As filed with the Securities and Exchange Commission on April 9, 1999
======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 77-0148208
- --------------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
3400 West Warren Avenue
Fremont, California 94538
(510) 623-9001
------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
The Prentice Hall Corporation
1013 Centre Road
Wilmington, Delaware 19805
(302) 998-0595
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with copies to:
Beth M. Gottlieb, Esq.
Eric M. Fogel, Esq.
Holleb & Coff
55 East Monroe, Suite 4100
Chicago, Illinois 60603
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, other than 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, 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, check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
Title of Proposed
each class maximum Proposed
of securities Amount offering maximum Amount of
to be to be price per offering registration
registered registered unit (1) price (1) fee
- ------------- ---------- ---------- ----------- ------------
Common Stock 8,229,290 $10.50 $86,407,545 $24,021.30
(1) Estimated solely for the purpose of determining the registration fee
in accordance with Rule 457(c) under the Securities Act of 1933, as
amended. The above calculation is based on the average of the reported bid
and asked prices of the common stock on the Nasdaq National Market System
on April 8, 1999.
----------------------------------------
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, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
======================================================================
<PAGE>
The information in this prospectus is not complete and may be changed.
These securities will not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer
to buy these securities in any state where the offer or sale is not
permitted
SUBJECT TO COMPLETION, DATED APRIL 9, 1999
PROSPECTUS
----------
8,229,290 Shares
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
Common Stock
_____________________________
We develop, manufacture and market laser systems for applications in
ophthalmology. Substantially all of our business activities, including
engineering and development, manufacturing, assembly and testing take place
at our facility in Fremont, California. All of the shares of common stock
offered in this Prospectus are being offered by the selling securityholders
in transactions on the Nasdaq National Market System or in privately
negotiated transactions. We will not receive any of the proceeds from the
sales.
Our common stock is traded on the Nasdaq National Market System under
the symbol "SNRS." On April 8, 1999, the closing price reported on the
Nasdaq National Market System was $10.50 per share.
THIS INVESTMENT IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE
"RISK FACTORS" BEGINNING ON PAGE 6.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities.
They have not determined if this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
__________________
The date of this Prospectus is [April ___, 1999]
<PAGE>
TABLE OF CONTENTS
Prospectus
Page
----
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . 3
WHERE YOU CAN FIND MORE INFORMATION. . . . . . . . . . . . . . 3
INCORPORATION OF INFORMATION WE FILE WITH THE SEC. . . . . . . 4
ABOUT SUNRISE. . . . . . . . . . . . . . . . . . . . . . . . . 5
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . 6
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 13
SELLING SECURITYHOLDERS. . . . . . . . . . . . . . . . . . . . 13
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . 16
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 16
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
FORWARD-LOOKING STATEMENTS
Sunrise Technologies International, Inc. makes statements in this
Prospectus and the documents incorporated by reference that are considered
forward-looking statements within the meaning of the Securities Act of 1933
and the Securities Exchange Act of 1934. The Private Securities Litigation
Reform Act of 1995 contains the safe harbor provisions that cover these
forward-looking statements. We are including this statement for purposes
of complying with these safe harbor provisions. We base these forward-
looking statements on our current expectations and projections about future
events. These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions
including, among other things:
. continued losses and cash flow deficits;
. the continued availability of financing in the amounts, at the
times and on the terms required to support our future business;
. inability to receive appropriate regulatory approval from the
Food and Drug Administration;
. uncertain market acceptance of our products;
. safety, efficacy and patent concerns regarding our products and
technology;
. competition;
. reliance on key personnel;
. changes in general economic conditions; and
. unforeseen operational difficulties and financial losses due to
year 2000 computer problems.
Words such as "expect," "anticipate," "intend," "plan," "believe,"
"estimate" and variations of such words and similar expressions are
intended to identify such forward-looking statements. We undertake no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Because of these risks, uncertainties and assumptions, the forward-looking
events discussed or incorporated by reference in this document may not
occur.
____________________
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Securities and Exchange Commission. Our SEC filings are also available
over the Internet at the SEC's web site at http://www.sec.gov. You may
also read and copy any document 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 more information on the public reference
rooms.
<PAGE>
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we
file with them, which means:
. incorporated documents are considered part of the Prospectus;
. we can disclose important information to you by referring you
to those documents; and
. information that we file with the SEC will automatically update
and supersede the Prospectus.
We are incorporating by reference the documents listed below which
were filed with the SEC under the Exchange Act:
. Annual Report on Form 10-K for the year ended December 31,
1998, including the portions of our proxy statement, dated April 9, 1999,
incorporated by reference in such report;
. Current Report on Form 8-K, dated January 1, 1999;
. Current Report on Form 8-K, dated March 10, 1999; and
. Current Report on Form 8-K, dated March 20, 1999.
We also incorporate by reference each of the following documents that
we will file with the SEC after the date of the Prospectus but before the
end of the offering:
. Reports filed under Sections 13(a) and (c) of the Exchange Act;
. Definitive proxy or information statements filed under Section
14 of the Exchange Act in connection with any subsequent stockholders'
meeting; and
. Any reports filed under Section 15(d) of the Exchange Act.
You may request a copy of these filings, at no cost, by contacting us
at the following address or phone number:
Sunrise Technologies International, Inc.
Attn: Ms. Sylvia Ward
Acting Controller
3400 West Warren Avenue
Fremont, California 94538
Tel: (510) 623-9001
http://www.sunrise-tech.com
You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement. We have not authorized
anyone else to provide you with different information. The selling
securityholders will not make an offer of these shares in any state where
the offer is not permitted. You should not assume that the information in
this Prospectus or any supplement is accurate as of any date other than the
date on the front of these documents.
This Prospectus is part of a Registration Statement we filed with the
SEC (Registration No. 333-72829).
<PAGE>
ABOUT SUNRISE
At Sunrise Technologies International, Inc., we develop, manufacture
and market laser systems for applications in ophthalmology. Substantially
all of our business activities, including engineering and development,
manufacturing, assembly and testing, take place at our facility in Fremont,
California.
Since mid-1992, we have focused a significant portion of our efforts
on engineering and development of our holmium laser corneal shaping
process. This process, known as laser thermal keratoplasty, treats
refractive errors of the eye, such as farsightedness and age-related loss
of near focusing ability. The laser thermal keratoplasty system is based
upon patented technology acquired in our acquisitions of in-process
technology from Laser Biotech, Inc. and Emmetropix Corporation in 1992. The
laser thermal keratoplasty system is currently undergoing premarket
clinical studies in the United States as required by the Food and Drug
Administration. Prior to this time, we were primarily a developer and
manufacturer of dental laser systems.
Our working capital is seriously depleted due to our substantial
losses in the past seven years. Sales of our existing ophthalmic products
at current levels will not be sufficient to sustain the continued
development and regulatory licensing of the laser thermal keratoplasty
system. We have been able to raise additional working capital for all
aspects of our business through the private placement of our common stock
and convertible notes with warrants.
