<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 27, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CARDIAC PATHWAYS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C>
DELAWARE 77-0278793
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
CARDIAC PATHWAYS CORPORATION
995 BENECIA AVENUE
SUNNYVALE, CALIFORNIA 94085
(408) 737-0505
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
THOMAS M. PRESCOTT
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CARDIAC PATHWAYS CORPORATION
995 BENECIA AVENUE
SUNNYVALE, CALIFORNIA 94085
(408) 737-0505
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
COPIES TO:
CHRIS F. FENNELL, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(650) 493-9300
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement is declared effective.
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, check the following box. [X]
If this Form is to register additional securities for an offering pursuant
to Rule 462(b) 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 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration 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
<TABLE>
<S> <C> <C> <C> <C>
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TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO TO BE OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE FILING FEE
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Common stock, par value $0.001 per
share........................... 5,858,823 shares(1) $3.56 $20,855,629 $5,214
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</TABLE>
(1) Includes Preferred Share Purchase Rights, which prior to the occurrence of
certain events will not be exercisable or evidenced separately from the
common stock.
(2) The price of $3.56 per share, which was the average of the high and low
prices of the Registrant's common stock on the Nasdaq National Market on
December 22, 2000, is set forth solely for the purposes of calculating the
registration fee in accordance with Rule 457(c) of the Securities Act.
------------------------
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a) MAY DETERMINE.
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<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
PROSPECTUS
(SUBJECT TO COMPLETION, DATED DECEMBER 27, 2000)
5,858,823 Shares
[CARDIAC LOGO]
CARDIAC PATHWAYS CORPORATION
Common Stock
-------------------------
These shares may be offered and sold from time to time by certain
stockholders of Cardiac Pathways Corporation identified in this prospectus. See
"Selling Stockholders." The selling stockholders acquired the shares in a
private placement financing pursuant to a common stock purchase agreement with
Cardiac Pathways.
The prices at which such stockholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions and these stockholders will pay all underwriting discounts and
selling commissions, if any, applicable to the sale of the shares. We will not
receive any of the proceeds from the sale of the shares.
Our common stock is listed on the Nasdaq National Market under the symbol
"CPWY." On December 22, 2000, the average of the high and low price for our
common stock was $3.56 per share.
-------------------------
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 2 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY.
-------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The date of this prospectus is January , 2001.
<PAGE> 3
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus (as it may be
amended or supplemented) in connection with the offering made hereby, and if
given or made, such information or representations must not be relied upon as
having been authorized by Cardiac Pathways Corporation (referred to in this
prospectus as "Cardiac Pathways," "we" and the "Company"), any selling
stockholder or by any other person. Neither the delivery of this prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that information herein is correct as of any time subsequent to the date hereof.
This prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the securities covered by this prospectus,
nor does it constitute an offer to or solicitation of any person in any
jurisdiction in which such offer or solicitation may not lawfully be made.
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Our Company (Cardiac Pathways Corporation).................. 1
Risk Factors ............................................... 2
Special Note Regarding Forward Looking Statements .......... 11
Use of Proceeds ............................................ 11
Selling Stockholders........................................ 12
Plan of Distribution ....................................... 13
Legal Matters............................................... 13
Experts..................................................... 13
Where You Can Find More Information ........................ 14
Information Incorporated by Reference....................... 14
</TABLE>
CARDIAC PATHWAYS CORPORATION
Cardiac Pathways designs, manufactures and markets advanced mapping,
ablation and navigation systems. Our major product platforms consist of the
Realtime Position Management (RPM) Tracking System and Chilli closed-loop Cooled
Ablation Catheter. These products are used to diagnose and treat cardiac
tachyarrhythmias (abnormally rapid heart rhythms) by specialized cardiologists
(electrophysiologists) performing electrophysiology (EP) ablation and diagnostic
procedures. Arrhythmias left untreated can cause palpitations, fainting, sudden
cardiac arrest or death.
The RPM Tracking System is the first FDA-cleared integrated advanced
mapping system that allows clinicians to visualize and navigate multiple
catheter positions and placements in real time and in three dimensions. The
system is designed to provide the electrophysiologist with a safe, accurate and
efficient approach to diagnose and treat certain forms of cardiac arrhythmias.
Traditional EP mapping and ablation procedures can take several hours to
complete and require extensive use of X-ray flouroscopy to navigate and
accurately position catheters within the heart.
Some cardiac arrhythmias also require a large area or depth of cardiac
tissue to be ablated for successful treatment. Ablating this tissue substrate
can result in lengthy procedure times. The Chilli Cooled Ablation Catheter,
integrated within the RPM Tracking System, is designed to provide a safe and
effective tool for the physician to ablate greater lesion (cardiac tissue
destruction) volume and depth than conventional radiofrequency (RF) ablation
catheters. The integration of the RPM Tracking System and Chilli Cooled Ablation
Catheter provides the physician with an optimal system designed to reduce
procedure times, increase clinical success and reduce the hazards of X-ray
exposure to EP healthcare personnel and patients.
Other Cardiac Pathways product lines consist of a conventional line of
mapping and ablation catheters called Radii/Radii-T as well as Trio/Ensemble
diagnostic catheters.
Cardiac Pathways was incorporated under the laws of the State of California
in April 1991 and re-incorporated in Delaware in May 1996. Our principal
executive offices are located at 995 Benecia Avenue, Sunnyvale, California,
telephone number (408) 737-0505.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully consider
the risks described below and the other information in this prospectus before
deciding to invest in our common stock.
WE HAVE A LIMITED HISTORY, A HISTORY OF LOSSES AND AN EXPECTATION OF FUTURE
LOSSES
The Company was founded in 1991 and to date has engaged primarily in
researching, developing, testing and obtaining regulatory clearances for its
products. The Company has experienced significant operating losses since
inception. As of September 30, 2000, the Company had an accumulated deficit of
$99.2 million. To date, the Company has generated only limited revenues from
sales of its products and expects its operating losses to continue through at
least the end of fiscal 2002 as it continues to expend funds to conduct its
research and development activities, establish commercial-scale manufacturing
capabilities and expand its sales and marketing activities. There can be no
assurance that any of the Company's products for diagnosis and treatment of
ventricular tachycardia and other arrhythmias, particularly the RPM Tracking
System or Chilli Cooled Ablation Catheter, will be successfully commercialized
or that the Company will achieve significant revenues from either international
or domestic sales. In addition, there can be no assurance that the Company will
achieve or sustain profitability in the future or meet the expectations of
securities industry analysts. The Company's results of operations may fluctuate
significantly from quarter to quarter or year to year and will depend on
numerous factors, including actions relating to regulatory matters, progress of
clinical trials, the extent to which the Company's products gain market
acceptance, the scale-up of manufacturing abilities and the expansion of sales
and marketing activities and competition.
