As filed with the Securities and
Exchange Commission on March 24, 1999.
Registration No. 333-72691
__________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
PRE-EFFECTIVE AMENDMENT NO. 2
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
______________________
LCA-VISION INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2882328
(State or other 7840 Montgomery Road (I.R.S. Employer
jurisdiction of Cincinnati, Ohio 45236 Identification No.)
incorporation or (513) 792-9292
organization)
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
________________
Stephen N. Joffe
LCA-Vision Inc.
7840 Montgomery Road
Cincinnati, Ohio 45236
(513) 792-9292
Fax: (513) 792-5620
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_________________
Copy to:
Charles F. Hertlein, Jr.
Dinsmore & Shohl LLP
1900 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
(513) 977-8315
Fax: (513) 977-8141
Approximate date of commencement of proposed sale to the
public;
As soon as practicable after this Registration Statement
becomes 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 the 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 a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.__
If 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 Amount to be Proposed Proposed Amount of
Class of Registered(1) Maximum Maximum Registration Fee
Securities Offering Aggregate
to be Price Per Offering
Registered Share Price
Common Stock,
$.001 par
value 2,705,076(2) $1.50(3) $4,057,614 $1,128.02(4)
(1) Also includes an indeterminate number of shares of Common
Stock that may become issuable to prevent dilution resulting from
stock splits, stock dividends and conversion price or exercise
price adjustments, which are included pursuant to Rule 416 under
the Securities Act of 1933, as amended.
(2) In reliance upon Rule 429, this amount is in addition to the
shares previously registered by the Registrant under Form S-3
Registration No. 333-55955. All shares unsold under such prior
registration statement (a total of 701,959 shares as of March 10,
1999) are carried forward into this registration statement.
(3) Estimated pursuant to Rule 457(g) solely for the purpose of
calculating the amount of the registration fee.
(4) Of this amount $850.68 was previously paid in connection with
Registration No. 333-55955 and is to be credited as provided in
Rule 429. The balance of $277.34 was paid prior to filing this
Pre-Effective Amendment No. 1 to this Registration Statement.
_______________
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 this Registration Statement shall
become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
_________________________________________________________________
<PAGE>
PROSPECTUS
3,407,035 Shares
LCA-VISION INC.
Common Stock
_______________
The shareholders of LCA-Vision Inc. listed below are offering
their shares of LCA-Vision Inc. common stock for sale to the
public at prevailing market prices by means of this prospectus.
LCA-Vision Inc. itself is not offering any shares of stock for
sale and will not receive any proceeds from this offering. The
selling shareholders are:
- Southbrook International Investments, Ltd.
- Marshall Capital Management, Ltd.
- Westover Investments, L.P.
- Donaldson, Lufkin & Jennette Securities Corporation
- Montrose Investments, Ltd.
_______________
An investment in LCA-Vision Inc. common stock could be risky,
and we urge you to read the information described under the "Risk
Factors" heading beginning on page 1.
__________
These securities have not been approved or disapproved by the
Securities and Exchange Commission or any sate securities
commission nor has the Securities and Exchange Commission or any
state securities commission passed upon the accuracy or adequacy
of this prospectus. Any representation to the contrary is a
criminal offense.
____________
The date of this prospectus is _______, 1999
<PAGE>
TABLE OF CONTENTS
LCA-VISION INC 1
RISK FACTORS 1
THE OFFERING 4
CERTAIN TRANSACTIONS 5
SELLING SHAREHOLDERS 6
PLAN OF DISTRIBUTION 7
DESCRIPTION OF SECURITIES 8
LEGAL MATTERS 9
EXPERTS 9
WHERE TO FIND MORE INFORMATION 9
FORWARD-LOOKING STATEMENTS 10
<PAGE>
LCA-VISION INC.
We are a leading developer and operator of free-standing
laser refractive eye surgery centers. Our laser refractive eye
surgery centers provide the facilities, equipment and support
services for performing various corrective eye surgeries that
employ state-of-the-art laser technologies. We have VISX (TM)
lasers in each of our U.S. centers. They can be used for
correcting nearsightedness, farsightedness and some forms of
astigmatism. Only excimer lasers approved by the FDA are used in
our U.S. centers.
