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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3 )*
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Escalon Medical Corp.
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(Name of Issuer)
Common Stock, no par value
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(Title of Class of Securities)
296074305
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(CUSIP Number)
John T. Rich, Vice President of Finance, EOI Corp.
351 East Conestoga Road, Wayne, PA (610) 688-6830
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 5, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 9 Pages
SEC 1746(12-91)
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SCHEDULE 13D
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CUSIP No. 296074305 Page 2 of 9 Pages
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
EOI Corp. (Formerly known as Escalon Ophthalmics, Inc.)
I.R.S. Identification No. 23-2488490
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a)
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(b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
OO
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
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7 SOLE VOTING POWER
825,555
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NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
EACH --------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 825,555
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
825,555
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.2%
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14 TYPE OF REPORTING PERSON (See Instructions)
CO
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CUSIP No. 296074305 Page 3 of 9 Pages
BACKGROUND OF THIS STATEMENT
This Amendment No. 3 to Schedule 13D relates to the ownership by EOI
Corp. (the "Reporting Person"), a Pennsylvania corporation, of 825,555 shares
(the "Shares") of Common Stock, no par value, of Escalon Medical Corp. (the
"Issuer"), a California corporation. The Reporting Person was formerly known
as Escalon Ophthalmics, Inc., and the Issuer was formerly known as Intelligent
Surgical Lasers, Inc. In November 1997, the Issuer effected a one-for-four
reverse stock split (the "Reverse Split"), as a result of which each
shareholder became the holder of one share of the Issuer's Common Stock for
every four shares owned before the Reverse Split. References in this Amendment
No. 3 to shares of Common Stock of the Issuer have been adjusted to reflect the
Reverse Split.
On October 2, 1995, the Board of Directors of the Reporting Person
adopted a Plan of Reorganization, Complete Liquidation and Dissolution (the
"Plan of Liquidation") providing that: (i) the Reporting Person would transfer
substantially all of its assets and certain of its liabilities to the Issuer in
exchange for shares of the Issuer's Common Stock (the "Asset Acquisition"),
which occurred on February 12, 1996; (ii) after the closing of the Asset
Acquisition, the Reporting Person would continue in existence for the sole
purpose of winding up its affairs, and that it would not thereafter engage in
any business activities other than activities related to the implementation of
the Plan of Liquidation; (iii) the Reporting Person would take all necessary
action to settle and discharge, or otherwise provide for, all of its remaining
liabilities, primarily through the delivery of shares of the Issuer's Common
Stock received in the Asset Acquisition and/or through the sale of any or all
of such shares and the application of the proceeds of the sale of such shares
to the payment of the Reporting Person's remaining liabilities; (iv) upon the
settlement and discharge of, or other provision for, all of the Reporting
Person's liabilities, the Reporting Person would transfer all of its remaining
assets, including the transfer in kind of any Shares then owned by the
Reporting Person, to its shareholders in accordance with their respective
rights and interests (less any assets retained as reasonable provisions to meet
claims, including unasserted, contingent, conditional or unmatured liabilities
or expenses, and specifically set aside for such purpose); and (v) the
Reporting Person would thereafter dissolve as a corporate entity.
The Plan of Liquidation was approved by the Reporting Person's
shareholders on January 19, 1996. Thereafter, on February 12, 1996, the
Reporting Person transferred substantially all of its assets and certain of its
liabilities to the Issuer in exchange for shares of the Issuer's Common Stock
in the Asset Acquisition. The Reporting Person has not conducted any business
operations since the Asset Acquisition was consummated.
In furtherance of the Plan of Liquidation and in order to permit the
Reporting Person to discharge its most significant remaining liability, in
January 1998, the Reporting Person commenced an offer (the "Exchange Offer") to
the holders of its 10% Convertible Subordinated Notes due October 31, 2000 (the
"Notes") to exchange shares of common stock of the Reporting Person for the
Notes. The Exchange Offer was completed on April 13, 1998, and, pursuant to
the Exchange Offer, the Reporting Person transferred 7,997,696 shares of the
Reporting Person's Common Stock to the holders of the Notes in complete
cancellation and discharge thereof.