THERE IS NO ASSURANCE THAT OUR PRODUCTS WILL PROVE TO BE SAFE AND EFFECTIVE
There can be no assurance that the Company's current or future products
will prove to be safe and effective in clinical trials under applicable United
States or international regulatory guidelines or that additional modifications
to the Company's products will not be necessary. Furthermore, there can be no
assurance that the Company will be successful in perfecting the design of the
RPM Tracking System. With respect to the Chilli Cooled Ablation System, because
ablation treatment of cardiac arrhythmias is relatively new, the long-term
effects of radiofrequency ablation on patients are unknown. As a result, the
long-term success of ablation therapy in treating ventricular tachycardia and
other tachyarrhythmias will not be known for several years.
THERE IS NO EXISTING MARKET FOR OUR PRODUCTS
The Company's future success will depend upon the successful
commercialization of the Chilli Cooled Ablation Catheter and RPM Tracking
System. These products have only recently received FDA approval and clearance to
be commercialized in the United States for the treatment of certain forms of
cardiac tachyarrhythmias. The Company has to date demonstrated only limited
ability to commercialize these new products. There can be no assurance that
these products will gain any significant degree of market acceptance among
physicians, patients, and health care payors. The Company believes that
physicians' acceptance of procedures using the Company's RPM Tracking System
will be essential for market acceptance of such system. Even though the clinical
efficacy of the system has been established, electrophysiologists, cardiologists
and other physicians may elect not to recommend the use of the RPM Tracking
System for any number of reasons.
There can be no assurance that this system will be successfully
commercialized for the approved product set in the United States and Europe.
There can be no assurance of the ability to obtain regulatory approval in
certain other international markets where RPM Tracking System has not yet
received approval. The Company believes that, as with any novel medical
technology, there will be a significant learning process involved for physicians
to become proficient. Broad use of the system will require training of
electrophysiologists, and the time required to complete such training could
adversely affect market acceptance. Failure of the product to achieve
significant market acceptance would have a material adverse
2
<PAGE> 5
effect on the Company's business, financial condition and results of operations.
Even if the RPM Tracking System achieves market acceptance, the Company will be
required to significantly ramp manufacturing operations to produce sufficient
quantities of the product to satisfy customer demand. Any failure to manufacture
the RPM Tracking System in quantities sufficient to satisfy demand will
materially adversely affect the Company's business, financial condition and
results of operations.
WE HAVE LIMITED MARKETING AND DISTRIBUTION EXPERIENCE
Establishing a marketing and sales capability sufficient to support planned
sales growth will require substantial efforts and significant management and
financial resources. There can be no assurance that the Company will be able to
continue to expand its marketing staff or sales force, that the establishment of
such a marketing staff or sales force will be cost-effective or that the
Company's sales and marketing efforts will be successful. There can be no
assurance that the Company will be able to maintain or enter into agreements
with existing or new distributors, or that such distributors will devote
adequate resources to selling the Company's products. Failure to establish
appropriate distribution relationships could have a material adverse effect upon
the Company's business, financial condition and results of operations.
WE ARE DEPENDENT ON SELLING CERTAIN OF OUR PRODUCTS IN INTERNATIONAL MARKETS
The Company currently sells its Chilli Cooled Ablation Catheters, Radii-T
mapping and ablation catheters, Trio/Ensemble diagnostic catheters and RPM
Tracking System Products through distributors in certain international markets.
All sales of the Company's products to date have been denominated in U.S.
dollars. Changes in overseas economic conditions, currency exchange rates,
foreign tax laws, or tariffs or other trade regulations could have a material
adverse effect on the Company's ability to market its products internationally
and therefore on its business, financial condition and results of operations.
WE RELY ON MAJOR DISTRIBUTORS
The Company currently relies upon international distributors of specialty
cardiovascular products to market and sell its products. A large percentage of
the Company's revenues are derived from sales to its Japanese distributor, Japan
Lifeline, Inc. Sales to Japan Lifeline accounted for 49%, 52% and 80%, of the
Company's net sales in fiscal 2000, 1999 and 1998, respectively. International
sales accounted for 63%, 78% and 87% of the Company's net sales in fiscal 2000,
1999 and 1998, respectively. In fiscal 2001, the Company anticipates that Japan
Lifeline will continue to account for a significant percentage of the Company's
net sales. The Company also relies on its European distributors for a
significant portion of its revenues. If the Company's sales to any of its
international distributors decline, the Company would experience a material
decline in revenues. Even if the Company is successful in selling its products
through new international distributors, the rate of growth of the Company's net
sales could be materially and adversely effected if its current international
distributors do not continue to sell a substantial number of the Company's
products. If the Company's sales to its current international distributors
decline, the Company cannot be certain that it will be able to attract
additional distributors that can market its products effectively or can provide
timely and cost-effective customer support and service. None of the Company's
international distributors are obligated to sell the Company's products after
its agreement with the Company has expired. Further, the Company cannot be
certain that its current international distributors will continue to represent
its products or that they will continue to devote a sufficient amount of effort
and resources to selling the Company's products.
WE WILL NEED TO DEVELOP STRATEGIC RELATIONSHIPS WITH THIRD PARTIES TO EXECUTE ON
OUR BUSINESS PLAN
The Company intends to pursue strategic relationships with corporations and
research institutions with respect to the research, development, international
regulatory approval, manufacturing and marketing of certain of its products.
There can be no assurance that the Company will be successful in establishing or
maintaining any such relationships or that any such relationship will be
successful.
3
<PAGE> 6
WE RELY ON SOLE SOURCE SUPPLIERS
A number of components for the Company's products are provided by sole
source suppliers. For certain of these components, there are relatively few
alternative sources of supply, and establishing additional or replacement
vendors for such components could not be accomplished quickly. For some
components, there is currently a long lead-time between purchases and the
receipt of shipments. For those components from a single source, the vendor's
inability to supply such components in a timely manner could have a material
adverse effect on the Company's ability to manufacture the RPM Tracking System
and other diagnostic and ablation catheters and therefore on its business,
financial condition and marketing efforts.
