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As filed with the Securities and Exchange Commission on June 7, 2000
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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ECLIPSE SURGICAL TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
California 77-0223740
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1049 Kiel Court
Sunnyvale, California 94089
(408) 548-2100
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(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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Alan L. Kaganov, Sc.D.
Chief Executive Officer
Eclipse Surgical Technologies, Inc.
1049 Kiel Court
Sunnyvale, California 94089
(408) 548-2100
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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With copies to:
Robert K. Montgomery, Esq.
Casey M. Nault, Esq.
Gibson, Dunn & Crutcher LLP
2029 Century Park East
Los Angeles, California 90067
(310) 552-8500
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================
Title Proposed Maximum Amount of
of Securities Aggregate Registration
to be Registered Offering Price(1) Fee
--------------------------------------------------------------------------------
<S> <C> <C>
Common Stock,
no par value $14,500,000 $3,828
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933.
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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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
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The information in this prospectus is not complete and may be changed without
notice. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 7, 2000
PRELIMINARY PROSPECTUS
4,000,000 Shares
ECLIPSE SURGICAL TECHNOLOGIES, INC.
Common Stock
This is a public offering of shares of common stock of Eclipse Surgical
Technologies, Inc. This means:
- we may offer for sale and sell shares in varying amounts and at
prices and on terms to be determined at the time of sale;
- we will provide a prospectus supplement each time we issue common
stock; and
- the prospectus supplement will inform you about the number of
shares of common stock to be sold by us, the purchase price, the
name of any agent or broker-dealer, and any applicable
commissions, discounts or other items constituting compensation
with respect to a particular offering.
We will receive all of the proceeds from our sale of our common stock.
If any broker-dealers are used to effect sales, any commissions paid to
the broker-dealers and, if broker-dealers purchase any shares of Common Stock as
principals, any profits received by the broker-dealers on the resale of the
shares of Common Stock, may be deemed to be underwriting discounts or
commissions under the Securities Act of 1933, as amended.
Our common stock is listed on the NASDAQ National Market under the
symbol "ESTI." On June 6, 2000, the closing price of one share of our common
stock was $4.38.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 1.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------
THE DATE OF THIS PROSPECTUS IS JUNE 7, 2000
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THE COMPANY
Eclipse Surgical Technologies, Inc., incorporated in California in 1989,
designs, develops, manufactures and distributes laser-based surgical products
and disposable fiber-optic accessories for the treatment of advanced
cardiovascular disease through transmyocardial revascularization, known as TMR,
and percutaneous transluminal myocardial revascularization, known as PTMR. TMR
and PTMR are recent laser-based heart treatments in which channels are made in
the heart muscle. It is believed these procedures encourage new vessel
formation, or angiogenesis, and result in reduced angina pain. TMR is performed
by a cardiac surgeon through a small incision in the chest under general
anesthesia. PTMR is performed by a cardiologist in a catheter based procedure
which utilizes local anesthesia.
In the United States, we offered our laser systems for sale in limited
numbers for investigational use only pursuant to Investigational Device
Exemptions from the United States Food and Drug Administration. On February 11,
1999, we received final approval from the FDA for our TMR products for treatment
of stable patients with angina (Canadian Cardiovascular Society Class 4)
refractory to other medical treatments and secondary to objectively demonstrated
coronary artery atherosclerosis and with a region of the myocardium with
reversible ischemia not amenable to direct coronary revascularization. Effective
July 1, 1999, the Health Care Financial Administration ("HCFA") began to provide
Medicare coverage for TMR. Hospitals and physicians are now eligible to receive
Medicare reimbursement for TMR equipment and procedures.
We have completed a pivotal clinical trial regarding PTMR, and the study
results were submitted to the FDA in a Pre Market Approval (PMA) application in
December of 1999. To date, no approval has been received from the agency.
Our principal executive offices are located at 1049 Kiel Court,
Sunnyvale, California 94089. Our telephone number is (408) 548-2100.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair our business
operations.
WE MAY FAIL TO OBTAIN REQUIRED REGULATORY APPROVALS TO MARKET OUR PRODUCTS IN
THE UNITED STATES.
Our business, financial condition and results of operations could be
harmed by any of the following events, circumstances or occurrences related to
the regulatory process:
- the failure to obtain regulatory approvals for our products;
- significant limitations in the indicated uses for which our
products may be marketed;
- substantial costs incurred in obtaining regulatory approvals; or
- delays in initiating or completing new clinical trials.
We must submit, and the FDA must approve applications for preliminary
market approval, known as PMA, before we can sell our TMR and PTMR laser systems
as medical devices. Before submitting a PMA application, we must complete
clinical testing to demonstrate the safety and effectiveness of our products.
In 1997, we submitted a PMA application to the FDA for certain
applications of our TMR laser system. On October 27, 1998, an advisory panel of
the FDA recommended that the FDA approve our PMA application for the TMR laser
system. Along with our approval, the FDA panel requested that we conduct
postmarket surveillance in a form to be determined through further discussions
with the FDA. On February 11, 1999, we received final approval from the FDA for
use of our TMR products for treatment of stable patients with angina (Canadian
Cardiovascular Society Class 4) refractory to other medical treatments and
secondary to objectively demonstrated coronary artery atherosclerosis and with a
region of the myocardium with reversible ischemia not amenable to direct
coronary revascularization.
In February 1996, we obtained FDA clearance to undertake Phase I of a
clinical study of TMR intended to assess the safety and effectiveness of "TMR
Used in Conjunction with CABG" as compared with coronary artery bypass graft,
known as CABG, alone. In September 1996, the FDA provided us with clearance to
begin Phase II of this study, which was subsequently completed. In July 1999, we
submitted a PMA supplement to FDA for an expanded indication to our approved TMR
labeling to include TMR in conjunction with CABG. In January 2000, we received a
response from the FDA requesting that we either provide more information or
modify our labeling request. Since TMR and CABG are each presently utilized to
treat separate regions of the heart, we concluded that our present FDA approved
labeling is adequate, and that the physician can best decide how to use the
laser system within the approved labeling. As a result, in March 2000, we
decided that we will not pursue any wording changes to our already approved TMR
labeling and have withdrawn our submission to the FDA for TMR in conjunction
with CABG.