We raised approximately $3,700,000 in the form of promissory notes
with warrants in 1997, approximately $9,300,000, net of offering costs, in
the form of promissory notes with warrants in January 1998, approximately
$11,800,000, net of offering costs, from the sale of common stock in
December 1998 and $10,000,000, net of offering costs, in the form of
promissory notes with warrants in January 1999.
Sunrise Technologies International, Inc. was incorporated in 1987
under the laws of the State of California and was reincorporated in 1993
under the laws of the State of Delaware. Our principal executive offices
are located at 3400 West Warren Avenue, Fremont, California 94538;
telephone (510) 623-9001.
<PAGE>
RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the risks described below and the other information contained in
this Prospectus before deciding to invest in shares of our common stock.
WE HAVE SUSTAINED LOSSES IN THE PAST AND WE EXPECT TO REPORT LOSSES IN THE
FUTURE
We have incurred substantial losses that have depleted our working
capital and reduced our stockholders' equity. In addition, we expect that
our business will continue to be a significant consumer of cash. Unless and
until the Food and Drug Administration (the "FDA") approves the domestic
sale of the laser thermal keratoplasty (the "LTK System"), our revenues
will not be sufficient to cover our operating costs. We filed the premarket
approval application (the "PMA") for low hyperopia with the FDA on
December 14, 1998. On January 28, 1999, the FDA determined that the PMA is
suitable for filing. We do not expect FDA approval, however, until the
second half of 1999, at the earliest.
We funded our negative cash flows during 1996, 1997 and 1998 by the
sale of additional equity and convertible debt with warrants. At
December 31, 1997, our cash and cash equivalents were approximately
$1,958,000. At December 31, 1998, after consummation of the offering of
promissory notes with warrants in January 1998 (the "1998 Notes Placement")
(approximate net proceeds of $9,300,000) and the sale of common stock in
December 1998 (the "1998 Equity Offering") (approximate net proceeds of
$11,800,000), our cash and cash equivalents were approximately $9,889,000.
Notwithstanding the proceeds of the offering of promissory notes with
warrants in January 1999 (the "1999 Notes Placement"), we may be required
to raise additional working capital during 1999 to fund our activities for
late 1999 and beyond. There can be no assurance that additional funds can
be raised on terms acceptable to us, if at all. Any additional equity or
debt offerings will dilute the holdings of our stockholders.
We expect to report operating losses during 1999. The losses will
come primarily from the expenses of the FDA approval process and underlying
clinical studies related to the LTK System. We will not have any domestic
revenues from this product line unless and until we obtain the FDA
approval. Our international revenues will not be sufficient to cover the
cost of the approval process or our general operating expenses.
NO ASSURANCE FUTURE CAPITAL WILL BE AVAILABLE TO US; ADDITIONAL CAPITAL
WILL DILUTE THE HOLDINGS OF OUR STOCKHOLDERS
Our stockholders have no preemptive rights. If we:
1. commence a subsequent public or private offering of common
stock, convertible debt, or preferred stock; or
2. issue preferred stock or shares of common stock upon exercise
of warrants to consultants or other parties providing goods or services to
us in lieu of or in addition to cash consideration,
our stockholders, who do not participate in any future stock issuance, will
experience dilution of their equity investment. At this time, we cannot
determine the potential dilution to our stockholders.
We cannot assure that additional financing will be available, or if
available, that it will be available on terms favorable to our
stockholders. If funds are not available to satisfy our short-term and
long-term operating requirements, we may limit or suspend our operations in
the entirety or, under certain circumstances, seek protection from
creditors. Our recent debt and equity offerings contained terms adverse to
our then existing stockholders. We believe that future financing undertaken
prior to the commencement of sales of the LTK System in the United States
may contain terms that could result in similar or more substantial dilution
than that incurred by our stockholders from the 1998 Notes Placement, the
1998 Equity Offering or the 1999 Notes Placement.
<PAGE>
WE MAY NOT CONTINUE TO RECEIVE NECESSARY APPROVAL FROM THE FOOD AND DRUG
ADMINISTRATION
The FDA and similar health authorities in foreign countries
extensively regulate our activities. The FDA regulates the LTK System under
the Food, Drug & Cosmetic Act, as a Class III medical device. Class III
medical devices must have a PMA approved by the FDA before commercial sales
in the United States commence. The PMA process (and underlying clinical
studies) is lengthy, the outcome is difficult to predict and the process
requires substantial commitments of our financial resources and our
management's time and effort. Delays in obtaining or failure to obtain
required regulatory approvals or clearances in the United States and other
countries would postpone or prevent the marketing of the LTK System and
other devices. Consequently, delays would impair our ability to generate
funds from operations, which in turn would have a material adverse effect
on our business, financial condition and results of operations.
In addition to analyzing the LTK System itself, the FDA may also
evaluate public disclosures made by us regarding the LTK System, as part of
the review and approval process. In this regard, we received in early
September 1998 a letter from the FDA stating that recent press releases
contained certain prohibited representations. The FDA did not require us to
respond to the letter. We no longer, however, include the items described
in the FDA letter in our public disclosures. We submitted our PMA on
December 14, 1998 to the FDA, and we received notification from the FDA in
a letter dated January 28, 1999 that our application has been accepted for
filing.
We cannot be certain that we will be able to timely obtain, if at
all, the required approval of our PMA in the United States for our intended
uses of the LTK System, or for any other devices which we may seek
approvals or clearances. The FDA will subject us to pervasive and
continuing regulation for any products that we manufacture or distribute.
A new FDA regulation requires disclosure of the financial interests
of clinical investigators. This new regulation applies to all new PMAs
submitted on or after February 2, 1999. The purpose of this new regulation
is to assist the FDA in determining if, and to what extent, the clinical
studies supporting a marketing application may have been subject to
investigator bias. Some of our current 11 clinical investigators of the LTK
System have financial interests in us that meet the threshold for
disclosure under this new FDA regulation. It is not possible to predict,
however, what impact, if any, the disclosure of these interests would have
on the FDA's review of the PMA we submitted for the LTK System.
We received a CE (European Community) Mark of approval on our LTK
device that allows us to sell the device in these countries. In addition to
the CE Mark, however, some foreign countries may require separate
individual foreign regulatory clearances. Although we have sold our
products in approximately 15 countries, sales of the LTK System require
rigorous regulatory approvals before we can sell them in the United States
and certain other countries. We cannot assure that we will be able to
obtain regulatory clearances for our products in the United States or other
foreign markets.
