Rule 424(b)(3)
File No. 333-2198
PROSPECTUS
Up to 1,921,313 Shares
LASERSIGHT INCORPORATED
Common Stock ($.001 par value)
This Prospectus relates to an aggregate of up to 1,921,313 shares (the
"Shares") of common stock, $.001 par value (the "Common Stock"), of LaserSight
Incorporated, a Delaware corporation (the "Company"), issued or issuable from
time to time by the Company. The following 1,741,313 shares (the "Resale
Shares") are being offered for sale from time to time by the selling
shareholders named or to be named in this Prospectus (the "Selling
Shareholders"):
(i) up to 952,070 shares (the "Conversion Shares") issuable upon the
conversion or exchange of the Company's outstanding Series A Convertible
Preferred Stock (the "Preferred Stock"),
(ii) up to 17,509 shares (the "1996 Warrant Shares") issuable upon the
exercise of warrants issued in connection with the Company's private
placement of the Preferred Stock in January 1996 (the "1996 Warrants"),
(iii) 320,218 outstanding shares issued in connection with the Company's
acquisition of MEC Health Care, Inc. in October 1995 (the "MEC Shares"),
(iv) up to 385,873 shares (the "Dividend Shares") issuable as dividends
on the Preferred Stock in connection with the conversion or exchange
thereof, and
(v) 65,643 shares outstanding as of the date hereof and issued upon the
conversion of certain shares of Preferred Stock or as dividends
thereon the"Issued Shares").
The actual numbers of Conversion Shares and Dividend Shares will depend on the
closing price of the Common Stock shortly before the Preferred Stock is
converted or exchanged and, with respect to the Dividend Shares, the amount of
dividends accrued on the Preferred Stock. In addition, up to 180,000 shares (the
"IPO Warrant Shares") are being offered by the Company in connection with the
exercise of warrants issued in connection with the Company's initial public
offering in 1991 (the "IPO Warrants"). See "The Offering," "Selling
Shareholders" and "Plan of Distribution."
If all of the IPO Warrants and 1996 Warrants are exercised, the Company
would realize $540,000 and $231,994 in proceeds, respectively. See "Use of
Proceeds." The Company will not receive any proceeds from any sale of Resale
Shares by the Selling Shareholders. The Company has been advised by the Selling
Shareholders that there are no underwriting arrangements with respect to the
sale of Common Stock, that the Resale Shares may be offered hereby from time to
time for the account of Selling Shareholders in transactions on The Nasdaq Stock
Market, in negotiated transactions or a combination of both at prices related to
prevailing market prices, or at negotiated prices. See "Selling Shareholders"
and "Plan of Distribution." The Company will pay the expenses in connection with
the registration of the Shares (other than any underwriting discounts and
selling commissions, and fees and expenses of counsel and other advisors, if
any, to the Selling Shareholders) estimated to be $170,000.
The Common Stock is traded on The Nasdaq Stock Market under the symbol
"LASE." On July 9, 1996, the closing sale price for the Common Stock was $10.50
per share.
THE SHARES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is July 12,1996.
