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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 1998
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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LASERSCOPE
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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CALIFORNIA 3845 77-0049527
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
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3052 ORCHARD DRIVE
SAN JOSE, CALIFORNIA, 95134-2011
(408) 943-0636
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT V. MCCORMICK
PRESIDENT AND CHIEF EXECUTIVE OFFICER
LASERSCOPE
3052 ORCHARD DRIVE
SAN JOSE, CALIFORNIA 95134-2011
(408) 943-0636
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
COPIES TO:
ELIAS J. BLAWIE
MARK L. SILVERMAN
THOMAS H. TOBIASON
VENTURE LAW GROUP
A PROFESSIONAL CORPORATION
2800 SAND HILL ROAD
MENLO PARK, CALIFORNIA 94025
(650) 854-4488
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
- ---------------------------
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------
Common Stock............ 4,268,345 $2.6563 $11,337,792 $3,500
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(1) Estimated solely for the purpose of computing the amount of the registration
fee based on the average of the high and low closing price of the Common
Stock as reported on the Nasdaq National Market on May 27, 1998 pursuant to
Rule 457(c).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 2, 1998
PROSPECTUS
LASERSCOPE
4,268,345 SHARES
COMMON STOCK
All references herein to "Laserscope" or the "Company" mean Laserscope
unless otherwise indicated by the context.
The 4,268,345 shares of Laserscope Common Stock, no par value, covered by
this Prospectus (the "Shares") are offered for the account of certain
shareholders of the Company named herein (the "Selling Shareholders"). The
Company will not receive proceeds from the sale of the Shares by the Selling
Shareholders. See "Use of Proceeds." The Shares were acquired by the Selling
Shareholders from Heraeus Med GmbH ("Heraeus Med") on May 7, 1998, in a Private
Placement (the "Private Placement"). For additional information concerning the
Private Placement and Heraeus Med, see "Sale of Common Stock to Selling
Shareholders." The Selling Shareholders may sell the Shares from time to time on
the over-the-counter market in regular brokerage transactions, in transactions
directly with market makers or in certain privately-negotiated transactions. See
"Plan of Distribution." Each Selling Shareholder has advised the Company that no
sale or distribution other than as disclosed herein will be effected until after
this Prospectus shall have been appropriately amended or supplemented, if
required, to set forth the terms thereof.
Each of the Selling Shareholders and any broker executing selling orders on
behalf of the Selling Shareholders may be deemed to be an "Underwriter," as such
term is defined in the Securities Act of 1933, as amended (the "Securities
Act"). See "Plan of Distribution" for information relating to the
indemnification of the Selling Shareholders.
The Company's Common Stock trades on the Nasdaq Stock Market under the
symbol "LSCP." On May 27, 1998, the last sale price of the Company's Common
Stock on the Nasdaq Stock Market was $2.6875 per share.
------------------------
SEE "RISK FACTORS," BEGINNING ON PAGE 5, FOR INFORMATION
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS(1) SHAREHOLDERS(1)
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Per Share...................... See Text Above See Text Above See Text Above
Total..........................
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(1) All expenses of registration of the Shares, estimated to be approximately
$53,500 shall be borne by the Company. Selling commissions, brokerage fees,
any applicable stock transfer taxes and any fees and disbursements of
counsel to the Selling Shareholders are payable individually by the Selling
Shareholders.
THE DATE OF THIS PROSPECTUS IS JUNE 2, 1998
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No person is authorized in connection with any offering made hereby to give
any information or to make any representation not contained in this Prospectus,
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company or any Selling Shareholder. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any security other than the shares of Common Stock offered hereby, nor does
it constitute an offer to sell or a solicitation of an offer to buy any of the
shares offered hereby to any person in any jurisdiction in which it is unlawful
to make such an offer or solicitation. Neither the delivery of this Prospectus
nor any sale made hereunder shall under any circumstances create any implication
that the information contained herein is correct as of any time subsequent to
the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files proxy statements, reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements, and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission in Washington, D.C., and at its regional offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New York, New York
10048; and at the Public Reference Office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. In addition, the Company is an electronic filer
and copies of such material may be retrieved from the Web site
(http://www.sec/gov) maintained by the Commission.
Copies of such material can be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Company's Common Stock is quoted on the Nasdaq Stock Market under the
symbol "LSCP." Reports, proxy and information statements and other information
about the Company may be inspected at the Nasdaq Stock Market, 1735 K Street,
N.W., Washington, DC 20006-1506.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1997.
2. The Company's definitive Proxy Statement dated May 19, 1998, filed in
connection with the Company's June 23, 1998 Annual Meeting of
Shareholders.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998.
4. The Company's Current Report on Form 8-K dated May 15, 1998.
5. The description of the Company's Common Stock which is contained in the
following documents: (1) Items 1 and 2 of the Company's Registration
Statement on Form 8-A filed pursuant to Section 12 of the Exchange Act
on November 15, 1991, as amended by the Form 8-A/A filed on June 12,
1996, as further amended by the Form 8-A/A filed on September 4, 1996,
and (2) Items 1 and 2 of the Company's Registration Statement on Form
8-A filed pursuant to Section 12 of the Exchange Act on October 23,
1989, as amended by Amendment No. 1 thereto filed on November 27, 1989.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock offered hereby shall be deemed
to be incorporated by reference in this Prospectus. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
(or in any other subsequently filed document which also is
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incorporated by reference herein) modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed to
Laserscope, 3052 Orchard Drive, San Jose, California 95134-2011, telephone:
(408) 9430636, Attn: Investor Relations.
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THE COMPANY
Laserscope(R) designs, manufactures, sells and services, on a worldwide
basis, surgical, dermatologic and therapeutic laser systems and related surgical
instrumentation and disposable supplies and accessories. Its portfolio of more
than 350 products, includes an advanced line of KTP/532(R), CO2, Nd:YAG, Er:YAG,
Ruby, Diode and Dye medical laser systems and related energy delivery devices
for the office, outpatient surgical center and hospital markets.