We applied for and received Investigational Device Exemptions, known as
IDEs, to engage in various clinical trials of our PTMR products and procedures.
In December, 1999, we submitted a PMA application to the FDA seeking marketing
clearance for PTMR in the United States. To date, the FDA has not granted
approval of this application. The FDA may not approve this application in a
timely manner, if ever.
THE MEDICAL COMMUNITY HAS NOT BROADLY ADOPTED OUR PRODUCTS, AND UNLESS OUR
PRODUCTS ARE BROADLY ADOPTED, OUR BUSINESS WILL SUFFER.
Our TMR products have not yet achieved broad commercial adoption, and
our PTMR products are experimental and have not yet achieved broad clinical
adoption. We cannot predict whether or at what rate and how broadly our products
will be adopted by the medical community. Our business would be harmed if:
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- our products fail to achieve significant clinical adoption; or
- our TMR or PTMR laser systems fail to achieve significant market
acceptance.
Positive endorsements by physicians are essential for clinical adoption
of our TMR and PTMR laser systems. Even if the clinical efficacy of TMR and PTMR
laser systems is established, physicians may elect not to recommend TMR and PTMR
laser systems for any number of reasons. The reasons why TMR or PTMR laser
systems may effectively treat coronary artery disease are not well understood.
Although we intend to use research, development and clinical efforts to
understand better the physiological effects of TMR and PTMR treatment, we may
not achieve such understanding on a timely basis, or at all. TMR and PTMR laser
systems may not be clinically adopted unless we:
- understand thoroughly the physiological effects of the products;
and
- disseminate such understanding within the medical community.
Clinical adoption of these products will also depend upon:
- our ability to facilitate training of cardiothoracic surgeons and
interventional cardiologists in TMR and PTMR therapy; and
- willingness of such physicians to adopt and recommend such
procedures to their patients.
Patient acceptance of the procedure will depend on:
- physician recommendations;
- the degree of invasiveness;
- the effectiveness of the procedure; and
- the rate and severity of complications associated with the
procedure as compared to other procedures.
TO EXPAND OUR BUSINESS, WE MUST ESTABLISH EFFECTIVE SALES, MARKETING AND
DISTRIBUTION SYSTEMS, AND WE HAVE LIMITED EXPERIENCE TO DATE ESTABLISHING THESE
OPERATIONS.
To expand our business, we must establish effective systems to sell,
market and distribute products. To date, we have had limited sales which have
consisted primarily of sales of our TMR lasers and disposable handpieces on a
commercial basis since February, 1999 and PTMR lasers and disposable catheters
for investigational use only.
We have recently changed our U.S. sales strategy to include both selling
lasers to hospitals outright, as well as loaning lasers to hospitals in return
for the hospital purchasing a minimum number of handpieces at a premium over the
list price. During the current year, the majority of lasers shipped have been
under this loan program. The purpose of this strategy is to focus our sales
force on increasing market penetration and selling disposable handpieces used in
connection with our TMR procedure. If the sales force is not successful in
increasing market share and selling our disposable handpieces our business will
suffer.
With FDA approval of our TMR laser system, we are marketing our products
primarily through our direct sales force. We have been expanding our operations
by hiring additional sales and marketing personnel. This has required and will
continue to require substantial management efforts and financial resources. If
we are not able to establish effective sales and marketing capabilities our
business will suffer.
THE EXPANSION OF OUR BUSINESS MAY PUT ADDED PRESSURE ON OUR MANAGEMENT AND
OPERATIONAL INFRASTRUCTURE AND COULD CREATE NUMEROUS RISKS AND CHALLENGES.
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The growth in our business may place a significant strain on our limited
personnel, management and other resources. The evolving growth of our business
involves numerous risks and challenges, including:
- the dependence on the growth of the market for our TMR and PTMR
systems;
- domestic and international regulatory developments;
- rapid technological change;
- the highly competitive nature of the medical devices industry;
and
- the risk of entering emerging markets in which we have limited or
no direct experience.
Our future operating results will be significantly affected by our
ability to:
- successfully and rapidly expand sales to potential customers;
- implement operating, manufacturing and financial procedures and
controls;
- improve coordination among different operating functions; and
- continue to attract, train and motivate additional qualified
personnel in all areas.
We may not be able to manage these activities and implement these
strategies successfully, and any failure to do so could harm our operating
results.
OUR OPERATING RESULTS WILL FLUCTUATE AND QUARTER TO QUARTER COMPARISONS OF OUR
RESULTS MAY NOT INDICATE FUTURE PERFORMANCE.
Our operating results have fluctuated significantly from quarter to
quarter and are expected to fluctuate significantly from quarter to quarter due
to a number of events and factors, including:
- the level of product demand and the timing of customer orders;
- changes in strategy;
- delays associated with the FDA and other regulatory approval
processes;
- personnel changes;
- the level of international sales;
- the timing and results of clinical trials;
- changes in competitive pricing policies;
- the ability to develop, introduce and market new and enhanced
versions of products on a timely basis;
- deferrals in customer orders in anticipation of new or enhanced
products;
- product quality problems; and
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- the enactment of health care reform legislation and any changes
in third party reimbursement policies.
We believe that quarter to quarter comparisons of our operating results
are not a good indication of our future performance. Our operating results have,
in the past, fallen below expectations and it is likely or possible that our
operating results for a future quarter will fall below the expectations of
public market analysts and investors. When this occurred in the past the price
of our common stock fell substantially and if this occurs, the price of our
common stock may fall again, perhaps substantially.
WE MAY NOT BE ABLE TO SUCCESSFULLY MARKET OUR PRODUCTS IF WE FAIL TO OBTAIN
THIRD PARTY REIMBURSEMENT FOR THE PROCEDURES PERFORMED WITH OUR PRODUCTS.
Few individuals are able to pay directly for the costs associated with
the use of our products. In the United States, hospitals, physicians and other
healthcare providers that purchase medical devices generally rely on third party
payors, such as Medicare, to reimburse all or part of the cost of the procedure
in which the medical device is being used. A failure by third party payors to
provide adequate reimbursement for the TMR and PTMR procedures that use our
products would harm our business.