<PAGE>
TABLE OF CONTENTS
-----------------
Documents Incorporated by Reference...2 Description of Capital Stock....... 9
The Company...........................3 Plan of Distribution...............12
The Offering..........................4 Selling Shareholders...............13
Risk Factors..........................5 Legal Matters......................14
Use of Proceeds.......................8 Experts............................15
Capitalization........................9 Available Information..............15
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No dealer, salesman or other person has been authorized to give any
information or to make any representation other than those contained or
incorporated by reference in this Prospectus in connection with the offerings
described herein, and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company or any Selling
Shareholder. Neither the delivery of this Prospectus nor any offer, sale or
exchange made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs or operations of the Company since
the date of this Prospectus, or that the information herein is correct as of any
time subsequent to such date.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
The following documents of the Company filed with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of 1934
(the "Exchange Act") are incorporated by reference in this Prospectus:
A. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
B. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31,1996;
C. The Company's Current Reports on Form 8-K filed with the Commission
on April 16, 1996, May 6, 1996, July 8, 1996 and July 9, 1996; and
D. The description of the Common Stock contained in the Company's
Form 8-A/A (Amend. No. 2)filed with the Commission on April 26, 1996.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of the filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated in this Prospectus by reference shall be modified or superseded for
the purpose of this Prospectus to the extent that a statement contained in this
Prospectus or in any other subsequently filed document which also is or is
deemed to be incorporated in this Prospectus by reference modifies or replaces
such statement.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on the
written or oral request of such person, a copy of any and all of the information
that has been or may be incorporated by reference in this Prospectus (not
including exhibits to the information that is incorporated by reference into the
information that this Prospectus incorporates). Written requests for such copies
should be directed to Secretary, LaserSight Incorporated, 12161 Lackland Road,
St. Louis, Missouri 63146; telephone no: (314) 469-3220.
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<PAGE>
THE COMPANY
LaserSight Incorporated and its subsidiaries operate in two major segments:
technology related and health care services. The Company's principal
wholly-owned operating subsidiaries include: LaserSight Technologies, Inc.
("LaserSight Technologies"), MRF, Inc. ("The Farris Group"), and MEC Health
Care, Inc. ("MEC").
The technology-related segment of the Company's operations includes
LaserSight Technologies which develops, manufactures and markets ophthalmic
lasers with a galvanometric scanning system primarily for use in performing
photorefractive keratectomy ("PRK"). PRK utilizes a one millimeter scanning
laser beam to ablate microscopic layers of corneal tissue in order to reshape
the cornea and to correct the eye's point of focus in persons with myopia
(nearsightedness), hyperopia (farsightedness) and astigmatism.
The health care services segment includes The Farris Group and MEC. The
Farris Group is a consulting firm which develops and implements vertical
integration strategies for hospitals and managed care companies, including the
identification, negotiation and acquisition of physician practices and the
development of physician networks. MEC is a total vision care, managed care
company which manages complete vision care for health maintenance organizations
("HMOs") and other insured enrollees.
In 1994, the Company shifted its emphasis from research and development of
its laser systems to the manufacturing and international sales of its lasers.
The Company's Compak-200 Mini-Excimer Laser ("Compak-200") was introduced
internationally in 1994, and sales increased during 1995. The LaserScan 2000
Excimer Laser PhotoPolishing System ("LaserScan 2000") was introduced in late
1995 to replace the Compak-200. The LaserScan 2000 incorporates improvements
that were developed as the result of the Company's world-wide clinical
experience with the Compak-200. In addition, the Company continues its
development of the first solid-state (non-gas) laser capable of generating
multiple wavelengths for use in a number of ophthalmic procedures which now
require separate lasers.
The Company's business strategy is to continue to develop and improve on
the technology-related products and to take advantage of its experience and
strength in the areas of managed care and network development to become a
provider of total vision care services. The Company seeks to grow its vision
managed care business by taking advantage of its experience in building networks
of care providers and contracting with HMOs and other insurers.
The Company was incorporated in Delaware in September 1987, but was
inactive until June 1991. In April 1993, the Company acquired its LaserSight
Centers Incorporated ("LaserSight Centers") subsidiary in a stock-for-stock
exchange. In February, 1994, the Company acquired the stock of MRF, Inc. in
exchange for stock of the Company, cash and a promissory note. On July 1, 1994,
the Company was reorganized as a holding company. In October 1995, the Company
acquired its MEC subsidiary in a merger.
As used herein, the term the "Company" refers to LaserSight Incorporated
and its subsidiaries, unless the context otherwise requires. The Company's
principal offices and mailing address are 12161 Lackland Road, St. Louis,
Missouri 63146, and its telephone number is (314) 469-3220.