Laserscope's Ascent Medical Systems(TM) (AMS) are innovative equipment for
the surgical and outpatient care environments. The AMS product family includes
procedure and treatment lights, ceiling-mounted equipment organizers,
centralized smoke evacuation systems and video systems.
Primary medical markets the Company serves include dermatology, aesthetic
surgery, urology, gynecology, ear, nose and throat (ENT) surgery and
photodynamic therapy (PDT), an emerging cancer treatment. Secondary markets
include general surgery, neurosurgery, orthopedics, gastroenterology as well as
other surgical specialties.
Laserscope was founded in 1982 and its first product was shipped in 1984.
During its initial years, the Company was funded by several venture capital
firms and by E.I. du Pont de Nemours & Company. Laserscope received the first in
a series of U.S. regulatory clearances in 1987 and completed its initial public
offering in December 1989. Laserscope is a California corporation. The Company's
principal executive offices are located at 3052 Orchard Drive, San Jose, CA
95134-2011 and its telephone number at that location is (408) 943-0636.
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RISK FACTORS
This Prospectus (including the documents incorporated by reference herein)
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 193, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including, without limitation, statements regarding the
Company's expectations, beliefs, intentions or future strategies. All
forward-looking statements included in this Prospectus are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statements. Actual results could
differ materially from those projected in the forward-looking statements as a
result of the risk factors set forth below and in the documents incorporated by
reference herein. Prospective purchasers of the Common Stock offered hereby
should carefully consider the following risk factors in addition to the risk
factors set forth in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 and the other information appearing in or incorporated by
reference into this Prospectus.
Limited Working Capital; Potential Need to Raise Additional Capital. As of
March 31, 1998, Laserscope's total assets and liabilities were $47.1 million and
$18.9 million, respectively. As of such date, Laserscope's working capital was
$20.6 million while cash and cash equivalents amounted to approximately $1.4
million. Laserscope's need for capital is affected by the current and
anticipated demand for its products as well as procurement and production lead
times in its manufacturing processes. Changes in these factors could have a
material impact on capital requirements. The Company has in place a $5.0 million
revolving bank line of credit that expires in November 1998 of which $3.0
million was outstanding as of March 31, 1998. At March 31, 1998, the collateral
provisions of the line allowed for approximately $4.7 million in borrowings.
Provisions of the credit line prohibit the payment of dividends and the
repurchase of stock and require the Company to maintain certain minimum working
capital, profitability and net worth levels. There can be no assurance that the
Company will be able to achieve such minimum thresholds. Nor can there be any
assurance that the Company will be able to obtain a timely bank waiver or
consent if the Company fails to achieve these minimum requirements. Failure to
satisfy these minimum credit line requirements could have a material adverse
effect on the Company. In addition, NWL Laser-Technology, GmbH ("NWL"), a
Laserscope subsidiary, has in place various revolving bank lines totaling
approximately $3.0 million that expire in 1999 and under which $2.5 million in
borrowings were outstanding at March 31, 1998.
The Company anticipates that future changes in cash and working capital
will be dependent on a number of factors. As a result of the acquisitions of
Heraeus Surgical, Inc. ("HSI") and NWL, which were completed on August 1996 and
June 1997, respectively, the Company's balance sheet liquidity ratios changed
and the Company's ability to generate cash will be partially dependent on
management's ability to manage effectively non-cash assets such as inventory and
accounts receivable. At March 31, 1998, the Company's inventories consisted of
$19.4 million and were comprised of $14.2 million of sub-assemblies and
purchased parts and $5.2 million of finished goods. This represents a 4%
increase from the prior year period in which the Company's inventories consisted
of $18.7 million comprised of $13.1 million of sub-assemblies and purchased
parts and $5.6 million of finished goods. The Company competes in a competitive
industry where technological changes and acceptance of new and alternative
procedures by its customers is rapid. Management's ability to anticipate and
adapt to these changes will significantly affect the Company's investment in
inventory and the potential for further valuation adjustments. In addition, the
level of profitability of the Company will have a significant impact on cash
resources.
From time to time, the Company may also consider the acquisition of, or
evaluate investments in, certain products and businesses complementary to the
Company's business. Any such acquisition or investment may require additional
capital resources. The Company financed the NWL acquisition and a portion of the
HSI acquisition using its existing cash resources. While the Company believes
its remaining cash resources will be sufficient to fund its operating needs for
the next twelve months, additional financing either through its bank lines of
credit or otherwise will be required for the Company's currently envisioned long
term needs. There can be no assurance that such additional financing will be
available on terms acceptable to the Company, on a timely basis or at all.
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Future equity financings could result in dilution to Laserscope's
shareholders, and future debt financings could result in certain financial and
operational restrictions. Laserscope currently anticipates that while its
remaining cash resources will be sufficient to fund its short-term operating
needs, additional financing either through the Company's bank line of credit or
otherwise will be required for the Company's currently envisioned long-term
needs. There can be no assurance that such additional financing will be
available on terms acceptable to the Company, on a timely basis or at all.
History of Losses; Uncertainty of Future Profitability. At March 31, 1998,
the Company had an accumulated deficit of $22.1 million. The Company reported a
net loss of $0.23 million for the three months ended March 31, 1998, and
experienced annual net losses of $.84 million, $1.7 million and $3.6 million for
the years ended December 31, 1997, 1996 and 1995, respectively. There can be no
assurance that Laserscope can achieve or maintain profitability on a quarterly
basis or at all. The Company's failure to achieve and maintain profitability on
a quarterly basis would violate certain bankline covenants which could have a
material adverse effect on the Company. See "-- Limited Working Capital;
Potential Need to Raise Additional Capital."
Potential Adverse Effect on Price of Common Stock and Laserscope's Ability
to Raise Capital Resulting From Sale of the Shares. In connection with the
Selling Shareholders' acquisition of the Shares from Heraeus Med, Laserscope
agreed to file this registration statement with respect to the Shares. Any
significant sale of Laserscope shares by the Selling Shareholders could
substantially alter the market float for Laserscope's common stock and could
have an adverse effect on Laserscope's ability to raise capital. In addition,
any such sales, especially in large amounts, could materially adversely affect
the market price of Laserscope's common stock.