Effective July 1, 1999, the Health Care Financing Administration
commenced Medicare coverage for TMR systems for any manufacturer's TMR
procedures. Hospitals are now eligible to receive Medicare reimbursement for TMR
equipment and procedures. The Health Care Financing Administration may not
approve reimbursement for PTMR. If it does not provide reimbursement, our
business will suffer. We have limited experience to date with the acceptability
of our TMR procedures for reimbursement by private insurance and private health
plans. Private insurance and private health plans may not approve reimbursement
for TMR or PTMR procedures. If they do not provide reimbursement, our business
will suffer.
Although we do not anticipate receiving Medicare reimbursements for our
laser systems that are in clinical trials, we will seek reimbursement from other
third party payors. However, such reimbursement may not be available.
Third party payors may deny reimbursement if they determine that the
device used in a treatment is:
- unnecessary;
- inappropriate;
- experimental;
- used for a non-approved indication; or
- not cost-effective.
Potential purchasers must determine whether the clinical benefits of our
TMR and PTMR laser systems justify:
- the additional cost or the additional effort required to obtain
prior authorization or coverage; and
- the uncertainty of actually obtaining such authorization or
coverage.
WE FACE INTENSE COMPETITION AND COMPETITIVE PRODUCTS COULD RENDER OUR PRODUCTS
OBSOLETE.
The market for TMR and PTMR laser systems is intensely competitive and
is constantly becoming more competitive. If our competitors are more effective
in developing new products and procedures and marketing existing and future
products, our business will suffer.
The market for TMR and PTMR laser systems is characterized by rapid
technical innovation. Accordingly, our current or future competitors may succeed
in developing TMR and PTMR products or procedures that:
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- are more effective than our products;
- are more effectively marketed than our products; or
- may render our products or technology obsolete.
We currently compete with PLC Systems, Inc., Johnson & Johnson and
Boston Scientific. PLC is currently selling TMR commercially in the United
States and abroad, while Johnson & Johnson is currently selling PTMR products
for investigational use. Boston Scientific has acquired radio frequency
technology to begin a percutaneous feasibility trial in the United States under
a preliminary IDE.
Earlier entrants in the market in a therapeutic area often obtain and
maintain greater market share than later entrants. PLC obtained a PMA approval
of its TMR laser system in 1998 prior to our PMA approval and thus, could be
able to capture a greater market share.
Even with the FDA approval for our TMR laser system, we will face
competition for market acceptance and market share for that product. Our ability
to compete may depend in significant part on the timing of introduction of
competitive products into the market, and will be affected by the pace, relative
to competitors, at which we are able to:
- develop products;
- complete clinical testing and regulatory approval processes;
- obtain third party reimbursement acceptance; and
- supply adequate quantities of the product to the market.
OUR PRODUCTS ALSO COMPETE WITH ALTERNATIVE TREATMENT METHODS AND OUR PRODUCTS
MUST REPLACE THESE METHODS TO BE COMMERCIALLY SUCCESSFUL.
Many of the medical indications that may be treatable with TMR and PTMR
laser systems are currently being treated by drug therapies or surgery and other
interventional therapies, including PTCA and CABG.
Our business would be materially harmed if TMR technology fails to
replace or augment existing therapies or to be more effective, safer or more
cost effective than new therapies. A number of the existing therapies are widely
accepted in the medical community, have a long history of use and continue to be
enhanced rapidly.
Procedures using TMR and PTMR technology may not be able to replace or
augment such established treatments. Clinical research results may not support
the use of TMR or PTMR procedures to augment or replace existing treatments.
Others are developing new surgical procedures and new drug therapies to
treat coronary artery disease. These new procedures and drug therapies could be
more effective, safer or more cost effective than TMR and PTMR laser systems.
The market acceptance and commercial success of our TMR and PTMR laser
systems will depend not only upon their safety and effectiveness, but also upon
the relative safety and effectiveness of alternative treatments.
OUR PRODUCTS DEPEND ON TMR TECHNOLOGY THAT IS RAPIDLY CHANGING, WHICH COULD
REQUIRE US TO INCUR SUBSTANTIAL PRODUCT DEVELOPMENT EXPENDITURES TO RESPOND TO
INDUSTRY CHANGES.
TMR and PTMR laser systems are our only products. Accordingly, if we
fail to develop and commercialize successfully our TMR and PTMR laser systems,
then our business would suffer.
The medical device industry is characterized by rapid and significant
technological change. Our future success will
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depend in large part on our ability to respond to such changes. In addition, we
must expand the indications and applications for our products by developing and
introducing enhanced and new versions of our TMR and PTMR laser systems. Product
research and development requires substantial expenditures and is inherently
risky. We may not be able to:
- identify products for which demand exists; or
- develop products that have the characteristics necessary to treat
particular indications.
Even if we identify and develop such products, we may not receive
regulatory approval and may not be commercially successful.
OVERALL INCREASES IN MEDICAL COSTS COULD ADVERSELY AFFECT OUR BUSINESS.
We believe that the overall escalating cost of medical products and
services has led, and will continue to lead, to increased pressures on the
health care industry, both foreign and domestic, to reduce the cost of products
and services, including products offered by them. We cannot assure you that in
either United States or international markets that:
- third party reimbursement and coverage will be available or
adequate;
- current reimbursement amounts will not be decreased in the
future; or
- future legislation, regulation or reimbursement policies of third
party payors will not otherwise adversely affect the demand for
our products or our ability to profitably sell our products.
Fundamental reforms in the healthcare industry in the United States and
Europe continue to be considered. We cannot predict whether or when any
healthcare reform proposals will be adopted and what effect such proposals might
have on our business.
WE HAVE A HISTORY OF LOSSES AND MAY NOT BE PROFITABLE IN THE FUTURE.
We have incurred significant losses since inception. Our revenues and
operating income will be constrained:
- until such time, if ever, as we obtain broad commercial adoption
of our TMR laser systems by healthcare facilities in the United
States;
- until such time, if ever, as we obtain FDA and other regulatory
approvals for our PTMR laser systems; and
- for an uncertain period of time after such approvals are
obtained.