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CUSIP No. 296074305 Page 4 of 9 Pages
On May 8, 1998, the Reporting Person settled two outstanding
liabilities by transferring to holders of those liabilities an aggregate of
139,870 shares of the Issuer's Common Stock in full payment and discharge
thereof. On June 5, 1998, the Reporting Person sold 4,000 shares of the
Issuer's Common Stock in a market transaction for the purpose of raising cash
to settle certain of its remaining liabilities. On August 5, 1998, the
Reporting Person sold 114,285 shares of the Issuer's Common Stock to the Issuer
in a private transaction for $100,000. In addition, on August 5, 1998, the
Reporting Person settled an outstanding liability with the Issuer by
transferring 20,695 shares of the Issuer's Common Stock to the Issuer in full
payment and discharge thereof.
The Reporting Person has currently outstanding liabilities in the
amount of approximately $86,500 for legal, accounting and other expenses
relating to the implementation of the Plan of Liquidation and the dissolution
of the Reporting Person, including expenses relating to the sale of Shares of
the Reporting Person. The Reporting Person anticipates that it will incur
additional expenses of this nature. The Reporting Person intends to complete
the Plan of Liquidation promptly by discharging its remaining liabilities and
distributing the remaining Shares to its shareholders in final liquidation of
its assets.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is supplemented and restated in its entirety as follows:
TRANSACTIONS RELATED TO THE ASSET ACQUISITION
The Reporting Person acquired 1,180,192 shares of the Issuer's Common
Stock in connection with the Asset Acquisition. Concurrently with and as part
of the closing of the Asset Acquisition, the Reporting Person and Genentech,
Inc. ("Genentech") entered into a Termination and Settlement Agreement (the
"Settlement Agreement") dated as of February 12, 1996. Pursuant to the
Settlement Agreement, the Reporting Person transferred and caused to be
delivered by the Issuer to Genentech 60,000 shares of the Common Stock of the
Issuer in consideration of (i) the termination by the Reporting Person and
Genentech of a license agreement between the two parties, (ii) the
extinguishment of all right, title and interest of Genentech in $1,737,260
aggregate principal amount of the Reporting Person's convertible notes and
warrants exercisable for the purchase of 227,500 shares of common stock of the
Reporting Person, (iii) the grant of registration rights by the Issuer to
Genentech and (iv) the mutual release by Genentech of the Reporting Person and
the Issuer, and the releases by the Reporting Person and the Issuer,
respectively, of Genentech, with respect to certain obligations relating to,
among other things, the Acquisition Agreement, the aforementioned license
agreement, the notes and warrant, and other matters occurring or existing on or
prior February 12, 1996.
In addition, 530,096 Shares (the "Escrow Shares") were held in escrow
(the "Escrow") pursuant to the terms of the Escrow Agreement (the "Escrow
Agreement") among the Issuer, the Reporting Person and PNC Bank, National
Association, as Escrow Agent, in order to assure the Issuer that the Reporting
Person will have assets available to satisfy certain liabilities of the
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CUSIP No. 296074305 Page 5 of 9 Pages
Reporting Person that were not being assumed by the Issuer in the Asset
Acquisition. These liabilities have now been satisfied, and the Escrow Shares
have been released from the Escrow.