Government Regulation; Uncertainty of Obtaining Regulatory
Approval. Government regulation in the United States and other countries is a
significant factor in the development, manufacturing and marketing of many of
the Company's products and in the Company's ongoing research and development
activities. The Company and its products are regulated in the United States by
the Food and Drug Administration ("FDA") under the Federal Food, Drug and
Cosmetic Act (the "FDC Act") and the Radiation Control for Health and Safety
Act. The FDC Act provides two basic review procedures for medical devices.
Certain products qualify for a Section 510(k) ("510(k)") procedure under which
the manufacturer gives the FDA premarket notification of the manufacturer's
intention to commence marketing the product. The manufacturer must, among other
things, establish that the product to be marketed is "substantially equivalent"
to a previously marketed product. In some cases, the manufacturer may be
required to include clinical data gathered under an investigational device
exemption ("IDE") granted by the FDA allowing human clinical studies.
If the product does not qualify for the 510(k) procedure, the manufacturer
must file a premarket approval application ("PMA") based on testing intended to
demonstrate that the product is both safe and effective. The PMA requires more
extensive clinical testing than the 510(k) procedure and generally involves a
significantly longer FDA review process. Approval of a PMA allowing commercial
sale of a product requires preclinical laboratory and animal tests and human
clinical studies conducted under an IDE establishing safety and effectiveness.
Generally, because of the amount of information required, the 510(k) procedure
takes less time than the PMA procedure.
To date, all of the Company's products (except for the 600 Series Dye
Module) have been marketed through the 510(k) procedure. Future applications,
however, may require clearance through the PMA procedure. There can be no
assurance that such marketing clearances can be obtained on a timely basis.
Delays in receiving such clearances could have a significant adverse impact on
the Company. The FDA may also require postmarket testing and surveillance
programs to monitor certain products.
Certain other countries require the Company to obtain clearances for its
products prior to marketing the products in those countries. The requirements
vary widely from country to country and are subject to change. The European
community is in the process of developing a new approach to the regulation of
medical products which may significantly change how medical devices are marketed
in those countries within the next several years. In February 1996, the Company
achieved ISO 9001 and CE (European Conformation) mark registration in
anticipation of this approach.
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The Company is also required to register with the FDA and state agencies,
such as the Food and Drug Branch of the California Department of Health
Services, as a medical device manufacturer. The Company is inspected on a
routine basis by both the FDA and the State of California for compliance with
the FDA's Current Good Manufacturing Practice regulations. Those regulations
impose certain procedural and documentation requirements upon the Company with
respect to manufacturing, testing and quality control activities. If violations
of applicable regulations are noted during these inspections, the continued
marketing of any products manufactured by the Company may be adversely affected.
In addition, the Company's laser products are covered by a performance
standard for laser products set forth in FDA regulations. The laser performance
standard imposes certain specific record-keeping, reporting, product testing,
and product labeling requirements on the Company. These requirements also
include affixing warning labels to the Company's laser systems, as well as the
incorporation of certain safety features in the design of the Company's
products.
Complying with applicable governmental regulations and obtaining necessary
clearances or approvals can be time consuming and expensive, and there can be no
assurance that regulatory review will not involve delays or other actions
adversely affecting the marketing and sale of the Company's products. The
Company also cannot predict the extent or impact of future legislation or
regulations.
The Company is also subject to regulation under federal and state laws
regarding, among other things, occupational safety, the use and handling of
hazardous materials and protection of the environment.
Insurance Reimbursement. Demand for the Company's products is dependent, to
a significant extent, on government and private insurance reimbursement of
hospitals and physicians for health care costs, including, but not limited to,
reimbursement of capital equipment costs. Reductions or delays in such insurance
coverage or reimbursement may negatively impact hospitals' and physicians'
decision to purchase the Company's products, adversely affecting the Company's
future sales. A substantial portion of the Company's laser sales are for
aesthetic procedures that are generally not subject to reimbursement by
government or private health insurance. The general absence of insurance
coverage for such cosmetic procedures may restrict the development of this
market, adversely affecting the Company.
Uncertainty of Technological Change; Uncertainty of New Product Development
and Acceptance. Laserscope operates in industries that are subject to rapid
technological change. The Company's ability to remain competitive and future
operating results will depend upon, among other things, the Company's ability to
anticipate and respond rapidly to such change by developing, manufacturing and
marketing technologically innovative products in sufficient quantities at
acceptable costs to meet such demand. Absent introduction of new products and
enhancements, Laserscope's products will likely become technologically obsolete,
which could result in the write-off of inventory as well as diminished revenues.
The Company's expenditures for research and development were approximately $3.4
million, $2.6 million and $3.8 million in 1997, 1996 and 1995, respectively.
Laserscope anticipates that its ability to compete will require significant
research and development expenditures with a continuing flow of innovative,
high-quality products. No assurance can be given that the Company will be
successful in designing, manufacturing or selling its enhanced or new products
in a timely manner. Nor can any assurance be given that a competitor could not
introduce a new or enhanced product or technology that could have an adverse
effect on the Company's competitive position.
In addition, certain of the Company's products are new to the market or
have recently been approved for new indications, including use of the Company's
PDT dye module for use in certain cancer therapies and centralized smoke
evacuation products sold as part of the Company's AMS product line. No assurance
can be given that the Company will be successful in marketing and selling these
new products or any other new products. Nor can any assurance be given that a
competitor could not introduce a new or enhanced product or technology that
could have an adverse effect on the Company's competitive position with respect
to any such new products.