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<PAGE>
THE OFFERING
------------
Common Stock outstanding as of June 24, 1996 7,090,975 shares
Shares Offered by Selling Shareholders:
- ---------------------------------------
Common Stock issued to date upon conversion
of, or as dividends on, Preferred Stock 65,643 shares
Common Stock issuable upon conversion or Minimum: 366,714 shares
exchange of outstanding Preferred Stock Maximum: 952,070 shares(1)
Common Stock issuable as dividends on
outstanding Preferred Stock To be determined.(2) For
example,assuming a single
conversion date for all of the
Preferred Stock and a Common
Stock price history at such
date identical to that at
June 24, 1996 ($11.53125 per
share), the number of Dividend
Shares could vary as follows:
Assumed Dividend
Conversion Date Shares
--------------- ------
7/10/96 22,424
1/10/97 45,095
1/10/98 90,190
Common Stock issuable upon exercise of 1996
Warrants 17,509 shares
Common Stock issued in connection with MEC
acquisition 320,218 shares
Shares Offered by the Company:
- ------------------------------
Common Stock issuable upon exercise of IPO
Warrants 180,000 shares
Other
- -----
Risk Factors The Shares involve a high
degree of risk. Investors
should carefully consider the
information set forth under
"Risk Factors."
Proceeds to the Company if the IPO Warrants
and the 1996 Warrants are exercised in full $771,994
Use of proceeds Working capital;
general corporate purposes.
The Nasdaq Stock Market trading symbol LASE
- ----------
1 In the event of a conversion, the actual number of shares of Common Stock
issuable will equal (i) the original purchase price of the shares of Preferred
Stock ($50,000 per share) to be converted divided by (ii) a conversion price
equal to the lesser of $14.18 per share or 85% of the average closing price of
the Common Stock during the five trading days preceding such conversion or
exchange, but in no event more than 952,070 shares. In the event that the
Company were to exercise its option to cause the exchange on or after January
10, 1997 of all of the Preferred Stock then-outstanding for Common Stock, the
actual number of shares of Common Stock issuable would be the number determined
pursuant to the preceding sentence increased by a premium initially equal to 35%
and increasing ratably thereafter to 65% on January 10, 1998. See "Description
of Capital Stock -- Preferred Stock."
2 The actual number of shares of Common Stock to be issued as dividends on
Preferred Stock will equal the amount of dividends accrued (at the rate of 10%
per year) on the Preferred Stock through the date of the conversion or exchange
thereof, divided by the market price of the Common Stock on the date preceding
such event, but will not exceed 385,873 shares. See "Description of Capital
Stock -- Preferred Stock."
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<PAGE>
RISK FACTORS
------------
The Shares offered hereby involve a high degree of risk. In addition,
This Prospectus contains forward-looking statements (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) which
involve risks and uncertainties. Set forth in the following Risk Factors are
factors that could affect the Company's actual results and could cause the
Company's actual results to differ in material respects from the results
discussed in any forward-looking statements made by, or on behalf of, the
Company in this Prospectus and the documents incorporated by reference herein.
In addition to the other information contained or incorporated by reference in
this Prospectus, potential purchasers of the Shares should carefully consider
the following risk factors:
Operating Results. Although the Company achieved profitability in 1995
and 1994, the Company incurred losses in the three preceding years. In addition,
the Company incurred a loss of $1,231,764 for the first quarter of 1996. As of
March 31, 1996, the Company had an accumulated deficit of $1,770,225. There can
be no assurance that the Company can regain or sustain profitability.
Government Regulation. The Company's laser products are subject to
strict governmental regulations which materially affect the Company's ability to
manufacture and market these products and directly impact the Company's overall
prospects. All laser devices to be marketed in interstate commerce are subject
to the laser regulations required by the Radiation Control for Health and Safety
Act, as administered by the U.S. Food and Drug Administration (the "FDA"). Such
Act imposes design and performance standards, labeling and reporting
requirements, and submission conditions in advance of marketing for all medical
laser products. The Company's laser systems produced for medical use will
require pre-market approval by the FDA if marketed in the United States. Each
separate medical device requires a separate FDA submission, and specific
protocols have to be submitted to the FDA for each claim made for each medical
device. In addition, laser products marketed in foreign countries are often
subject to local laws governing health product development processes which may
impose additional costs for overseas product development. The Company cannot
determine the costs or time it will take to complete the approval process and
the related clinical testing for its medical laser products. Future legislative
or administrative requirements in the United States, or elsewhere, may adversely
affect the Company's ability to obtain or retain regulatory approval for its
laser products. The failure to obtain required approvals on a timely basis could
have a material adverse effect on the Company's business, financial condition
and results of operations.