We may not achieve or sustain profitability in the future.
IF WE EXPERIENCE INCREASED DEMAND FOR OUR PRODUCTS, WE MAY NOT BE ABLE TO EXPAND
OUR BUSINESS TO MEET SUCH DEMAND.
We may be required to expand our business to:
- respond to increasing clinical adoption of the TMR procedure;
- develop future products;
- generally compete successfully;
- complete the clinical trials that are currently in progress; and
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- prepare additional products for clinical trials.
Such expansion could place a significant strain on managerial,
operational and financial systems and resources. To accommodate such expansion
and compete effectively, we must improve information systems, procedures and
controls and expand, train, motivate and manage our employees.
THIRD PARTIES MAY LIMIT THE DEVELOPMENT AND PROTECTION OF OUR INTELLECTUAL
PROPERTY, WHICH COULD ADVERSELY AFFECT OUR COMPETITIVE POSITIONS.
Our success is dependent in large part on our ability to:
- obtain patent protection for our products and processes;
- preserve our trade secrets and proprietary technology; and
- operate without infringing upon the patents or proprietary rights
of third parties.
The medical device industry has been characterized by extensive
litigation regarding patents and other intellectual property rights. Companies
in the medical device industry have employed intellectual property litigation to
gain a competitive advantage. Certain competitors and potential competitors of
ours have obtained United States patents covering technology that could be used
for certain TMR and PTMR procedures. We do not know if such competitors,
potential competitors or others have filed and hold international patents
covering other TMR or PTMR technology. In addition, international patents may
not be interpreted the same as any counterpart United States patents.
In September 1995, one of our competitors sent us a notice of potential
infringement of their patent regarding a method for TMR utilizing
synchronization of laser pulses to the electrical signals from the heart. After
discussion with patent counsel, we concluded that we did not utilize the process
and/or apparatus that was the subject of the patent at issue, and we provided a
response to the competitor to that effect. We have not received any additional
correspondence from this competitor on these matters.
In 1996, prior to the merger with us, CardioGenesis initiated a suit in
the United States against PLC seeking a judgment that the PLC patent is invalid
and unenforceable. In 1997, PLC counterclaimed in that suit alleging
infringement by CardioGenesis of the PLC patent. Also in 1997, PLC initiated
suit in Germany against CardioGenesis and CardioGenesis' former German sales
agent alleging infringement of a European counterpart to the PLC patent. In
1997, CardioGenesis filed an Opposition in the European Patent Office to a
European counterpart to the PLC patent, seeking to have the European patent
declared invalid.
On January 5, 1999, before trial on the United States suit commenced,
CardioGenesis and PLC settled all litigation between them, both in the United
States and in Germany, with respect to the PLC patent and the European patents.
Under the Settlement and License Agreement signed by the parties, CardioGenesis
stipulated to the validity of the PLC patents and PLC granted CardioGenesis a
non-exclusive worldwide license to the PLC patents. CardioGenesis agreed to pay
PLC a license fee, and minimum royalties, totaling $2.5 million over an
approximately forty-month period, with a running royalty credited against the
minimums.
The Settlement and License Agreement applies only to those products or
that technology covered by the PLC patents, and the agreement does not provide
PLC any rights to any CardioGenesis intellectual property. The Eclipse TMR 2000
laser system does not use the technology associated with the PLC patents.
While we periodically review the scope of our patents and other relevant
patents of which we are aware, the question of patent infringement involves
complex legal and factual issues. Any conclusion regarding infringement may not
be consistent with the resolution of any such issues by a court.
We may not be able to protect our intellectual property because:
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- patents may not be issued;
- patents may be challenged, invalidated or designed around by
competitors; or
- patent protection may not continue to be available for surgical
methods in the future.
COSTLY LITIGATION MAY BE NECESSARY TO PROTECT INTELLECTUAL PROPERTY RIGHTS.
We may have to engage in time consuming and costly litigation to protect
our intellectual property rights or to determine the proprietary rights of
others. In addition, we may become subject to patent infringement claims or
litigation, or interference proceedings declared by the United States Patent and
Trademark Office to determine the priority of inventions.
Defending and prosecuting intellectual property suits, United States
Patent and Trademark Office interference proceedings and related legal and
administrative proceedings are both costly and time-consuming. We may be
required to litigate further to:
- enforce our issued patents;
- protect our trade secrets or know-how; or
- determine the enforceability, scope and validity of the
proprietary rights of others.
Any litigation or interference proceedings will result in substantial
expense and significant diversion of effort by technical and management
personnel. If the results of such litigation or interference proceedings are
adverse to us, then the results may:
- subject us to significant liabilities to third parties;
- require us to seek licenses from third parties;
- prevent us from selling our products in certain markets or at
all; or
- require us to modify our products.
Although patent and intellectual property disputes regarding medical
devices are often settled through licensing and similar arrangements, costs
associated with such arrangements may be substantial and could include ongoing
royalties. Furthermore, we may not be able to obtain the necessary licenses on
satisfactory terms, if at all.
Adverse determinations in a judicial or administrative proceeding or
failure to obtain necessary licenses could prevent us from manufacturing and
selling our products. This would harm our business.
WE RELY ON PATENT AND TRADE SECRET LAWS, WHICH ARE COMPLEX AND MAY BE DIFFICULT
TO ENFORCE.
The validity and breadth of claims in medical technology patents involve
complex legal and factual questions and, therefore, may be highly uncertain.
Issued patent or patents based on pending patent applications or any future
patent application may not exclude competitors or may not provide a competitive
advantage to us. In addition, patents issued or licensed to us may not be held
valid if subsequently challenged and others may claim rights in or ownership of
such patents.
Furthermore, we cannot assure you that our competitors:
- have not developed or will not develop similar products;
- will not duplicate our products; or
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- will not design around any patents issued to or licensed by us.
Because patent applications in the United States are currently
maintained in secrecy until patents issue, we cannot be certain that:
- others did not first file applications for inventions covered by
our pending patent applications; or
- we will not infringe any patents that may issue to others on such
applications.
