As filed with the Securities and Exchange Commission on February
___, 1999.
Registration No. 333-55955
__________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
POST-EFFECTIVE
AMENDMENT NO. 1
TO
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
jurisdiction of 7840 Montgomery Road (I.R.S. incorporation
or organization) Cincinnati, Ohio 45236 Employer
(513) 792-9292 Identification No.)
(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 Proposed Proposed Amount of
Class of to be Maximum Maximum Registration
Securities Registered(1) Offering Aggregate Fee
to be Price Offering
Registered Per Share Price
_______________ _____________ __________ ___________ ____________
Common Stock,
$.001 par value 2,040,000(2) $1.50(3) $3,060,000 $850.68(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) This total amount is in addition to 7,560,000 shares which
were originally registered under this registration statement for
which a filing fee was already paid.
(3) Estimated pursuant to Rule 457(g) solely for the purpose of
calculating the amount of the registration fee.
(4) This amount is in addition to $7,948.31 which was previously
paid and represents the additional amount now payable with respect
to the additional shares included in this post-effective
amendment.
_______________
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.
PROSPECTUS
9,600,000 Shares
LCA-VISION INC.
Common Stock
_______________
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." Please refer to the sections of this
Prospectus entitled "Selling Shareholders" and "Recent
Developments" for more information.
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.
__________
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
WHERE TO FIND MORE INFORMATION
Government Filings. We file annual, quarterly and special
reports and other information with the Securities and Exchange
Commission (the "SEC"). 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. The Company's Annual Report on Form 10-K, which
includes sections from its Annual Report to Stockholders for the
year ended December 31, 1997.
2. The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30 and September 30, 1998.
3. The Company's Proxy Statement dated April 21, 1998.
4. The Company's Reports on Form 8-K dated October 15,
1998, November 3, 1998, January 7, 1999, February 8, 1999, and
February 11, 1999.
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
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
FORWARD-LOOKING STATEMENTS
THE COMPANY
RISK FACTORS
RECENT DEVELOPMENTS
SELLING SHAREHOLDERS
PLAN OF DISTRIBUTION
DESCRIPTION OF SECURITIES
LEGAL MATTERS
EXPERTS
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 such differences in the section below entitled
"Risk Factors".
<PAGE>
THE COMPANY
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. The laser vision
correction surgeries performed in our centers primarily include
laser in situ keratomileusis ("LASIK") and photorefractive
keratectomy ("PRK"). On November 3, 1998, the United States Food
and Drug Administration ("FDA") approved the VISX Star S2 excimer
laser to treat farsightedness (hyperopia). The VISX laser, which
we have in each of our U.S. centers, can now be used for
correcting nearsightedness, myopic astigmatism, and hyperopia.
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, some of which are described below. You should
carefully consider these risk factors before you decide to
purchase our Common Stock from the Selling Shareholders.
Limited Operating History and Losses from Operations; Uncertainty
of Future Profitability
In October 1995, the FDA first approved the use of the
excimer laser for the correction of nearsightedness in the U.S.
As a result, no one in our industry has more than approximately
three years' experience in the operation and management of laser
refractive surgery centers or in the marketing of laser refractive
surgery procedures to the general public in the U.S. We opened
our first laser eye surgery center in the U.S. in 1996, and until
the second half of 1998, our laser eye surgery operations were not
profitable. We cannot assure you that recent capital infusions,
acquisitions, related management changes or the market for our
services will cause us to become profitable on a consistent basis.
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.
Uncertainty of Market Acceptance
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 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
Potential Volatility of Stock Price
The market price of our Common Stock has tended to fluctuate.
This fluctuation, or price volatility, may continue to occur in
the future due to overall market conditions or business-specific
factors such as:
- our ability to effectively penetrate the market
- changes in government regulations
- the issuance of new or changed stock market analyst
reports and recommendations
- our ability to meet analysts' projections
- our actual financial results
In addition, our Common Stock could experience extreme
fluctuations in market price that are wholly unrelated to our
operating performance.
Shares Eligible for Future Sale
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 such 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.
