SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 25, 1996
LCA-Vision Inc.
(Exact name of Registrant as specified in its Charter)
Delaware 0-27610 11-2882328
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification Number)
7840 Montgomery Road, Cincinnati, Ohio 45236
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513)792-9292
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On November 25, 1996, LCA-Vision Inc. (the "Company") issued a
total of 44,444 shares of its common stock for total consideration
of $100,000 to certain private investors in connection with the
Company's plans to open one or more laser sight centers on the west
coast.
On December 3, 1996, the Company issued a total of five shares
of an Interim Series of its Class B Preferred Stock to Stephen N.
Joffe in exchange for the conversion of $1,000,000 of the debt owed
to Dr. Joffe by the Company. One additional share of Interim Series
Class B Preferred Stock was issued to Sandra Joffe in exchange for
the conversion of $200,000 of debt owed to her by the Company.
The above described transactions increased the Company's
stockholders' equity by an aggregate total of $1,300,000, as
reflected on the pro forma September 30, 1996 balance sheet filed
herewith as an exhibit.
Item 7. Financial Statements and Exhibits
(a) Exhibit 7(a) -- Pro forma balance sheet of the Company
as of September 30, 1996 showing effects of certain stock issuances.
(b) Exhibit 3(i) -- Certificate of Designations of Interim
Series Class B Preferred Stock as filed with the Delaware Secretary
of State
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
LCA-VISION INC.
Date: December 3, 1996 By: /s/ Larry P. Rapp
Larry P. Rapp,
Chief Financial Officer
<PAGE>
EXHIBIT 7(a)
LCA-Vision Inc.
Condensed Consolidated Balance Sheet
September 30, 1996
(unaudited)
As Reported Pro Forma
____________ __________
ASSETS
Current Assets
Cash and cash equivalents $ 802,847 $ 902,847
Accounts receivable, net
of allowance for doubtful
accounts of $205,235 2,283,440 2,283,440
Supplies inventory, prepaid
expenses, and other 1,103,902 1,103,902
_________ _________
Total current assets 4,190,189 4,290,189
Property and equipment, net 8,644,793 8,664,793
Investment in unconsolidated
affiliates 364,760 364,760
Other assets 783,344 783,344
____________ ___________
Total assets $ 13,983,086 $14,083,086
____________ ___________
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities
Accounts payable $ 546,411 $ 546,411
Bank line of credit 1,940,000 1,940,000
Accrued liabilities 1,084,879 1,084,879
Current portion of long-term
debt 636,757 636,757
Deferred revenue 623,245 623,245
__________ _________
Total current liabilities 4,831,292 4,831,292
Long-term debt, net of current
portion 5,056,870 5,056,870
Notes payable to shareholders 4,021,672 2,821,672
Shareholders' Equity
Preferred stock-authorized
6,751 shares
$.001 par value, 6,751 shares
issued and outstanding 7 7
Preferred stock-authorized
shares $.001 par value,
shares issued and outstanding - 1,200,000
Common stock-authorized
110,000,000 shares
$.001 par value, 19,662,319
shares issued and outstanding 78,471 78,515
Paid in capital 3,077,642 3,177,598<PAGE>
Retained (deficit) (3,103,147) (3,103,147)
Translation adjustment 20,279 20,279
___________ _________
Total shareholders' equity 73,252 1,373,252
___________ __________
Total liabilities and
shareholders' equity $ 13,983,086 $14,083,086
___________ ______________
___________ ______________
EXHIBIT 3(i)
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS
OF INTERIM SERIES CLASS
B PREFERRED STOCK
OF
LCA-VISION INC.
LCA-Vision Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify that, pursuant to authority
conferred upon the Corporation's Board of Directors by the
Corporation's Restated Certificate of Incorporation, as amended, and
pursuant to Section 151 of Title 8 of the Delaware Code of 1953,
said Board of Directors, by the unanimous written consent of its
members dated November 30, 1996, duly filed with the minutes of the
Board, adopted a resolution providing for the designations
preferences and relative, participating, optional or other rights,
and the qualifications, limitations or restrictions, of the Interim
Series of the Corporation's Class B Preferred Stock, the text of
which resolution is appended hereto as Exhibit A and made a part
hereof.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be signed by Stephen N. Joffe, its President, this 29th day of
November, 1996.
LCA-VISION INC.
