satisfaction of a prospectus delivery
requirement.
Shares of common stock that we may issue in the future in connection
with acquisitions or financings or pursuant to outstanding warrants or
agreements could also adversely affect the market price of our common stock and
cause significant dilution in our earnings per share and net book value per
share. We may be required to issue more than 7,800,000 additional shares of
common stock upon the conversion of outstanding preferred stock, the exercise of
outstanding warrants and stock options, and the satisfaction of certain
contingent contractual obligations.
The anti-dilution provisions of certain of our existing securities and
obligations require us to issue additional shares if we issue shares of common
stock below specified price levels. If a future share issuance triggers these
adjustments, the beneficiaries of such provisions effectively receive some
protection from declines in the market price of our common stock, while our
other stockholders incur additional dilution of their ownership interest. We may
include similar anti-dilution provisions in securities issued in connection with
future financings. See "Description of Capital Stock--Warrants and Other
Agreements to Issue Shares."
ANTI-TAKEOVER PROVISIONS UNDER DELAWARE LAW AND IN OUR CERTIFICATE OF
INCORPORATION, BY-LAWS AND STOCKHOLDER RIGHTS PLAN MAY MAKE AN ACQUISITION OF
LASERSIGHT MORE DIFFICULT AND COULD PREVENT YOU FROM RECEIVING A PREMIUM OVER
THE MARKET PRICE OF OUR STOCK.
Certain provisions of our certificate of incorporation, by-laws,
stockholder rights plan and Delaware law could delay or frustrate the removal of
incumbent directors, discourage potential acquisition proposals and delay, defer
or prevent a change in control of us, even if such events could be beneficial,
in the short term, to the economic interests of our stockholders. For example,
our certificate of incorporation allows us to issue preferred stock with rights
senior to those of the common stock without stockholder action, and our by-laws
require advance notice of director nominations or other proposals by
stockholders. We also are subject to provisions of Delaware corporation law that
prohibit a publicly-held Delaware corporation from engaging in a broad range of
business combinations with a person who, together with affiliates and
associates, owns 15% or more of the corporation's common stock (an interested
stockholder) for three years after the person became an interested stockholder,
unless the business combination is approved in a prescribed manner. We also have
adopted a stockholder rights agreement, or "poison pill," and declared a
dividend distribution of one preferred share purchase right for each share of
common stock. The rights would cause substantial dilution to a person or group
that attempts to acquire 15% or more of our common stock on terms not approved
by our board of directors.
ACQUISITION RISKS
PAST AND POSSIBLE FUTURE ACQUISITIONS THAT ARE NOT SUCCESSFULLY
INTEGRATED WITH OUR EXISTING OPERATIONS MAY ADVERSELY AFFECT OUR BUSINESS.
We have made several significant acquisitions since 1994, and we may in
the future selectively pursue strategic acquisitions of, investments in or enter
into joint ventures or other strategic alliances with companies whose business
or technology complement our business. We may not be able to identify suitable
candidates to acquire or enter into joint ventures or other arrangements with
entities, and we may not be able to obtain financing on satisfactory terms for
such activities. In addition, we could have difficulty assimilating the
personnel, technology and operations of any acquired companies, which could
prevent us from realizing expected synergies, and may incur unanticipated
liabilities and contingencies. This could disrupt our ongoing business and
distract our management and other resources.
15
AMORTIZATION AND CHARGES RELATING TO OUR SIGNIFICANT INTANGIBLE ASSETS
COULD ADVERSELY AFFECT OUR STOCK PRICE AND REPORTED NET INCOME OR LOSS.
Of our total assets at June 30, 2001, approximately $8.6 million, or
19%, were goodwill or other intangible assets. Any reduction in net income or
increase in net loss resulting from the amortization of goodwill and other
intangible assets resulting from future acquisitions by us may have an adverse
impact upon the market price of our common stock. In addition, in the event of a
sale of LaserSight or our assets, we cannot be certain that the value of such
intangible assets would be recovered.
In accordance with SFAS 121, we review intangible assets for impairment
whenever events or changes in circumstances, including a history of operating or
cash flow losses, indicate that the carrying amount of an asset may not be
recoverable. If we determine that an intangible asset is impaired, a non-cash
impairment charge would be recognized. We continue to assess the current results
and future prospects of TFG, our subsidiary that provides health care and vision
care consulting services, in view of the substantial reduction in the
subsidiary's operating results in 1997. Though TFG's operating results improved
in 1998 when compared to 1997, operating losses similar to those incurred during
the first half of 1998 continued during 1999. Since 1999, TFG's operations have
reflected financial improvement. If TFG is unsuccessful in continuing to improve
its financial performance, some or all of the carrying amount of goodwill
recorded, $3.1 million at June 30, 2001, may be subject to an impairment
adjustment.
OTHER RISKS
The risks described above are not the only risks facing LaserSight.
There may be additional risks and uncertainties not presently known to us or
that we have deemed immaterial which could also negatively impact our business
operations. If any of the foregoing risks actually occur, it could have a
material adverse effect on our business, financial condition and results of
operations. In that event, the trading price of our common stock could decline,
and you may lose all or part of your investment.
FORWARD-LOOKING STATEMENTS
This prospectus, and the documents incorporated by reference, contain
certain "forward-looking" statements as described in Section 27A of the
Securities Act and Section 21E of the Exchange Act. These statements involve
known and unknown risks, uncertainties and other factors that may cause our
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among other things, those listed under "Risk Factors" and
elsewhere in this prospectus and the documents incorporated by reference.
In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "could," "expects," "plans,"
"intends," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of such terms and other comparable terminology.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable based on currently available
information, we cannot guarantee future results, levels of activity, performance
or achievements. Moreover, neither we nor anyone else assumes responsibility for
the accuracy and completeness of such statements. We are under no duty to update
any of the forward-looking statements after the date of this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
being offered by the selling stockholders pursuant to this prospectus. The
selling stockholders, through broker-dealers or agents designated from time to
time, may sell the shares from time to time on terms to be determined at the
time of sale. The aggregate proceeds to the selling stockholders from the shares
will be the purchase price of the shares sold less the aggregate commissions,
underwriting discounts or similar amounts payable in respect of any sale
pursuant to this prospectus, if any, and other expenses of issuance and
distribution not borne by LaserSight.