Dependence on Single-Source Suppliers and Certain Third Parties. Certain of
the components used in the Company's laser products, including KTP crystals,
molded and cast components, power supplies, and certain optical components, are
purchased from single sources. In addition, many of the Company's AMS
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products and components used in the Company's AMS products, including lights,
operating tables and column components are purchased from single sources under
contracts that may be canceled by vendors on short notice. While the Company
believes that most of these components are available from alternate sources, an
interruption of these or other supplies could adversely affect the Company. In
particular, KTP crystals that are used in the Company's best selling laser
products are currently available at appropriate quality levels from only one
supplier, a division of Litton Industries. This supplier has a second crystal
growing and fabrication facility at a second location in the United States
geographically isolated from its original production facility. While the Company
believes that an alternative supplier of KTP crystals could be qualified, if the
supply of crystals from the present supplier were interrupted there could be an
adverse effect on the Company's business and results of operations.
The Company has invested substantial efforts in developing a laser
treatment that when combined with PDT drugs may be an effective treatment for
certain types of cancer. Currently, QLT PhotoTherapeutics, Inc. is the sole
supplier of PDT drugs. The inability or refusal of QLT to supply drugs for use
with the Company's lasers would have a material adverse effect on sales of the
Company's laser for such treatment.
Competition. The medical equipment market is highly competitive. The
Company's competitors are numerous and include some of the world's largest
organizations as well as smaller, highly-specialized firms. The ability of the
Company to compete effectively depends on such factors as market acceptance of
its products, product performance and price, customer support, the success and
timing of new product development, and continued development of successful
channels of distribution. Some of the Company's current and prospective
competitors have or may have significantly greater financial, technical,
research and development, manufacturing and marketing resources than the
Company. To compete, the Company will need to continue to expand its product
offerings, periodically enhance its existing products and continue to expand its
distribution internationally.
Laserscope competes in the nonophthalmic surgical segment of the worldwide
medical laser market, in which lasers are used in hospital operating rooms,
outpatient surgery centers and individual physician offices for a wide variety
of procedures. In addition, Laserscope competes in the operating room equipment
market, in which certain equipment is used in connection with the building and
remodeling of hospital operating rooms. A large number of companies participate
in this market, many of which have significantly greater financial and other
resources than the Company.
Certain surgical laser manufacturers have targeted their efforts on narrow
segments of the market, such as angioplasty and lithotripsy. To the extent that
their products compete for the same capital equipment funds, these manufacturers
may be deemed to compete with the Company. More generally, surgical laser
manufacturers such as Laserscope compete with standard surgical methods and
other medical technologies and treatment modalities. There can be no assurance
that the Company can compete effectively against such competitors. In addition,
there can be no assurance that these or other companies will not succeed in
developing technologies, products or treatments that are more effective than the
Company's or that would render the Company's technology or products obsolete or
uncompetitive.
Furthermore, the market for operating room equipment such as that
distributed by the Company is primarily for operating rooms in hospitals that
are being remodeled or newly built. The hospitals and the architects designing
the operating rooms generally both are involved in selecting the vendor for the
operating room equipment. Their decision is often made at the commencement of
the project which can be as much as a year or more before the equipment is
required to be delivered for installation. The Company's competitors are
competing for the same capital equipment funds and the same projects. In
addition, many of the Company's competitors are developers and manufacturers of
the equipment they sell and are better able to control the product
specifications, cost and the availability of such equipment, including
inventory. In addition, the Company imports most of its AMS products and as a
result must pay tariffs which are subject to change. There can be no assurance
that the Company can compete effectively against its competitors, or that other
companies will not succeed in developing technologies, products or treatments
that are more effective than the Company's or that would render the Company's
technology or products obsolete or uncompetitive.
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Reliance on Patents and Licenses. The Company's ability to compete
effectively will depend in part on its ability to develop and maintain
proprietary aspects of its technology. The Company holds several patents issued
in the United States, generally covering surgical laser systems, delivery
devices, calibration inserts, the laser resonator and the connector used to
attach disposable and reusable instrumentation to the Company's laser systems.
There can be no assurance that the patents that have been issued to the Company
or any patents which may be issued as a result of the Company's patent
applications will provide any competitive advantages for the Company's products
or that they will not be successfully challenged, invalidated or circumvented in
the future. 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 that will
prevent, limit or interfere with the Company's ability to make, issue, use and
sell its products.
Failure to Attract or Retain Key Personnel Can Adversely Affect
Results. Laserscope is and will continue to be dependent upon the efforts and
abilities of a number of current key personnel. Laserscope's inability to
attract and retain key employees would have a material adverse effect on the
business, financial condition and results of operations of Laserscope.
Fluctuations in Quarterly Operating Results. A number of factors affect the
Company's financial results and stock price, especially on a quarterly basis,
including the timing of shipments and orders. The Company's laser products are
relatively expensive pieces of medical capital equipment and the precise
shipment date of specific units can have a marked effect on the Company's
results of operations on a quarterly basis. In addition, the Company's AMS
products are sold to hospitals that are building new, or remodeling existing
operating rooms. Orders for AMS products are made early in the process of
designing the operating room, but shipment and payment dates are often dependent
upon the timing of the construction or remodeling of the operating room and
ultimately the completion of such projects. Any delay in product shipments near
the end of a quarter could cause quarterly results to fall short of anticipated
levels. Furthermore, to the extent orders are received by the Company near the
end of a quarter, the Company may not be able to fulfill the order during the
balance of that same quarter. Moreover, the Company typically receives a
disproportionate percentage of its orders toward the end of each quarter. To the
extent that anticipated orders are not received or are delayed beyond the end of
the applicable quarter, the Company's revenues may be adversely affected and the
Company's revenues may be unpredictable from quarter to quarter. In addition,
because a significant portion of the Company's revenues in each quarter result
from orders received in that quarter, the Company establishes its production,
inventory and operating expenditure levels based on anticipated revenue levels.
Thus, if sales do not occur when expected, expenditure levels could be
disproportionately high and operating results for that quarter and potentially
future quarters, would be adversely affected. There can be no assurance that
revenue growth or profitability on a quarterly or annual basis will be
accomplished or will not fluctuate significantly from quarter to quarter.