By: /s/ Stephen N. Joffe
Stephen N. Joffe, President
<PAGE>
EXHIBIT A
TEXT OF CERTIFICATE
OF DESIGNATIONS
RESOLVED, that pursuant to the authority conferred upon the
Board of Directors of LCA-Vision Inc., a Delaware corporation (the
"Corporation") by Article Fourth, Paragraph (b)(B) of the
Corporation's Certificate of Incorporation, as amended, the Board of
Directors hereby establishes a series of six shares of the
authorized Class B Preferred Stock of the Corporation to be
designated as the Interim Series of Class B Preferred Stock, par
value $.001 per share (hereinafter referred to as "Interim Series
Class B Preferred Stock"), and fixes and determines the rights,
preferences, privileges, limitations restrictions and relative
rights of such Interim Series Class B Preferred Stock as follows:
1. Dividends. The holders of the Interim Series Class B
Preferred Stock shall be entitled to receive, on a pari passu basis
out of any funds legally available therefor, dividends on each
outstanding share of Interim Series Class B Preferred Stock, payable
in preference and priority to any payment of any dividend on Common
Stock or Class A Preferred Stock, at the rate of 7% of the price
paid per share in exchange for the initial issuance of such shares,
per annum. Such dividends shall be paid to the holders of Interim
Series Class B Preferred Stock when and as declared by the Board of
Directors; provided, however, that the Board of Directors shall not
be obligated to declare such dividends. If dividends are not
declared on the Interim Series Class B Preferred Stock at the
aforesaid rate in any year, then such dividends shall nevertheless
accumulate. If dividends are declared and paid with respect to any
Preferred Stock, they must be declared and paid on all outstanding
Interim Series Class B Preferred Stock contemporaneously. No
dividends shall be declared or paid on the Common Stock until
dividends on the Interim Series Class B Preferred Stock have been
declared and paid or set aside for payment at the rate set forth
above for the current year and all accumulated dividends on the
Interim Series Class B Preferred Stock have been paid. Upon
conversion of a share of Interim Series Class B Preferred Stock into
Common Stock, all declared but unpaid dividends on such share shall
be payable by the Corporation to the holder of such share and all
accumulated but undeclared dividends shall be forfeited. Dividends
with respect to shares of Interim Series Class B Preferred Stock
shall begin to accumulate on the date of issuance thereof by the
Corporation. No accumulated dividend shall bear or accrue interest.
Accumulated dividends shall be accrued on a per diem basis.
2. Liquidation Preference.
(a) Preference. In the event of any liquidation, dissolution
or winding up of the Corporation, either voluntarily or
involuntarily, the holders of Interim Series Class B Preferred Stock
shall be entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the
Corporation to the holders of Series A Preferred Stock and/or Common
Stock of the Corporation, an amount equal to $200,000 per share of
Interim Series Class B Preferred Stock, plus a further amount equal
to any accumulated but unpaid dividends on such shares.
If upon such liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation are insufficient to
provide for the cash payment described above to the holders of
Interim Series Class B Preferred Stock, such assets as are available
shall be paid ratably (giving proportionate effect to the different
liquidation preferences of each series of Preferred Stock) to the
holders of Interim Series Class B Preferred Stock.
(b) Reorganization or Merger. A reorganization or merger of
the Corporation with or into any other corporation or corporations,
or a sale of all or substantially all of the assets of the
Corporation shall not be deemed to be a liquidation within the
meaning of this Section 2; provided that the holders of Interim
Series Class B Preferred Stock, Class A Preferred Stock, and Common
Stock shall be paid in cash or in securities received from the
acquiring corporation or in a combination thereof (in the same
proportions as the consideration received in the transaction). Any
securities to be delivered to the holders of the Class A Preferred
Stock, Interim Series Class B Preferred Stock, and Common Stock upon
a merger, reorganization or sale of substantially all of the assets
of the Corporation shall be valued as follows:
(i) If traded on a securities exchange, the value shall be
deemed to be the average of the closing prices of the securities on
such exchange over the 30-day period ending three business days
prior to the closing;
(ii) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid prices over the
30-trading day period ending three trading days prior to the
closing; and
(iii) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined by the
Corporation and the holders of not less than a majority of the
outstanding shares of Interim Series Class B Preferred Stock,
provided that if the Corporation and the holders of a majority of
the outstanding shares of Interim Series Class B Preferred Stock are
unable to reach agreement, then by independent appraisal by an
investment banker hired and paid by the Corporation, but acceptable
to the holders of a majority of the outstanding shares of Interim
Series Class B Preferred Stock.
(c) Noncash Distributions. If any of the assets of the
Corporation are to be distributed other than in cash under this
Section 2 or for any purpose, then the Board of Directors of the
Corporation shall promptly engage independent competent appraisers
acceptable to the holders of a majority of the outstanding shares of
Interim Series Class B Preferred Stock, to determine the value of
the assets to be distributed to the holders of Class A Preferred
Stock, Interim Series Class B Preferred Stock, or Common Stock. The
Corporation shall, upon receipt of such appraiser's valuation, give
prompt written notice to each holder of shares of Interim Series
Class B Preferred Stock of the appraiser's valuation.