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CAPITALIZATION
The following table sets forth LaserSight's actual capitalization at
June 30, 2001 and proforma capitalization on that date, including the issuance
of series F preferred stock.
Actual Proforma
------ --------
Long-term obligations $ 3,010,358 $ 3,010,358
Stockholders' equity:
Convertible Preferred Stock,
Series F, par value $.001
per share, authorized
10,000,000 total preferred
shares; issued and
outstanding proforma
1,276,596 shares -- 1,277
Common Stock, par value
$.001 per share authorized
100,000,000 shares; actual
25,708,311 shares and
proforma 26,547,216 shares 25,708 26,547
Additional paid-in capital 99,939,609 102,887,493
Stock subscription receivable (1,140,000) (1,140,000)
Accumulated deficit (70,754,990) (70,754,990)
Treasury stock, at cost, 145,200
shares (542,647) (542,647)
------------ ------------
Total capitalization and
stockholders' equity $ 30,538,038 $ 33,488,038
============ ============
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DESCRIPTION OF CAPITAL STOCK
Capital Stock Overview
As of the date of this prospectus, LaserSight is authorized to issue up
to 100,000,000 shares of common stock, $.001 par value, and 10,000,000 shares of
preferred stock, $.001 par value, issuable in series. As of August 14, 2001,
LaserSight had 26,437,895 shares of common stock, not including any shares of
common stock issuable upon the exercise of outstanding options and warrants to
acquire common stock
All references to our common stock in this prospectus include the
associated preferred stock purchase rights issued pursuant to the stockholder
rights agreement described below between LaserSight and American Stock Transfer
& Trust Company, as rights agent. See "Stockholder Rights Agreement."
Common Stock
Holders of our common stock are entitled to one vote for each share
held on all matters submitted to a vote of stockholders and do not have
cumulative voting rights, subject to any preferential rights of our outstanding
preferred stock. Holders of a majority of the shares of capital stock entitled
to vote in any election of directors may elect all of the directors standing for
election, subject to any preferential rights of our outstanding preferred stock.
Holders of our common stock are entitled to share pro rata in such dividends and
other distributions as may be declared by our board of directors out of funds
legally available for that purpose, subject to any preferential rights of our
outstanding preferred stock. Upon the liquidation or dissolution of LaserSight,
the holders of common stock are entitled to share proportionally in all assets
available for distribution to such holders subject to the rights and preferences
of any holder of outstanding preferred stock. Holders of common stock have no
preemptive, redemption or conversion rights. The issued and outstanding shares
of our common stock are fully paid and nonassessable.
Preferred Stock
Our certificate of incorporation authorizes our board of directors,
without further stockholder approval, to issue up to an aggregate of 10,000,000
shares of preferred stock in one or more series. The board of directors may fix
or alter the designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each series of preferred stock,
including:
o dividend rights;
o dividend rates;
o conversion rights;
o voting rights;
o terms of redemption;
o redemption price or prices; and
o liquidation preferences.
The rights, preferences and privileges of holders of our common stock
may be adversely affected by the rights of the holders of shares of any series
of preferred stock which LaserSight may designate and issue in the future. The
issuance of preferred stock could also, under some circumstances, have the
effect of making it more difficult for a third party to acquire, or discouraging
a third party from acquiring, a majority of our outstanding common stock or
otherwise adversely affect the market price of our common stock.
Series A, Series B and Series D Preferred Stock
All previously issued and outstanding shares of our series A preferred
stock, par value $.001 per share, series B preferred stock, par value $.001 per
share, and series D preferred stock, par value $.001 per share, have been
converted, redeemed or repurchased.
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Series C Preferred Stock
All previously issued and outstanding shares of our series C preferred
stock, par value $.001 per share, have been converted.
The former series C preferred stockholders have the right to nominate
one candidate to stand for election to our board of directors. This nomination
right will continue for as long as the former series C preferred stockholders
own at least 7.5% of our outstanding common stock on the record date for a
meeting of stockholders at which directors will be elected.
For as long as the former series C preferred stockholders own at least
5% of our outstanding common stock, such holders have the right, subject to the
exceptions noted below, to participate in any below-market equity financing
transaction so as to maintain their percentage ownership level of common stock
at the same level as immediately prior to the closing of any such financing.
This right to participate in certain below-market third party financings does
not include:
o the grant of options or warrants, or the issuance of securities,
under any employee or director stock option, stock purchase or
restricted stock plan;
o the issuance of common stock pursuant to any contingent obligation
existing as of June 5, 1998; o the issuance of securities upon the
exercise or conversion of options, warrants or other convertible
securities outstanding as of June 5, 1998;
o the declaration of a rights dividend to holders of common stock in
connection with the adoption of a stockholder rights plan;
o the issuance of securities in connection with a merger,
acquisition, joint venture or similar arrangement; or
o a public offering of our securities.
Series E Preferred Stock
Our board of directors designated 500,000 shares of our preferred stock
as series E junior participating preferred stock in connection with the adoption
of the stockholders rights agreement described below. Because of the nature of
the dividend, liquidation and voting rights of the series E preferred stock, the
value of each one one-thousandth interest in a share of series E preferred stock
purchasable upon exercise of a preferred share purchase right should approximate
the value of one share of common stock. The series E preferred stock purchasable
upon exercise of the preferred share purchase rights will not be redeemable.
Each share of series E preferred stock will be entitled to the greater of (1) a
preferential quarterly dividend payment of $1.00 per share, or (2) an aggregate
dividend of 1,000 times the dividend declared per share of common stock. In the
event of liquidation, the holders of the series E preferred stock will be
entitled to a preferential liquidation payment of $1,000 per share, plus an
amount equal to 1,000 times the aggregate amount to be distributed per share of
common stock. Each share of series E preferred stock will have 1,000 votes, and
will vote on all matters submitted to a vote of the holders of our common stock
except as otherwise required by law. Finally, in the event of any merger,
consolidation or other transaction in which shares of common stock are
exchanged, each share of series E preferred stock will be entitled to receive
1,000 times the amount of consideration received per share of common stock.