Also, in connection with the Asset Acquisition, the Reporting Person
adopted the Plan of Liquidation. The Plan of Liquidation provides that (i)
upon the closing of the Asset Acquisition, the Reporting Person would continue
in existence for the sole purpose of winding up its affairs, and that it would
not thereafter engage in any business activities other than activities related
to the implementation of the Plan of Liquidation, (ii) the Reporting Person
would take all necessary action to settle and discharge, or otherwise provide
for, all of its remaining liabilities either through the delivery of Shares
and/or pursuant to the sale of any or all of such Shares and the application of
the proceeds of the sale of such Shares to the payment of the Reporting
Person's remaining liabilities, (iii) upon the settlement and discharge of, or
other provision for, all of the Reporting Person's liabilities, the Reporting
Person would transfer all of its remaining assets, including the transfer in
kind of any Shares then owned by the Reporting Person, to its shareholders in
accordance with their respective rights and interests (less any assets retained
as reasonable provisions to meet claims, including unasserted, contingent,
conditional or unmatured liabilities or expenses, and specifically set aside
for such purpose) and (iv) the Reporting Person would thereafter dissolve as a
corporate entity.
Pursuant to the Registration Rights Agreement dated as of February 12,
1996 between the Issuer and the Reporting Person (the "Registration Rights
Agreement"), the Reporting Person has also been granted certain demand and
piggyback registration rights. See "Subsequent Developments" below for a
description of certain registrations effected under and modifications made to
the Registration Rights Agreement
Upon the consummation of the Asset Acquisition, and as contemplated by
the Acquisition Agreement, three directors of the Issuer, Dieter Broska, Heinz
R. Gisel and Ann H. Lamont, resigned from the Board of Directors of the Issuer,
and four persons who were directors of the Reporting Person, Jay L. Federman,
Richard DePiano, Jack M. Dodick and Sterling C. Johnson, were elected to serve
as directors of the Issuer. Following the consummation of the Asset
Acquisition, the Issuer's Board of Directors consisted of Robert J. Kunze,
Anthony B. Evnin, Jay L. Federman, Richard J. DePiano, Jack M. Dodick and
Sterling C. Johnson. Mr. Kunze, Dr. Federman, Dr. Dodick and Mr. DePiano are
the current directors of the Issuer, and Mr. DePiano is the Chairman of the
Board and Chief Executive Officer of the Issuer. Dr. Federman, Dr. Dodick and
Mr. DePiano are also currently directors of the Reporting Person. There is no
continuing obligation under any contractual arrangements to cause such persons
to be nominated or elected as directors of the Issuer. The Reporting Person is
entitled to cumulate its votes in the election of directors under the
provisions of the California General Corporation Law. Inasmuch as the
Reporting Person owns approximately 26.2% of the outstanding shares of the
Issuer, such cumulative voting rights will permit the Reporting Person to elect
a certain number of nominees as directors of the Issuer. Also, its percentage
of ownership will permit the Reporting Person to cast a significant number of
votes with respect to other matters presented to the Issuer's shareholders for
their consideration and vote.
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CUSIP No. 296074305 Page 6 of 9 Pages
Three directors of the Reporting Person are also directors of the
Issuer, and one of the officers of the Reporting Person is an officer of the
Issuer. Such persons may take actions from time to time in their respective
capacities as officers and directors of the Issuer relating to the management
and control of the Issuer that differ from the current intentions of the
Reporting Person acting in its capacity as a shareholder of the Issuer.
SUBSEQUENT DEVELOPMENTS
The Shares and the cash received from prior sales of Shares are the
Reporting Person's only significant asset and are the sole source of payment of
its liabilities.
The Reporting Person currently has outstanding liabilities in the
amount of approximately $86,500 for legal, accounting and other expenses
relating to the implementation of the Plan of Liquidation and the dissolution
of the Reporting Person, including expenses relating to the sale of Shares by
the Reporting Person. The Reporting Person anticipates that it will incur
additional expenses of this nature prior to the completion of its liquidation
and dissolution.
COMPLETION OF THE EXCHANGE OFFER
On April 13, 1998, the Reporting Person completed the Exchange Offer,
pursuant to which the holders of the Notes received 2.566 shares of Common
Stock of the Reporting Person in exchange for each $1.00 in principal amount of
the Notes. As of that date, $3,116,810 in principal amount of Notes were
outstanding. A total of 7,997,696 shares of the Reporting Person's Common
Stock were transferred by the Reporting Person to the holders of the Notes
pursuant to the Exchange Offer in complete cancellation and discharge of the
Notes.