Potential Side Effects and Long-Term Results of Laser Refractive
Surgery
Concerns with respect to the safety and efficacy of the
performance of laser eye surgery include predictability and
stability of results and potential complications or side effects
such as:
- post-operative pain
- corneal haze during healing (an increase in light
scattering properties of the cornea)
- glare/halos (undesirable visual sensations produced by
bright lights)
- decrease in contrast sensitivity (diminished vision in low
light)
- temporary increases in intraocular pressure in reaction to
post-procedure medication
- modest fluctuations in astigmatism and modest decreases in
best corrected vision (i.e. with eyeglasses)
- loss of fixation during the procedure; unintended over- or
under-corrections
- instability, reversion or regression of effect; corneal
scars (blemishing marks left on the cornea)
- corneal ulcers (inflammatory lesions resulting in loss of
corneal tissue)
- corneal healing disorders (compromised or weakened immune
system or connective tissue disease which causes poor
healing)
No one can guarantee that additional complications will not
be identified in the future which could significantly affect the
safety and efficacy of laser eye surgery systems, which in turn
could negatively affect the FDA approval of the excimer laser, the
market acceptance of such procedures and/or lead to product
liability or other claims against us.
Technological Change
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.
Dependence on Key Personnel
The departure of any of the members of our senior management,
especially our Chairman and Chief Executive Officer, Stephen N.
Joffe, M.D., could negatively affect strategic and financial
objectives. None of our employees, including Dr. Joffe, has an
employment contract.
Competition
Laser eye surgery competes with other surgical and
non-surgical treatments for refractive eye disorders, including
eyeglasses, contact lenses, other types of refractive surgery
(such as radial keratotomy) 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 vision correction alternatives (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 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.
Government Regulation
Our operations are subject to extensive federal, state and
local laws, rules and regulations affecting the health care
industry and the delivery of heath care. These include laws and
regulations, which vary significantly from state to state,
prohibiting the practice of medicine and optometry by persons not
licensed to practice medicine and optometry, prohibiting unlawful
rebates and division of fees, and limiting the manner in which
prospective patients may be solicited. Further, contractual
arrangements with hospitals, surgery centers, ophthalmologists
and optometrists, among others, are extensively regulated by state
and federal law.
Failure to comply with applicable FDA requirements could
subject excimer laser manufacturers and us to enforcement action,
including product seizures, recalls, withdrawal of approvals and
civil and criminal penalties, any one or more of which could have
a material adverse effect on our business, financial condition and
results of operations. In addition, clearances or approvals could
be withdrawn in appropriate circumstances. A failure by us or our
principal suppliers to comply with regulatory requirements, or
any adverse regulatory action, could result in a limitation on or
prohibition of our use of excimer lasers which in turn would have
a material adverse effect on our business, financial condition and
results of operations. Furthermore, if any of the manufacturers
that supply or may supply excimer lasers to us fail to comply
with applicable federal, state, or foreign regulatory requirements
could result in regulatory action against such manufacturers and
therefore could limit the supply of lasers to us or limit our
ability to use the lasers we already have.
Litigation
We are involved in litigation arising out of closure of our
Manhattan center. The plaintiff has alleged breaches of various
agreements, as well as fraud and the usurpation of a business
opportunity, and has demanded not less than $4.5 million of
compensatory damages and not less than $2 million of punitive
damages and certain equitable remedies. We believe the
plaintiff's claims are without merit, and we are vigorously
defending this suit.
Also, our wholly-owned Canadian subsidiary, Toronto
Laservision Centre (1992) Inc., is a named party in a claim filed
March 27, 1997 in the Ontario Court (General Division). The
plaintiff is seeking CN $5 million plus attorney fees for damages
to her right eye resulting from a LASIK procedure performed in
March 1996. Our attorneys have filed a Statement of Defense and a
Third Party Claim against the manufacturer and distributor of the
LASIK machinery utilized during the procedure. We are vigorously
defending this suit.
We have also been sued, or have been threatened with
litigation, in various situations arising out of our closure in
1997 of a number of unprofitable centers and our reduction in the
number of employees. We consider these matters to be routine to
its business and, to date, not material. We cannot guarantee,
however, that one or more of these matters will not become
material in the future.
Good Relations with Physicians
We 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, a significant
negative impact on our business could result.
Legislative Change for the Health Care Industry
Numerous legislative proposals have been introduced in
Congress and in various state legislatures over the past several
years that would, if enacted, effect major reforms of the U.S.
health care system. We cannot predict whether any of these
proposals will be adopted and, if adopted, what impact such
legislation would have on our business.