Series F Preferred Stock
On July 6, 2001, we issued 1,276,596 shares of series F convertible
participating preferred stock. The series F preferred stock is convertible on a
share-for-share basis into common stock at the option of the holder at any time
until July 6, 2004. After July 6, 2004, all shares of series F preferred stock
then outstanding will automatically convert into an equal number of shares of
common stock. Subject to certain limited exceptions, the shares of series F
preferred stock are non-voting.
The series F preferred stockholders receive dividends only if dividends
are payable on our common stock. Each outstanding share of series F preferred
stock entitles its holder to a liquidation preference equal to $2.35.
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Except as noted above, holders of our series F preferred stock have no
preemptive, subscription, redemption or conversion rights. There are no
redemption or sinking fund provisions applicable to the series F preferred
stock. The issued and outstanding shares of our series F preferred stock are
fully paid and nonassessable. The series F preferred stock contains a provision
limiting the series F preferred stockholders' ability to convert their shares of
series F preferred stock to the extent such conversion would result in the
series F preferred stockholder and its affiliates owning more than 4.99% of our
common stock. This limitation may be waived by the series F preferred
stockholders providing us with at least 61 days prior written notice.
Series G Preferred Stock
In connection with the issuance of our series F preferred stock, we
have entered in to agreements with the purchasers of our series F preferred
stock for the issuance of our series G convertible participating preferred stock
upon the occurrence of certain events.
If on or prior to October 1, 2001, LaserSight or one of our affiliates
receives a written notice from the United States Food and Drug Administration
(the "FDA") that our LaserScan LSX(R) excimer laser system has been approved or
is approvable by the FDA to treat myopic astigmatism (the "Astigmatism
Approval") and the three day volume weighted average price of our common stock
exceeds $2.75, we may elect, during the 10 day period following the Astigmatism
Approval, to sell 800,000 shares of our series G preferred stock to the
purchasers of our series F preferred stock. The per share purchase price for the
series G preferred stock shall be $2.50 (the "LaserSight Election Price").
Alternatively, if we receive the Astigmatism Approval but do not elect to sell
our series G preferred stock as described above, the purchasers of the series F
preferred stock, for a period of 30 days following the expiration of our
election period, may elect to purchase shares of series G preferred stock at a
per share purchase price of 85% of the ten day volume weighted average price
(the "Series F Purchaser Election Price") but limited to an aggregate purchase
price of $4,000,000.
Subject to certain anti-dilution adjustments, the shares of series G
preferred stock will be convertible into shares of our common stock on a share
for share basis. Subject to certain limited exceptions, the shares of series G
preferred stock will be are non-voting.
The series G preferred stockholders will receive dividends only if
dividends are payable on our common stock. Each outstanding share of series G
preferred stock will entitle its holder to a liquidation preference equal to
either the LaserSight Election Price or the Series F Purchaser Election Price,
as applicable.
Except as noted above, holders of our series G preferred stock will
have no preemptive, subscription, redemption or conversion rights. There are no
redemption or sinking fund provisions applicable to the series G preferred
stock. The series G preferred stock contains a provision limiting the series G
preferred stockholders' ability to convert their shares of series G preferred
stock to the extent such conversion would result in the series G preferred
stockholder and its affiliates owning more than 4.99% of our common stock. This
limitation may be waived by the series G preferred stockholders providing us
with at least 61 days prior written notice.
Our series G preferred stock has been authorized and if and when issued
will be fully paid and nonassessable. However, we have not and will not be
required to file our series G certificate of designation, preferences and rights
of the series G preferred stock with the Delaware Secretary of State unless and
until we exercise our right to cause the purchasers of the series F preferred
stock to purchase the series G preferred stock or the purchasers of the series F
preferred stock exercise their right to purchase the series G preferred stock.
If the Astigmatism Approval is not obtained, if we do not exercise our right to
cause the purchasers of the series F preferred stock to purchase the series G
preferred stock or the purchasers of the series F preferred stock do not
exercise their right to purchase our series G preferred stock, the certificate
of designation, preferences and rights of the series G preferred stock will not
be filed with the Delaware Secretary of State, and the series G preferred stock
will not be issued.
Stockholder Rights Agreement
Our board of directors adopted a rights agreement in July 1998 and
declared a dividend of one right on each outstanding share of common stock.
Subject to certain exceptions, each right, when exercisable, entitles the holder
thereof to purchase from LaserSight one-thousandth of a share of series E
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preferred stock of LaserSight at an exercise price of $20.00 per one-thousandth
of a preferred share, subject to adjustment. The terms of the rights are set
forth in the rights agreement between LaserSight and American Stock Transfer &
Trust Company, as the rights agent.
Until the first to occur of (1) 10 days following a public announcement
that a person or group of affiliated or associated persons has become an
"acquiring person"(as defined below), or (2) 10 business days (or such later
date as may be determined by action of our board of directors prior to such time
as any person or group becomes an acquiring person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in a person or group becoming an
acquiring person (the earlier of such dates being called the "distribution
date"), the rights will be evidenced by common stock certificates.