Uncertainty Concerning Patents: Patent Infringement Suit. Summit
Technologies, Inc. ("Summit") and VisX, Inc. ("VisX"), through a general
partnership named Pillar Point Partners ("Pillar Point"), purport to have a
patent protecting any refractive surgical procedure utilizing scanning lasers
producing an ultraviolet ("UV") wavelength. On March 31, 1995, Pillar Point
commenced a lawsuit against the Company in the United States District Court for
the District of Delaware alleging that the Compak-200 infringes the certain
patent rights allegedly held by Pillar Point under exclusive licenses from
Summit and VisX. This patent, if valid and enforceable, might require the
Company to obtain a license to market its laser medical systems for ultraviolet,
refractive surgical procedures. The Company believes that, because of the
substantial difference between the unique laser beam delivery system used by its
lasers and the delivery system described in the U.S. patent asserted by Pillar
Point, the Pillar Point patent does not apply to the Company's laser systems.
The Company is vigorously defending the patent infringement suit. The Company
also believes that the patents held by Summit and VisX in certain international
markets do not apply to the Company's products and procedures for similar
reasons. Should the Company's lasers be found to infringe upon any valid and
enforceable patents held by Summit or VisX in certain international markets, or
by Pillar Point in the United States, then the Company may be required to
license such technology from them and/or pay damages for past sales of products.
No assurance can be given that such licenses will be available to the Company on
acceptable terms, if at all, or that such a judgment will not be entered. If
required licenses are not obtained, the Company might be prohibited from
manufacturing or marketing its UV laser systems in those countries where such
patents are in effect, including the United States.
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<PAGE>
Competition. The vision correction industry is subject to intense,
increasing competition. The Company competes against both alternative and
traditional medical technologies (such as eyeglasses, contact lenses and radial
keratotomy ("RK")) and other laser manufacturers. Many of the Company's
competitors are substantially larger, better financed, and better known, with
existing products and distribution systems in the marketplace. A number of
lasers manufactured by other companies have either received, or are much further
advanced in the process of receiving, FDA approval for specific procedures, and,
accordingly, may have a higher level of acceptance in some markets than the
Company's lasers. The entry of new competitors into the markets for the
Company's products could cause downward pressure on the prices of such products
and a material adverse effect on Company's business, financial condition and
results of operations.
Technological Change. Technological developments in the medical and
laser industries are expected to continue at a rapid pace. Newer technologies
and surgical techniques could be developed which may offer better performance
than the Company's laser systems. The success of any competing alternatives to
PRK could have a material adverse effect on the Company's business, financial
condition and results of operations.
International Sales. International sales may be limited or disrupted by
the imposition of government controls, export license requirements, political
instability, trade restrictions, changes in tariffs, difficulties in staffing
and coordinating communications among and managing international operations.
Additionally, the Company's business, financial condition and international
results of operations may be adversely affected by increases in duty rates,
difficulties in obtaining export licenses, ability to maintain or increase
prices, and competition. To date, all sales made by the Company have been
denominated in U.S. dollars. Due to its export sales, however, the Company is
subject to currency exchange rate fluctuations in the U.S. dollar, which could
increase the price in local currencies of the Company's products; potentially
resulting in longer payment cycles and greater difficulty in collection of
receivables. See "--Receivables" below. Although the Company has not experienced
any material adverse effect on its operations as a result of such regulatory,
political and other factors, there can be no assurance that such factors will
not have a material adverse effect on the Company's operations in the future or
require the Company to modify its current business practices.