WE DEPEND ON THE LTK SYSTEM AND MARKET ACCEPTANCE OF THAT SYSTEM IS UNCLEAR
We intend to continue to concentrate our efforts primarily on the
development of the LTK System and will be dependent upon the successful
development of that system to generate revenues. We have not yet
commercially introduced the LTK System in the United States. There can be
no assurance that if approved by the FDA, the ophthalmic community or the
general population will accept the LTK System as an alternative to existing
methods of treating refractive vision disorders. Many ophthalmologists may
have already invested significant time and resources in developing
expertise in other corrective ophthalmic techniques. Acceptance of the LTK
System may be affected adversely by
. its costs,
<PAGE>
. concerns related to its safety and efficacy,
. the general resistance to use of laser products on the eye,
. the effectiveness of alternative methods of correcting refractive
vision disorders,
. the lack of long-term follow-up data, or
. the possibility of unknown side effects.
Promotional efforts by suppliers of products or procedures which are
alternatives to the LTK System, including eyeglasses, contact lenses and
laser and non-laser surgical procedures, may also adversely affect the
marketplace for the LTK System. Any failure to achieve broad market
acceptance of the LTK System will have a material adverse effect on our
business, financial condition and results of operations.
LONG-TERM SAFETY AND EFFICACY DATA ABOUT OUR PRODUCT IS NOT YET AVAILABLE
We have developed limited clinical data on the safety and efficacy of
the LTK System in correcting hyperopia (farsightedness) and related long-
term data. The FDA has not yet determined whether the LTK System will prove
to be safe or effective for the predictable and reliable treatment of
hyperopia or other common vision problems. Potential complications and side
effects reported in studies to date from the use of the LTK System include
. mild foreign body sensation,
. temporary increased light sensitivity,
. modest fluctuations in refractive capabilities during healing,
. unintended over or under-corrections,
. regression of effect, and
. induced astigmatism.
We cannot assure that long-term safety and efficacy data when
collected will be consistent with the clinical trial results previously
obtained or will demonstrate that the LTK System can be used safely and
successfully to treat hyperopia in a broad segment of the population on a
long-term basis.
OUR PRODUCT EMPLOYS PROPRIETARY TECHNOLOGY AND THIS TECHNOLOGY MAY INFRINGE
ON THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES
We hold United States process and apparatus patents for the use of
holmium lasers in non-destructive cornea shaping. Other parties, however,
hold process and apparatus patents relating to shaping the cornea with
holmium lasers. Generally, an apparatus patent contains claims to a new and
useful machine or device. A process patent generally contains claims to a
new and useful process, art, or method, which may include a new use of a
known process, machine, manufacture, composition of matter, or material. We
believe that we are not infringing on any patents held by others. However,
if patents held by others were adjudged valid and interpreted broadly in an
adversarial proceeding, they could be deemed to cover one or more aspects
of our holmium laser corneal shaping systems, use of the LTK System, or
other procedures. Any claims for patent infringement could be time-
consuming, result in costly litigation, divert technical and management
personnel, or require us to develop non-infringing technology or to enter
into royalty or licensing agreements. We cannot be certain that we will not
be subject to one or more claims for patent infringement, that we would
prevail in any such action, or that our patents will afford protection
against competitors with similar technology.
<PAGE>
If a court determines that the LTK System infringes, directly or
indirectly, a patent in a particular market, the court may enjoin us from
making, using and selling such system. Furthermore, we may be required to
pay damages or obtain a royalty-bearing license, if available, on
acceptable terms. Alternatively, if a license is not offered or available,
we may be required to redesign those aspects of the LTK System held to
infringe, directly or indirectly, to avoid such infringement. Any redesign
could delay reintroduction of our products into certain markets, or may be
so significant as to be impractical. If redesign efforts were impractical,
we could be prevented from manufacturing and selling the infringing
products, which would have a material adverse effect on our business,
financial condition and results of operations.
LACK OF AVAILABILITY OF KEY SYSTEM COMPONENTS COULD RESULT IN DELAYS,
INCREASED COSTS, OR COSTLY REDESIGN OF OUR PRODUCT
Although some of the parts and components used by us in producing our
products are available from multiple sources, we currently purchase most of
our components from a single source in an effort to obtain volume
discounts. Lack of availability of any of these parts and components could
result in production delays, increased costs, or costly redesign of our
products. We continually evaluate ways to minimize any impact to our
business from any potential part or component shortage through inventory
stockpiling and design changes to afford opportunities for multiple sources
of supply for these essential components. In addition, a component of the
LTK delivery system is possibly covered by a patent owned by the University
of Miami or licensed to another party. We believe that we will be able to
conclude a satisfactory arrangement with the University of Miami. If,
however, we are unable to reach an agreement with the University
successfully, we may have no rights to components of the delivery system
presently configured in the LTK System. If we are forced to redesign the
LTK System, such redesign efforts could be time consuming, expensive and
prolong FDA review. Any loss of availability of an essential system
component could result in a material adverse change to our business,
financial condition and results of operations.
THE SUCCESS OF COMPETITIVE PRODUCTS COULD HAVE AN ADVERSE AFFECT ON OUR
BUSINESS
The vision correction industry is intensely competitive. The
significant competitive factors in the industry include
. price,
. convenience,
. success relative to vision correction,
. acceptance of new technologies,
. patient satisfaction, and
. government approval.
Patients with hyperopia (farsightedness) can achieve vision
correction with eyeglasses, contact lenses and possibly with other
technologies and surgical techniques currently under development, such as
. corneal implants,
. human lens replacement,
. intra-ocular implantable contact lenses, and
. surgery using different types of lasers.
<PAGE>
The success of any competing alternative to the LTK System for
treating hyperopia could have a material adverse effect on our business,
financial condition and results of operations. Most of our competitors have
substantially greater financial capabilities for product development and
marketing than we do. These financial capabilities enable our competitors
to market their products or procedures to the consumer and to the
ophthalmic community in a more effective manner.
The excimer laser is the dominant laser used for the treatment of
refractive disorders. In the United States, VISX, Inc. ("VISX") and Summit
Technologies, Inc. ("Summit") are the leading manufacturers of excimer
refractive surgical systems. We believe the LTK System offers several
distinct advantages over the use of excimer lasers for treating hyperopia,
including ease of use and decreased invasiveness. Both VISX and Summit,
however, have significantly greater financial resources than we do and have
received FDA approval for their respective excimer laser products for
treating myopia (nearsightedness) and astigmatism. In addition, certain of
our competitors, including Summit, have developed LTK devices for the
treatment of hyperopia. Furthermore, one of our competitors, VISX, has
received FDA approval to treat hyperopia in the United States with its
excimer laser.
Neither the Summit excimer laser products nor the Summit LTK devices
are currently approved for treating hyperopia in the United States.
Furthermore, Summit discontinued its clinical trials for treating hyperopia
with its holmium laser system in 1996. Any alternative treatment offered by
VISX or Summit, however, will have a competitive advantage. They are
promoting their excimer laser products for correcting myopia
(nearsightedness) using lasers and have established a base of customers
that are currently using their products.