Product Liability Risk; Limited Insurance Coverage. Laserscope's
development, manufacture and sale of surgical, dermatological and therapeutic
laser systems and related surgical instrumentation and disposable supplies and
accessories entails significant risks of product liability claims. The Company's
current product liability insurance covers claims related to products sold by
Laserscope and its subsidiaries and affiliated persons in an amount up to $10
million (subject to a $100,000 deductible). There can be no assurance that
Laserscope's product liability insurance coverage is adequate to protect the
Company from any liabilities that it might incur in connection with the
development, manufacture and sale of its products. In addition, product
liability insurance is expensive and in the future may not be available to the
Company on acceptable terms, or at all. A successful product liability claim or
series of claims brought against the Company in excess of its insurance coverage
would have a material adverse effect on the Company's business, financial
condition and results of operations.
Volatility of Stock Price. The market price of the Company's common stock
may be subject to significant fluctuations. These fluctuations may be due to
factors specific to the Company, such as quarterly fluctuations in the Company's
financial results, changes in analysts' estimates of future results, changes in
investors' perceptions of the Company or the announcement of new or enhanced
products by the Company or its competitors as well as announcements relating to
acquisitions and strategic transactions by the Company or its competitors. In
addition, such fluctuations may be due to or exacerbated by general conditions
in the
9
<PAGE> 11
medical equipment industry or conditions in the financial markets generally. 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 Laserscope's performance, such as
negative industry reports or disappointing earnings announcements by publicly
traded competitors, may have an adverse impact on the market price of the
Company's common stock.
International Business. The Company conducts an increasingly significant
portion of its business internationally and purchases most of its AMS products
from international sources. International operations accounted for approximately
33% and 26% of the Company's revenues for fiscal 1997 and 1996, respectively.
During the Quarter Ended March 31, 1998, revenues from international operations
accounted for approximately 37% of total net revenues. The Company expects that
international sales will continue to account for a significant portion of its
net sales in the future. A significant amount of these sales occur through its
international subsidiaries, some of which also perform research, development,
manufacturing and service functions. As a result of the Company's international
sales and operations, it is subject to the risks of conducting business
internationally, including fluctuations in foreign exchange rates and changes in
the economies of specific countries or regions of the world, which could affect
the sales price in local currencies of the Company's products in foreign
markets, the Company's local costs and expenses of its foreign operations and
the demand for the Company's products. There can be no assurance that such
factors will not adversely impact the Company's operations in the future or
require the Company to modify its current business practices.
Warranty Obligations. A direct field service organization provides
installation and service for the Company's products. The Company generally
provides a twelve month warranty on its laser and AMS systems. After the
warranty period, maintenance and support is provided on a variety of service
contract bases or on an individual call basis. The Company also has a "99.0%
Uptime Guarantee" on its laser systems. Under provisions of this guarantee, the
Company extends the term of the related warranty or contract if specified system
uptime levels are not maintained. Although most systems covered by this
guarantee have achieved a 99.0% uptime rate to date, there can be no assurance
that the Company can maintain such uptime rates in the future.
Year 2000. Many currently installed computer systems and software products
are coded to accept only two digit entries in the date field. Beginning in the
year 2000, these date fields need to accept four digit entries to distinguish
21st century dates from 20th century dates. As a result, in less than two years,
computer systems and/or software used by many companies may need to be upgraded
to comply with such "Year 2000" requirements. Significant uncertainty exists
concerning the potential effects associated with such compliance. Any Year 2000
compliance problem to either the Company, its suppliers, its service providers
or its customers could result in a material adverse effect on the Company's
financial condition and operating results. The Company has developed a plan to
modify its information technology to recognize the Year 2000 and has begun
converting critical data processing systems. The Company currently expects the
project to be substantially complete by early 1999 and to cost approximately
$250,000. This estimate includes internal costs, but excludes the costs to
upgrade and replace systems in the normal course of business. The Company
currently does not expect this project to have a significant effect on
operations and continues to implement systems with strategic value though some
projects may be delayed due to resource constraints.
SALE OF COMMON STOCK TO SELLING SHAREHOLDERS
Heraeus Transactions. On August 30, 1996, Laserscope consummated an
acquisition transaction (the "HSI Acquisition") pursuant to which Laserscope
acquired Heraeus Surgical, Inc., a wholly-owned subsidiary of Heraeus Med as
well as certain other assets and liabilities of Heraeus Med. As consideration,
Laserscope paid $2 million and issued to Heraeus Med, in a private placement,
4,609,345 shares of Laserscope common stock. Under the HSI acquisition agreement
(the "Heraeus Agreement"), the Company and Heraeus Med have certain obligations
to each other. These obligations include: reciprocal indemnification obligations
in connection with the HSI Acquisition; Heraeus Med's obligation not to develop,
manufacture,
10
<PAGE> 12
service or sell hospital or physician office-based laser surgical systems or
accessories prior to August 30, 2003; and the Company's obligation not to
develop, manufacture, service or sell products outside the United States based
on mounting device technology licensed to the Company prior to August 30, 2006.
In addition, the Heraeus Agreement obligated the Company to register the Heraeus
Shares issued to Heraeus Med as partial consideration for the acquisition of HSI
and to pay certain registration expenses and other costs in connection with any
such registration. The Company and Heraeus Med agreed to customary reciprocal
indemnification obligations in connection with any such registration.
Under the Heraeus Agreement, Heraeus Med agreed that, until August 30,
2003, neither Heraeus Med nor its affiliates would acquire additional shares of
Laserscope common stock (or rights to acquire Laserscope common stock) without
the approval of Laserscope's Board of Directors (the "Standstill"). In addition,
under the Standstill, Heraeus Med could not, prior to August 30, 1999, sell or
transfer more than 1,000,000 shares of Laserscope common stock acquired in the
HSI Acquisition to any person (aggregating all Laserscope common stock held by
such person and its affiliates) unless such person(s) agreed to the Standstill.
In connection with the HSI Acquisition, the Company amended its Common Shares
Rights Agreement dated as of October 31, 1991 (the "Rights Agreement") to
provide that the issuance of the Laserscope shares in connection with the HSI
Acquisition to Heraeus Med and Heraeus Med's transfer of such shares to
permitted transferees ("Permitted Transferees") would not result in such persons
becoming "Acquiring Persons" as defined under the Rights Agreement.