Potential Liability and Insurance
While we have secured medical malpractice insurance, and we
require physicians using our facilities to provide evidence of
insurance, this insurance coverage might not be sufficient to
satisfy claims against us. We cannot be certain that liability
insurance will continue to be available to us or the doctors
performing procedures at our laser eye surgery centers.
Performance of laser eye surgery procedures could expose us to
claims of negligence, malpractice or other forms of liability.
Further, use of laser systems in our centers may give rise to
claims against us resulting from laser-related injury. While we
believe that any claims alleging defects in the laser systems we
purchase from our suppliers would be covered by their product
liability insurance, we cannot be certain they will continue to
carry product liability insurance or that their insurance will be
adequate to protect us.
Year 2000
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.
RECENT DEVELOPMENTS
The following is a description of certain recent developments
that occurred after the filing of our most recent annual report on
Form 10-KSB filed with the Securities and Exchange Commission
(which is incorporated by reference in this Prospectus) and have
not otherwise been disclosed in one of our other SEC filings.
Placement of Series B-1 and B-2 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. Pursuant to the Purchase Agreement, the Selling
Shareholders also have 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 act between November 11, 1998 and May 11,
1999. 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 on May 7, 1998 (as corrected on
May 11, 1998 and May 12, 1998). If the Selling Shareholders
exercise their option to purchase Series B-2 Stock, we will file a
separate Certificate of Designation to govern the rights,
preferences and privileges of Series B-2 Stock, which we expect
will be the same as the Series B-1 Certificate of Designation, as
corrected, except the original issuance date will be different,
which affects conversion pricing as described below.
Each share of Series B-1 Stock is convertible into that
number of shares of our Common Stock determined by multiplying
such share by $1,000 (plus the amount of any accrued but unpaid
dividends other than dividends of Common Stock) and dividing the
result by a conversion price equal to the lesser of (i) 125% of
the closing bid price on the trading day preceding original
issuance of the Series B-1 Stock, or (ii) 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, subject
to adjustment as described in the Certificate of Designation for
Series B-1 Stock. We expect that if holders of Series B-1 Stock
exercise their option to purchase up to 5,000 shares of Series B-2
Stock, we will file a Certificate of Designation for the Series
B-2 Stock which will establish respective rights, preferences and
privileges for Series B-2 Stock identical to the Series B-1 Stock,
with equal priority with regard to dividends, liquidation, voting
rights and any other preferential rights of the Series B-2 Stock,
except that the price of conversion for Series B-2 Stock will be
determined by reference to the issue date of the Series B-2 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 Series B-2 Stock (and 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 February 11,
1999, a total of 6,688,562 shares had already been sold by the
Selling Shareholders.
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 ("DLJ"),
also a Selling Shareholder, as compensation for certain investment
banking services related to the acquisition of Refractive Centers
International, Inc.
Certain Transactions
Our Chairman and Chief Executive Officer, Stephen N. Joffee,
M.D., and his wife, Sandra Joffe, have loaned LCA-Vision Inc. the
aggregate amount of approximately $1,500,000. These loans mature
on September 25, 2005, and bear interest at 6.91%. In connection
with our acquisition of Refractive Centers International, Inc., in
May 1998, the Joffes agreed that our payments to them in
connection with these loans, including all principal and interest,
would be limited each year to an amount equal to 25% of our
earnings for the prior fiscal year exceed $1 million. However, in
February, 1999, this restriction was waived. In addition, our
obligation to make payments under these loans are subordinate to
our obligation to make payments under our credit facility with The
Provident Bank.
In 1998, we loaned approximately $2.1 million to the Joffes.
As collateral to secure repayment by the Joffes, we received a
security interest in the loans to us from the Joffes, including
all principal and interest, as well as any rights the Joffes have
to preferred stock dividends we may owe them from time to time.
These loans bear interest at 8.5% and mature on September 26,
2005.