WE ARE DEPENDENT ON OUR MANAGEMENT AND KEY PERSONNEL TO SUCCEED
Our principal executive officers have extensive experience in
ophthalmic research, development and sales. The loss of the services of any
of our executive officers or other key personnel, or our failure to attract
and retain other skilled and experienced personnel on acceptable terms,
could have a material adverse effect on our business, results of operations
and financial condition.
LOSS OF DENTAL REVENUES SEVERELY REDUCED OUR REVENUES
Before the sale of our dental assets in June 1997, the sale of our
dental laser and air abrasive products constituted the majority of our
revenues. These sales represented 98% and 69% of our revenues in 1996 and
1997, respectively. By selling the dental assets, we lost a significant
source of continued revenue, although the dental assets made a negative
contribution to our financial results.
OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY INHIBIT A TAKEOVER
The provisions of
. our Certificate of Incorporation, as amended;
. our Bylaws, as amended; and
. the Delaware General Corporation Law
may have the effect of delaying, discouraging, inhibiting, preventing or
rendering more difficult an attempt to obtain control of us by means of a
tender offer, business combination, proxy contest or otherwise. These
provisions include
. charter authorization of "blank check" preferred stock,
. classification of the Board of Directors,
<PAGE>
. a restriction on the ability of the stockholders to take
actions by written consent, and
. a Delaware law provision imposing restrictions on business
combinations with certain interested parties.
In addition, we adopted a Stockholder Rights Plan. Under this Plan,
each issued and outstanding share of our common stock has associated with
it one right (the "Right") to purchase a share of our common stock from us
at a price of $20, subject to adjustment. These Rights will be exercisable
if a person or group either:
1. acquires beneficial ownership of 15% or more of the common
stock; or
2. commences a tender or exchange offer upon consummation of which
such person or group would beneficially own 15% or more of the common
stock.
We will be entitled to redeem the Rights at $.001 per Right at any time
until ten days following a public announcement that a 15% position has been
acquired.
THE FUTURE PRICE OF OUR STOCK CANNOT BE PREDICTED
Quarterly fluctuations in our operating results, announcements by us
or our competitors of technological innovations or new product
introductions, and other factors may affect the market price of our common
stock. If revenue or earnings in any quarter fail to meet expectations of
the investment community, there could be an immediate impact on our stock
price. In addition, the stock market has from time to time experienced
extreme price and volume fluctuations, particularly among stocks of high
technology companies, which on occasion have been unrelated to the
operating performance of particular companies. Factors not directly related
to our performance, such as negative industry reports or disappointing
earnings announcements by publicly traded competitors, may have an adverse
impact on the market price of our common stock.
THE FAILURE OF KEY SUPPLIERS AND OUR PRODUCTS TO BE YEAR 2000 COMPLIANT
COULD NEGATIVELY AFFECT OUR BUSINESS
We are aware of the issues associated with computer systems
programming code as the millennium (year 2000) approaches. The "Year 2000"
problem is pervasive and complex because virtually every computer operation
will be affected in the same way by the rollover of the two-digit year
value to "00." The issue is whether computer systems will properly
recognize date-sensitive information when the year changes to 2000. Systems
that do not properly recognize such information could generate erroneous
data or cause a system to fail.
We are utilizing both internal and external resources to identify,
correct or reprogram, and test our systems for Year 2000 compliance. As of
December 31, 1998, the estimated costs of these reprogramming efforts have
been approximately $250,000. We expect that the remaining costs to complete
these reprogramming efforts will be less than $100,000. We anticipate that
we will complete all of our reprogramming efforts by July 31, 1999,
allowing adequate time for testing. This process includes obtaining
confirmations from our primary vendors that they have developed (or are
developing) plans to address processing of transactions in the year 2000.
We expect to obtain these confirmations in writing prior to June 30, 1999.
There can be no assurance, however, that the systems of other companies, on
which our systems rely, will also be converted in a timely manner.
Moreover, we cannot be certain that any such failure to convert by another
company would not have a material adverse effect on our business, financial
conditions or results of operations.
We believe that we do not have a Year 2000 problem with the products
we have sold in the past. We have not performed, however, an extensive
review of these systems, and we are unlikely to be able to complete a
<PAGE>
review before January 1, 2000. In addition, we are designing a new product
to replace our existing LTK System that will properly recognize date-
sensitive information for the year 2000 and beyond. Although we plan to
perform extensive testing of our new product, we cannot be certain that the
new system will function properly until we deploy it in the field and
subject it to extensive use. Any malfunction of a deployed system could
have a material adverse effect on our business, financial condition or
results of operations.
We are not expecting to have a material accounts receivable exposure
or significant amount of revenues with any one customer after December 31,
1999. Therefore, we are not pursuing verification of customer Year 2000
compliance at this time. Any failure to pay in a timely manner, or place
orders for our products, by a significant number of individual customers or
by a customer with a material accounts receivable balance, due to Year 2000
compliance issues would have material adverse effects on our business,
financial condition or results of operations.
We are currently developing a contingency plan to evaluate business
disruption scenarios, coordinate the establishment of Year 2000 contingency
plans and identify and implement the strategies. We expect to complete this
detailed contingency plan by June 30, 1999.
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of
common stock by the selling securityholders.
SELLING SECURITYHOLDERS
The shares of common stock offered herein (the "Offered Shares") were
acquired by the individuals and entities listed below (the "Selling
Securityholders") through private placements of both our equity and
convertible subordinated notes with accompanying warrants in 1997, 1998 and
1999, and by the issuance of warrants to certain of our consultants and
non-employee directors. Absent registration under the Securities Act, the
Offered Shares are subject to certain limitations on resale. The
Registration Statement of which this Prospectus forms a part has been filed
in satisfaction of certain registration rights granted by us to the Selling
Securityholders.
Certain of the Selling Securityholders, Pennsylvania Merchant Group
("PMG") and M.J. Meehan & Co., are, or are affiliated with, members of the
National Association of Securities Dealers, Inc. PMG has engaged from time
to time, and in the future PMG and/or M.J. Meehan & Co. and/or their
respective affiliates may engage, in market-making activities with respect
to the common stock. PMG, M.J. Meehan & Co. and their respective
affiliates have engaged from time to time, and in the future may engage, in
purchase and sale transactions involving the common stock, including
transactions with other NASD member firms. The Selling Securityholders,
including PMG and M.J. Meehan & Co., and any participating broker or dealer
may be deemed to be "underwriters" within the meaning of the Securities
Act. Any commissions, discounts or concessions and any gain realized by a
person deemed to be an underwriter may be deemed to be underwriting
compensation to such person. From time to time since 1994, PMG has provided
financial advisor and investment banking services to us pursuant to
engagement and other agreements (the "PMG Agreements"). Under the PMG
Agreements, we have agreed to indemnify PMG and certain of its affiliates
and employees from and against certain losses and liabilities.