Additional Capital. The Company is exploring alternative sources of
capital to fund its manufacturing and sales activities, to consummate strategic
acquisitions, and to accelerate its implementation of managed care strategies
through conventional debt financing, joint ventures from third-party sources or
by the private or public sale of additional equity securities. The Company has
no present commitments to obtain such capital, and no assurance can be given
that the Company will be able to obtain additional capital, on terms
satisfactory to the Company, if at all. To the extent that future financing
requirements are satisfied through the sale of equity securities, holders of the
Common Stock may experience significant dilution in earnings per share and the
net book value per share. Debt financing could result in a substantial portion
of the Company's cash flow from operations being dedicated to the payment of
principal and interest on such indebtedness and may render the Company more
vulnerable to competitive pressures and economic downturns.
Potential Product Liability Claims; Limited Insurance. As a producer of
medical devices, the Company may face liability for damages to users of such
devices in the event of product failure. The testing and use of human care
products entails an inherent risk of negligence or other action. The assessment
of damages in excess of insurance coverage could have a material adverse effect
on the Company's business, financial condition and results of operations. While
the Company maintains product liability insurance, there can be no assurance
that any such liability of the Company will be included within its insurance
coverage or that damages will not exceed the limits of its coverage. The
Company's current insurance coverage limitation is $1,000,000.
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<PAGE>
Possible Issuance of Common Stock--LaserSight Centers. In connection
with its acquisition of LaserSight Centers in 1993, the Company issued 500,000
shares of Common Stock to the former shareholders of LaserSight Centers
(including the chairman of the board of the Company and certain former officers
and directors of the Company) and expensed the value of such shares in 1993. The
Company has also agreed, based on the original acquisition agreement as modified
in 1995, to issue to such former shareholders up to 1,265,333 shares of Common
Stock (together with additional shares representing interest on such additional
payment to the extent required by the Internal Revenue Service (collectively,
the "Centers Earnout Shares")) if LaserSight Centers receives aggregate
specified gross revenues from performing PRK, PTK or other refractive laser
surgical procedures or if the Company acquires another entity that exceeds
certain specified size threshholds. The Company has determined that the original
business plan of LaserSight Centers to provide refractive services on a mobile
platform is not a viable strategy. Therefore, unless the Company is able to
develop a strategy that will provide sufficient return on investment to warrant
the issuance of the Centers Earnout Shares, the Company will seek to minimize
the issuance of such, particularly if the issuance of such shares creates a
charge to earnings. The amount of such earnings charge, which could be material
to the Company's financial condition and results of operations, could equal the
value of such Centers Earnout Shares at the time of their issuance. However,
there can be no assurance that the shares will not be issued. In addition, the
Company is obligated to pay to a partnership that includes the chairman of the
board of the Company and certain former officers and directors of the Company a
royalty of $86 (payable in shares of Common Stock based on its then-current
market value (the "Royalty Shares")), for each eye on which laser refractive
optical surgical procedure is conducted by, or pursuant to a contract with,
LaserSight Centers or its affiliates. The value of any Royalty Shares would be
expensed in the period in which they were accrued. To date, none of the Centers
Earnout Shares or the Royalty Shares have been reflected in the Company's
financial statements because the future specified events have not yet occurred.
If and when the Centers Earnout Shares and/or the Royalty Shares are reflected
in the Company's financial statements, holders of the Common Stock would be
likely to experience a dilution in earnings per share.
Possible Issuance of Common Stock--The Farris Group. To the extent that
an earnout provision relating to the Company's acquisition of The Farris Group
in 1994 is satisfied based on certain pre-tax income targets through December
31, 1998, the Company would be required to issue to the former owner of such
company (Mr. Michael R. Farris, the President and Chief Executive Officer of the
Company) an aggregate of up to 750,000 shares of Common Stock (collectively, the
"Farris Earnout Shares"). To date, none of the Farris Earnout Shares have been
issued, but those shares that are contingently issuable (438,600 shares as of
March 31, 1996) have been reflected in calculations of the Company's per share
operating results unless the result would be anti-dilutive. If and when the
Farris Earnout Shares are issued, charges for the amortization of goodwill would
increase.