We also manage laser and minimally invasive surgical
procedures at several hospitals and ambulatory surgical centers on
a contract basis. We are generally compensated based on procedures
performed, increased surgical volume, reduced surgical costs, or a
combination of these. We may also receive compensation for
conducting the marketing programs and educating the surgical
staffs of the facilities.
RISK FACTORS
You should be aware that there are various risks associated
with our business, which are described below. You should carefully
consider these risk factors before you decide to purchase our
common stock from the selling shareholders.
If laser eye surgery does not achieve broad customer acceptance,
we might not achieve consistent long-term profitability.
The laser eye surgery industry is relatively new, so we
cannot be certain that enough people will choose to have laser eye
surgery in our centers to make us consistently profitable. A
number of factors could contribute to laser eye surgery not
becoming broadly accepted. These factors include:
- - the relatively high cost of the surgery and the fact that it is
not usually covered by insurance
- - traditional treatments, such as eyeglasses and contact lenses,
are effective and much less expensive
- - possible short-term side effects, including post-operative
pain, corneal glaze during healing, glare/halo effects,
diminished vision in low light, corneal ulcers other healing
disorders
- - possible long-term side effects of the surgery which are not
presently known
- - the fact that many people are resistant to having surgery that
is not absolutely necessary
If we cannot become consistently profitable, we could fail to
meet our obligations when they come due. In that case, if our
creditors sought to satisfy amounts owed them, their actions could
have a material adverse effect on our business, financial
condition and results of operations.
The large number of our shares eligible for future sale could
depress the market price for our common stock generally.
We previously registered 9,901,218 shares of our common
stock. Of these, 9,000,000 shares were for distribution by a
major shareholder, Summit Technologies, Inc. to its shareholders
and for their resale of shares, and 901,218 shares were for
resales by certain other individuals who received shares in
connection with our August 18, 1997 acquisition of all of the
issued and outstanding shares of stock of Refractive Centers
International, Inc. from Summit Technologies, Inc. In addition,
we entered into a registration rights agreement which gives Summit
the right to demand that we register the remaining 7,164,361
shares of our common stock they own. So far, they have not
demanded registration of these shares. However, if Summit does
require registration, their sale of all or part of these shares
could negatively affect the trading price of our common stock.
We previously registered 19,145,798 shares of our common
stock for resale by Stephen N. Joffe, M.D., his wife, Sandra F.W.
Joffe, and his son, Craig P.R. Joffe. There is no restriction on
the timing of the sale, or the amount of sales, of these shares.
As a result, sales of our common stock by Summit and the Joffes
could have a similar negative effect.
If technological change occurs which renders our equipment or
services obsolete and we are financially or otherwise unable to
upgrade our equipment or services, LCA-Vision could be made
unprofitable.
Newer technologies, techniques or products for the treatment
of refractive vision disorders could be developed with better
performance than the excimer laser technology we use. The
availability of new and better ophthalmic laser technology or
other surgical or non-surgical methods for correcting refractive
vision disorders could have a significantly negative impact on our
business. If a new and superior product or technique is
introduced which we would like to use in our centers, we might not
have access to sufficient funds to make the capital expenditures
required to acquire such new technology.
If a better-financed or lower-cost provider of laser surgery or
other, competitive vision treatments forces us to cut our laser
surgery prices in a particular geographic area, our revenues will
probably decline.