Subject to certain exceptions, an "acquiring person" is a person or
group of affiliated or associated persons who have acquired beneficial ownership
of 15% or more of our outstanding common stock. In no event however, will
LaserSight, any subsidiary of LaserSight, or any employee benefit plan of
LaserSight or its subsidiaries be deemed to be an acquiring person. In addition,
no person shall become an acquiring person as the result of an acquisition of
common stock by LaserSight which by reducing the number of our common shares
outstanding increases the proportionate number of shares beneficially owned by
such person and its affiliates and associates to 15% or more of the common stock
then outstanding. If a person becomes the beneficial owner of 15% or more of
the common stock then outstanding by reason of share acquisitions by LaserSight
and, after such share acquisitions, (1) acquires beneficial ownership of an
additional number of shares of common stock which exceeds the lesser of 10,000
shares of common stock or 0.25% of the then-outstanding common stock, and (2)
beneficially owns after such acquisition 15% or more of the aggregate number of
common stock then outstanding, then such person shall be deemed to be an
acquiring person. Moreover, if our board of directors determines in good faith
that a person who would otherwise be an acquiring person has become such
inadvertently, and such person divests as promptly as practicable a sufficient
number of shares of common stock so that such person would no longer be an
acquiring person, then such person shall not be deemed to be an acquiring person
for any purposes of the rights agreement.
The rights are not exercisable until the distribution date. The rights
will expire on July 2, 2008, unless the Rights are earlier redeemed or exchanged
by LaserSight, as described below.
To prevent dilution the exercise price payable and the number of shares
of series E preferred stock or other securities or property issuable upon
exercise of the rights are subject to adjustment from time to time:
o in the event of a stock dividend on, or a subdivision, combination
or reclassification of, the series E preferred stock;
o upon the grant to holders of the series E preferred stock of
certain rights or warrants to subscribe for or purchase series E
preferred stock at a price, or securities convertible into series
E preferred stock with a conversion price, less than the
then-current market price of the series E preferred stock; or
o upon the distribution to holders of the series E preferred stock
of evidences of indebtedness, assets or capital stock (excluding
regular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in shares of series E preferred
stock) or of subscription rights or warrants other than those
referred to above.
With certain exceptions, no adjustment in the exercise price will be required
until cumulative adjustments require an adjustment of at least 1% of such
exercise price. LaserSight will not be required to issue fractional shares of
common stock or series E preferred stock other than fractions which are integral
multiples of one-thousandth of a share of series E preferred Stock, which may,
at the election of LaserSight, be evidenced by depositary receipts. In lieu of
such issuance of fractional shares, an adjustment in cash may be made based on
the market price of common stock or series E preferred Stock on the last trading
day prior to the date of exercise.
Subject to certain exceptions described in the rights agreement, if any
person or group becomes an acquiring person, then each holder of a right will
have the right to receive upon exercise of such right that number of common
21
stock or, in certain circumstances, cash, property or other securities of
LaserSight, having a market value of two times the exercise price of the right.
If at any time after the time that any person or group becomes an
acquiring person, LaserSight is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a right,
other than rights beneficially owned by the acquiring person, any associate or
affiliate thereof, and certain transferees thereof, which will be void, will
thereafter have the right to receive, upon the exercise thereof at the
then-current exercise price of the right, that number of shares of common stock
of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the right.
At any time after the time that a person or group becomes an acquiring
person and prior to the acquisition by such person or group of 50% or more of
the outstanding common stock, our board of directors may exchange the rights,
subject to certain exceptions, in whole or in part, at an exchange ratio of one
share of common stock or one-thousandth of a share of series E preferred stock
per right.
At any time prior to the time that a person or group becomes an
acquiring person, our board of directors may redeem the rights in whole, but not
in part, at a price of $.01 per right, subject to adjustment which may at
LaserSight's option be paid in cash, common stock or other consideration deemed
appropriate by the board of directors. The redemption of the rights may be made
effective at such time, on such basis and with such conditions as the board of
directors in its sole discretion may establish; provided, however, that no
redemption will be permitted or required after the time that any person becomes
an acquiring person. Immediately upon any redemption of the rights, the right to
exercise the rights will terminate and the only right of the holders of the
rights will be to receive the redemption price.
The terms of the rights may be amended by our board of directors
without the consent of the holders of the rights, except that from and after
such time as any person becomes an acquiring person no such amendment may make
the rights redeemable if the rights are not then redeemable in accordance with
the terms of the rights agreement or may adversely affect the interests of the
holders of the rights.
Until a right is exercised, the holder thereof, as such, will have no
rights as a LaserSight stockholder, including the right to vote or to receive
dividends. The rights will have anti-takeover effects. The rights, if exercised,
would cause substantial dilution to a person or group that attempts to acquire
LaserSight on terms not approved by our board of directors.
Warrants and Other Agreements to Issue Shares
In connection with the establishment of a credit facility with Foothill
Capital Corporation in March 1997, we issued warrants to purchase shares of
LaserSight common stock to Foothill. We are required to make anti-dilution
adjustments to both the number of warrant shares and the warrant exercise price
if we issue securities at a price per share that is (or could be) less than the
fair market value of our common stock at the time of such sale (a "below-market
issuance"). To date, such anti-dilution adjustments have resulted in (1) an
increase in the number of Foothill warrants to approximately 598,418, and (2) a
reduction to the exercise price of the Foothill warrants to approximately $4.91
per share from an initial exercise price of $6.06 per share. Additional
anti-dilution adjustments to the Foothill warrants could also result from any
future below-market issuance of common stock by us, including in connection with
this offering. The Foothill warrants may be exercised at any time through March
31, 2002. On March 31, 2002, we are obligated to repurchase from the holder of
each unexercised Foothill warrant the number of shares of common stock for which
such warrant could be exercised at a price of $1.21 per share (subject to
certain anti-dilution adjustments). As of August 14, 2001, warrants for 101,414
shares of our common stock remain outstanding.
In connection with our sale of the series B preferred stock in August
1997, we issued warrants to purchase a total of 750,000 shares of common stock
at a price of $5.91 per share to the former holders of our series B preferred
stock. The series B warrants are exercisable at any time before August 29, 2002.
22
In connection with a March 1998 agreement whereby we obtained the option to
repurchase the series B preferred stock and a lock-up on conversions, the
exercise price of the series B warrant shares was reduced to $2.753 per share.