The Heraeus Agreement, as amended, required the Company to use its best
efforts to have three nominees of Heraeus Med elected to the Board of Directors
for so long as Heraeus Med owned at least 3.3 million shares of Company common
stock, two nominees of Heraeus Med elected to the Board for so long as Heraeus
Med owned at least 1.6 million shares of Company common stock and one nominee of
Heraeus Med elected to the Board for so long as Heraeus Med owned at least
600,000 shares of Company common stock. Messrs. Cohen, Goffloo and Ihlenfeldt
were the initial Heraeus Directors and were appointed to the Company's Board of
Directors on August 30, 1996. Mr. Goffloo is Chairman of Heraeus Med and is a
member of the Board of Directors of Heraeus Holding GmbH, Heraeus Med's parent
company. Mr. Ihlenfeldt is Managing Director of Heraeus Med. From 1990 through
1995 Mr. Ihlenfeldt served as President and Chief Executive Officer of Heraeus
Surgical, Inc. Mr. Cohen's firm served as counsel to Heraeus Med and HSI in
connection with the Company's acquisition of HSI.
On April 28, 1998, Laserscope's Board of Directors approved the Letter
Agreement (the "Registration Rights Agreement") among Laserscope and the Selling
Shareholders pursuant to which Laserscope granted the Selling Shareholders
registration rights, as further discussed below. In addition, the Board of
Directors approved the Private Placement, exempting the Private Placement from
the Standstill and the Rights Agreement as well as the Company's Management
Continuity Agreements with certain executives which result, among other things,
in payments to such executives in connection with certain significant
acquisitions of Laserscope common stock not approved by the Board. In addition,
Laserscope's Board agreed to accept the resignations of Messrs. Cohen, Goffloo
and Ihlenfeldt effective upon the closing of the Private Placement and reduced
the authorized number of members of its Board of Directors from eight to five
directors as provided in Laserscope's Bylaws. On May 7, 1998, Messrs. Cohen,
Goffloo and Ihlenfeldt resigned from Laserscope's Board of Directors.
Under the Registration Rights Agreement, Laserscope agreed to, within
thirty days after the closing of the Private Placement, file a single
registration statement on Form S-3 for a public offering of the Shares.
Laserscope agreed to keep such registration statement effective until the
earlier of (a) May 5, 2000 and (b) the disposition of the Shares in accordance
with the plan of distribution provided in such registration statement. Under the
Registration Rights Agreement, Laserscope agreed to bear the registration
expenses (filing fees, printing expenses, fees and disbursements of counsel for
the Company and blue sky fees and expenses) incurred in connection with the
registration and sale of the Shares. The Selling Shareholders agreed to bear the
selling expenses (underwriting discounts, selling commissions, stock transfer
taxes and fees and costs of counsel to the Selling Shareholders) incurred in
connection with the registration and sale of the Shares. Under the Registration
Rights Agreement, Laserscope and the Selling Shareholders agreed to
11
<PAGE> 13
customary reciprocal indemnification provisions in connection with the
registration and sale of the Shares. This registration statement is being filed
pursuant to the Registration Rights Agreement.
Private Placement to Selling Shareholders. On May 7, 1998, Heraeus Med
privately placed 4,268,345 shares of Laserscope Common Stock with the Selling
Shareholders (representing all shares of the Company's Common Stock it then
held) pursuant to the terms of a Stock Purchase Agreement dated as of May 5,
1998 by and among Heraeus Med and the Selling Shareholders. This Prospectus
covers the 4,268,345 shares of the Company's Common Stock sold in the Private
Placement to the Selling Shareholders.
USE OF PROCEEDS
All shares of Common Stock offered hereby are being sold by the Selling
Shareholders named under "Selling Shareholders." The Company will not receive
proceeds from the offering.
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares in whole or in part, from time
to time on the over-the-counter market at prices and on terms prevailing at the
time of any such sale. Any such sale may be made in broker's transactions
through broker-dealers acting as agents, in transactions directly with market
makers or in privately-negotiated transactions where no broker or other third
party (other than the purchaser) is involved. The Selling Shareholders will pay
selling commissions or brokerage fees, if any, with respect to the sale of the
Shares in amounts customary for the type of transaction effected. The Selling
Shareholders will also pay all applicable transfer taxes and all fees and
disbursements of counsel for such Selling Shareholders incurred in connection
with the sale of the Shares.
The Selling Shareholders have advised the Company that during such time as
such Selling Shareholders may be engaged in the attempt to sell Shares
registered hereunder, such persons will:
(i) not engage in any stabilization activity in connection with any of
the Company's securities;
(ii) cause to be furnished to each person to whom Shares included
herein may be offered, and to each broker-dealer, if any, through whom
Shares are offered, such copies of this Prospectus, as supplemented or
amended, as may be required by such person;
(iii) not bid for or purchase any of the Company's securities or any
rights to acquire the Company's securities, or attempt to induce any person
to purchase any of the Company's securities or rights to acquire the
Company's securities other than as permitted under the Exchange Act;
(iv) not effect any sale or distribution of the Shares until after the
Prospectus shall have been appropriately amended or supplemented, if
required, to set forth the terms thereof; and
(v) effect all sales of Shares in broker's transactions through
broker-dealers acting as agents, in transactions directly with market
makers or in privately negotiated transactions where no broker or other
third party (other than the purchaser) is involved.
The Selling Shareholders, and any other persons who participate in the sale
of the Shares, may be deemed to be "Underwriters" as defined in the Securities
Act. Any commissions paid or any discounts or concessions allowed to any such
persons, and any profits received on resale of the Shares, may be deemed to be
underwriting discounts and commissions under the Securities Act.
The Company has agreed to maintain the effectiveness of this Registration
Statement until the earlier of (a) the sale of all the Shares registered
pursuant to this Prospectus or (b) such date as the Company shall be satisfied
that each holder of Shares can sell all of the Shares it holds in any
three-month period in compliance with Rule 144 promulgated under the Securities
Act, but in no event later than May 5, 2000. No sales may be made pursuant to
this Prospectus after such date unless the Company amends or supplements this
Prospectus
12
<PAGE> 14
to indicate that it has agreed to extend such period of effectiveness. There can
be no assurance that the Selling Shareholders will sell all or any of the Shares
of Common Stock offered hereunder.