Laser eye surgery competes with other surgical and
non-surgical treatments for refractive eye disorders, including
eyeglasses, contact lenses, other types of refractive surgery and
other technologies currently under development. Among providers
of laser refractive surgery, competition will come from firms
similar to us and from hospitals, hospital-affiliated group
entities, physician group practices and private ophthalmologists
that, in order to offer laser refractive surgery to patients,
purchase or rent excimer lasers. Suppliers of conventional
eyeglasses and contact lenses, such as optometry chains, also may
compete with us by purchasing laser systems and offering laser eye
surgery to their customers. We cannot guarantee that our
management, operation and marketing plans will be successful in
meeting this variety of competition. If more competitors offer
laser eye surgery or other competitive types of vision treatments
in a given geographic market, we might find it necessary to reduce
the prices we charge. If that were to happen, we cannot assure
you that we could make up for the reduced profit margin by
increasing the number of procedures we perform. In that case, our
corporate revenues could decrease. Further, it is possible that
our competitors' access to capital and/or financing will give them
an advantage against us.
If a significant number of the surgeons who use our facilities
were to cease using our facilities, our revenues and earnings
would suffer.
Our revenues are generated through the use of our centers by
independent physicians who choose to perform their surgical cases
there. We therefore rely on good relationships with the
physicians who perform laser eye surgery procedures at our
centers. If we are unable for some reason to continue our
relationships with these physicians, or to find comparable
replacements in the event of a termination of any significant
number of these relationships, the number of proceedings performed
in our centers could decline, which in turn would cause our
revenues and earnings to decline. The reasons physicians might
choose not to utilize our centers include the following:
- Better-financed competing laser eye surgery facilities
could offer physicians more financially-attractive terms to use
their facilities.
- Better-financed competing laser eye surgery facilities
could lure physicians by hiring the physicians outright as
highly-paid employees who are prohibited by the terms of their
employment from using our centers.
- Some physicians could find competing facilities to be more
technologically advanced.
- Some physicians could find competing facilities to be more
attractive or geographically convenient.
- Some physicians could choose to purchase their own lasers
and other necessary equipment in order to perform their surgical
cases in their own offices.
Unexpected Year 2000 failures could negatively affect our
business.
The Year 2000 problem exists because many computer systems
and programs utilize two digits rather than four digits to define
years for computer calculations. After December 31, 1999, any
computer recognizing a two digit date may incur system failure or
miscalculate date-sensitive information. The failure of our
computers or those of third parties that we deal with due to this
Year 2000 problem could have an adverse effect on our operations.
We have completed an assessment of our computer software and
hardware for compliance with Year 2000 and have determined that
all business critical systems are compliant. Business critical
systems include financial reporting systems and all lasers
utilized in our centers. Costs associated with the assessment were
internal costs, were expensed as incurred and were immaterial. We
have not verified or tested compliance with our telemarketing
information system because we are in the process of purchasing a
new telemarketing system that will be Year 2000 compliant and will
be installed and operational by June 30, 1999. The cost of this
new system will be included in our capital expenditures or leased.
We anticipate that the cost of this new system will exceed
$200,000.
We have also completed an assessment of external risks
associated with Year 2000. Although management does not believe
that such external risks are significant, the loss of power or
other telecommunication link difficulties could disrupt our
operations.
Although we have taken action to remedy internal and external
Year 2000 problems, there can be no assurance that we will not
experience internal systems failures or that our products and
services suppliers will not experience systems failures which
could have an adverse impact on us and our operations.
THE OFFERING
In 1998, LCA-Vision Inc. was a party to two different private
placement transactions which resulted in the issuance of
restricted stock to a number of sophisticated investors. As part
of these transactions, the investors negotiated for and received
registration rights agreements which required us to file a
registration statement with the Securities and Exchange Commission
which would be available for the investors to use in case they
decide to sell their restricted stock in open market sales.
Most of this restricted stock was in the form of our 6%
Series B-1 Convertible Stock which we will refer to as simply the
"Series B-1 Stock" for ease of reference. The investors have the
right to convert the Series B-1 Stock into LCA-Vision Inc. common
stock at any time they choose. One other investor received our
common stock directly, in exchange for investment banking services
they provided to us. For ease of reference, we will refer to the
investors who may sell common stock under this prospectus as the
"selling shareholders."