We are required to make anti-dilution adjustments to both the number of warrant
shares and the warrant exercise price in the event we make a below-market
issuance. To date, these anti-dilution adjustments and other agreements among
the former holders of the series B preferred stock and us have resulted in (1)
an increase in the number of outstanding series B warrants to approximately
825,132, and (2) a reduction to the exercise price of series B warrants to
approximately $2.46 per share. As of August 14, 2001, 140,625 of such warrants
had been exercised and 684,507 of such warrants remained outstanding. We are
obligated to maintain the effectiveness of the registration of the series B
warrant shares under the Securities Act.
We also issued warrants to purchase a total of 40,000 shares of common
stock at a price of $5.91 per share to four individuals associated with the
placement agent for the series B preferred stock. These warrants are exercisable
at any time before August 29, 2002. We are required to make anti-dilution
adjustments to both the number of warrant shares and the warrant exercise price
in the event we make a below-market issuance. To date, these anti-dilution
adjustments have resulted in (1) an increase in the number of warrants to
approximately 44,186, and (2) a reduction to the exercise price of the warrants
to approximately $5.28 per share. As of August 14, 2001, 8,589 of such warrants
had been exercised and 35,597 of such warrants remained outstanding.
Based on previously-reported agreements entered into in 1993 in
connection with our acquisition of LaserSight Centers, and modified in July 1995
and March 1997, we may be obligated as follows:
o To issue up to 600,000 unregistered shares of common stock to the
former stockholders and option holders of LaserSight Centers.
These former stockholders and option holders include two trusts
related to our chairman of the board and certain of our former
officers and directors. These contingent shares will be issued
only if we achieve certain pre-tax operating income levels through
March 2002. Such income levels must be related to our use of a
fixed or mobile excimer laser to perform certain specified types
of laser surgery, the arranging for the delivery of certain types
of laser surgery or receipt of license or royalty fees associated
with patents held by LaserSight Centers. The contingent shares
are issuable at the rate of one share per $4.00 of such operating
income.
o To pay to a partnership whose partners include our chairman of the
board and certain of our former officers and directors a royalty
of up to $43 for each eye on which certain specified types of
laser surgery is performed on a fixed or mobile excimer laser
system owned or operated by LaserSight Centers or its affiliates.
This royalty may be paid either in cash or in shares of common
stock
o Royalties do not begin to accrue until the earlier of March 2002
or the delivery of all of the 600,000 contingent shares.
To date, we have not accrued any obligation to issue contingent shares
or royalty shares described above. We cannot be certain that any issuance of
contingent shares or royalty shares will be accompanied by an increase in our
per share operating results. We are not obligated to pursue strategies that may
result in the issuance of contingent shares or royalty shares and, in fact, late
in 2000 we abandoned the LaserSight Centers mobile laser strategy due to
industry conditions and our increased focus on development and commercialization
of our refractive products. It may be in the interest of our chairman of the
board for us to pursue business strategies that maximize the issuance of
contingent shares and royalty shares.
In connection with our sale of common stock in March 1999, we issued
the purchasers warrants to purchase a total of 225,000 shares of common stock at
an exercise price of $5.125 per share, the closing price of the our common stock
on March 22, 1999. The warrants have a term of five years. As of August 14,
2001, 45,000 of such warrants had been exercised and 180,000 of such warrants
remained outstanding.
23
On February 22, 1999, in connection with a consulting services
agreement that we entered into with an individual, we issued warrants to
purchase a total of 67,500 shares of our common stock at a price of $5.00 per
share. One-third of the warrants become exercisable on each annual anniversary
of the grant until all the warrants are exercisable. The warrants expire on
February 22, 2004. As of August 14, 2001, 45,000 of such warrants had become
exercisable and all such warrants remained outstanding.
In connection with our sale of common stock in September 2000, we
issued the purchasers warrants to purchase a total of 600,000 shares of common
stock at an exercise price of $3.60 per share. The warrants have a term of three
years. As of August 14, 2001, all such warrants remained outstanding.
In connection with the March 2001 loan agreement that we entered into
with Heller Healthcare Finance, Inc., we issued to Heller warrants to purchase a
total of 243,750 shares of common stock at an exercise price of $3.15 per share.
The warrant is exercisable during the period beginning on its date of issue and
ending March 12, 2004. As of August 14, 2001, all such warrants remained
outstanding.
Delaware Law and Certain Charter and Bylaw Provisions
Certain provisions of our certificate of incorporation, by-laws and
Delaware corporate law described in this section may delay, make more difficult
or prevent acquisitions or changes in control of LaserSight that are not
approved by our board of directors, including those attempts that might result
in a premium over the market price for the shares held by stockholders.
Section 203 of Delaware General Corporation Law
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Subject to certain exceptions, Section 203 prohibits a
publicly-held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
interested stockholder attained such status with the approval of the board of
directors or unless:
o the business combination is approved by the corporation's board of
directors prior to the date the interested stockholder became an
interested stockholder;
o the interested stockholder acquired at least 85% of the voting
stock of the corporation (other than stock held by directors who
are also officers or by certain employee stock plans) in the
transaction in which it becomes an interested stockholder; or
o the business combination is approved by a majority of the board of
directors and by the affirmative vote of 66-2/3% of the
outstanding voting stock that is not owned by the interested
stockholder voting at an annual or special meeting of stockholders
and not by written consent.
A "business combination" includes mergers, consolidations, asset sales
and other transactions having an aggregate value in excess of 10% of the
consolidated assets of the corporation and certain transactions that would
increase the interested stockholder's proportionate share ownership in the
corporation. Subject to certain exceptions, an "interested stockholder" is a
person who, together with affiliates and associates, owns, or within three years
did own, 15% or more of the corporation's voting stock.
Indemnification and Limitation of Liability
Our certificate of incorporation contains certain provisions that
eliminate a director's liability for monetary damages for a breach of fiduciary
duty, except in certain circumstances involving certain wrongful acts. These
acts include the breach of a director's duty of loyalty or acts or omissions
that involve intentional misconduct or a knowing violation of law.