Possible Future Sales of Shares. Any resale of a substantial portion of
the Shares could depress the market price of the Common Stock, especially if
such resales occur over a short period of time. Further, a decrease in the
market price of the Common Stock at the time of a conversion or exchange of the
Preferred Stock could increase the number of Conversion Shares and Dividend
Shares issued. See "The Offering" and "Description of Capital Stock--Preferred
Stock." The resale of such an increased number of Shares could have a material
adverse effect on the market price of the Common Stock.
Volatility of Stock Price. The Common Stock has experienced substantial
price volatility, and such volatility may occur in the future.
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<PAGE>
Manufacturing Risks. The Company began manufacturing lasers in a facility
in Costa Rica in late 1995. The Company needs to train and retain qualified
personnel to meet production requirements. In addition, the Company contracts
with third parties for certain components used in its lasers. Several of these
components are currently provided by a single vendor. If any of these
sole-source suppliers were to cease providing components to the Company, the
Company would have to locate and contract with a substitute supplier, and there
can be no assurances that such substitute supplier could be located and
qualified in a timely manner or could provide required components on
commercially reasonable terms. A failure to achieve and maintain production
volumes at the new Costa Rica facility in a cost-effective and timely manner, or
an interruption in the supply of laser components, could have a material adverse
effect on the Company's business, financial condition and results of operations.
MEC Shares Held in Escrow. All of the shares of Common Stock of MEC
owned by the Company are being held in escrow pending the Company's payment in
full of a promissory note in the original principal amount of $1,799,100 and a
current principal amount of $1,000,000 (the "MEC Note") issued by the Company as
part of the consideration for its acquisition of MEC in October 1995. The MEC
Note was originally due on demand on or after April 1, 1996, but has twice been
extended, most recently to be due on demand on or after August 15, 1996. If the
Company were to default under the MEC Note, the former shareholders of MEC would
be entitled to regain ownership of all of such shares.
Backlog. Concentration of Sales at End of Quarter. The Company has
historically operated with little or no backlog because its products are
generally shipped as orders are received. Historically, the Company has received
and shipped a significant portion of its orders for a particular quarter near
the end of the quarter. As a result, the Company's operating results for any
quarter often depend on orders received and laser systems shipped late in that
quarter. Any delay in such orders may cause a significant fluctuation in
period-to-period operating results.
Receivables. At March 31, 1996, the Company's net trade accounts and
notes receivable aggregated approximately $12.2 million. Accrued commissions,
the payment of which generally depends on the collection of such receivables,
aggregated approximately $1.9 million at March 31, 1996. The Company monitors
the status of its receivables and maintains a reserve for estimated losses, but
there can be no assurance that such reserve will be sufficient to cover actual
write-offs over time. Actual write-offs that materially exceed any amounts
reserved ($1,140,000 at March 31, 1996) could have a material adverse effect on
the Company's financial condition and results of operations. Approximately $4.6
million of the Company's currently outstanding receivables are due to be
collected in July and August 1996. A failure to collect timely a material
portion of such receivables could have a material adverse effect on the
Company's liquidity. In addition, the Company has not determined whether or to
what extent courts or administrative agencies located in foreign countries would
enforce its right to payment or to recover laser systems from customers in the
event of a failure to pay.
USE OF PROCEEDS
---------------
If all of the IPO Warrants (with an exercise price of $3.00 per share)
and the 1996 Warrants (with an exercise price of $13.25 per share) are
exercised, the Company will realize proceeds in the amounts of $540,000 and
$231,994, respectively. Such proceeds will be contributed to the working capital
of the Company and used for general corporate purposes. The Company will not
receive any proceeds from any resale of the Resale Shares by the Selling
Shareholders.