We have not retained an underwriting firm to handle sales of
common stock by the selling shareholders. We expect the selling
shareholders to work directly with broker/dealer firms of their
own choosing to arrange for sales of their common stock. We also
expect that the broker/dealers who arrange for sales of common
stock will be compensated by commissions at whatever rates they
may agree upon with the selling shareholders. We will not receive
any proceeds from the selling shareholders' sales of common stock
under this prospectus, and we are not responsible for compensating
their brokers.
Placement of Series B-1 Stock
All but one of the selling shareholders purchased a total of
10,000 shares of Series B-1 Stock for an aggregate purchase price
of $10,000,000. The rights, preferences and privileges of Series
B-1 Stock are governed by a Certificate of Designation which we
filed with the Delaware Secretary of State in May 1998. The
purchase agreement also granted the selling shareholders the
option to purchase an additional 5,000 shares of Series B-2 Stock
for an aggregate purchase price of $5,000,000, if they acted
between November 11, 1998 and May 11, 1999. However, as of March
5, 1999, the original purchasers of a majority of the B-1 Stock
agreed not to exercise the option to purchase Series B-2 Stock.
In exchange for their agreement not to exercise the Series B-2
option, we issued a total of 165,076 shares of common stock to
them.
Each share of Series B-1 Stock is convertible into that
number of shares of our common stock determined by multiplying
the share by $1,000 plus the amount of any accrued but unpaid cash
dividends and dividing the result by a conversion price equal to
the lesser of
- 125% of the closing bid price on the trading day
preceding original issuance of the Series B-1 Stock, or
- the average of the lowest closing bid prices on any four
of the 22 trading days immediately preceding conversion of the
Series B-1 Stock.
However, each selling shareholder owning Series B-1 Stock has
agreed to restrict its ability to convert shares of Series B-1
Stock and to receive shares of common stock in payment of
dividends so that they will not become 5% or greater shareholders
of LCA-Vision Inc.
We estimated the maximum number of shares to be included in
this prospectus by estimating the maximum number of shares of
common stock into which the Series B-1 Stock may be converted
based on events which we believe are reasonably foreseeable,
assuming conversion of all outstanding Series B-1 Stock. The
actual number of shares of common stock into which the Series B-1
Stock may be converted could be more or less than the maximum
number of shares covered by this prospectus. As of March 10,
1999, a total of 6,858,041 shares had already been sold by the
selling shareholders under a prior registration statement.
Donaldson, Lufkin & Jenrette Securities Corporation Shares
On May 4, 1998, we issued 200,000 shares of our common stock
to Donaldson, Lufkin & Jenrette Securities Corporation, also a
selling shareholder, as compensation for certain investment
banking services related to our acquisition of Refractive Centers
International, Inc.
CERTAIN TRANSACTIONS
In 1995, we borrowed a total of $4,390,772 from our largest
stockholders, Dr. and Mrs. Stephen N. Joffe. Dr. Joffe was and
remains our Chief Executive Officer. The loans were made under
two promissary notes which specified an interest rate of 6.91% per
annum and a maturity date of September 26, 2005. As of January 1,
1997, the total amount due under these notes, including
outstanding principal and accrued interest, was $1,962,953. In
August 1997, in connection with our acquisition of Refractive
Centers International, Inc. from Summit Technology, Inc., Dr. and
Mrs. Joffe agreed to amend the promissory notes to provide that we
could not make principal payments to them in any year unless for
the prior fiscal year our earnings before taxes, amortization and
depreciation net of capital expenditures exceeded $1,000,000, and
then payments could be made only up to 25% of such excess. We did
not make any payments under these loans in 1997 or 1998, and as of
December 31, 1998 the total amount of principal and accrued
interest due under these loans was $2,068,000. In February 1999,
Summit agreed to waive the payment restriction which prevented
payments under these notes in 1997 and 1998.
Prior to August 1997, Dr. Joffe was the guarantor of
approximately $11,080,000 of our bank loans. Dr. Joffe was not
compensated for these personal guarantees.
In 1998, we loaned Dr. and Mrs. Joffe a total of $2,100,000.