The United States patent laws were recently amended to exempt
physicians, other health care professionals, and affiliated entities from
infringement liability for medical and surgical procedures performed on
patients. We are not able to predict if this amendment will materially affect
our ability to protect our proprietary methods and procedures.
Competitors may independently develop proprietary information
substantially equivalent to our proprietary information and techniques, or
otherwise gain access to our proprietary technology.
In addition to our patents, we rely upon trade secrets, technical
know-how and continuing technological innovation to develop and maintain our
competitive position. We may not be able to meaningfully protect our unpatented
technology because:
- our employees, consultants and advisors may breach their
confidentiality and invention assignment agreements and there may
not be an adequate remedy for such breach;
- our competitors may independently develop substantially
equivalent proprietary information and techniques; or
- competitors may otherwise gain access to our proprietary
technology.
Our inability to protect our unpatented intellectual property could
materially harm our business.
WE DEPEND ON SINGLE SOURCE SUPPLIERS FOR CERTAIN KEY COMPONENTS AND PRODUCTION
COULD BE INTERRUPTED IF A KEY SUPPLIER HAD TO BE REPLACED.
We currently purchase certain critical laser and fiber-optic components
from single sources. Although we have identified alternative suppliers, a
lengthy process would be required to qualify them as additional or replacement
suppliers. Any significant interruption in the supply of critical materials or
components could delay our ability to manufacture our products and could harm
our manufacturing operations, business and results of operations.
We anticipate that products will be manufactured based on forecasted
demand and will seek to purchase subassemblies and components in anticipation of
the actual receipt of purchase orders from customers. Lead times for materials
and components vary significantly and depend on factors such as the business
practices of each specific supplier and the terms of particular contracts, as
well as the overall market demand for such materials and components at any given
time. If the forecasts are inaccurate, we could experience fluctuations in
inventory levels, resulting in excess inventory, or shortages of critical
components, either of which could cause our business to suffer.
Certain of our suppliers could have difficulty expanding their
manufacturing capacity to meet our needs if demand for our TMR and PTMR laser
systems were to increase rapidly or significantly. In addition, any defect or
malfunction in the laser or other products provided by such suppliers could
cause a delay in regulatory approvals or adversely affect product acceptance. We
cannot predict if:
- materials obtained from outside suppliers will continue to be
available in adequate quantities; or
- alternative suppliers can be located on a timely basis.
9
<PAGE> 13
We operate on a purchase order basis with most of our suppliers. Such
vendors could at any time determine to cease the supply and production of such
components.
WE HAVE LIMITED MANUFACTURING EXPERIENCE WHICH COULD PREVENT US FROM
SUCCESSFULLY INCREASING CAPACITY IN RESPONSE TO MARKET DEMAND.
We have limited experience in manufacturing products. Manufacturers
often encounter difficulties in increasing production, including problems
involving:
- production yields;
- adequate supplies of components;
- quality control and assurance (including failure to comply with
good manufacturing practices regulations, international quality
standards and other regulatory requirements); and
- shortages of qualified personnel.
We also may not be able to successfully increase manufacturing capacity
or avoid manufacturing difficulties or product recalls.
OUR PRODUCTS MAY CONTAIN DEFECTS WHICH COULD DELAY REGULATORY APPROVAL OR MARKET
ACCEPTANCE OF OUR PRODUCTS.
We may experience future product defects, malfunctions, manufacturing
difficulties or recalls related to the lasers or other components used in our
TMR and PTMR laser systems. Any such occurrence could cause a delay in
regulatory approvals or adversely affect the commercial acceptance of our
products and could cause harm to our business.
WE MUST COMPLY WITH FDA MANUFACTURING STANDARDS OR FACE FINES OR OTHER PENALTIES
INCLUDING SUSPENSION OF PRODUCTION.
We are required to demonstrate compliance with the FDA's current good
manufacturing practices regulations if we market devices in the United States or
manufacture finished devices in the United States. The FDA inspects
manufacturing facilities on a regular basis to determine compliance. If we fail
to comply with applicable FDA or other regulatory requirements, we can be
subject to:
- fines, injunctions, and civil penalties;
- recalls or seizures of products;
- total or partial suspensions of production; and
- criminal prosecutions.
WE WILL BE ABLE TO OBTAIN FDA APPROVAL ONLY FOR THOSE PRODUCTS THAT ARE PROVEN
SAFE AND EFFECTIVE IN CLINICAL SITES.
The FDA has not approved our PTMR laser systems for any indication in
the United States. We submitted a PMA Supplement for our Axcis PTMR system to
the FDA in December, 1999. The PTMR study compares PTMR to conventional medical
therapy in patients with no option for other treatment. The FDA may not accept
the study as safe and effective, and PTMR may not be approved for commercial use
in the United States. Responding to FDA requests for additional information
could require substantial financial and management resources and take several
years.
We cannot determine if our PTMR laser systems will prove to be safe or
effective. Our business would be materially and adversely harmed if our PTMR
laser systems do not prove to be safe and effective in clinical trials.
10
<PAGE> 14
WE MAY SUFFER LOSSES FROM PRODUCT LIABILITY CLAIMS IF OUR PRODUCTS CAUSE HARM TO
PATIENTS.
We are exposed to potential product liability claims and product
recalls. These risks are inherent in the design, development, manufacture and
marketing of medical devices. Our products are designed to be used in
life-threatening situations where there is a high risk of serious injury or
death, and we could be subject to product liability claims if the use of our TMR
or PTMR laser systems is alleged to have caused adverse effects on a patient or
such products are believed to be defective.
Any regulatory clearance for commercial sale of these products will not
remove these risks. Any failure to comply with the FDA's good manufacturing
practices or other regulations could hurt our ability to defend against product
liability lawsuits. Although we have not experienced any product liability
claims to date, any such claims could cause our business to suffer.
OUR INSURANCE MAY BE INSUFFICIENT TO COVER PRODUCT LIABILITY CLAIMS AGAINST US.
Our product liability insurance may not be adequate for any future
product liability problems or continue to be available on commercially
reasonable terms, or at all.