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CAPITALIZATION
--------------
The following table sets forth (i) the actual capitalization of the
Company at March 31, 1996, including the Preferred Stock, and (ii) the
capitalization of the Company at March 31, 1996, as adjusted to reflect the
effects of the assumed conversion of all Preferred Stock into Common Stock and
the related issuance of Dividend Shares based on the assumptions indicated in
the footnotes to the table.
March 31, 1996
--------------
Actual As Adjusted(1)
------ --------------
Long-term debt $ -- $ --
Stockholders' equity:
Preferred stock, par value $.001 per share; authorized -- --
10,000,000 shares; actual, 116 shares; as adjusted, no
shares(2)
Common stock, par value $.001 per share; authorized
20,000,000 shares; actual 7,192,132 shares; as
adjusted, 7,797,271 shares 7,192 7,797
Additional paid-in capital 27,234,311 27,233,706
Obligation to issue common stock 780,125 780,125
Stock subscription receivable (1,140,000) (1,140,000)
Accumulated deficit (1,770,225) (1,770,225)
Less treasury stock, at cost; 170,200 shares (632,709) (632,709)
------------ ------------
Total capitalization and stockholders' equity $ 24,478,694 $ 24,478,694
============ ============
- ----------
(1) Adjusted to give effect to (i) the conversion of 104 shares of the
Preferred Stock into 517,072 shares of Common Stock on July 10, 1996, based
on an assumed price history for the Common Stock as of such date identical
to its actual price as of June 24, 1996; (ii) the issuance of 22,424
Dividend Shares based on an assumed conversion date of July 10, 1996 and an
assumed price history for the Common Stock as of such date identical to its
actual price as of June 24, 1996 ($11.53125); and (iii) the actual
conversion on April 23, 1996 of two shares of Preferred Stock into 11,495
shares of Common Stock and on May 31, 1996 of 10 shares of Preferred Stock
into 54,148 shares of Common Stock, including shares issued in payment of
dividends accrued on such shares of Preferred Stock. The totals exclude the
aggregate proceeds of $771,994 that would be received if the IPO Warrants
and 1996 Warrants were exercised in full. The actual number of Conversion
Shares and Dividend Shares may vary from the amounts shown. See "The
Offering."
(2) As of June 24, 1996, twelve (12) shares of Preferred Stock have been
converted into 65,643 shares of Common Stock (including shares issued in
payment of dividends accrued on such shares of Preferred Stock).
DESCRIPTION OF CAPITAL STOCK
----------------------------
The following description of the Company's capital stock is not complete
and is subject in all respects to the Delaware General Corporation Law (the
"DGCL") and to the provisions of the Company's Certificate of Incorporation, as
amended (the "Charter"), and By-Laws.
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock and 10,000,000 shares of preferred stock, $.001 par
value, issuable in series. As of June 24, 1996, 7,090,975 shares of Common Stock
were outstanding (not including outstanding options to acquire Common Stock or
any shares of Common Stock issuable upon the conversion or exchange of Preferred
Stock). As of June 24, 1996, the only shares of preferred stock outstanding were
the 104 shares of the Preferred Stock.
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<PAGE>
Common Stock
- ------------
Holders of Common Stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of Common Stock are entitled to share pro rata in
such dividends and other distributions, if any, as may be declared by the Board
of Directors out of funds legally available therefor, subject to any prior
rights accruing to any holders of preferred stock. Upon the liquidation or
dissolution of the Company, the holders of Common Stock are entitled to share
proportionally in all assets available for distribution to such holders. Holders
of Common Stock have no preemptive, redemption or conversion rights. The
outstanding shares of Common Stock issued are fully paid and nonassessable.
Preferred Stock
- ---------------
The Board of Directors is authorized, subject to certain limitations
prescribed by law, without further stockholder approval, to issue from time to
time up to an aggregate of 10,000,000 shares of preferred stock in one or more
series and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions of the shares of each such series,
including the dividend rights, dividend rates, conversion rights, voting rights,
terms of redemption (including sinking fund provisions), redemption price or
prices, liquidation preferences and the number of shares constituting any series
or designations of such series. The rights, preferences and privileges of
holders of Common Stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any series of preferred stock which the
Company may designate and issue.