This loan bears interest at the rate of 8.5% per annum and is
collateralized with Dr. and Mrs. Joffe's pledge back to us of
their rights under the notes documenting their loans to us
described above. As of December 31, 1998, the total amount of
principal and accrued interest due under this loan was $2,160,000.
Dr. Joffe is the majority owner of The LCA Center for
Surgery, Ltd. We do not hold an investment in The LCA Center for
Surgery Ltd. During 1997 and approximately half of 1998, we
leased a portion of our headquarters building to The LCA Center
for Surgery, Ltd. at an annual rental of $190,000. In February
1997, we agreed to forego any further rent in return for the
surgery center providing us with certain systems and processes for
research and development, for providing additional staffing, and
for giving us unlimited use of the leased premises for research,
testing, educational and other agreed purposes. In 1997, we
recorded rent, administrative and marketing income of
approximately $74,000 related to the surgery center.
In addition, in August 1997 we pledged to The Fifth Third
Bank a $985,000 certificate of deposit issued by Fifth Third as
security for a $985,000 loan made by Fifth Third to the surgery
center. We pledged the CD for up to 30 days while the surgery
center arranged to replace the CD as collateral for this loan.
When Dr. Joffe's personal guarantee of our prior facility with
Fifth Third expired in August 1997, he remained personally
obligated to us with respect to replacing the CD as collateral for
Fifth Third's loan to the surgery center. Dr. Joffe fulfilled
this obligation to us by pledging the required collateral, and we
are no longer obligated to Fifth Third with respect to the CD.
In June 1998, we purchased the leasehold improvements that
had been paid for by the surgery center for their book value of
approximately $872,000 and also advanced approximately $576,000 to
the surgery center which remained outstanding. As of December 31,
1998 the surgery center owed us approximately $738,000.
Dr. and Mrs. Joffe own 12.6 shares of our Interim Series
Class B Preferred Stock which accrues dividends on an annual
basis, none of which have been declared or paid. As of December
31, 1998, we owed Dr. and Mrs. Joffe a total of approximately
$359,000 in accrued dividends on this stock.
SELLING SHAREHOLDERS
The following table sets forth information as of March 10,
1999, with respect to beneficial ownership of common stock by the
selling shareholders and has been provided to us by the selling
shareholders. Persons named in this table have sole voting and
investment power with respect to all shares shown as beneficially
owned by them, subject to community property laws, where
applicable. This table excludes 6,858,041 shares previously sold
in this offering under a prior registration statement, and it
assumes sale of all shares owned by the selling shareholders.
This table includes shares of common stock issuable upon
conversion of the shares of Series B-1 Stock at an assumed
conversion price of $1.50 per share. Because the number of shares
of common stock issuable upon conversion of the Series B-1 Stock
and as payment of dividends on the Series B-1 Stock is dependent
in part upon the market price of the common stock prior to a
conversion, the actual number of shares of common stock that will
be issued in respect of conversions or dividend payments, and
consequently the number of shares of common stock that will be
beneficially owned by each selling shareholder, will fluctuate
daily and cannot be determined at this time.
Shares
Shares Beneficially
Beneficially Shares to Owned
Name of Owned Prior be Sold in After the
Selling Shareholder to Offering Offering Offering
- --------------------- ------------ ----------- -------------
Southbrook International
Investments, Ltd. 2,216,360 2,216,360 0
Marshall Capital
Managment Ltd. 927,1844(1) 927,184 0
Westover Investments
L.P. 20,952 (2) 20,952 0
Donaldson, Lufkin &
Jenrette Securities
Corporation 200,000 200,000 0
Montrose Investments,
Ltd. 42,539 (2) 42,539 0
_________________
(1) Includes 101,585 shares we issued in exchange for
Marshall Capital's agreement not to exercise the option to
purchase Series B-2 Stock.
(2) Consists of shares we issued in exchange for their
agreement not to exercise the option to purchase Series B-2 Stock.