24
Our certificate of incorporation also contains provisions indemnifying
the directors and officers of LaserSight to the fullest extent permitted by the
Delaware General Corporation Law. Our by-laws require that we advance the
expenses of an indemnified person defending a legal proceeding after we receive
an undertaking from the person to repay such advance if a court ultimately
determines that he or she is not entitled to indemnification. Our bylaws also
require us to pay any expenses of an indemnified person in connection with such
person enforcing their indemnification rights. We also maintain a directors and
officers liability insurance policy that provides for indemnification of our
directors and officers against certain liabilities incurred in their capacities
as such.
Amendment of Certificate of Incorporation and By-laws
The Delaware General Corporation Law provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's certificate of incorporation or bylaws, unless
a corporation's certificate of incorporation or by-laws, as the case may be,
requires a greater percentage. Our by-laws may, subject to the provisions of
Delaware General Corporation Law, be amended or repealed by a majority vote of
the board of directors or by two-thirds vote of stockholders entitled to vote on
such matter.
Advance Notice Requirements for Stockholder Proposals and Nomination of
Directors
Our by-laws provide that stockholders seeking to bring business before
an annual meeting of stockholders, or to nominate candidates for election as
directors at an annual meeting of stockholders, must provide timely notice in
writing. To be timely, a stockholder's notice must be delivered to or mailed and
received at our principal executive offices not less than 90 days and not more
than 120 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders. However, in the event that the annual meeting is called
for a date that is not within 30 days before or after such anniversary date,
notice by the stockholder in order to be timely must be received not later than
the close of business on the tenth day following the date on which notice of the
date of the annual meeting was publicly announced. Our by-laws also specify
requirements as to the form and content of a stockholder's notice.
Special Meetings of Stockholders; Procedural Requirements for
Stockholder Action by Written Consent
Our bylaws provide that special meetings of our stockholders may be
called only by our chairman of the board, chief executive officer or by the
board of directors. In addition, our by-laws provide:
o procedures for setting a record date to determine which
stockholders may express written consent;
o that no written consent shall be effective unless, within 60 days
of the record date, consents signed by holders of the requisite
minimum number of shares have been delivered to us; and
o that no action by written stockholder consent could become
effective until the completion of a ministerial review of the
consents within five business days after delivery of the requisite
number of written consents.
Number of Directors, Stockholder Removal of Director
Our by-laws provide that we have at least three directors on the board
of directors and currently provides that we have seven directors. The board of
directors may increase or decrease the number of directors, provided that the
board cannot decrease the number directors to fewer than three. The board has
decreased the number of directors to six. A majority of the directors remaining
in office generally can fill any vacancies on the board of directors.
Our by-laws provide that the stockholders can remove a member of the
board of directors only if the holders of at least a majority of the outstanding
shares of stock entitled to vote generally in the election of directors, voting
together as a single class, vote in favor of the removal.
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Stockholder Rights Plan
In July 1998, our board of directors adopted a stockholder rights plan.
A stockholder rights plan typically creates dilution and other impediments that
would discourage persons seeking to gain control of LaserSight by means of a
merger, tender offer, proxy contest or otherwise if our board of directors
determines that such change in control is not in the best interests of our
stockholders.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company, New York, New York.
SELLING STOCKHOLDERS
The following table describes the beneficial ownership of LaserSight
common stock by the selling stockholders named in this prospectus, and the
number of shares of common stock to be offered by the selling stockholders.
Unless otherwise indicated, each person has sole investment and voting power
over the shares listed in the table, subject to community property laws, where
applicable. For purposes of this table, a person or group of persons is deemed
to have "beneficial ownership" of any shares that such person has the right to
acquire within 60 days. For purposes of computing the percentage of outstanding
shares held by each person or group of persons named in the table, any security
which such person or group of persons has the right to acquire within 60 days is
deemed to be outstanding for the purpose of computing the percentage ownership
for such person or persons, but is not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person.
Common Stock Beneficially Common Stock Beneficially Owned
Owned Prior To Offering After The Offering
----------------------- ------------------
Percent of Shares of Common Number of Percent of
Selling Stockholder Common Stock Outstanding Stock to be Sold Shares Outstanding(5)
------------------- ------------ ----------- ---------------- ----------- --------------
BayStar Capital, L.P.(1)(3)(4) 2,887,138 10.4% 1,410,334 1,476,804 5.3%
BayStar International, Ltd.(2)(3)(4) 1,439,509 5.3% 705,167 734,342 2.7%
(1) Includes 1,636,074 shares of our common stock, 851,064 shares of our
common stock issuable upon the conversion of our series F preferred
stock and warrants to purchase 400,000 shares of our common stock. Both
the series F preferred stock and the warrants contain a provision
limiting the selling stockholder's ability to convert its shares of
series F preferred stock or exercise its warrants, as applicable, to
the extent such conversion would result in the selling stockholder and
its affiliates owning more than 4.99% of our issued and outstanding
common stock. This limitation may be waived by the selling stockholders
providing us with at least 61 days prior written notice. Excludes
shares of our common stock and other securities described in footnote 2
and footnote 3.
(2) Includes 813,977 shares of our common stock, 425,532 shares of our
common stock issuable upon the conversion of our series F preferred
stock and warrants to purchase 200,000 shares of our common stock. Both
the series F preferred stock and the warrants contain a provision
limiting the selling stockholder's ability to convert its shares of
series F preferred stock or exercise its warrants, as applicable, to
the extent such conversion would result in the selling stockholder and
its affiliates owning more than 4.99% of our issued and outstanding
common stock. This limitation may be waived by the selling stockholders
providing us with at least 61 days prior written notice. Excludes
shares of our common stock and other securities described in footnote 1
and footnote 3.
(3) Stark International ("Stark"), a Bermuda general partnership,
beneficially owns warrants to purchase 239,414 shares of our common
stock of which 35,000 of these warrants may be exercised without
limitation and 204,414 of these warrants may only be exercised at such
time as Stark and its affiliates, in the aggregate, own less than 9.9%
of our issued and outstanding common stock. Shepherd Investment
International Limited ("Shepherd"), a British Virgin Islands
26
corporation, beneficially owns warrants to purchase 219,414 shares of
our common stock of which 15,000 of these warrants may be exercised
without limitation and 204,414 of these warrants may only be exercised
at such time as Shepherd and its affiliates, in the aggregate, own less
than 9.9% of our issued and outstanding common stock.