The following table assumes that each of the Selling Securityholders
will sell all of the Offered Shares set forth opposite such Selling
Securityholder's name. However, one or more of the Selling Securityholders
may sell only a portion or may sell none of the Offered Shares set forth
opposite such Selling Securityholder's name.
<PAGE>
<TABLE><CAPTION>
Common Shares Common Shares
Beneficially Owned Beneficially Owned
Prior to the Numbers of After the
Offering (1) Shares Held of Offering (1)
---------------------- Record to be --------------------
Number of Percent Sold in the Number of Percent
Shares of Class Offering Shares of Class
----------- -------- -------------- --------- --------
<S> <C> <C> <C> <C> <C>
William M. Aden. . . . . . . . . . . . . . . . . . 57,143 * 57,143 -- *
Drs. Alan B. Aker and Ann G. Kasten-Aker . . . . . 1,774,807 4.2% 714,285 1,060,522 2.5%
Amanda Alton . . . . . . . . . . . . . . . . . . . 1,000 * 1,000 -- *
Andrew Alton . . . . . . . . . . . . . . . . . . . 1,000 * 1,000 -- *
Bob Alton. . . . . . . . . . . . . . . . . . . . . 1,000 * 1,000 -- *
Carley Alton . . . . . . . . . . . . . . . . . . . 2,000 * 2,000 -- *
David Alton. . . . . . . . . . . . . . . . . . . . 1,000 * 1,000 -- *
Jill Alton . . . . . . . . . . . . . . . . . . . . 1,000* 1,000 -- *
Aragon Ventures LLC. . . . . . . . . . . . . . . . 2,373,934 5.6% 2,305,200 68,734 *
Jay Alpha Arney, Alpha Group Corporation . . . . . 215,000 0.5% 215,000 -- *
Hank Asher . . . . . . . . . . . . . . . . . . . . 386,420 0.9% 50,000 336,420 0.8%
Charles H. Bechert IRA. . . . . . . . . . . . . . 60,000 * 60,000 -- *
Charles H. Bechert II, M.D.. . . . . . . . . . . . 30,000 * 30,000 -- *
Harold P. Bernstein. . . . . . . . . . . . . . . . 50,000 * 50,000 -- *
David C. Brown, M.D. . . . . . . . . . . . . . . . 3,168,580 7.5% 742,857 2,425,723 5.8%
Lawton and Rhea Chiles . . . . . . . . . . . . . . 171,429 * 171,429 -- *
Coutts (Jersey) Limited. . . . . . . . . . . . . . 250,000 0.6% 250,000 -- *
Allan R. Crevi and James F. Sullivan, JTWROS . . . 14,285 * 14,285 -- *
Arthur S. DeMoss Foundation. . . . . . . . . . . . 100,000 * 100,000 -- *
Alexander M. Eaton . . . . . . . . . . . . . . . . 14,500 * 14,500 -- *
Amir L. Ecker. . . . . . . . . . . . . . . . . . . 80,000 * 50,000 30,000 *
Amir L. Ecker IRA. . . . . . . . . . . . . . . . . 39,000 * 39,000 -- *
EDJ Limited. . . . . . . . . . . . . . . . . . . . 30,000 * 30,000 -- *
Jan Feldman. . . . . . . . . . . . . . . . . . . . 4,285 * 4,285 -- *
Gary J. and Susan O. Ferrentino. . . . . . . . . . 20,000 * 20,000 -- *
Eric M. and Deborah K. Fogel, JTWROS . . . . . . . 20,000 * 20,000 -- *
Gregory A. and Carol G. Frankenfield, JTWROS . . . 7,000 * 4,000 3,000 *
Jerre M. Freeman, M.D. . . . . . . . . . . . . . . 28,571 * 28,571 -- *
J. L. Gayton, M.D. . . . . . . . . . . . . . . . . 195,854 * 128,570 67,284 *
J.L. Gayton, M.D. PC, 401(k) Profit
Sharing Plan . . . . . . . . . . . . . . . . . . 14,285 * 14,285 -- *
James P. Gills, M.D. . . . . . . . . . . . . . . . 285,714 0.7% 285,714 -- *
Frank Goes, M.D. . . . . . . . . . . . . . . . . . 28,571 * 28,571 -- *
George H. Griffin. . . . . . . . . . . . . . . . . 638,314 1.5 285,714 352,600 1.0%
David I. Herbst. . . . . . . . . . . . . . . . . . 6,000 * 6,000 -- *
Don S. and Mary R. Hershman, JTWROS. . . . . . . . 3,000 * 3,000 -- *
William Wells Hutchins . . . . . . . . . . . . . . 25,000 * 25,000 -- *
Mitchell A. Jackson, M.D.. . . . . . . . . . . . . 25,714 * 25,714 -- *
Maurice John . . . . . . . . . . . . . . . . . . . 14,285 * 14,285 -- *
Gerald Jones . . . . . . . . . . . . . . . . . . . 1,000 * 1,000 -- *
Harvey Kahn. . . . . . . . . . . . . . . . . . . . 8,100 * 8,100 -- *
<PAGE>
Common Shares Common Shares
Beneficially Owned Beneficially Owned
Prior to the Numbers of After the
Offering (1) Shares Held of Offering (1)
---------------------- Record to be --------------------
Number of Percent Sold in the Number of Percent
Shares of Class Offering Shares of Class
----------- -------- -------------- --------- --------
Dave Kenly . . . . . . . . . . . . . . . . . . . . 15,000 * 15,000 -- *
Erin Kenly . . . . . . . . . . . . . . . . . . . . 1,000 1,000 -- *
Steve Kenly. . . . . . . . . . . . . . . . . . . . 4,000 * 4,000 -- *
Joseph D. Koenig . . . . . . . . . . . . . . . . . 113,033 * 50,000 63,033 *
Manus C. Kraff . . . . . . . . . . . . . . . . . . 407,849 1% 71,429 336,420 0.8%
Stephen J. Landes. . . . . . . . . . . . . . . . . 3,000 * 3,000 -- *
Mary Losty . . . . . . . . . . . . . . . . . . . . 27,000 * 27,000 -- *
Robert Maynor. . . . . . . . . . . . . . . . . . . 14,285 * 14,285 -- *
Scott McQueen. . . . . . . . . . . . . . . . . . . 25,000 * 25,000 -- *
Terence S. Meehan. . . . . . . . . . . . . . . . . 20,000 * 20,000 -- *
Dr. Salomon and Flor Melgen,
Tenancy by the Entirety. . . . . . . . . . . . . 1,123,893 3.1% 428,571 695,322 1.6%
Michael M. Nesbitt . . . . . . . . . . . . . . . . 20,000 * 20,000 -- *
Daniel J. O'Connor . . . . . . . . . . . . . . . . 28,571 * 28,571 -- *
Joel Packer. . . . . . . . . . . . . . . . . . . . 14,286 * 14,286 -- *
Pennsylvania Merchant Group. . . . . . . . . . . . 227,442 0.5% 227,442 -- *
Joseph Piccirilli. . . . . . . . . . . . . . . . . 14,286 * 14,286 -- *
Jeff Porter. . . . . . . . . . . . . . . . . . . . 171,000 * 171,000 -- *
Porter Partners, L.P.. . . . . . . . . . . . . . . 141,000 * 141,000 -- *
Leonid Roytman . . . . . . . . . . . . . . . . . . 50,000 * 25,000 25,000 *
Donald Sanders, M.D. . . . . . . . . . . . . . . . 668,062 1.6% 285,714 382,348 0.9%
William R. Schlichtemeier, M.D.. . . . . . . . . . 14,285 * 14,285 -- *
Joseph W. Shaffer. . . . . . . . . . . . . . . . . 50,000 * 50,000 -- *
Sol-Rich Capital Group LLC . . . . . . . . . . . . 28,571 * 28,571 -- *
Douglas L. Steel, MD TTEE a Prof. Corp.