If we were held liable for a product liability claim or series of claims
in excess of our insurance coverage, such liability could harm our business and
financial condition. We maintain insurance against product liability claims in
the amount of $10 million per occurrence and $10 million in the aggregate.
We may require increased product liability coverage as sales of approved
products increase and as additional products are commercialized. Product
liability insurance is expensive and in the future may not be available on
acceptable terms, if at all.
WE DEPEND HEAVILY ON CERTAIN KEY PERSONNEL.
Our future business and results of operations depend in significant part
upon the continued contributions of our key technical and senior management
personnel.
Our future business and results of operations also depend in significant
part upon our ability to attract and retain additional qualified management,
manufacturing, technical, marketing and sales and support personnel for our
operations. If we lose a key employee or if a key employee fails to perform in
his or her current position, or if we are not able to attract and retain skilled
employees as needed, our business could suffer.
WE MAY ENGAGE IN FUTURE ACQUISITIONS THAT DISTRACT OUR MANAGEMENT, CAUSE US TO
INCUR DEBT, OR DILUTE OUR SHAREHOLDERS.
We may, from time to time, acquire or invest in other complementary
businesses, products or technologies. While there are currently no commitments
with respect to any particular acquisition or investment, our management
frequently evaluates the strategic opportunities available related to
complementary businesses, products or technologies. The process of integrating
an acquired company's business into our operations may result in unforeseen
operating difficulties and expenditures and may absorb significant management
attention that would otherwise be available for the ongoing development of our
business. Moreover, the anticipated benefits of any acquisition or investment
may not be realized. Any future acquisitions or investments by us could result
in potentially dilutive issuances of equity securities, the incurrence of debt
and contingent liabilities and amortization expenses related to goodwill and
other intangible assets, any of which could materially harm our operating
results and financial condition.
WE MAY FAIL TO COMPLY WITH INTERNATIONAL REGULATORY REQUIREMENTS AND COULD BE
SUBJECT TO REGULATORY DELAYS, FINES OR OTHER PENALTIES.
Regulatory requirements in foreign countries for international sales of
medical devices often vary from country to country. The impact of the following
factors would harm our business:
11
<PAGE> 15
- delays in receipt of, or failure to receive, foreign regulatory
approvals or clearances;
- the loss of previously obtained approvals or clearances; or
- the failure to comply with existing or future regulatory
requirements.
Our products will be subject to other regulatory requirements in the
European Union and other countries. Any enforcement action by international
regulatory authorities with respect to past or future regulatory noncompliance
could cause our business to suffer.
The time required to obtain approval for sale in foreign countries may
be longer or shorter than required for FDA approval, and the requirements may
differ. In addition, there may be foreign regulatory barriers other than
regulatory approval. Except as stated in the following sentence, the FDA must
approve exports of devices that require a PMA but are not yet approved
domestically. An unapproved device may be exported without prior FDA approval to
any member country of the European Union and the other "listed" countries,
including Australia, Canada, Israel, Japan, New Zealand, Switzerland and South
Africa:
- if the device is approved for sale by that country; or
- for investigational use in accordance with the laws of that
country.
We received the CE Mark for our TMR laser system in December 1996 and
for our PTMR laser system in July 1998. In addition, the Vertex TMR Probe and
the Axcis PTMR Catheter system, acquired in the merger with Cardiogenesis,
received CE mark approval in July 1996 and January 1998, respectively. In the
European Economic Area, we will be:
- subject to continued supervision;
- required to report any serious adverse incidents to the
appropriate authorities; and
- required to comply with additional national requirements that are
outside the scope of the Medical Device Directive.
We became ISO 9001 certified in May 1997. We may not be able to:
- achieve or maintain the compliance required for CE marking on all
or any of our products; or
- produce our products profitably and in a timely manner while
complying with the requirements of the Medical Device Directive
and other regulatory requirements.
If we fail to comply with applicable regulatory requirements we could
face:
- fines, injunctions, civil penalties;
- recalls or seizures of products;
- total or partial suspensions of production;
- refusals by foreign governments to permit product sales; and
- criminal prosecution.
Furthermore, if existing regulations are changed or new regulations or
policies are adopted, we may:
12
<PAGE> 16
- not be able to obtain, or affect the timing of, future regulatory
approvals or clearances;
- not be able to obtain necessary regulatory clearances or
approvals on a timely basis or at all; and
- be required to incur significant costs in obtaining or
maintaining such foreign regulatory approvals.
WE SELL OUR PRODUCTS INTERNATIONALLY WHICH SUBJECTS US TO CERTAIN SIGNIFICANT
RISKS OF TRANSACTING BUSINESS IN FOREIGN COUNTRIES.
Our international revenue is subject to the following risks:
- foreign currency fluctuations;
- economic or political instability;
- foreign tax laws;
- shipping delays;
- various tariffs and trade regulations;
- restrictions and foreign medical regulations;
- customs duties, export quotas or other trade restrictions; and
- difficulty in protecting intellectual property rights.
Any of these factors could have an adverse effect on our international
sales revenues. In future quarters, international sales could become a
significant portion of our revenue.
WE MAY NOT ACHIEVE WIDE ACCEPTANCE OF OUR PRODUCTS IN FOREIGN MARKETS IF WE FAIL
TO OBTAIN THIRD PARTY REIMBURSEMENT FOR THE PROCEDURES PERFORMED WITH OUR
PRODUCTS.
If we obtain the necessary foreign regulatory registrations or
approvals, market acceptance of our products in international markets would be
dependent, in part, upon the availability of reimbursement within prevailing
health care payment systems. Reimbursement and health care payment systems in
international markets vary significantly by country. They include both
government sponsored health care and private insurance. Although we expect to
seek international reimbursement approvals, any such approvals may not be
obtained in a timely manner, if at all. Failure to receive international
reimbursement approvals could hurt market acceptance of TMR products in the
international markets in which such approvals are sought.
THE PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY, WHICH MAY RESULT IN
LOSSES FOR INVESTORS.
