As filed with the Securities and Exchange Commission on
February 19, 1999.
Registration No. 333-_____
_______________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
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 7840 Montgomery Road (I.R.S. Employer
of Cincinnati, Ohio 45236 Identification No.)
incorporation (513) 792-9292
or 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 Amount to Proposed Proposed Amount of
Each Class be Maximum Maximum Registration
of Registered (1) Offering Aggregate Fee
Securities Price Offering
to be Per Share Price
Registered
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) 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 749,405 shares as of February 19,
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) This amount was previously paid in connection with
Registration No. 333-55955 and is to be credited as
provided in Rule 429.
_______________
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
2,789,405 Shares
LCA-VISION INC.
Common Stock
_______________
Certain shareholders of LCA-Vision Inc. 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.
An investment in LCA-Vision Inc. common stock
could be quite 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
TABLE OF CONTENTS
AVAILABLE INFORMATION ............................. ii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ... ii
FORWARD-LOOKING STATEMENTS ........................iii
THE COMPANY ....................................... 1
RISK FACTORS ...................................... 1
THE OFFERING ...................................... 4
CERTAIN TRANSACTIONS .............................. 5
SELLING SHAREHOLDERS .............................. 6
PLAN OF DISTRIBUTION .............................. 7
DESCRIPTION OF SECURITIES ......................... 7
LEGAL MATTERS ..................................... 8
EXPERTS ........................................... 9
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 and
photorefractive keratectomy to treat nearsightedness.
On November 3, 1998, the United States Food and Drug
Administration 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.
Future Profitability Uncertain Due to Limited Operating
History and Losses from Operations
The FDA first approved the use of the excimer
laser for the correction of nearsightedness in the U.S.
in October 1995. As a result, no one in our industry
has more than approximately three years' experience in
the operation and management of laser eye surgery
centers or in the marketing of laser eye 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.
Laser Eye Surgery Might Not Achieve Broad Customer
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 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
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.
Large Number of Shares Eligible for Future Sale Could
Depress Market Price for Common Stock
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.
Technological Change Could Render Our Equipment or
Services Obsolete
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.
Various Sources of Competition Could Harm Our Business
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.
Extensive Government Regulation Could Limit Our
Business
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.
Loss of Good Relations with Physicians Could Reduce
Procedures Performed at Our Centers
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, the
number of proceedings performed in our centers could
decline, which in turn would cause our revenues and
earnings to decline.
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 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 19, 1999, a total of
6,810,595 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
Surgery Center. During 1997 and approximately half of
1998, we leased a portion of our headquarters building
to the Surgery Center at an annual rental of $190,000.
In February 1997, we agreed to forego any further rent
in return of 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
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
Name of Owned Prior be Sold in Owned
Selling To Offering Offering (3) After the
Shareholder (1) Offering (4)
- --------------- ----------- ------------ ------------
Southbrook
International
Investments,
Ltd. 1,730,3602(2) 1,730,360 0
Marshall
Capital
Managment Ltd. 859,0452 859,045 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 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 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 under a prior registration.
(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.
<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
Company Common Stock are entitled to dividends when and
as declared by the 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, ratably, 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.
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 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 Common
Stock to be trade on The Nasdaq Stock Market, failure
to deliver certificates for shares of Common Stock
upon conversion of Series B-1 Stock, or failure to have
reserved a sufficient number of shares of 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 us by our counsel,
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.
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 its Annual Report to
Stockholders for the year ended December 31, 1998.
2. Our Proxy Statements dated April 21, 1998
and September 21, 1998.
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 such differences in the section below
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 ................ $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.
<PAGE>
LCA-VISION INC.
By: /s/ Stephen N. Joffe, M.D.
Stephen N. Joffe, M.D.,
Chairman and Chief
Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below hereby constitutes
and appoints Stephen N. Joffe, M.D. and Larry P. Rapp,
and each of them, jointly and severally, as his or her
true and lawful attorneys-in-fact and agents, each with
full power of substitution, and each with power to act
alone, to sign and execute on behalf of the undersigned
any amendment or amendments to this Registration
Statement on Form S-3, and to perform any acts
necessary to be done in order to file such amendment
with exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission,
and each of the undersigned does hereby ratify and
confirm all that said attorneys-in-fact and agents, or
their or his substitutes, shall do or cause to be done
by virtue hereof.
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 February 12, 1999
Stephen N. Joffe, M.D. and Chief
Executive
Officer
(Principal
Executive
Officer)
/S/ Larry P. Rapp Chief February 12, 1999
Larry P. Rapp Financial
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
Exhibits 5 and 23.1
Charles F. Hertlein, Jr.
(513) 977-8315
February 18, 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 18, 1999,
under which 2,040,000 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 2,040,000 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.
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
February 19, 1999, on our audits of the consolidated
financial statements of LCA-Vision Inc. as of December
31, 1996 and 1997 and for each of the three years in
the period ended December 31, 1998. We also consent to
the reference to our firm under the caption "Experts."
PricewaterhouseCoopers LLP
Cincinnati, Ohio
February 19, 1999