The Company has agreed to indemnify the Selling Shareholders against
certain liabilities, including liabilities under the Securities Act.
SELLING SHAREHOLDERS
The following table sets forth certain information as of June 2, 1998 with
respect to the Selling Shareholders:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES OF SHARES BENEFICIALLY
OWNED PRIOR COMMON STOCK OWNED AFTER
NAME OF SELLING SHAREHOLDER TO THE OFFERING(1) OFFERED HEREBY(1) THE OFFERING(1)(2)
--------------------------- -------------------- ----------------- --------------------
NUMBER PERCENT NUMBER PERCENT
--------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Dimensional Fund Advisors........... 553,100 4.47% 50,000 503,100 4.07%
1299 Ocean Avenue
Santa Monica, CA 90401 (3)
Oracle Partners L.P................. 200,000 1.62% 200,000 0 *
712 Fifth Avenue
45th Floor
New York, NY
Allen & Company..................... 90,000 * 90,000 0 *
711 Fifth Avenue
9th Floor
New York, NY
Mercury Ltd. Partnership............ 40,000 * 40,000 0 *
950 East Ferry Paces Road
Suite 2400
Atlanta, GA 30326
FK Investments L.P.................. 100,000 * 100,000 0 *
350 Park Avenue, 11th Flr
New York, NY 10022
The Pharmaceutical.................. 144,000 1.16% 144,000 0 *
Medical Technology Fund L.P.
350 Park Avenue, 11th Flr
New York, NY 10022
Strategic Healthcare Fund Ltd....... 26,400 * 26,400 0 *
350 Park Avenue, 11th Flr
New York, NY 10022
Covegrass & Co...................... 65,000 * 65,000 0 *
c/o LGT / Chancellor Asset
Management
50 California Street
San Francisco, CA 94111
Gudme Healthcare Fund............... 69,600 * 69,600 0 *
350 Park Avenue, 11th Flr
New York, NY 10022
Egger & Co.......................... 60,000 * 60,000 0 *
c/o LGT/Chanceller Asset Management
50 California Street
San Francisco, CA 94111
Pequot Scout Fund................... 400,000 3.23% 400,000 0 *
354 Pequot Avenue
Southport, CT 06490
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES OF SHARES BENEFICIALLY
OWNED PRIOR COMMON STOCK OWNED AFTER
NAME OF SELLING SHAREHOLDER TO THE OFFERING(1) OFFERED HEREBY(1) THE OFFERING(1)(2)
--------------------------- -------------------- ----------------- --------------------
NUMBER PERCENT NUMBER PERCENT
--------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
P.A.W Offshore Fund, Ltd............ 150,000 1.21% 150,000 0 *
c/o P.A.W. Partners
10 Glenville Street
Greenwich, CT 06831
Attn: John Ernenwein
Antilles Partners................... 275,000 2.22% 275,000 0 *
850 Third Ave, 10th Floor
New York, NY 10022
C F Partners........................ 73,345 * 73,345 0 *
One Penn Plaza
Suite 4720
New York, NY 10119
Donald P Martin..................... 25,000 * 25,000 0 *
10134 S Western Ave
Chicago, IL 60643
Stanley Peltz....................... 50,000 * 50,000 0 *
1526 E 16th Street
Brooklyn, NY 11230
Mike Rapoport....................... 100,000 * 100,000 0 *
721 Fifth Ave, Apt 57H
New York, NY 10022
Dr. Daniel Koshland Jr.............. 50,000 * 50,000 0 *
3991 Happy Valley Road
Lafayette, CA 94549
Gordon D Mogerley TTEE.............. 75,000 * 75,000 0 *
Hudson Tank Terminal Corp. TR
PS Plan DTD 07/01/80
173 Export St
Newark, NJ 07114
James Sloman, Jr.................... 25,000 * 25,000 0 *
TradeWins Investments
Two International Place
24th Floor
10169 Boston, MA 02110
Grandview Partners, L.P............. 150,000 * 150,000 0 *
2 International Place
Boston, MA 02211
Grandview Partners L.P.
Abydos & Co......................... 150,000 1.21% 150,000 0 *
c/o LGT / Chanceller Asset
Management
50 California Street
San Francisco, CA 94111
Special Situations Fund III, L.P.
(4)............................... 1,050,000 8.49% 1,050,000 0 *
Special Situations Private Equity
Fund, L.P (4)..................... 500,000 4.04% 500,000 0 *
Special Situations Cayman Fund,
L.P.(4)........................... 350,000 2.83% 350,000 0 *
Total..................... 4,771,345 38.6% 4,268,345 503,100 4.07%
</TABLE>
- ---------------
* Less than 1%.
(1) Information with respect to beneficial ownership is based upon information
contained in filings made by certain Selling Shareholders with the
Securities and Exchange Commission, and information obtained from the
Company's transfer agent and the Selling Shareholders.
14
<PAGE> 16
(2) Assumes sale of all Shares offered hereby and no other purchases or sales of
the Company's Common Stock. See "Plan of Distribution."
(3) Includes 2,000, 6,000, 6,000, 24,000 and 12,000 shares held, respectively,
by DFA Group Trust Small Co. U.S. 9-10 Small Co. Portfolio (Fund), DFA Group
Trust Subtrust 6-10 Subtrust, DFA Group Trust 6-10 Value Subtrust and DFA
Group Trust US 6-10 Value Series.
(4) Austin W. Marxe is the principal owner and President of AWM Investment
Company, Inc. ("AWM") and is the principal owner of MG Advisers, L.L.C.