WE HAVE LIMITED MANUFACTURING EXPERIENCE
The Company has limited experience manufacturing its products in the
volumes that will be necessary for the Company to achieve significant commercial
sales, and there can be no assurance that reliable, high volume manufacturing
capacity can be established or maintained at commercially reasonable costs. The
Company needs to expend significant capital resources and develop manufacturing
expertise to establish large scale manufacturing capabilities. Manufacturers
often encounter difficulties in scaling up production of new products, including
problems involving production yields, quality control and assurance, component
supply shortages, shortages of qualified personnel, compliance with FDA
regulations, and the need for further FDA approval of new manufacturing
processes. In addition, the Company believes that substantial cost reductions in
its manufacturing operations will be required for it to commercialize its
catheters and systems on a profitable basis. Any inability of the Company to
establish and maintain large scale manufacturing capabilities would have a
material adverse effect on the Company's business, financial condition and
results of operations.
IF WE LOSE OUR LICENSE TO MANUFACTURE MEDICAL DEVICES IT MAY HARM OUR BUSINESS
The Company's manufacturing facilities are subject to periodic inspection
by regulatory authorities, and its operations must undergo QSR compliance
inspections conducted by the FDA. The Company is required to comply with QSR in
order to produce products for sale in the United States and with ISO9001/EN46001
standards in order to produce products for sale in Europe. Any failure of the
Company to comply with QSR or ISO9001/EN46001 standards may result in the
Company being required to take corrective actions, such as modification of its
policies and procedures. The Company has been granted by the State of California
the required license to manufacture medical devices. If the Company is unable to
maintain such a license, it would be unable to manufacture or ship any product,
and such inability would have a material adverse effect on the Company's
business, financial condition and results of operations.
OUR PATENT POSITION IS UNCERTAIN AND OUR SUCCESS DEPENDS ON OUR PROPRIETARY
RIGHTS
The Company's success will depend in part on its ability to obtain patent
and copyright protection for its products and processes, to preserve its trade
secrets and to operate without infringing or violating the proprietary rights of
third parties. The patent positions of medical device companies, including those
of the Company, are uncertain and involve complex and evolving legal and factual
questions. The coverage sought in a patent application either can be denied or
significantly reduced before or after the patent is issued. Consequently, there
can be no assurance that:
- any patents from pending patent applications or from any future patent
application will be issued,
- the scope of any patent protection will exclude competitors or provide
competitive advantages to the Company, or
- any of the Company's patents will be held valid if subsequently
challenged or that others will not claim rights in or ownership of the
patents and other proprietary rights held by the Company.
In addition, there can be no assurance that competitors, many of which have
substantial resources and have made substantial investments in competing
technologies, will not seek to apply for and obtain patents
4
<PAGE> 7
that will prevent, limit or interfere with the Company's ability to make,
modify, use or sell its products either in the United States or in international
markets. Litigation or regulatory proceedings, which could result in substantial
cost and uncertainty to the Company, may also be necessary to enforce patent or
other intellectual property rights of the Company or to determine the scope and
validity of other parties' proprietary rights. There can be no assurance that
the Company will have the financial resources to defend its patents from
infringement or claims of invalidity.
IF OTHERS SUCCESSFULLY ASSERT THEIR PROPRIETARY RIGHTS AGAINST US, WE MAY BE
PRECLUDED FROM MAKING OR SELLING OUR PRODUCTS
The medical device industry has been characterized by extensive litigation
regarding patents and other intellectual property rights, and companies in the
medical device industry have employed intellectual property litigation to gain a
competitive advantage. There can be no assurance that the Company will not
become subject to patent infringement claims or litigation in a court of law, or
interference proceedings declared by the United States Patent and Trademark
Office ("USPTO") to determine the priority of inventions or an opposition to a
patent grant in a foreign jurisdiction. The defense and prosecution of
intellectual property suits, USPTO interference or opposition proceedings and
related legal and administrative proceedings are both costly and time-consuming.
Any litigation, opposition or interference proceedings will result in
substantial expense to the Company and significant diversion of effort by the
Company's technical and management personnel. An adverse determination in
litigation or interference proceedings to which the Company may become a party
could:
- subject the Company to significant liabilities to third parties,
- require disputed rights to be licensed from third parties, or
- require the Company to cease using such technology.
Although patent and intellectual property disputes in the medical device
area have often been settled through licensing or similar arrangements, costs
associated with such arrangements may be substantial and could include ongoing
royalties. Furthermore, there can be no assurance that necessary licenses from
others would be available to the Company on satisfactory terms, if at all.
Adverse determinations in a judicial or administrative proceeding or failure to
obtain necessary licenses could prevent the Company from manufacturing and
selling its products, which would have a material adverse effect on the
Company's business, financial condition and results of operations.
The Company is aware of certain patents owned or licensed by others and
relating to cardiac catheters and cardiac monitoring. Certain enhancements of
the Company's products are still in the design and pre-clinical testing phase.
Depending on the ultimate design specifications and results of pre-clinical
testing of these enhancements, there can be no assurance that the Company would
be able to obtain a license to such parties' patents or that a court would find
that such patents are either not infringed by the Company's enhancements or that
the Company's patents are invalid. Further, there can be no assurance that
owners or licensees of these patents will not attempt to enforce their patent
rights against the Company in a patent infringement suit or other legal
proceeding, regardless of the likely outcome of such suit or proceeding.
WE FACE INTENSE COMPETITION
At present, the Company considers its primary competition to be companies
involved in current, more established therapies for the treatment of ventricular
tachycardia and atrial fibrillation, including drugs, external electrical
cardioversion and defibrillation, implantable defibrillators, ablation
accompanied by pacemaker implantation and open-heart surgery. In addition,
several competitors are also developing new approaches and new products for the
treatment and mapping of ventricular tachycardia and other arrythmias, including
ablation systems using ultrasound, microwave, laser and cryoablation
technologies and mapping systems using contact mapping, single-point spatial
mapping and non-contact, multisite electrical mapping technologies.
5
<PAGE> 8
Many of the Company's competitors have an established presence in the field
of interventional cardiology and electrophysiology, including:
- Boston Scientific Corporation,
- C.R. Bard, Inc.,
- Johnson and Johnson,
- St. Jude Medical,
- Medtronic, Inc., and
- Endocardial Solutions, Inc.