PLAN OF DISTRIBUTION
The selling shareholders, from time to time, may sell their
common stock on the Nasdaq SmallCap Market in privately negotiated
transactions or otherwise, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to
such market prices or at negotiated prices. The selling
shareholders may sell their common stock by one or more of the
following methods:
- trades of large blocks of our common stock assembled from
several owners, in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction
- purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this prospectus
- an exchange distribution in accordance with the rules of
the relevant exchange
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers
- privately negotiated transactions
In effecting sales, brokers and dealers engaged by the
selling shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers may receive commissions or
discounts from the selling shareholders in amounts to be
negotiated which are not expected to exceed those customary in the
types of transactions involved. Broker-dealers may agree with the
selling shareholders to sell a specified number of such shares of
common stock at a stipulated price per share, and, to the extent
such broker-dealer is unable to do so acting as agent for a
selling shareholders, to purchase as principal any unsold shares
of common stock at the price required to fulfill the broker-dealer
commitment to the selling shareholders. Broker-dealers who
acquire shares of common stock as principal may thereafter resell
such shares of common stock from time to time in transactions in
the over-the-counter market or otherwise at prices and on terms
then prevailing at the time of sale, at prices then related to
then-current market price or in negotiated transactions and, in
connection with such resales, may pay to or receive from the
purchasers of such shares of common stock commissions as described
above. The selling shareholders may also sell shares of common
stock in accordance with Rule 144 under the Securities Act, rather
than under this prospectus.
The selling shareholders and any broker-dealers or agents
that participate with the selling shareholders in sales of shares
of common stock may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with sales they make.
In that case, any commissions received by broker-dealers and any
profit on the resale of shares of common stock purchased by them
may be deemed to be underwriting commissions or discounts under
the Securities Act. From time to time the selling shareholders
may engage in the following kinds of transactions:
- short sales
- short sales against the box, which means transacting short
sales even though they have an actual ownership position in the
shares
- puts and calls
- transactions in other securities of LCA-Vision
- derivatives of LCA-Vision securities
- the sale or delivery of shares of common stock in
settlement of securities loans.
If the selling shareholders engage in these sorts of transactions,
the conversion price with respect to Series B-1 Stock may be
affected. From time to time the selling shareholders may pledge
their shares of common stock as security for loans from their
broker-dealers. Upon a loan default by the selling shareholders,
the broker may offer and sell the pledged shares of common stock
from time to time.
<PAGE>
DESCRIPTION OF SECURITIES
Our Amended and Restated Certificate of Incorporation
authorizes 110,000,000 shares of common stock, $.001 par value,
1,688 shares of Class A Preferred Stock, .001 par value, and
5,000,000 shares of Class B Preferred Stock, $.001 par value. The
holders of shares of common stock and Class A Preferred Stock
have one vote per share. Neither the common stock nor the Class A
Preferred Stock has any conversion rights. The closing bid price
of the common stock on the Nasdaq SmallCap Market at February 11,
1999 was $1.84 per share. The holders of shares of our common
stock are entitled to dividends when and as declared by our board
of directors from legally available funds. We do not anticipate
declaring or paying any cash dividends for the foreseeable
future. There are currently 1,182 shares of Class A Preferred
Stock issued and outstanding. The holders of shares of Class A
Preferred Stock have one vote per share. The Class A Preferred
Stock does not have any conversion rights.
We have issued a total of 12.6 shares of two series of
Interim Class B Preferred Stock. Each of the 12.6 shares of our
Interim Series Class B Preferred Stock and Second Interim Series
Class B Preferred Stock is convertible into the number of fully
paid and nonassessable shares of common stock that results from
dividing $3.50 into the sum of $200,000 plus all accrued but
unpaid dividends on each such share at the time of conversion.