3. Voting Rights.
Each share of Interim Series Class B Preferred Stock shall be
entitled to the number of votes equal to the number of shares of
Common Stock into which each share of Preferred Stock could be
converted, pursuant to Section 4 hereof, on the record date for the
vote or written consent of stockholders and, except as otherwise
required by law, shall have voting rights and powers equal to the
voting rights and powers of the Common Stock. The holder of each
share of Interim Series Class B Preferred Stock shall be entitled to
notice of any stockholders' meeting in accordance with the Bylaws of
the Corporation and the holders of Interim Series Class B Preferred
Stock shall vote together with holders of the Common Stock upon all
matters submitted to a vote of stockholders, except those matters
required to be submitted to a class vote by law.
4. Conversion. The holders of the Interim Series Class B
Preferred Stock shall have conversion rights as follows:
(a) Right to Convert. From and after July 1, 1997, each share
of Interim Series Class B Preferred Stock shall be convertible
without the payment of any additional consideration by the holder
thereof and, at the option of the holder thereof, at any time after
the date of issuance of such share at the office of the Corporation
or any transfer agent for the Interim Series Class B Preferred
Stock. Each share of Interim Series Class B Preferred Stock shall
be convertible into the number of fully paid and nonassessable
shares of Common Stock which results from dividing (i) the
Conversion Value (as hereinafter defined) per share in effect at the
time of conversion by (ii) the per share Conversion Price (as
hereinafter defined) per share in effect at the time of conversion.
The Conversion Value per share of Interim Series Class B Preferred
Stock shall be the sum of $200,000 plus all accrued but unpaid
dividends, on a per share basis, on the Interim Series Class B
Preferred Stock. The per share Conversion Price of Interim Series
Class B Preferred Stock shall be deemed to be the average of the
closing bid prices of the Corporation's Common Stock over the 30-trading day
period ending three trading days prior to the date of
conversion.
(b) Automatic Conversion. Each share of Interim Series Class
B Preferred Stock shall automatically and immediately be converted
into shares of any class or series of equity securities of the
Corporation ("New Shares") which are issued pursuant to a private
placement effected by the Corporation if such private placement (i)
results in aggregate gross proceeds to the Company of at least
$10,000,000 and (ii) is consummated on or before June 30, 1997;
provided, however that if a private placement of the Corporation's
equity securities occurs but does not meet the criteria set forth in
items (i) and (ii) above, then the holders of Interim Series Class
B Preferred Stock shall have the right but not the obligation to
convert their Interim Series Class B Preferred Stock in accordance
with this Section 4(b). In any conversion under this Section 4(b),
each share of converting Interim Series Class B Preferred Stock
shall convert into the number of fully paid and nonassessable New
Shares which results from dividing the Conversion Value (as defined
in Section 4(a) above) per share in effect at the time of the
conversion by the New Share Conversion Price (as hereinafter
defined). The New Share Conversion Price shall equal the price per
New Share in the aforementioned private placement of the New Shares.
(c) Mechanics of Conversion. Before any holder of Interim
Series Class B Preferred Stock shall be entitled to convert any
shares thereof into shares of Common Stock, such holder shall
surrender the certificate or certificates therefor, duly endorsed,
at the office of the Corporation or of any transfer agent for the
Interim Series Class B Preferred Stock. Such holder shall give
written notice to the Corporation at such office that he, she or it
elects to convert the number of shares of Interim Series Class B
Preferred Stock specified in such notice (except that no such
written notice of election to convert shall be necessary in the
event of an automatic conversion pursuant to Section 4(b) hereof).
The Corporation shall, as soon as practicable after its receipt of
such notice or after the date of automatic conversion, as the case
may be, issue and deliver at such office to such holder a
certificate or certificates for the number of New Shares and/or
shares of Common Stock, as the case may be, to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to
have been made immediately prior to the close of business on the
date of such surrender of the shares of Interim Series Class B
Preferred Stock to be converted (except that in the case of an
automatic conversion pursuant to Section 4(b) hereof such conversion
shall be deemed to have been made immediately prior to the closing
of the offering referred to in Section 4(b)) and the person or
persons entitled to receive the New Shares and/or shares of Common
Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares on such
date.
(d) Fractional Shares. In lieu of any fractional shares to
which the holder of Interim Series Class B Preferred Stock would
otherwise be entitled, the Corporation shall pay cash equal to such
fraction multiplied by the fair market value of one share of such
stock as determined by the Board of Directors of the Corporation.
Whether or not fractional shares are issuable upon such conversion
shall be determined on the basis of the total number of shares of
Interim Series Class B Preferred Stock of each holder at the time
converting into New Shares and/or shares of Common Stock and the
number of New Shares and/or shares of Common Stock issuable upon
such aggregate conversion.
(e) No Impairment. The Corporation will not through any
reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4
and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the holders
of Interim Series Class B Preferred Stock against impairment.
(f) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities
for the purpose of determining the holders thereof who are entitled
to receive any dividend (other than a cash dividend) or other
distribution, any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property or to receive any other right, the Corporation shall mail
to each holder of Interim Series Class B Preferred Stock at least
ten days prior to such record date, a notice specifying the date on
which any such record is to be taken for the purpose of such
dividend or distribution or right, and the amount and character of
such dividend, distribution or right.