The market price for our common stock has been and may continue to be
volatile. For example, during the 52-week period ended June 2, 2000, the closing
prices of our common stock as reported on the Nasdaq National Market ranged from
a high of $18.69 to a low of $2.88. We expect our stock price to be subject to
fluctuations as a result of a variety of factors, including factors beyond our
control. These factors include:
- actual or anticipated variations in our quarterly operating
results;
- announcements of technological innovations or new products or
services by us or our competitors;
- announcements relating to strategic relationships or
acquisitions;
13
<PAGE> 17
- changes in financial estimates by securities analysts;
- statements by securities analysts regarding us or our industry;
- conditions or trends in the medical device industry; and
- changes in the economic performance and/or market valuations of
other medical device companies.
Because of this volatility, we may fail to meet the expectations of our
stockholders or of securities analysts at some time in the future, and our stock
price could decline as a result.
In addition, the stock market has experienced significant price and
volume fluctuations that have particularly affected the trading prices of equity
securities of many high technology companies. These fluctuations have often been
unrelated or disproportionate to the operating performance of these companies.
Any negative change in the public's perception of medical device companies could
depress our stock price regardless of our operating results.
Recently, when the market price of a stock has been volatile, holders of
that stock have often instituted securities class action litigation against the
company that issued the stock. If any of our stockholders brought such a lawsuit
against us, we could incur substantial costs defending the lawsuit. The lawsuit
could also divert the time and attention of our management.
ECLIPSE MANAGEMENT HAS BROAD DISCRETION TO USE THE OFFERING PROCEEDS FOR
PURPOSES AND THEIR USE OF THESE PROCEEDS MAY NOT YIELD A FAVORABLE RETURN ON
YOUR INVESTMENT.
The net proceeds of this offering are not allocated for specific uses
other than working capital and general corporate purposes. Thus, Eclipse
management has broad discretion over how these proceeds are used and could spend
most of these proceeds in ways with which Eclipse shareholders may not agree.
Eclipse cannot assure you that the proceeds will be invested in a way that
yields a favorable return to you. See "Use of Proceeds" for more information
about how Eclipse plans to use the proceeds from this offering.
14
<PAGE> 18
USE OF PROCEEDS
We will receive all of the net proceeds from the sale of our
common stock registered by the registration statement of which this prospectus
is a part. The proceeds we receive will be used for working capital and general
corporate purposes or as may be stated in a supplement or supplements to this
prospectus.
PLAN OF DISTRIBUTION
Our common stock may be offered for sale and sold in one or more
transactions, including block transactions, at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at prices determined on a negotiated
or competitive bid basis. Shares of common stock may be sold directly, through
agents designated from time to time, or by such other means as may be specified
in the supplement to this prospectus. Participating agents or broker-dealers in
the distribution of any of the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended. Any
discount or commission received by any underwriter and any participating agents
or broker-dealers, and any profit on the resale of shares of common stock
purchased by any of them may be deemed to be underwriting discounts or
commissions under the Securities Act.
Shares of our common stock may be sold through a broker-dealer
acting as agent or broker or to a broker-dealer acting as principal. In the
latter case, the broker-dealer may then resell such shares of common stock to
the public at varying prices to be determined by the broker-dealer at the time
of resale.
To the extent required, the number of shares of common stock to
be sold, information relating to the underwriters, the purchase price, the
public offering price, if applicable, the name of any underwriter, agent or
broker-dealer, and any applicable commissions, discounts or other items
constituting compensation to such underwriters, agents or broker-dealers with
respect to a particular offering will be set forth in an accompanying supplement
to this prospectus.
If underwriters are used in a sale, shares of common stock will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. Shares of common stock may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering of shares of
common stock will be named in the supplement to this prospectus relating to that
offering and, if an underwriting syndicate is used, the managing underwriter or
underwriters will be stated on the cover of the prospectus supplement.
Under the securities laws of some states, the shares of common
stock registered by the registration statement may be sold in those states only
through registered or licensed brokers or dealers.
Any person participating in the distribution of common stock
registered under the registration statement that includes this prospectus will
be subject to applicable provisions of the Securities Exchange Act of 1934, as
amended, and the applicable SEC rules and regulations, including, among others,
Regulation M, which may limit the timing of purchases and sales of any of our
common stock by any such person. Furthermore, Regulation M may restrict the
ability of any person engaged in the distribution of our common stock to engage
in market-making activities with respect to our common stock. These restrictions
may affect the marketability of our common stock and the ability of any person
or entity to engage in market-making activities with respect to our common
stock.
Upon sale under the registration statement that includes this
prospectus, the shares of common stock registered by the registration statement
will be freely tradable in the hands of persons other than our affiliates.
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<PAGE> 19
LEGAL MATTERS
Gibson, Dunn & Crutcher LLP, Los Angeles, California, will pass
upon the legality of the common stock being offered by this prospectus for
Eclipse.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference to the Annual Report on Form 10-K for the year ended
December 31, 1999, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, that involve risks and uncertainties. Forward-looking statements can
typically be identified by the use of forward-looking words, such as "may,"
"will," "could," "project," "believe," anticipate," "expect," "estimate,"
"continue," "potential," "plan," "forecasts," and the like. These statements
appear in a number of places in this prospectus and include statements regarding
our intentions, plans, strategies, beliefs or current expectations and those of
our directors or our officers with respect to, among other things:
- our financial prospects;
- our financing plans;
- trends affecting our financial condition or operating results;
and
- our strategies for growth, operations, and product development
and commercialization.
Forward-looking statements do not guarantee future performance
and involve risks and uncertainties that could cause actual results to differ
materially from those anticipated. The information contained in this prospectus,
or incorporated by reference, identifies important factors that could cause such
differences.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 under the Securities Act with respect to the
common stock offered by this prospectus. This prospectus, which constitutes part
of the Registration Statement, omits some of the information contained in the
Registration Statement and the exhibits and schedules thereto on file with the
SEC pursuant to the Securities Act of 1933 and the rules and regulations of the
SEC. We also file reports, proxy statements and other information with the SEC
under the Securities Exchange Act of 1934.