Many competitors have substantially greater financial and other resources
than the Company, including larger research and development staffs, more
experience, capabilities in conducting research and development activities,
testing products in clinical trials, obtaining regulatory approvals and
manufacturing, marketing and distributing products. There can be no assurance
that the Company will succeed in developing and marketing technologies and
products that are more clinically efficacious and cost effective than the more
established treatments or the new approaches and products developed and marketed
by its competitors. Furthermore, there can be no assurance that the Company will
succeed in developing new technologies and products that are available prior to
its competitors' products. The failure of the Company to demonstrate the
efficacy and cost effective advantages of its products over those of its
competitors or the failure to develop new technologies and products before its
competitors, could have a material adverse effect on the Company's business,
financial condition and results of operations.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION
United States
The design, pre-clinical and clinical testing, manufacture, labeling, sale,
distribution and promotion of the Company's products are subject to regulation
by numerous governmental authorities, principally the FDA and corresponding
state and foreign regulatory agencies. Noncompliance with applicable
requirements can result in, among other things, fines, injunctions, civil
penalties, recall or seizure of products, total or partial suspension of
production, failure of the government to grant PMA clearance or PMA approval for
devices, withdrawal of marketing authorization, a recommendation by the FDA that
the Company not be permitted to enter into government contracts and/or criminal
prosecution. The FDA also has the authority to request repair, replacement or
refund of the cost of any device manufactured or distributed by the Company.
Before a new device can be introduced into the market, a manufacturer must
generally obtain marketing clearance through a premarket notification under
Section 510(k) of the FDC Act or an approval of a PMA application under Section
515 of the FDC Act. Commercial distribution of a device for which a 510(k)
clearance is required can begin only after the FDA issues an order finding the
device to be "substantially equivalent" to a predicate device. If the Company
cannot establish that a proposed device is substantially equivalent to a legally
marketed predicate device, the Company must seek premarket approval of the
proposed device from the FDA through the submission of a PMA application.
The Company will be required to make a new 510(k) submission for any device
that is cleared through the 510(k) process if the Company modifies or enhances
the device in a manner that could significantly affect safety or effectiveness,
or if those changes constitute a major modification in the intended use of the
device. If the Company cannot establish that a proposed device is substantially
equivalent to a legally marketed predicate device, the Company must seek
premarket approval of the proposed device from the FDA through the submission of
a PMA application. There can be no assurance that the FDA will act favorably or
quickly on any of the Company's PMA applications. Significant difficulties and
costs may be encountered by the Company in its efforts to obtain FDA clearance
that could delay or preclude the Company from selling its products in the United
States. Furthermore, there
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<PAGE> 9
can be no assurance that the FDA will not request additional data or require
that the Company conduct further clinical studies, causing the Company to incur
substantial cost and delay. In addition, there can be no assurance that the FDA
will not impose strict labeling requirements, onerous operator training
requirements or other requirements as a condition of its PMA approval, any of
which could limit the Company's ability to market its systems. Labeling and
promotional activities are subject to scrutiny by the FDA and, in certain
circumstances, by the Federal Trade Commission ("FTC"). FDA enforcement policy
strictly prohibits the marketing of FDA cleared or approved medical devices for
unapproved uses. Further, if a company wishes to modify a product after FDA
approval of a PMA, including changes in indications or other modifications that
could affect safety or efficacy, additional clearances or approvals will be
required from the FDA. Failure to receive or delays in receipt of FDA clearances
or approvals, including the need for additional clinical trials or data as a
prerequisite to clearance or approval, or any FDA conditions that limit the
ability of the Company to market its systems, could have a material adverse
effect on the Company's business, financial condition and results of operations.
International
The European Union has promulgated rules which require that medical
products distributed after June 14, 1998 bear the CE mark, an international
symbol of adherence to quality assurance standards and compliance with
applicable European medical device directives. Quality system certification is
one of the CE mark requirements. The Company has received ISO9001/EN46001
certification by its ISO Certification Registrar, one of the CE mark
certification prerequisites, for its manufacturing facility in Sunnyvale,
California. Furthermore, in January 1998, the Company received the right to
affix the CE mark to its Arrhythmia Mapping System and Chilli Cooled Ablation
System. In April 1998, the Company received the right to affix the CE mark to
its Radii catheters. In July 1998, the Company received the right to affix the
CE mark to its Trio/Ensemble catheters. In April 2000, the Company received CE
mark certification for the RPM tracking system, and for its Chilli Cooled
Ablation Catheters incorporating Real-time Position Management navigation
technology. While the Company intends to satisfy the requisite policies and
procedures that will permit it to receive the CE Mark Certification for other
products, there can be no assurance that the Company will be successful in
meeting the European certification requirements and failure to receive the right
to affix the CE mark will prohibit the Company from selling these and other
products in member countries of the European Union.
The time required to obtain approval for sale in foreign countries may be
longer or shorter than that required for FDA approval, and the requirements may
differ. Export sales of medical devices that have not received FDA marketing
authorization are subject to FDA export requirements. In accordance with the FDA
Export Reform & Enforcement Act of 1996, such devices may be exported to any
country provided that the device meets a number of criteria including marketing
authorization in one of the "Tier I" countries identified in that Act. If the
device has no marketing authorization in a Tier I country, and is intended for
marketing, it may be necessary to obtain approval from the FDA to export the
device. In order to obtain export approval, the Company may be required to
provide the FDA with documentation from the medical device regulatory authority
of the country in which the study is to be conducted or the purchaser is
located, stating that the device has the approval of the country. In addition,
the FDA must find that the exportation of the device is not contrary to the
public health and safety of the country in order for the Company to obtain the
permit. The Company currently has marketing authorization in one or more Tier I
countries for all its clinically used products. The RPM Tracking System products
are currently undergoing the process and clinical trials necessary to obtain
regulatory approvals in Japan.
WE FACE UNCERTAINTY OVER REIMBURSEMENT AND HEALTHCARE REFORM
In the United States, health care providers, including hospitals and
physicians, that purchase medical products for treatment of their patients,
generally rely on third party payors, principally federal Medicare, state
Medicaid and private health insurance plans, to reimburse all or a part of the
costs and fees associated with the procedures performed using these products.