Our Amended and Restated Certificate of Incorporation
provides holders of each series of Interim Class B Preferred
Stock with a liquidation preference payable upon any voluntary or
involuntary liquidation, dissolution or winding up of LCA-Vision
Inc. of $200,000 per share, plus all accrued and unpaid dividends
to be paid prior to any distributions to the holders of Class A
Preferred Stock or common stock, and holders of Class A Preferred
Stock with a liquidation preference payable upon any voluntary or
involuntary liquidation, dissolution or winding up of LCA-Vision
Inc. of $40 per share, plus all accrued and unpaid dividends to be
paid prior to any distributions to the holders of common stock.
Subject to those preferential rights, the holders of common stock
are entitled to receive all of our remaining assets.
None of the Class A Preferred Stock, either Series of Interim
Class B Preferred Stock, or common stock has preemptive or
cumulative voting rights, is redeemable, or is liable for
assessments or further calls.
In May 1998, we filed a Certificate of Designation with the
Delaware Secretary of State governing the rights, preferences and
privileges of Series B-1 Stock. We have issued 10,000 shares of
Series B-1 Stock. The holders of Series B-1 Stock have no voting
rights. Each share of Series B-1 Stock is convertible into shares
of common stock in the manner described above in the section of
this prospectus entitled "The Offering -- Placement of Series B-1
Stock."
Shares of Series B-1 Stock are subject to mandatory
redemption in certain circumstances specified in the Certificate
of Designation for Series B-1 Stock. These circumstances include:
- failure to maintain effectiveness of the registration
statement of which this prospectus is a part
- failure of the common stock to be traded on the Nasdaq
Stock Market
- failure to deliver certificates for shares of common stock
upon conversion of Series B-1 Stock
- failure to have reserved a sufficient number of shares of
common stock to honor conversions of Series B-1 Stock.
LEGAL MATTERS
The validity of the shares of common stock offered hereby
will be passed upon for us by our counsel, Dinsmore & Shohl LLP,
Cincinnati, Ohio.
EXPERTS
The consolidated balance sheets of LCA-Vision Inc. and
subsidiaries as of December 31, 1998 and 1997, and the
consolidated statement of operations, shareholders' investment and
cash flows for each of the three years in the period ended
December 31, 1998, incorporated by reference in this registration
statement, have been incorporated into this registration
statement in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as
experts in accounting and auditing.
WHERE TO FIND MORE INFORMATION
Government Filings. We file annual, quarterly and special
reports and other information with the Securities and Exchange
Commission. You may read and copy any documents that we file at
the SEC's public reference rooms in Washington, D.C., New York,
New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-
0330 for further information on the public reference rooms. The
public reference rooms impose a nominal fee for copying requested
documents. Our SEC filings are also available to you free of
charge at the SEC's website at http://www.sec.gov.
Information Incorporated by Reference. The SEC allows us to
"incorporate by reference" the information we file with them,
which means that we can disclose important information to you by
referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and
information that we file later with the SEC will automatically
update and supercede previously filed information, including
information included in this document.
We incorporate by reference the documents listed below and
any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
this offering has been completed.
1. Our Annual Report on Form 10-K, which includes sections
from our Annual Report to Stockholders for the year ended December
31, 1998 (SEC file no. 0-27610).
2. Our Proxy Statements dated April 21, 1998 (SEC file no.
0-27610) and September 21, 1998 (SEC file no. 0-27610).
You may request free copies of these filings by writing or
telephoning us at the following address:
Larry P. Rapp
Chief Financial Officer
LCA-Vision Inc.
7840 Montgomery Road
Cincinnati Ohio 45236
Telephone: 513-792-9292
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements" that
include statements regarding the intent, belief or current
expectations of LCA-Vision Inc., our directors or our executive
officers about the many factors which could affect our business,
some of which are:
- trends affecting our financial condition or results of
operations
- our business and growth potential
- various risk factors
- pro forma financial data
You should be aware that these forward-looking statements are
not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of
various factors. We have identified several important factors
that could cause these sorts of differences in the section above
entitled "Risk Factors".
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an itemized statement of the expenses (all
but the SEC fees are estimates) in connection with the issuance
of the securities being registered hereunder. All such expenses
will be borne by the Company.