You may read and copy the Registration Statement, including
exhibits and schedules thereto, as well as our reports, proxy statements and
other information that we file, at the Public Reference Room maintained by the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for more information about the public reference rooms. The SEC
also maintains a web site that contains reports, proxy and information
statements and other information filed electronically with the SEC at
http://www.sec.gov.
Our statements in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete. For a
complete understanding of any such contract or other document, you should read
that contract or document, which has been filed as an exhibit to the
Registration Statement.
You should rely on the information provided in this prospectus.
We have not authorized anyone else to provide you with different information. We
are not making an offer of these securities in any state where the offer is not
permitted. You should not assume the information in this prospectus is accurate
as of any date other than the date on the front cover of this prospectus.
16
<PAGE> 20
INFORMATION INCORPORATED BY REFERENCE
The following documents, which have been filed with the SEC, are
incorporated by reference into this prospectus.
- our quarterly report on Form 10-Q for the quarter ended March 31,
2000;
- our definitive proxy statement on Schedule 14A dated April 26,
2000;
- our annual report on Form 10-K for the fiscal year ended December
31, 1999; and
- the description of our capital stock contained in our
registration statement on Form 8-A filed with the SEC on April
18, 1996, including any amendments or reports filed for the
purpose of updating such description.
All documents that we file with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this prospectus and before the termination of the offering of the shares of
common stock shall be deemed incorporated by reference into this prospectus and
to be a part of this prospectus from the respective filing dates of such
documents.
We will provide without charge to each person to whom a copy of
this prospectus is delivered, upon such person's written or oral request, a copy
of any and all of the information incorporated by reference in this prospectus,
other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that this prospectus
incorporates. Requests should be directed in writing to Richard P. Powers, Chief
Financial Officer, Eclipse Surgical Technologies, Inc., 1049 Kiel Court,
Sunnyvale, California 94089 or by telephone at (408)548-2100.
Any statement contained in a document incorporated or deemed to
be incorporated by reference in this prospectus shall be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any subsequently filed document
that also is or is deemed to be incorporated by reference in this prospectus
modifies, supersedes or replaces such statement. Any statement so modified,
superseded or replaced shall not be deemed, except as so modified, superseded or
replaced, to constitute a part of this prospectus.
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<PAGE> 21
================================================================================
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR ANY OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
YOU SHOULD NOT RELY UPON SUCH INFORMATION OR REPRESENTATIONS AS HAVING BEEN
AUTHORIZED BY ECLIPSE SURGICAL TECHNOLOGIES, INC. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THOSE TO WHICH IT RELATES
IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME AFTER THE DATE OF THIS PROSPECTUS.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RISK FACTORS 1
USE OF PROCEEDS 15
PLAN OF DISTRIBUTION 15
LEGAL MATTERS 16
EXPERTS 16
FORWARD-LOOKING STATEMENTS 16
WHERE YOU CAN FIND MORE INFORMATION 16
INFORMATION INCORPORATED BY REFERENCE 17
</TABLE>
---------------
UNTIL , 2000 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING), ALL DEALERS THAT
EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS
OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH
RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
================================================================================
================================================================================
4,000,000 Shares
Eclipse Surgical Technologies, Inc.
Common Stock
______________
PRELIMINARY PROSPECTUS
JUNE 7, 2000
______________
================================================================================
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by Eclipse in
connection with the offering of our common stock being registered hereby. All
amounts are estimated except the SEC registration fee:
<TABLE>
<CAPTION>
Expenses Amount
-------- ------
<S> <C>
SEC Registration Fee......................... $3,828
NASDAQ National Market Fees.................. $
Legal Fees and Expenses...................... $
Accounting Fees and Expenses................. $
Miscellaneous Expenses....................... $
------
TOTAL......................... $
======
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
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.
Article IV of the Amended and Restated Articles of Incorporation and Article V
of the Amended and Restated Bylaws of Eclipse Surgical Technologies, Inc. (the
"Company") provide for indemnification of its directors, officers, employees and
other agents to the maximum extent permitted by the California Corporations
Code.
In addition, the Company has entered into indemnification
agreements with each director and executive officer which provide
indemnification to such directors and executive officers under certain
circumstances for acts or omissions which may not be covered by directors' and
officers' liability insurance.
ITEM 16. EXHIBITS.
See Exhibit Index attached hereto following the signature pages
and incorporated herein by reference.
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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement.
II-1
<PAGE> 23
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Securities and Exchange Commission by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from Registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) 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.
(5) To deliver or cause to be delivered with the prospectus, to
each person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
<PAGE> 24
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sunnyvale, State of California, on June 7, 2000.
ECLIPSE SURGICAL TECHNOLOGIES, INC.
By: /s/ Alan L. Kaganov, Sc.D.
-----------------------------
Alan L. Kaganov, Sc.D.
Chief Executive Officer
II-3
<PAGE> 25
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Alan L. Kaganov, Sc.D. and Richard
P. Powers his or her true and lawful attorneys-in-fact and agents, each with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement, and to file the same, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Douglas Murphy-Chutorian Chairman of the Board June 5, 2000
--------------------------------
Douglas Murphy-Chutorian, M.D.
/s/ Alan L. Kaganov Chief Executive Officer and Director June 7, 2000
-------------------------------- (Principal Executive Officer)
Alan L. Kaganov, Sc.D.
/s/ Richard P. Powers Executive Vice President and June 2, 2000
-------------------------------- Chief Financial Officer
Richard P. Powers (Principal Financial and Accounting
Officer)
/s/ Jack M. Gill Director June 5, 2000
--------------------------------
Jack M. Gill, Ph.D.
/s/ Robert L. Mortensen Director June 3, 2000
--------------------------------
Robert L. Mortensen
/s/ Robert C. Strauss Director June 5, 2000
--------------------------------
Robert C. Strauss
</TABLE>
II-4
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE+
------ ----------- ------------
<S> <C> <C>
5.1 Opinion and consent of Gibson, Dunn & Crutcher LLP.*
23.1 Consent of Independent Accountants.
23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1).*
24.1 Power of Attorney (included as part of signature page).
</TABLE>
---------------------
* To be filed by amendment.
+ Only contained in manually executed version.