Profit Sharing Plan UAP. . . . . . . . . . . . . 14,285 * 14,285 -- *
Byron A. and Caroline B. Stratas . . . . . . . . . 124,285 * 124,285 -- *
C. Russell Trenary, III. . . . . . . . . . . . . . 816,098 2.0% 68,571 747,527 2.0%
M. Jay Walkingshaw . . . . . . . . . . . . . . . . 14,300 * 14,300 -- *
Daniel W. Welch and Marcia McBride Welch . . . . . 60,000 * 60,000 -- *
Joyce P. Wexler. . . . . . . . . . . . . . . . . . 3,000 * 3,000 -- *
Dennis L. Williams, M.D. . . . . . . . . . . . . . 92,857 * 92,857 -- *
Bill Wimberly. . . . . . . . . . . . . . . . . . . 2,000 * 2,000 -- *
Carolyn Wittenbraker . . . . . . . . . . . . . . . 7,857 * 7,857 -- *
Allan Wulfstat . . . . . . . . . . . . . . . . . . 3,000 * 3,000 -- *
Irwin L. Zalcberg. . . . . . . . . . . . . . . . . 20,000 * 20,000 -- *
Irwin L. Zalcberg Profit Sharing Plan Dtd.
8/15/84 Irwin Zalcberg TTEE. . . . . . . . . . . 14,286 * 14,286 -- *
<FN>
* Less than one percent.
(1) Determined as of March 22,1999.
</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
Some or all of the Offered Shares may be offered for sale and sold
from time to time by the Selling Securityholders in the over-the-counter
market (or any national securities exchange or interdealer quotation system
on which the common stock may then be listed), or in privately negotiated
transactions (which may include block transactions) or otherwise. In
addition, the Selling Securityholders may engage in short sales and other
transactions in the common stock or derivatives thereof, and may pledge,
sell, deliver or otherwise transfer the Offered Shares in connection
therewith. This Prospectus may be used by the Selling Securityholders or by
any broker-dealer who may participate in sales of the Offered Shares.
Participating broker-dealers may act as agents or principals or both and
may receive commissions, discounts or concessions in connection with sales
or other transfers of Offered Shares. We have not entered into any
agreements or arrangements relating to the sale of the Offered Shares.
We have agreed to pay the expenses of registering the Offered Shares
on behalf of the Selling Securityholders, other than broker-dealer
commissions, discounts or concessions and any legal fees incurred by the
Selling Securityholders in connection with sales of the Offered Shares.
Sunrise Technologies International, Inc. (the "Company") and the Selling
Securityholders have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act.
EXPERTS
The consolidated financial statements of the Company at December 31,
1996 have been incorporated by reference herein and in the Registration
Statement in reliance upon the report of Ernst & Young LLP, independent
auditors, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The consolidated balance sheets as of December 31, 1998 and 1997 and
the consolidated statements of operations, stockholders' equity and cash
flows for each of the two years in the period ended December 31, 1998,
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.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Offered
Shares will be passed upon for the Company by Holleb & Coff, Chicago,
Illinois. Eric M. Fogel, a partner with the law firm of Holleb & Coff, is
presently the Secretary of the Company and certain of such firm's partners
own shares of common stock, some of which are the Selling Securityholders.
INDEMNIFICATION
Section 102(b)(7) of the General Corporation Law of the State of
Delaware grants corporations the right to limit or eliminate the personal
liability of their directors in certain circumstances in accordance with
provisions therein set forth. The Certificate of Incorporation of the
Company contains a provision eliminating director liability to the Company
and its stockholders for monetary damages for breach of fiduciary duty as a
director. The provision does not, however, eliminate or limit the personal
liability of a director:
<PAGE>
. for any breach of such director's duty of loyalty to the
Company or its stockholders;
. for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
. under the Delaware statutory provision making directors
personally liable, for improper payment of dividends or improper stock
purchases or redemptions; or
. for any transaction from which the director derived an improper
personal benefit.
This provision offers persons who serve on the Company's Board of
Directors protection against awards of monetary damages resulting from
breaches of their duty of care (except as indicated above). As a result of
this provision, the ability of the Company or a stockholder thereof to
successfully prosecute an action against a director for a breach of his
duty of care is limited. However, the provision does not affect the
availability of equitable remedies such as an injunction or rescission
based upon a director's breach of his duty of care. The SEC has taken the
position that the provision will have no effect on claims arising under
federal securities laws.
Section 145 of the Delaware law grants corporations the right to
indemnify their directors, officers, employees and agents in accordance
with the provisions therein set forth. The Company's By-laws provide that
the Company shall, subject to limited exceptions, indemnify its directors
and executive officers to the fullest extent not prohibited by the Delaware
Law. The Company's By-laws provide further that the Company shall have the
power to indemnify its other officers, employees and other agents as set
forth in the Delaware law. Such indemnification rights include
reimbursement for expenses incurred by such director, executive officer,
other officer, employee or agent in advance of the final disposition of
such proceeding in accordance with the applicable provisions of the
Delaware law.
The Company has entered into agreements with certain of its directors
and officers pursuant to which the Company has agreed to indemnify such
directors and officers to the fullest extent permitted under applicable
law. In addition, the Company has purchased insurance containing customary
terms and conditions as permitted by law on behalf of its directors and
officers, which may cover liabilities under the Securities Act. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Company
pursuant to these provisions, or otherwise, the Company 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.
<PAGE>
============================================================
8,229,290 Shares
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
Common Stock
--------------------
PROSPECTUS
--------------------
April____, 1999
============================================================
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company and the
Selling Securityholders in connection with the sale of the common stock
being registered. All amounts are estimates except the registration fee.