SEC registration fees $1,128.02
Legal fees and expenses $7,500.00
Accounting fees and expenses $3,500.00
Miscellaneous $10,371.98
Total $22,500.00
Item 15. Indemnification of Directors and Officers
The Company's Amended Bylaws provide that each person who is
made a party or is otherwise involved in an action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Company), by reason of the fact that he is or was a director,
officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or
agent of another entity, shall be indemnified and held harmless by
the Company to the fullest extent authorized by the Delaware
General Corporation Law (the "DGCL") against all 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 the director or officer
acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company and with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The intent of the
Company's Amended Bylaws is to make indemnification for directors
and officers mandatory rather than permissive. In addition, the
Amended Bylaws provide that the Company may pay a director's or
officer's expenses incurred in defending any such proceeding, in
advance of the proceeding's final disposition, provided that the
director or officer delivers to the Company an undertaking to
repay all advanced amounts if it is ultimately determined that he
is not entitled to be indemnified under Delaware law. To the
extent that an officer or director is successful on the merits in
any proceeding, Delaware law mandates indemnification for
expenses, including attorneys' fees. The Company's Amended Bylaws
also provide that the Company may maintain insurance, at its
expense, to protect itself and any director, officer, employee or
agent of the Company against any expense, liability or loss,
whether or not the Company would have the power to indemnify such
person against such expense, liability or loss under the DGCL.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that, in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the
Securities Act and is, therefore unenforceable.
Item 16. Exhibits
Each of the following exhibits is filed or incorporated by
reference in this Registration Statement.
Exhibit
Number Description of Exhibit
(5) and (23.1) Opinion and consent of Dinsmore & Shohl
LLP, counsel to the Registrant. (a)
(23.2) Consent of PricewaterhouseCoopers LLP (a)
(24) Powers of Attorney (a)
________
(a) Previously filed.
Item 17. Undertakings
(a) Rule 415 Offering. The undersigned small business
issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act,
treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end
of the offering.
(e) Request for Acceleration of Effective Date. Insofar
as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the small business issuer pursuant to
the foregoing provisions, or otherwise, the small business issuer
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 small business issuer
of expenses incurred or paid by a director, officer or controlling
person of the small business issuer 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 small business issuer 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 Securities Act and will be governed by
the final adjudication of such issue.
(f) Reliance on Rule 430A. The undersigned small business
issuer will:
(1) For determining any liability under the
Securities Act, treat the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the small business issuer under Rule 424(b)(1), or (4) or
497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective.
(2) For determining any liability under the
Securities Act, treat each post-effective amendment that contains
a form of prospectus as a new registration statement for the
securities offered in the registration statement, and that
offering of the securities at that time as the initial bona fide
offering of those securities.
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 a Form S-3 and
has duly caused this pre-effective amendment no. 2 registration
statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cincinnati, State of Ohio on the
24th day of March, 1999.
LCA-VISION INC.
By: /s/Larry P. Rapp
----------------------
Larry P. Rapp
Chief Financial Officer and
Treasurer
<PAGE>
POWER OF ATTORNEY
In accordance with the requirements of the Securities Act
of 1933, this Registration Statement was signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Stephen N. Joffe * Chairman and March 24, 1999
-------------------- Chief Executive
Stephen N. Joffe, M.D. Officer
(Principal Executive
Officer)
/s/Larry P. Rapp Chief Financial Officer March 24, 1999
- -------------------- Officer
Larry P. Rapp (Principal Financial
and Accounting Officer)
/s/John C. Hassan * Director March 24, 1999
- --------------------
John C. Hassan
/s/Stephen N. Joffe * Director March 24, 1999
- --------------------
Stephen N. Joffe, M.D.
/s/John H. Gutfreund * Director March 24, 1999
- --------------------
John H. Gutfreund
/s/William O. Coleman * Director March 24, 1999
- ---------------------
William O. Coleman
_____________________________
*Executed on behalf of the indicated signatures by Larry P. Rapp,
attorney-in-fact.