The Company's success will be dependent upon, among other things, the ability of
health care providers to obtain satisfactory reimbursement from
7
<PAGE> 10
third party payors for medical procedures in which the Company's products are
used. Third party payors may deny reimbursement if they determine that a
prescribed device has not received appropriate regulatory clearances or
approvals, is not used in accordance with cost-effective treatment methods as
determined by the payor, or is experimental, unnecessary or inappropriate. Third
party reimbursement is generally provided on the basis of the procedure's DRG
code as established by the HCFA. The failure of the procedures in which the
Company's products are used or an insufficient level of reimbursements for such
procedures would have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, medical equipment
reimbursements have been mandated by statute to be reduced in the past, and
there can be no assurance that any such reimbursements with respect to the
Company's products will be adequate or provided at all. Failure by hospitals and
other users of the Company's products to obtain reimbursement from third party
payors, or changes in government and private third party payors' policies toward
reimbursement for procedures employing the Company's products, would have a
material adverse effect on the Company's business, financial condition and
results of operations. Moreover, the Company is unable to predict what
additional legislation or regulation, if any, relating to the health care
industry or third party coverage and reimbursement may be enacted in the future,
or what effect such legislation or regulation would have on the Company.
Reimbursement systems in international markets vary significantly by
country and by region within some countries, and reimbursement approvals must be
obtained on a country by country basis. Many international markets have
government managed health care systems that control reimbursement for new
products and procedures. In most markets, there are private insurance systems as
well as government managed systems. Market acceptance of the Company's products
will depend on the availability and level of reimbursement in international
markets targeted by the Company. There can be no assurance that the Company will
obtain reimbursement in any country within a particular time, for a particular
amount, or at all.
Regardless of the type of reimbursement system, the Company believes that
physician advocacy of the Company's products will be required to obtain
reimbursement. The Company believes that less invasive procedures generally
provide less costly overall therapies as compared to conventional drug, surgery
and other treatments. In addition, the Company believes that treatment with the
Company's products will be more efficacious than currently available therapies.
The Company anticipates that hospital administrators and physicians would
justify the use of the Company's products by the attendant cost savings and
clinical benefits that the Company believes would be derived from the use of its
products. However, there can be no assurance that this will be the case. There
can be no assurance that reimbursement for the Company's products will be
available in the United States or in international markets under either
government or private reimbursement systems, or that physicians will support and
advocate reimbursement procedures using the Company's products.
WE FACE PRODUCT LIABILITY RISKS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE INSURANCE
The development, manufacture and sale of medical products entail
significant risk of product liability claims and product failure claims. The
Company has only limited commercial sales to date and does not yet have, and
will not have for a number of years, sufficient clinical data to allow the
Company to measure the risk of such claims with respect to its products. The
Company faces an inherent business risk of financial exposure to product
liability claims in the event that the use of its products results in personal
injury or death. The Company also faces the possibility that defects in the
design or manufacture of the Company's products might necessitate a product
recall. There can be no assurance that the Company will not experience losses
due to product liability claims or recalls in the future. In addition, the
Company will require increased product liability coverage if any of its
potential products are successfully commercialized. Such insurance is expensive,
difficult to obtain and may not be available in the future on acceptable terms,
or at all. Any claims against the Company regardless of their merit or eventual
outcome could have a material adverse effect upon the Company's business,
financial condition and results of operations.
8
<PAGE> 11
WE DEPEND ON KEY PERSONNEL AND MUST CONTINUE TO ATTRACT AND RETAIN KEY EMPLOYEES
AND CONSULTANTS
The Company's ability to operate successfully depends in significant part
upon the continued service of certain key scientific, technical, clinical,
regulatory and managerial personnel, and its continuing ability to attract and
retain additional highly qualified scientific, technical, clinical, regulatory
and managerial personnel. Competition for such personnel is intense, and there
can be no assurance that the Company can retain such personnel or that it can
attract or retain other highly qualified scientific, technical, clinical,
regulatory and managerial personnel in the future, including key sales and
marketing personnel. The loss of key personnel or the inability to hire and
retain qualified personnel could have a material adverse effect upon the
Company's business, financial condition and results of operations.
OUR MANAGEMENT TEAM IS NEW TO CARDIAC PATHWAYS
The Company's management has recently gone through a significant
restructuring. The Company's new President and Chief Executive Officer, Thomas
M. Prescott, joined the Company in May 1999. In addition, the Company's Chief
Financial Officer, Vice President, Operations and Vice President, Sales each
joined the Company in January 2000. The Company also hired a new Vice President
of Human Resources who joined the Company in July 2000. There can be no
assurance that these newly hired officers of the Company will be able to operate
effectively with that portion of the management team that was retained.
OUR FUTURE SUCCESS IS DEPENDENT ON OUR ABILITY TO EXPAND OUR MANUFACTURING AND
MARKETING EFFORTS
In order to manufacture and market its products in commercial quantities,
the Company believes that it will be required to expand its operations,
particularly in the areas of manufacturing and sales and marketing and, in
connection therewith, to have new personnel to work in these areas. There can be
no assurance that the Company's officers and its sales and marketing personnel
will be able to build a successful sales force or that they will be able to
operate effectively with the existing management team. As the Company expands
its operations in these areas, such expansion will likely result in new and
increased responsibilities for management personnel and place significant strain
upon the Company's management, operating and financial systems and resources. To
accommodate any such growth and compete effectively, the Company will be
required to implement and improve information systems, procedures, and controls,
and to expand, train, motivate and manage its work force. Any failure to
implement and improve the Company's operational, financial and management
systems or to expand, train, motivate or manage employees as required by future
growth, if any, could have a material adverse effect on the Company's business,
financial condition and results of operations.
OUR STOCK PRICE IS HIGHLY VOLATILE
The market price of shares of our common stock, like that of the common
stock of many medical product and technology companies, has in the past been,
and is likely in the future to continue to be highly volatile. Factors that have
a significant effect on the market price of our common stock include:
- fluctuations in the Company's operating results,
- the fact that our common stock is thinly traded,
- the proportion of ownership between common stockholders and Series B
Convertible Preferred stockholders,
- announcements of technological innovations or new commercial products by
the Company or competitors,
- government regulation,
- changes in the current structure of the health care financing and payment
systems,
- developments in or disputes regarding patent or other proprietary rights,
9
<PAGE> 12
- release of reports by securities analysts and changes in securities
analysts recommendations,
- economic and other external factors, and
- general market conditions.