THE REGISTRATION RIGHTS AGREEMENT AND PROPOSED
TRANSFERS AND DISTRIBUTION OF THE REMAINING SHARES
In August 1996, pursuant to the Registration Rights Agreement, the
Issuer registered under the Securities Act of 1933 the offer and sale of up to
100,000 shares of the Issuer's Common Stock, 60,000 shares of which represented
shares of the Issuer's Common Stock acquired by Genentech in February 1996 and
40,000 shares owned by the Reporting Person so as to register for transfer to
permit the Reporting Person to discharge of certain of its liabilities. In
August 1996, the Reporting Person transferred 10,787 shares of the Issuer's
Common Stock to a creditor of the Reporting Person in discharge of certain
liabilities of the Reporting Person at the rate of $5.5624 per share. After
such transfer, 29,213 Shares remained available for transfer sale or under that
registration statement.
In December 1997, the Reporting Person agreed with the Issuer not to
exercise its demand registration rights under the Registration Rights Agreement
through February 15, 1998, but the Reporting Person retained its piggyback
registration rights. Pursuant to the exercise of Reporting Person's piggyback
registration rights, the Issuer has registered 1,080,192 Shares in a
registration statement under the Securities Act, which became effective on May
1, 1998.
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CUSIP No. 296074305 Page 7 of 9 Pages
On May 8, 1998, the Reporting Person settled two outstanding
liabilities by transferring to holders of those liabilities an aggregate of
139,870 shares of the Issuer's Common Stock in full payment and discharge
thereof. On June 5, 1998, the Reporting Person sold 4,000 shares of the
Issuer's Common Stock in a market transaction for the purpose of raising cash
to settle certain of its remaining liabilities. On August 5, 1998, the
Reporting Person sold 114,285 shares of the Issuer's Common Stock to the Issuer
in a private transaction for $100,000. In addition, on August 5, 1998, the
Reporting Person settled an outstanding liability with the Issuer by
transferring 20,695 shares of the Issuer's Common Stock to the Issuer in full
payment and discharge thereof.
The Reporting Person proposes to complete its liquidation promptly by
discharging its remaining liabilities and distributing to the holders of the
Reporting Person's Common Stock the Shares that the Reporting Person continues
to hold in final liquidation of its assets.
OTHER INFORMATION UNDER THIS ITEM 4
As of the date of this Amendment No. 3, except as described in this
Item and Item 6 of this Schedule 13D, the Reporting Person does not have any
plans or proposals which relate to or would result in:
(a) the acquisition or disposition by any person of additional
securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of
its subsidiaries;
(c) a sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the board;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or
corporate structure;
(g) changes in the Issuer's charter, by-laws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(h) causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
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CUSIP No. 296074305 Page 8 of 9 Pages
(i) a class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is supplemented and restated in its entirety as follows:
(a) The Reporting Person beneficially owns 825,555 Shares, or
approximately 26.2%, of the outstanding shares of Common Stock of the Issuer.
No other person named in Item 2 of this Schedule 13D beneficially owns shares
of Common Stock of the Issuer other than Shares held by the Reporting Person.
(b) The Reporting Person has the sole power to vote or to direct
the vote, and sole power to dispose or direct the disposition, of the Shares.
(c) See Item 4 for a discussion of transactions in the Shares by
the Reporting Person since the initial filing of this Schedule 13D and certain
proposed transfers and distributions of the remaining Shares.
(d) The Reporting Person through its management and Board of
Directors has the sole right to receive and the power to direct the receipt of
dividends from, or the proceeds of the sale of, the Shares.
(e) Not applicable.
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CUSIP No. 296074305 Page 9 of 9 Pages
SIGNATURE
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
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EOI CORP.
Date: August 11, 1998 By: /s/ John T. Rich
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Title: Vice President of Finance
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