(4) Based upon information filed with the Securities and Exchange
Commission by affiliates of BayStar Capital and BayStar International,
Michael A. Roth and Brian J. Stark beneficially own and possess sole
voting power over the shares of our common stock held by BayStar
Capital, BayStar International, Stark and Shepard as a result of their
capacity as the members of Northbay Partners, LLC, which serves as the
managing trading member of BayStar Management, LLC, the managing
partner of BayStar Capital, and BayStar International Management, LLC,
the investment manager of BayStar International and Staro Asset
Management, L.L.C., which serves as the managing general partner of
Stark and the investment manager of Shepherd.
(5) Excludes shares of our common stock which may be sold in public sales
by BayStar Capital, BayStar International, Stark or Shepherd pursuant
to offerings registered with the Securities and Exchange Commission not
covered by this prospectus.
PLAN OF DISTRIBUTION
The shares of LaserSight common stock being registered pursuant to this
prospectus are being registered on behalf of the selling stockholders named in
this prospectus. All costs, expenses and fees in connection with registration of
the shares offered by this prospectus will be paid by LaserSight. Brokerage
commissions, underwriting discounts and similar selling expenses, if any,
attributable to the sale of shares shall be paid by the selling stockholders.
The selling stockholders may sell the shares registered by this prospectus from
time to time in one or more types of transactions including (A) over-the-counter
market transactions, (B) negotiated transactions, (C) through put or call
options transactions relating to the shares, (D) through short sales of shares,
or (E) a combination of such methods of sale. The shares may be sold at market
prices prevailing at the time of sale, or at negotiated prices. These
transactions may or may not involve securities brokers or dealers. The selling
stockholders have advised LaserSight that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities, nor is there an
underwriter or coordinating broker acting in connection with the proposed sale
of shares by the selling stockholders.
The selling stockholders may sell shares directly to purchasers or to
or through broker-dealers, which may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions,
or commissions from the selling stockholders or the purchasers of shares for
whom such broker-dealers may act as agents or to whom they sell as principal, or
both. Any such compensation may be equal to, less than or in excess of customary
amounts.
The selling stockholders named in this prospectus and any
broker-dealers that act in connection with the sale of shares might be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by such broker-dealers and any profit on the resale of
the shares sold by them while acting as principals might be deemed to be
underwriting discounts or commissions under the Securities Act. Because selling
stockholders may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, the selling stockholders, to the extent they are
deemed "underwriters", will be subject to the prospectus delivery requirements
of the Securities Act. LaserSight has informed the selling stockholders that the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales in the market.
Selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
Upon LaserSight being notified by a selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the Act,
disclosing (A) the name of each such selling stockholder and of the
participating broker-dealer(s), (B) the number of shares involved, (C) the price
27
at which such shares were sold, (D) the commissions paid or discounts or
concessions allowed to such broker-dealer(s), where applicable, (E) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus, and (F) other facts
material to the transaction.
LaserSight has agreed to indemnify each selling stockholder against
certain liabilities, including liabilities arising under the Securities Act. The
selling stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for
LaserSight by Sonnenschein Nath & Rosenthal, Chicago, Illinois.
EXPERTS
The consolidated financial statements of LaserSight and its
subsidiaries as of December 31, 2000 and 1999, and for each of the years in the
three-year period ended December 31, 2000, have been incorporated herein by
reference and in the Registration Statement in reliance upon the report of KPMG
LLP, independent certified public accountants, and upon the authority of said
firm as experts in accounting and auditing.
With respect to the unaudited interim financial information for the
periods ended March 31, 2001 and 2000, and June 30, 2001 and 2000, incorporated
by reference herein, the independent certified public accountants have reported
that they applied limited procedures in accordance with professional standards
for a review of such information. However, their separate reports included in
LaserSight's quarterly reports on Form 10-Q for the quarters ended March 31 and
June 30, 2001, and incorporated by reference herein, state that they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
The accountants are not subject to the liability provisions of section 11 of the
Securities Act of 1933 for their reports on the unaudited interim financial
information because those reports are not a "report" or a "part" of the
registration statement prepared or certified by the accountants within the
meaning of sections 7 and 11 of the Act.
WHERE TO FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's Pubic Reference Room at 450 Fifth Street, N.W., Washington, D.C.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the Public Reference Room. Our SEC filings are also available to the public
from our Internet site at www.lase.com or at the SEC's Internet site at
http://www.sec.gov. The other information at those Internet sites is not part of
this prospectus. Such reports, proxy statements and other information concerning
LaserSight can also be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
This prospectus is only part of a Registration Statement on Form S-3
that we have filed with the SEC under the Securities Act. We have also filed
exhibits and schedules with the Registration Statement that are not included in
this prospectus, and you should refer to the applicable exhibit or schedule for
a complete description of any statement referring to any contract or other
document. A copy of the Registration Statement, including the exhibits and
schedules thereto, may be inspected without charge at the Public Reference Room
of the SEC described above, and copies of such material may be obtained from
such office upon payment of the fees prescribed by the SEC.
28
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act until the selling
stockholders sell all of the shares being registered by this prospectus:
o Annual Report on Form 10-K for the year ended December 31, 2000
filed on March 30, 2001, as amended by Form 10-K/A filed on
April 18, 2001;
o Quarterly Reports on Form 10-Q for the quarter ended March 31,
2001 filed on May 15, 2001 and for the quarter ended June 30, 2001
filed on August 14, 2001;
o Definitive Proxy Statement filed on May 25, 2001;
o Current Reports on Form 8-K filed on March 16, 2001, May 31, 2001
and July 18, 2001; and
o The description of the Common Stock contained in LaserSight's Form
8-A/A (Amendment No. 6) filed on August 10, 2001.