Amount to be Paid
-----------------
SEC Registration Fee $ 24,021.30
Printing 25,000.00
Legal Fees and Expenses 75,000.00
Accounting Fees and Expenses 15,000.00
Blue Sky Fees and Expenses 15,000.00
Transfer Agent and Registrar Fees 5,000.00
Miscellaneous 978.70
-----------
Total $160,000.00
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the General Corporation Law of the State of
Delaware (the "Delaware Law") grants corporations the right to limit or
eliminate the personal liability of their directors in certain
circumstances in accordance with provisions therein set forth. The
Certificate of Incorporation of the Company contains a provision
eliminating director liability to the Company and its stockholders for
monetary damages for breach of fiduciary duty as a director. The provision
does not, however, eliminate or limit the personal liability of a director:
(i) for any breach of such director's duty of loyalty to the Company or its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) under the
Delaware statutory provision making directors personally liable, for
improper payment of dividends or improper stock purchases or redemptions;
or (iv) for any transaction from which the director derived an improper
personal benefit. This provision offers persons who serve on the Company's
Board of Directors protection against awards of monetary damages resulting
from breaches of their duty of care (except as indicated above). As a
result of this provision, the ability of the Company or a stockholder
thereof to successfully prosecute an action against a director for a breach
of his duty of care is limited. However, the provision does not affect the
availability of equitable remedies such as an injunction or rescission
based upon a director's breach of his duty of care. The SEC has taken the
position that the provision will have no effect on claims arising under
federal securities laws.
Section 145 of the Delaware Law grants corporations the right to
indemnify their directors, officers, employees and agents in accordance
with the provisions therein set forth. The Company's By-laws provide that
the corporation shall, subject to limited exceptions, indemnify its
directors and executive officers to the fullest extent not prohibited by
the Delaware Law. The Company's By-laws provide further that the Company
shall have the power to indemnify its other officers, employees and other
agents as set forth in the Delaware Law. Such indemnification rights
include reimbursement for expenses incurred by such director, executive
officer, other officer, employee or agent in advance of the final
disposition of such proceeding in accordance with the applicable provisions
of the Delaware Law.
The Company has entered into agreements with certain of its directors
and officers pursuant to which the Company has agreed to indemnify such
directors and officers to the fullest extent permitted under applicable
law. In addition, the Company has purchased insurance containing customary
terms and conditions as permitted by law on behalf of its directors and
officers, which may cover liabilities under the Securities Act. Insofar as
<PAGE>
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Company
pursuant to these provisions, or otherwise, the Company 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.
ITEM 16. EXHIBITS
EXHIBIT DESCRIPTION
- ------- -----------
2.1 Asset Purchase Agreement dated as of March 26, 1997, by and
between the Company and Lares Research, a California corporation (2)
4 Instruments Defining the Rights of Security Holders
4.1 Form of 5% Convertible Notes due 1999 (3)
4.2 Form of Security Agreement relating to 5% Convertible Notes due
1999 (3)
4.3 Form of Registration Rights Agreement (3)
4.4 Form of Warrant issued to Pennsylvania Merchant Group (1)
4.5 Form of Rights Agreement, dated as of October 24, 1997, between
the Company and ChaseMellon Shareholder Services, L.L.C., as rights agent
(4)
4.6 Form of 12% Subordinated Pay-In-Kind Note due 2001 (5)
4.7 Form of Registration Rights Agreement (5)
4.8 Form of 5% Convertible Subordinated Pay-In-Kind Note due 2001
(6)
4.9 Form of Warrant for the Purchase of common stock (6)
4.10 Form of Registration Rights Agreement (6)
5.1 Opinion of Holleb & Coff as to the legality of the Offered
Shares being registered
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2 Consent of Ernst & Young LLP, former Independent Auditors
24.1 Power of Attorney (Included on the Signature Page)
27 Financial Data Schedule
_____________________
(1) Incorporated by reference from the registrant's Annual Report on Form
10-K for the year ended December 31, 1992 (File No. 0-17816)
(2) Incorporated by reference from the registrant's Annual Report on Form
10-K for the year ended December 31, 1996 (File No. 1-10428)
(3) Incorporated by reference from the registrant's Current Report on
Form 8-K dated March 12, 1997 (File No. 0-17816)
(4) Incorporated by reference from the registrant's Current Report on
Form 8-K dated October 24, 1997 (File No. 0-17816)
<PAGE>
(5) Incorporated by reference from the registrant's Current Report on
Form 8-K dated January 26, 1998 (File No. 0-17816)
(6) Incorporated by reference from the registrant's Current Report on
Form 8-K dated January 1, 1999 (File No. 1-10428)
ITEM 17. UNDERTAKINGS
PURSUANT TO ITEM 512(A) OF REGULATION S-K
We hereby undertake 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.
PURSUANT TO ITEM 512(H) OF REGULATION S-K
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 amended
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Fremont, state of California, on
April 9, 1999.
Sunrise Technologies International, Inc.
By: /s/ C. RUSSELL TRENARY, III
----------------------------------------
C. Russell Trenary, III
President and Chief Executive Officer
<PAGE>
POWERS OF ATTORNEY
Each person whose signature appears below hereby appoints C. Russell
Trenary, III and Eric M. Fogel, and each of them severally, acting alone
and without the other, his true and lawful attorney-in-fact with authority
to execute in the name of each such person, and to file with the SEC,
together with any exhibits thereto and other documents therewith, any and
all amendments (including without limitation post-effective amendments) to
this Registration Statement, and to sign any registration statement for the
same offering covered by this Registration Statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act,
necessary or advisable to enable the registrant to comply with the
Securities Act and any rules, regulations and requirements of the SEC in
respect thereof, which amendments may make such changes in this
Registration Statement as the aforesaid attorney-in-fact deems appropriate.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on
the dates indicated.
Date: April 9, 1999 /s/ C. RUSSELL TRENARY, III
----------------------------------------
C. Russell Trenary, III
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: April 9, 1999 /s/ TINA T. HERBERT
----------------------------------------
Tina T. Herbert, Acting Chief
Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
Date: April 9, 1999 /s/ JOSEPH D. KOENIG
----------------------------------------
Joseph D. Koenig
Chairman of the Board and Director
Date: April 9, 1999 /s/ R. DALE BOWERMAN
----------------------------------------
R. Dale Bowerman
Director
Date: April 9, 1999 /s/ MICHAEL S. MCFARLAND, M.D.
----------------------------------------
Michael S. McFarland, M.D.