Moreover, the stock market has from time to time experienced extreme price
and volume fluctuations which have particularly affected the market prices for
medical products and high technology companies and which have often been
unrelated to the operating performance of such companies. These broad market
fluctuations, as well as general economic, political and market conditions, may
adversely affect the market price of the Company's common stock. In the past,
following periods of volatility in the market price of a company's stock,
securities class action litigation has occurred against the issuing company.
There can be no assurance that such litigation will not occur in the future with
respect to the Company. Such litigation could result in substantial costs and a
diversion of management's attention and resources, which could have a material
adverse effect on the Company's business, operating results and financial
condition. Any adverse determination in such litigation could also subject the
Company to significant liabilities.
HOLDERS OF OUR SERIES B PREFERRED STOCK ARE ENTITLED TO SIGNIFICANT RIGHTS AND
PREFERENCES
The Company has 27,250 shares of Series B Convertible Preferred Stock
outstanding which are convertible, at the option of the holder, into 5.94
million shares of the Company's common stock. The holders of Series B
Convertible Preferred Stock are entitled to significant rights, preferences and
privileges over holders of common stock including the right to a preferential
cumulative dividend, to certain redemption rights and to a substantial
liquidation payment preference over the Company's common stock which is also
payable upon any transaction or series of transactions (including, without
limitation, any merger, reorganization or consolidation) involving a transfer of
50% or more of the outstanding voting power of the Company.
The holders of Series B Convertible Preferred Stock are also entitled to
certain registration rights and enjoy certain protective rights in that their
consent is required to effect certain corporate transactions including, but not
limited to, amending the Company's certificate of incorporation or by-laws,
issuing common or preferred stock, declaring dividends or selling all or
substantially all of the Company's stock or assets. It is likely that the
preferences and rights enjoyed by the holders of Series B Convertible Preferred
Stock has a negative impact the market price of the common stock of the Company.
Also, if these holders, by converting their Series B Convertible Preferred Stock
into common stock and then exercising their registration rights, cause a large
number of securities to be registered and sold in the public market, such sales
could materially and adversely affect the market price for the Company's common
stock. In addition, if the Company were to include in a registration statement
shares held by these holders pursuant to the exercise of their registration
rights, such sales may impede the Company's ability to raise needed capital. For
a more complete description of the rights, preferences and privileges attaching
to the Series B Convertible Preferred Stock refer to the section of the
Company's Annual Report on Form 10-K/A for the year ended June 30, 2000, which
is incorporated herein by reference, entitled "Item 5. Market for Registrant's
Common Equity and Related Stockholder Matters."
THE HOLDERS OF OUR SERIES B PREFERRED STOCK EXERCISE SIGNIFICANT INFLUENCE OVER
US
The holders of Series B Convertible Preferred Stock beneficially own an
aggregate of approximately 41.4% of the outstanding voting stock of the Company
and are entitled to elect three of five directors to the Company's Board of
Directors. These stockholders, if acting together, will be able to significantly
influence all matters requiring approval of either the Board of Directors or the
stockholders of the Company, including the approval of significant corporate
transactions. This concentration of ownership may also delay, deter or prevent a
change in control and may make some transactions more difficult or impossible to
complete without the support of these stockholders.
10
<PAGE> 13
THE SALE OR AVAILABILITY FOR SALE OF SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK
COULD CAUSE A DECLINE IN THE MARKET PRICE OF OUR COMMON STOCK, EVEN IF OUR
BUSINESS IS DOING WELL
Sales of substantial amounts of the Company's common stock in the public
market or the perception that these sales could occur could cause a decline in
the market price of our common stock, especially given the thin trading volume
of our publicly held common stock, and could impair our future ability to raise
capital through offerings of our common stock. Upon the closing of our private
placement financing, which occurred on December 26, 2000, the Company had
outstanding an aggregate of 9,000,852 shares of common stock. Of these
outstanding shares, 2,142,029 are currently publicly held and 5,858,823 shares
may be sold pursuant to this prospectus and upon such sale will be freely
tradable without restriction or further registration, unless purchased by our
"affiliates" as that term is defined in Rule 144 under the Securities Act of
1933. The availability for sale of such shares could materially and adversely
affect the market price of our common stock.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
We have made forward looking statements in this prospectus that are subject
to risks and uncertainties. Forward looking statements include information
concerning possible or assumed future results of operations of Cardiac Pathways.
Also, when we use such words as "intends," "believes," "expects," "anticipates,"
"plans" or similar expressions, we are making forward looking statements. You
should note that an investment in our securities involves risks and
uncertainties that could affect future financial results. Our actual results
could differ materially from those anticipated in these forward looking
statements as a result of factors, including those set forth in "Risk Factors"
and elsewhere in this prospectus.
USE OF PROCEEDS
Cardiac Pathways will not receive any of the proceeds from the sale of the
shares offered by this prospectus. All proceeds from the sale of the shares
offered by this prospectus will be for the account of the selling stockholders,
as described below.
11
<PAGE> 14
SELLING STOCKHOLDERS
The following table sets forth, to our knowledge, the names of each of the
selling stockholders, the number of Common Equivalent Shares that each selling
stockholder owns, the number of shares of common stock owned by each selling
stockholder that may be offered for sale from time to time by this prospectus
and the number of Common Equivalent Shares to be held by each selling
stockholder assuming the sale of all the common stock offered hereby.
The selling stockholders are certain stockholders who are entitled to
registration rights. We may amend or supplement this prospectus from time to
time to update the disclosure set forth herein.