You may request a copy of any of these filings, at no cost, by writing
or telephoning us at the following address: LaserSight Incorporated, 3300
University Boulevard, Suite 140, Winter Park, Florida 32792; telephone:
(407) 678-9900; Attn: Corporate Secretary.
29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
SEC registration fee....... ..................... $ 1,058.00
Legal fees and expenses.......................... 25,000.00
Accountants' fees................................ 2,000.00
Nasdaq Listing fees.............................. 21,155.01
Miscellaneous.................................... 786.99
-----------
Total................................... $ 50,000.00
===========
---------------------------------------
The foregoing items, except for the SEC registration fee, are
estimated.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL"), inter
alia, empowers a Delaware corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including attorneys'
fees) actual and reasonably incurred in connection with the defense or
settlement of any such threatened, pending or completed action or suit by or in
the right of the corporation if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and provided further that (unless a court of competent jurisdiction
otherwise provides) such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the shareholders or disinterested
directors or by independent legal counsel in a written opinion that
indemnification is proper because the indemnitee has met the applicable standard
of conduct. The Charter provides that directors and officers shall be
indemnified as described above in this paragraph to the fullest extent permitted
by the DGCL; provided, however, that any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person shall be
indemnified only if such proceeding (or part thereof) was authorized by the
board of directors of LaserSight.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in such capacity,
or arising out of his status as such, whether or not the corporation would
otherwise have the power to indemnify him under Section 145.
The Charter provides that, to the fullest extent permitted by the DGCL,
no director of LaserSight shall be personally liable to LaserSight or its
stockholders for monetary damages for breach of fiduciary as a director. Section
102(b)(7) of the DGCL currently provides that such provisions do not eliminate
the liability of a director (i) for a breach of the director's duty of loyalty
to LaserSight or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the DGCL (relating to the declaration of dividends and
II-1
purchase or redemption of shares in violation of the DGCL), or (iv) for any
transaction from which the director derived an improper personal benefit.
Reference is made to the Charter and By-laws filed as Exhibits 4.1 and 4.2
hereto, respectively.
LaserSight maintains directors' and officers' liability insurance
policies covering certain liabilities of persons serving as officers and
directors and providing reimbursement to LaserSight for its indemnification of
such persons.
Item 16. Exhibits
The exhibit index set forth on page II-5 of this Registration Statement
is hereby incorporated herein by reference.
Item 17. Undertakings.
(a) Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10
(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
(c) Acceleration of Effectiveness.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be filed on its behalf by the undersigned, thereunto duly
authorized, in the City of Winter Park, State of Florida, this 15th day of
August, 2001.
LASERSIGHT INCORPORATED
By: /s/ Gregory L. Wilson
---------------------
Gregory L. Wilson, Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities on the dates indicated.
/s/ Michael R. Farris* August 15, 2001
------------------------------------------------
Michael R. Farris, President, Chief Executive
Officer, and Director
/s/ Francis E. O'Donnell, Jr., M.D.* August 15, 2001
------------------------------------------------
Francis E. O'Donnell, Jr., M.D., Chairman of the
Board and Director
/s/ Guy W. Numann* August 15, 2001
------------------------------------------------
Guy W. Numann, Director
/s/ Terry A. Fuller, Ph.D.* August 15, 2001
------------------------------------------------
Terry A. Fuller, Ph.D., Director
/s/ David T. Pieroni* August 15, 2001
------------------------------------------------
David T. Pieroni, Director
/s/ D. Michael Litscher* August 15, 2001
------------------------------------------------
D. Michael Litscher, Chief Operating Officer
and Director
/s/ Gregory L. Wilson August 15, 2001
------------------------------------------------
Gregory L. Wilson, Chief Financial Officer
(Principal financial and accounting officer)
---------------------
*/ By: /s/ Gregory L. Wilson
- ----------------------
(Gregory L. Wilson, as Attorney-in-Fact)
II-4
INDEX TO EXHIBITS
Exhibit
No. Description
--- -----------
4.1 Certificate of Incorporation (incorporated by reference to
Exhibit 1 to the Form 8-A/A (Amendment No. 6) filed by the
Company on August 10, 2001).
4.2 By-laws, as amended (incorporated by reference to Exhibit
3.2 to the Company's Form 8-K filed on December 20, 1999).
4.3 Rights Agreement, dated as of July 2, 1998,
between LaserSight Incorporated and American Stock Transfer
& Trust Company, as Rights Agent, which includes (i) as
Exhibit A thereto the form of Certificate of Designation of
the Series E Junior Participating Preferred Stock, (ii) as
Exhibit B thereto the form of Right certificate (separate
certificates for the Rights will not be issued until after
the Distribution Date) and (iii) as Exhibit C thereto the
Summary of Stockholder Rights Agreement. (incorporated by
reference to Exhibit 99.1 to the Form 8-K filed by the
Company on July 8, 1998).
4.4 First Amendment to Rights Agreement, dated as of March 22,
1999, between LaserSight Incorporated and American Stock
Transfer & Trust Company, as Rights Agent (incorporated by
reference to Exhibit 2 to Form 8-A/A filed by the Company on
March 29, 1999).
4.5 Second Amendment to Rights Agreement, dated as of
January 28, 2000, between LaserSight Incorporated and
American Stock Transfer & Trust Company, as Rights Agent
(incorporated by reference to Exhibit 99.6 to Form 8-K filed
by the Company on February 8, 2000).
4.6 Third Amendment to Rights Agreement, dated as of June 29,
2001, between LaserSight Incorporated and American Stock
Transfer & Trust Company, as Rights Agent (incorporated by
reference to Exhibit 99.5 to Form 8-K filed by the Company
on July 18, 2001).
5.1 Opinion of Sonnenschein Nath & Rosenthal.
15 Acknowledgment of Independent Certified Public Accountants
Regarding Independent Auditors' Review Report.
23.1 Consent of KPMG LLP.
23.2 Consent of Sonnenschein Nath & Rosenthal (included in
Exhibit 5.1).
24.1 Powers of Attorney.
II-5
-------------