Dr. Joffe is also the majority owner of The LCA Center for
Surgery, Ltd. (the "Surgery Center"), which is inactive and
otherwise unaffiliated with LCA-Vision Inc. We previously leased
a portion of our headquarters building to the Surgery Center, and
also performed some administrative and marketing services on
behalf of the Surgery Center. For rent and as compensation for
these services, the Surgery Center paid LCA-Vision Inc. the
approximate amounts of $74,000 in 1997 and $162,000 in 1996. In
addition, the Surgery Center had made significant leasehold
improvements to our headquarters building, which we purchased in
June 1998 for approximately $872,000, the book value of those
leasehold improvements at the time of our purchase. During 1998,
we also advanced approximately $576,000 to the Surgery Center,
which was used by the Surgery Center for working capital. We were
required by generally accepted accounting principles to record a
loss of approximately $265,000 in 1998 as a result of these
transactions, using the equity method of accounting.
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth information as of February 11,
1999, with respect to beneficial ownership of Common Stock by the
Selling Shareholders and has been provided to us by the Selling
Shareholders:
Shares Shares
Beneficially Shares to Beneficially
Owned Prior be Sold in Owned
Name of to Offering Offering(3) After the
Selling Shareholder (1) Offering (4)
Southbrook International
Investments, Ltd. 940,000(2) 940,000 0
Marshall Capital
Managment Ltd. 466,667(2) 466,667 0
Donaldson, Lufkin &
Jenrette Securities
Corporation 200,000 200,000 0
_________________
(1) 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.
(2) Includes shares of Common Stock issuable upon
conversion of the shares of the 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 thereon 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 such 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.
(3) Excludes 6,810,595 shares previously sold in this
offering.
(4) Assumes sale of all shares offered hereby.
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:
- block trades in which the broker or dealer so engaged
will attempt to sell shares of Common Stock 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 such exchange
- ordinary brokerage transactions and transactions in
which the broker solicits purchasers
- privately negotiated transactions
- short sales
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 (or, if any such
broker-dealer acts as agent for the purchaser of such shares,
from such purchaser) 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 (which may involve block
transactions and sales to and through other broker-dealers,
including transactions of the nature described above) 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 such sales. In
such event, any commissions received by such broker-dealers or
agents 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 short sales, short sales against the
box, puts and calls and other transactions in securities of the
Company or derivatives thereof, and may sell and deliver shares of
Common Stock in connection therewith or in settlement of
securities loans. If the Selling Shareholders engage in such
transactions, the conversion price with respect to Series B-1
Stock or Series B-2 Stock may be affected. From time to time the
Selling Shareholders may pledge their shares of Common Stock
pursuant to the margin provisions of its customer agreements with
its brokers. Upon a default by the Selling Shareholders, the
broker may offer and sell the pledged shares of Common Stock from
time to time.
DESCRIPTION OF SECURITIES
The Amended and Restated Certificate of Incorporation of the
Company authorizes 110,000,000 shares of common stock, $.001 par
value ("Common Stock"), 1,688 shares of Class A Preferred Stock,
.001 par value ("Class A Preferred Stock"), 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 Company Common
Stock are entitled to dividends when and as declared by the Board
of Directors from funds legally available therefor. We do not
anticipate declaring or paying any cash dividends for the
foreseeable future. There are currently 1,688 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.
LCA-Vision Inc. has issued an aggregate 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 Company 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 (i) 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 Company Common Stock, and (ii) holders of Class
A Preferred Stock with a liquidation preference payable upon any
voluntary or involuntary liquidation, dissolution or winding up
of the Company of $40 per share, plus all accrued and unpaid
dividends to be paid prior to any distributions to the holders of
Company Common Stock. Subject to such preferential rights, the
holders of Company Common Stock are entitled to receive, ratably,
all the remaining assets of LCA-Vision Inc.
None of the Class A Preferred Stock, either Series of Interim
Class B Preferred Stock, or Company Common Stock has preemptive or
cumulative voting rights, is redeemable, or is liable for
assessments or further calls.
On May 7, 1998, we filed a Certificate of Designation (as
corrected on May 11, 1998 and May 12, 1998) 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 that
number of shares of Company Common Stock determined by multiplying
such share by $1,000 (plus the amount of any accrued but unpaid
dividends other than dividends of Common Stock) and dividing the
result by a conversion price equal to the lesser of (i) 125% of
the closing bid price on the trading day preceding issuance of the
Series B-1 Stock, or (ii) 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, subject to adjustment as
described in the Certificate of Designation for Series B-1 Stock.