<TABLE>
<CAPTION>
COMMON EQUIVALENT
SHARES BENEFICIALLY COMMON EQUIVALENT
OWNED PRIOR TO SHARES BENEFICIALLY
OFFERING(1) NUMBER OF OWNED AFTER OFFERING
---------------------- SHARES BEING ----------------------
NAME OF SELLING STOCKHOLDER NUMBER PERCENT(2) OFFERED(3) NUMBER PERCENT(2)
--------------------------- --------- ---------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Van Wagoner Funds.............................. 4,714,312 31.6% 3,529,412 1,184,900 7.9%
Bank of America Ventures(4).................... 2,798,755 18.7% 500,000 2,210,520 14.8%
BA Venture Partners V.......................... 415,235 * 88,235 0 *
State of Wisconsin Investment Board............ 2,260,315 15.1% 588,235 1,672,080 11.2%
Special Situations Private Equity Fund,
L.P. ........................................ 582,888 3.9% 470,588 112,300 *
Morgan Stanley Venture Partners III, L.P.(5)... 2,790,035 18.7% 516,062 2,201,800 14.7%
Morgan Stanley Venture Investors III, L.P. .... 231,363 1.5% 49,551 183,556 1.2%
The Morgan Stanley Venture Partners
Entrepreneur Fund, L.P. ..................... 105,680 * 22,622 83,930 *
Faria Fund Ltd. ............................... 47,059 * 47,059 0 *
Trellis Health Ventures, L.P. ................. 132,529 * 23,529 109,000 *
Fogarty Family Revocable Trust................. 132,529 * 23,529 109,000 *
</TABLE>
-------------------------
* Less than 1%
(1) The share capital of Cardiac Pathways consists of (i) common stock,
9,000,852 shares of which were outstanding as of December 21, 2000, (ii)
Series B Convertible Preferred Stock, 27,250 shares of which were
outstanding as of December 21, 2000, (iii) 14,628 shares of common stock and
300 shares of Series B Convertible Preferred Stock subject to outstanding
warrants to purchase such shares, (iv) Preferred Share Purchase Rights. Each
share of Series B Convertible Preferred Stock is convertible into 218 shares
of common stock and entitles the holder thereof to a number of votes, on all
matters which properly come before the stockholders of Cardiac Pathways,
equal to the number of shares of common stock issuable on conversion of the
shares of Series B Convertible Preferred Stock held by such holder. For the
purposes of this table, the term "Common Equivalent Shares" shall refer to
shares of common stock and shares of Series B Convertible Preferred Stock on
an as converted basis.
(2) Based on 14,941,352 Common Equivalent Shares outstanding as of December 21,
2000 (consisting of 9,000,852 shares of common stock and 27,250 shares of
Series B Convertible Preferred Stock convertible into 5,940,500 shares of
common stock).
(3) Shares being offered consist solely of common stock of the Company.
(4) Includes 88,235 shares of common stock and 1,500 shares of Series B
Convertible Preferred Stock (convertible into 327,000 shares of common
stock) held by BA Venture Partners V (one of the selling stockholders), an
affiliate of Bank of America Ventures.
(5) Includes (i) 834 shares of Series B Convertible Preferred Stock (convertible
into 181,812 shares of common stock) and 49,551 shares of common stock held
by Morgan Stanley Venture Investors III, L.P. (one of the selling
stockholders), (ii) 381 shares of Series B Convertible Preferred Stock
(convertible into 83,058 shares of common stock) and 22,622 shares of common
stock held by The Morgan Stanley Venture Partners Entrepreneur Fund, L.P.
(one of the selling stockholders), and (iii) 100 shares of Series B
Convertible Preferred Stock (convertible into 21,800 shares of common stock)
held by Morgan Stanley Dean Witter Equity Funding, Inc.) each of which are
affiliates of Morgan Stanley Venture Partners III, L.P.
12
<PAGE> 15
PLAN OF DISTRIBUTION
On November 7, 2000, we entered into a common stock purchase agreement with
the selling stockholders pursuant to which we sold 5,858,823 shares of our
common stock at a purchase price of $4.25 per share. Pursuant to that sale, we
agreed to register the shares under the Securities Act for resale to the public.
Under a registration rights agreement between Cardiac Pathways and the selling
stockholders, we must use best efforts to cause this registration statement to
be declared effective by the Securities and Exchange Commission as soon as
practicable and to keep this registration statement, or a replacement,
continuously effective under the Securities Act until the earlier of: (i) two
years from the effective date of this prospectus, subject to extension in some
circumstances, (ii) such time as all of the shares offered by this prospectus
may be sold by the selling stockholders within a three month period without
volume limitation pursuant to Rule 144 of the Securities Act, or (iii) such time
as the selling stockholders have sold all shares offered by this prospectus or a
replacement prospectus.
The sale of all or a portion of the shares of common stock offered hereby
by the selling stockholders may be effected from time to time at prevailing
market prices at the time of such sales, at prices related to such prevailing
prices, at fixed prices that may be changed or at negotiated prices. The selling
stockholders may effect such transactions by selling directly to purchasers in
negotiated transactions, to dealers acting as principals or through one or more
brokers, or any combination of these methods of sale. In addition, shares may be
transferred in connection with the settlement of call options, short sales or
similar transactions that may be effected by the selling stockholders. Dealers
or brokers may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders. The selling stockholders and any
brokers or dealers that participate in the distribution may under certain
circumstances be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions received by such brokers or dealers and any
profits realized on the resale of shares by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Cardiac
Pathways and the selling stockholders may agree to indemnify such brokers or
dealers against certain liabilities, including liabilities under the Securities
Act.
To the extent required under the Securities Act or the rules of the
Securities and Exchange Commission, a supplemental prospectus will be filed,
disclosing (i) the name of any such brokers or dealers, (ii) the number of
shares involved, (iii) the price at which such shares are to be sold, (iv) the
commissions paid or discounts or concessions allowed to such brokers or dealers,
where applicable, (v) that such brokers or dealers did not conduct any
investigation to verify the information set out in this prospectus, as
supplemented, and (vi) other facts material to the transaction.
There is no assurance that the selling stockholders will sell any or all of
the shares of common stock offered hereby.
We have agreed to pay the expenses incurred in connection with the
registration of the shares of common stock offered hereby. The selling
stockholders will be responsible for all selling commissions, transfer taxes and
related charges in connection with the offer and sale of such shares.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon
for Cardiac Pathways by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, San Francisco, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended June 30, 2000, as set forth in their report, which is also
incorporated here in by reference in this prospectus and elsewhere in the
registration statement. Our financial statements and schedule are incorporated
by reference in reliance upon Ernst & Young LLP's report, given upon their
authority as experts in accounting and auditing.
13
<PAGE> 16
WHERE YOU CAN FIND MORE INFORMATION
As required by Section 13(a) of the Securities Exchange Act of 1934, we
file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms located at 450 Fifth Street, N.W., Washington,
D.C., 20549, and in New York, New York and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public from the SEC's web site at
http://www.sec.gov.
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3 under the Securities Act with respect to the common stock
offered hereby. This prospectus, which is part of the registration statement,
does not contain all of the information set forth in the registration statement.