Director
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
2.1 Asset Purchase Agreement dated as of March 26, 1997, by and
between the Company and Lares Research, a California corporation (2)
4 Instruments Defining the Rights of Security Holders
4.1 Form of 5% Convertible Notes due 1999 (3)
4.2 Form of Security Agreement relating to 5% Convertible Notes due
1999 (3)
4.3 Form of Registration Rights Agreement (3)
4.4 Form of Warrant issued to Pennsylvania Merchant Group (1)
4.5 Form of Rights Agreement, dated as of October 24, 1997, between
the Company and ChaseMellon Shareholder Services, L.L.C., as rights agent
(4)
4.6 Form of 12% Subordinated Pay-In-Kind Note due 2001 (5)
4.7 Form of Registration Rights Agreement (5)
4.8 Form of 5% Convertible Subordinated Pay-In-Kind Note due 2001
(6)
4.9 Form of Warrant for the Purchase of common stock (6)
4.10 Form of Registration Rights Agreement (6)
5.1 Opinion of Holleb & Coff as to the legality of the Offered
Shares being registered
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2 Consent of Ernst & Young LLP, former Independent Auditors
24.1 Power of Attorney (Included on the Signature Page)
27 Financial Data Schedule
_____________________
(1) Incorporated by reference from the registrant's Annual Report on Form
10-K for the year ended December 31, 1992 (File No. 0-17816)
(2) Incorporated by reference from the registrant's Annual Report on Form
10-K for the year ended December 31, 1996 (File No. 1-10428)
(3) Incorporated by reference from the registrant's Current Report on
Form 8-K dated March 12, 1997 (File No. 0-17816)
(4) Incorporated by reference from the registrant's Current Report on
Form 8-K dated October 24, 1997 (File No. 0-17816)
<PAGE>
(5) Incorporated by reference from the registrant's Current Report on
Form 8-K dated January 26, 1998 (File No. 0-17816)
(6) Incorporated by reference from the registrant's Current Report on
Form 8-K dated January 1, 1999 (File No. 1-10428)
EXHIBIT 5.1
- -----------
HOLLEB & COFF
ATTORNEYS AT LAW
55 EAST MONROE STREET
SUITE 4100
CHICAGO, ILLINOIS 60603-5896
(312) 807-4600
TELECOPIER (312) 807-3900
OPINION OF HOLLEB & COFF
April 9, 1999
Sunrise Technologies International, Inc.
3400 West Warren Avenue
Fremont, California 94538
Ladies and Gentlemen:
We have acted as special counsel for Sunrise Technologies
International, Inc., a Delaware corporation (the "Company"), in connection
with the Company's Registration Statement on Form S-3 (the "Registration
Statement") being filed by the Company under the Securities Act of 1933, as
amended, with respect to 8,229,290 shares (the "Shares") of the Company's
common stock, par value $.001 per share (the "Common Stock"), which may be
disposed of from time to time by the selling securityholders (the "Selling
Securityholders") named therein.
In connection with the preparation of the Registration Statement and
this letter, we have examined, considered and relied solely upon the
following documents (collectively, the "Documents"): the Registration
Statement; the Company's Amended and Restated Certificate of Incorporation
as filed with the Secretary of State of the State of Delaware; Bylaws; a
Certificate of Good Standing of the Company issued on April 8, 1999 by the
Secretary of State of the State of Delaware; the forms of U.S. Note and
Warrant Purchase Agreements and Offshore Note and Warrant Purchase
Agreements between certain of the Selling Securityholders and the Company
(collectively, the "1997 Warrant Agreement"); the forms of Subscription
Books utilized by certain of the Selling Securityholders in connection with
their acquisition of restricted shares of Common Stock in 1998
(collectively, the "Subscription Book"); the forms of U.S. Note and Warrant
Purchase Agreements between certain of the Selling Securityholders and the
Company (collectively, the "1998 Warrant Agreement"); the forms of Warrants
between certain of the Selling Securityholders and the Company
(collectively, the "1999 Warrant"); certain minutes of the meetings of the
Company's Board of Directors; a certificate of the Company's president; and
such matters of law as we have considered necessary or appropriate for the
expression of the opinions contained herein.
In rendering the opinions set forth below, we have assumed without
investigation the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, the conformity to authentic
original documents of all documents submitted to us as copies, and the
veracity of the Documents. As to questions of fact material to the
opinions hereinafter expressed, we have relied upon the representations and
warranties of the Company made in the Documents. We would call your
attention to the fact that Eric M. Fogel, a partner of this law firm, also
acts as the Secretary of the Company and certain of our firm's partners,
including Mr. Fogel, own shares of the Company's Common Stock.
<PAGE>
HOLLEB & COFF
Attorneys at Law
Sunrise Technologies International, Inc.
April 9, 1999
Page 2
Based solely upon and subject to the Documents, and subject to the
qualification set forth below, we are of the opinion that the Shares have
been duly authorized and when the Shares have been duly delivered against
payment therefor, as contemplated in the 1997 Warrant Agreement, the
Subscription Book, the 1998 Warrant Agreement and the 1999 Warrant, the
Shares will be validly issued, fully paid and non-assessable.
Although we have acted as counsel to the Company in connection with
certain other matters, our engagement is limited only to matters which have
been specifically referred to us. Consequently, there may exist matters of
a legal nature involving the Company in connection with which we have not
been consulted and have not represented the Company. This opinion letter
is limited to the matters stated herein and no opinions may be implied or
inferred beyond the matters expressly stated herein. The opinions
expressed herein are as of the date hereof, and we assume no obligation to
update or supplement such opinions to reflect any facts or circumstances
that may hereafter come to our attention or any changes in law that may
hereafter occur.
This opinion is solely for the information of the addressee hereof
and the purchasers of the Shares, and is not to be quoted in whole or in
part or otherwise referred to, nor is it to be filed with any governmental
agency or other person without a prior written consent. Other than the
addressee, the purchasers of the Shares and ChaseMellon Shareholder
Services, L.L.C., no one is entitled to rely on this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus contained in the Registration Statement.
Very truly yours,
/s/ Holleb & Coff
---------------------
HOLLEB & COFF
EXHIBIT 23.1
- ------------
CONSENT OF PRICEWATERHOUSECOOPERS LLP,
INDEPENDENT ACCOUNTANTS
The Board of Directors
Sunrise Technologies International, Inc.
We consent to the incorporation by reference in the registration
statement of Sunrise Technologies International, Inc. on Amendment No. 1 to
Form S-3 of our report dated February 19, 1999, on our audits of the
consolidated financial statements and financial statement schedule of
Sunrise Technologies International, Inc. as of December 31, 1998 and 1997
and for the years ended December 31, 1998 and 1997, which report is
included in the Annual Report on Form 10-K. We also consent to the
reference to our firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
San Jose, CA
April 9, 1999
EXHIBIT 23.2
- ------------
CONSENT OF ERNST & YOUNG LLP, FORMER INDEPENDENT AUDITORS
The Board of Directors
Sunrise Technologies International, Inc.
We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the
Prospectus.
/s/ Ernst & Young LLP
Palo Alto, CA
April 9, 1999