We expect that if the holders of Series B-1 Stock exercise their
option to purchase up to 5,000 shares of Series B-2 Stock, we will
file a Certificate of Designation for the Series B-2 Stock which
will establish rights, preferences and privileges for the Series
B-2 Stock identical to the Series B-1 Stock, with equal priority
with regard to dividends, liquidation, voting rights and any other
preferential rights of the Series B-2 Stock, except that the price
of conversion for Series B-2 Stock will be determined by reference
to the issue date of the Series B-2 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, including among other things,
the failure to maintain effectiveness of the Registration
Statement of which this Prospectus is a part, failure of the
Company Common Stock to be trade on The Nasdaq Stock Market,
failure to deliver certificates for shares of Company Common Stock
upon conversion of Series B-1 Stock, or failure to have reserved a
sufficient number of shares of Company Common Stock upon
conversion of Series B-1 Stock.
LEGAL MATTERS
The validity of the Shares of Common Stock offered hereby
will be passed upon for LCA-Vision Inc. by Dinsmore & Shohl LLP,
Cincinnati, Ohio.
EXPERTS
The consolidated balance sheets of LCA-Vision Inc. and
subsidiaries as of December 31, 1997 and 1996, and the
consolidated statement of operations, shareholders' investment and
cash flows for each of the three years in the period ended
December 31, 1997, incorporated by reference in this Registration
Statement, have been incorporated herein in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and
auditing.
<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 $850.68
Legal fees and expenses $7,500.00
Accounting fees and expenses $3,500.00
Miscellaneous $10,649.32
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.
<PAGE>
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.
(23.2) Consent of PricewaterhouseCoopers LLP
(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 registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Cincinnati, State of Ohio on the 12th day of February, 1999.
LCA-VISION INC.
By: /s/ Stephen N. Joffe, M.D.
Stephen N. Joffe, M.D.,
Chairman and
Chief Executive Officer
<PAGE>
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, M.D.* Chairman and February 12, 1999
Stephen N. Joffe, M.D. Chief Executive
Officer
(Principal
Executive Officer:)
/S/ Larry P. Rapp* Chief Financial February 12, 1999
Larry P. Rapp Officer
(Principal Financial
and Accounting Officer)
/S/ John C. Hassan* Director February 12, 1999
John C. Hassan
/S/ Stephen N. Joffe, M.D.* Director February 12, 1999
Stephen N. Joffe, M.D.
/S/ John H. Gutfreund* Director February 12, 1999
John H. Gutfreund
/S/ William O. Coleman* Director February 12, 1999
William O. Coleman
*Executed in each case by Larry P. Rapp, attorney-in-fact.<PAGE>
Exhibits 5 and 23.1
Charles F. Hertlein, Jr.
(513) 977-8315
February 12, 1999
LCA-Vision, Inc.
7840 Montgomery Road
Cincinnati, Ohio 45236
Ladies and Gentlemen:
This opinion is rendered for use in connection with the
Registration Statement on Form S-3, prescribed pursuant to the
Securities Act of 1933, to be filed by LCA-Vision, Inc. (the
"Company") with the Securities and Exchange Commission on or about
February 12, 1999, under which 9,600,000 shares of the Company's
Common Stock, $.001 par value ("Common Stock") are to be
registered.
We hereby consent to the filing of this opinion as Exhibits 5
and 23.1 to the Registration Statement and to the reference to our
name in the Registration Statement.
As counsel to the Company, we have examined and are familiar
with originals or copies, certified or otherwise identified to our
satisfaction, of such statutes, documents, corporate records,
certificates of public officials, and other instruments as we have
deemed necessary for the purpose of this opinion, including the
Company's Amended Certificate of Incorporation and Amended Bylaws
and the record of proceedings of the stockholders and directors of
the Company.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of
the State of Delaware.
2. When the Registration Statement shall have been
declared effective by order of the Securities and Exchange
Commission, such 9,600,000 shares of Company Common Stock will be
legally and validly issued and outstanding, fully-paid and
nonassessable.
Very truly yours,
DINSMORE & SHOHL LLP
/s/ Charles F. Hertlein, Jr.
Charles F. Hertlein, Jr.
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 25, 1998, on our
audits of the consolidated financial statements of LCA-Vision Inc.
as of December 31, 1997 and 1996 and for each of the three years
in the period ended December 31, 1997. We also consent to the
reference to our firm under the caption "Experts."
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Cincinnati, Ohio
February 12, 1999