("MG"). AWM is the sole general partner of MGP Advisers Limited Partnership
("MGP"), a registered investment adviser. MGP is a general partner of and
investment adviser to Special Situations Fund III, L.P. AWM is also the
investment adviser and general partner of Special Situations Cayman Fund,
L.P. MG is the general partner of and investment adviser to Special
Situations Private Equity Fund, L.P. The applicable address for each of
Special Situations Fund III, L.P., and Special Situations Private Equity
Fund, L.P. is: 153 East 53rd Street, 51st Flr., New York, NY 10022. The
applicable address for Special Situations Cayman Fund, L.P. is: c/o CIBC
Bank and Trust Company (Cayman) Limited, CIBC Bank Building, P.O. Box 694,
Grand Cayman, Cayman Islands, British West Indies, Attn: Mr. Martin Laidlow.
LEGAL MATTERS
Certain legal matters with respect to the legality of the issuance of the
Common Stock offered hereby will be passed upon for the Company by Venture Law
Group, A Professional Corporation, 2800 Sand Hill Road, Menlo Park, California
94025.
EXPERTS
The consolidated financial statements of Laserscope incorporated by
reference in Laserscope's Annual Report (Form 10-K) for the year ended December
31, 1997, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon incorporated by reference therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Shares
offered hereby, reference is hereby made to the Registration Statement.
Statements contained herein concerning the provisions of any document are not
necessarily complete, and each such statement is qualified in its entirety by
reference to the copy of such document filed with the Commission. The
Registration Statement, including exhibits thereto, may be inspected without
charge at the Commission's principal office in Washington D.C., and copies of
all or any part thereof may be obtained from the Public Reference Section,
Securities and Exchange Commission, Washington D.C., 20549, upon payment of the
prescribed fees.
15
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale and distribution of the Common Stock
being registered. Selling commissions and brokerage fees and any applicable
transfer taxes and fees and disbursements of counsel for the Selling
Shareholders are payable individually by the Selling Shareholders. All amounts
are estimates except the registration fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
Registration Fee............................................ $ 3,500
Legal Fees and Expenses..................................... 20,000
Accounting Fees and Expenses................................ 20,000
Miscellaneous............................................... 10,000
-------
Total............................................. $53,500
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
"Section 317 of the California Corporations Code authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity 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 of 1933, as amended (the "Securities
Act"). The Company's Bylaws provide that the Company shall indemnify its
directors and officers to the fullest extent permitted by California law,
including circumstances in which indemnification is otherwise discretionary
under California law. The Company has entered into indemnification agreements
with its officers and directors containing provisions that are in some respects
broader than the specific indemnification provisions contained in the California
Corporations Code."
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
4.1 Letter Agreement among Laserscope and the Selling
Shareholders dated as of May 5, 1998(1)
5.1 Opinion of Venture Law Group, A Professional Corporation
23.1 Consent of Ernst & Young LLP, Independent Auditors (see page
II4)
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
</TABLE>
- ---------------
(1) Incorporated by reference to Exhibit 99.2 of the Registrant's Current Report
on Form 8-K filed May 15, 1998.
ITEM 17. UNDERTAKINGS
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 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
II-1
<PAGE> 18
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(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 the offering.
(4) 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 Securities Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities 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.
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 provisions referred to in Item 15 above or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. 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 against the Registrant by such director, officer
or controlling person in connection with the securities being registered
hereunder, 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.
II-2
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 San Jose, State of California, on the 29th day of
May, 1998.
LASERSCOPE
By: /s/ ROBERT V. MCCORMICK
------------------------------------
Robert V. McCormick
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints, Robert V. McCormick and Dennis
LaLumandiere, and each of them acting individually, as his attorney-in-fact,
each with full power of substitution, for him in any and all capacities, to sign
any and all amendments to this Registration Statement (including post-effective
amendments), and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorney to any and all amendments to said Registration Statement. Pursuant to
the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ BENJAMIN L. HOLMES Chairman of the Board of Directors May 29, 1998
- ------------------------------------------------
(Benjamin L. Holmes)
/s/ ROBERT V. MCCORMICK President, Chief Executive Officer and May 29, 1998
- ------------------------------------------------ Director (Principal Executive
(Robert V. McCormick) Officer)
/s/ DENNIS LALUMANDIERE Vice President of Finance and Chief May 29, 1998
- ------------------------------------------------ Financial Officer (Principal
(Dennis LaLumandiere) Financial and Accounting Officer)
/s/ E. WALTER LANGE Director May 29, 1998
- ------------------------------------------------
(E. Walter Lange)
/s/ RODNEY PERKINS, M.D. Director May 29, 1998
- ------------------------------------------------
(Rodney Perkins, M.D.)
/s/ ROBERT J. PRESSLEY, PH.D. Director May 29, 1998
- ------------------------------------------------
(Robert J. Pressley, Ph.D.)
</TABLE>
II-3
<PAGE> 20
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Laserscope for the
registration of 4,268,345 shares of its common stock and to the incorporation by
reference therein of our report dated February 17, 1998, with respect to the
consolidated financial statements and schedule of Laserscope included in its
Annual Report (Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
San Jose, California
May 29, 1998
II-4
<PAGE> 21
LASERSCOPE
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER PAGE
------- ------------
<S> <C> <C>
5.1 Opinion of Venture Law Group, A Professional Corporation
23.1 Consent of Ernst & Young LLP, Independent Auditors (see page
II4)
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (see page II3)
</TABLE>
<PAGE> 1
EXHIBIT 5.1
June 2, 1998
Laserscope
3052 Orchard Drive
San Jose, CA 95134-2011
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Securities and Exchange Commission on or about June 3, 1998 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of a total of 4,268,365 additional shares of
your Common Stock (the "Shares") to be sold by certain Selling Shareholders of
Laserscope. As your legal counsel, we have examined the proceedings taken and
are familiar with the proceedings proposed to be taken by you in connection with
the sale and issuance of the Shares.
It is our opinion that, upon conclusion of the proceedings being taken
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares, and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states where required, the Shares, when issued and sold in the
manner described in the Registration Statement, will be legally and validly
issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever it appears in the
Registration Statement and any amendments to it.
Sincerely,
VENTURE LAW GROUP
A Professional Corporation
MLS