Certain parts of the registration statement are omitted from the prospectus in
accordance with the rules and regulations of the Securities and Exchange
Commission. You should review the registration statement and its exhibits and
schedules for further information regarding Cardiac Pathways and the common
stock offered hereby. This prospectus contains descriptions of some of our
contracts and other documents. These descriptions are not complete. We encourage
you to review the complete copies of these contracts and other documents that
have been filed as exhibits to our reports and other information filed with the
Securities and Exchange Commission pursuant to the Exchange Act or registration
statements filed with the Securities and Exchange Commission pursuant to the
Securities Act.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Exchange Act until this offering is completed:
(1) Our Quarterly Report on Form 10-Q for the quarter ended September
30, 2000;
(2) Our Current Report on Form 8-K, filed with the SEC on December 27,
2000;
(3) Our Current Report on Form 8-K, filed with the SEC on November 7,
2000;
(4) Our Annual Report on Form 10-K/A for the year ended June 30, 2000;
and
(5) The description of our common stock contained in our Registration
Statement on Form 8-A filed pursuant to Section 12 of the Exchange Act and
declared effective on June 12, 1996, including any amendments or reports
filed for the purpose of updating such description.
(6) The description of our preferred share purchase rights contained
in our Registration Statement on Form 8-A, filed May 15, 1997 pursuant to
Section 12 of the Exchange Act and declared effective on May 22, 1997,
including any amendments or reports filed for the purpose of updating such
description.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Eldon Bullington
Chief Financial Officer
Cardiac Pathways Corporation
995 Benecia Avenue
Sunnyvale, California 94085
(408) 737-0505
14
<PAGE> 17
You should rely only on the information incorporated by reference or
provided in this prospectus as it may be amended or supplemented. We have
authorized no one to provide you with different information.
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus as it may
be amended or supplemented. You must not rely on any unauthorized information or
representations. This prospectus is an offer to sell only the shares offered
hereby, but only under circumstances and in jurisdictions where it is lawful to
do so. The information contained in this prospectus is current only as of its
date.
<PAGE> 18
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
5,858,823 Shares
[CARDIAC LOGO]
CARDIAC PATHWAYS CORPORATION
Common Stock
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the securities being registered. All amounts shown are estimates except for
the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 5,214
Accountant's fees and expenses.............................. 10,000
Printing Costs.............................................. 10,000
Legal Fees.................................................. 25,000
Miscellaneous............................................... 4,786
---------
Total..................................................... $ 55,000
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law provides that directors
will not be personally liable to the Registrant or its stockholders for monetary
damages for breach of their fiduciary duties as directors, except for liability
(i) for any breach of their duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law; (iii) for unlawful
payments of dividends or unlawful stock purchases or redemptions as provided in
Section 174 of the Delaware General Corporation Law; or (iv) for any transaction
from which the director derives an improper personal benefit. This provision
eliminates the personal liability of directors for monetary damages for actions
involving a breach of their fiduciary duty of care, including any such actions
involving gross negligence. The Registrant's Restated Certificate of
Incorporation provides that, to the fullest extent permitted by the Delaware
General Corporation Law, the Registrant's directors will not be personally
liable to the Registrant or its stockholders for monetary damages for breach of
their fiduciary duties as directors.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act. The
Registrant's Restated Certificate of Incorporation permits the Registrant to
indemnify its directors, officers and employees to the maximum extent permitted
by the Delaware General Corporation Law. The Registrant's Bylaws require the
Company to indemnify its directors and officers, and permit the Registrant to
indemnify its employees and other agents, to the maximum extent permitted by the
Delaware General Corporation Law.
The Registrant and the selling stockholders have entered into a
Registration Rights Agreement which provides for cross-indemnification of each
such stockholder, on the one hand, and the Registrant, its officers, directors
and controlling persons, and each other such stockholder, on the other hand, for
certain liabilities arising under the Securities Act or otherwise.
The Company has also obtained directors and officers insurance to insure
its directors and officers against certain liabilities, including certain
liabilities under United States securities laws.
II-1
<PAGE> 20
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
10.33 Registration Rights Agreement dated November 7, 2000 by and
among Cardiac Pathways and the selling stockholders
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.1 Power of Attorney (included on Page II-4)
</TABLE>
ITEM 17. UNDERTAKINGS.
A. UNDERTAKING REGARDING RULE 415 OFFERING.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act,
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that clauses (i) and (ii) will
not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of this offering.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS
BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
We hereby undertake to deliver or cause to be delivered with the
prospectus, to each person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3
or Rule 14c-3 under the Exchange Act; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus or provide such interim financial
information.
II-2
<PAGE> 21
C. UNDERTAKING REGARDING INDEMNIFICATION.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, 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 registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Sunnyvale, California, on December 27, 2000.
CARDIAC PATHWAYS CORPORATION
By: /s/ THOMAS M. PRESCOTT
------------------------------------
Thomas M. Prescott
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas M. Prescott and Eldon M.
Bullington as his attorneys-in-fact, with the power of substitution, for him in
any and all capacities, to sign any amendment or post-effective amendment to
this Registration Statement on Form S-3 or abbreviated registration statement
(including, without limitation, any additional registration filed pursuant to
Rule 462 under the Securities Act of 1933) with respect hereto and to file the
same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ THOMAS M. PRESCOTT President, Chief Executive December 27, 2000
----------------------------------------------------- Officer and Director
Thomas M. Prescott (Principal Executive
Officer)
/s/ ELDON M. BULLINGTON Chief Financial Officer December 27, 2000
----------------------------------------------------- (Principal Financial and
Eldon M. Bullington Accounting Officer)
/s/ MARK J. BROOKS Director December 27, 2000
-----------------------------------------------------
Mark J. Brooks
/s/ M. FAZLE HUSAIN Director December 27, 2000
-----------------------------------------------------
M. Fazle Husain
/s/ ANCHIE Y. KUO Director December 27, 2000
-----------------------------------------------------
Anchie Y. Kuo
/s/ WILLIAM N. STARLING Director December 27, 2000
-----------------------------------------------------
William N. Starling
</TABLE>
II-4
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
10.33 Registration Rights Agreement dated November 7, 2000 by and
among Cardiac Pathways and the selling stockholders
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.1 Powers of Attorney (included on Page II-4)
</TABLE>