On January 10, 1996, the Company issued and sold 116 shares of the
Preferred Stock at a price of $50,000 per share. The Preferred Stock is
convertible at any time into shares of Common Stock at the option of the holders
thereof through January 10, 1998 ("optional conversion"). Any shares of
Preferred Stock that remain outstanding on January 10, 1998 will automatically
be converted into shares of Common Stock. The conversion price will equal the
lesser of $14.18 per share of Common Stock or 85% of the average closing price
of the Common Stock during the five trading days preceding the conversion date.
The conversion price as of any date shall not be less than the highest price
that, if all shares of Preferred Stock then outstanding were converted at such
price, would result in the issuance of a number of shares of Common Stock that,
when added to the number of shares of Common Stock issued in connection with all
previous conversions of Preferred Stock, would not exceed 1,015,736. In
addition, if the conversion price in effect at the time of any optional
conversion is less than or equal to a cash option price of $10.00 per share,
subject to anti-dilution adjustments, the Company shall have the right, but not
the obligation, to redeem for cash any or all of the shares of Preferred Stock
surrendered for conversion in an amount equal to $57,500 per share to be so
redeemed. On or after April 9, 1996, the Company can, subject to certain
conditions, elect to redeem all of the Preferred Stock then outstanding for cash
at a premium of 35% through January 10, 1997, and increasing ratably thereafter
to 65% on January 10, 1998. On or after January 10, 1997, the Company can,
subject to certain conditions, cause the exchange of all of the Preferred Stock
for shares of Common Stock at a premium initially equal to 35% and increasing
ratably thereafter to 65% on January 10, 1998. Dividends on the Preferred Stock
accrue at an annual rate of 10% and are payable in cash or shares of Common
Stock, at the option of the Company, at the time of conversion or redemption of
the Preferred Stock. The Company will not issue more than 387,850 shares of
Common Stock in payment of dividends on the Preferred Stock. Each outstanding
share of Preferred Stock entitles the holder thereof to a liquidation preference
equal to the sum of $50,000 plus the amount of unpaid dividends accrued on such
share.
-10-
<PAGE>
Delaware Law and Certain Charter Provisions
- -------------------------------------------
The Company is subject to the provisions of Section 203 of the DGCL.
Subject to certain exceptions, Section 203 prohibits a publicly-held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the interested
stockholder attained such status with the approval of the corporation's board of
directors or unless the business combination is approved in a prescribed manner.
A "business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder which is not
shared pro rata with the other stockholders of the Company. Subject to certain
exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of a
corporation's voting stock.
The DGCL provides generally that the affirmative vote of a majority of
the shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or by-laws, unless a corporation's certificate of
incorporation or by-laws, as the case may be, requires a greater percentage. In
addition, the By-laws of the Company may, subject to the provisions of DGCL, be
amended or repealed by a majority vote of the Company's Board of Directors.
The Charter contains certain provisions permitted under the DGCL
relating to the liability of directors. These provisions eliminate a director's
liability for monetary damages for a breach of fiduciary duty, except in certain
circumstances involving certain wrongful acts, such as the breach of a
director's duty of loyalty or acts or omissions which involve intentional
misconduct or a knowing violation of law. The Charter contains provisions
indemnifying the directors and officers of the Company to the fullest extent
permitted by the DGCL. The Company also has a directors' and officers' liability
insurance policy which provides for indemnification of its directors and
officers against certain liabilities incurred in their capacities as such. The
Company believes that these provisions will assist the Company in attracting and
retaining qualified individuals to serve as directors.
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.
Warrants
- --------
In connection with the private placement of Preferred Stock on January
10, 1996, the Company issued to its placement agent, Spencer Trask Securities
Incorporated ("Spencer Trask") and to an assignee of Spencer Trask, the 1996
Warrants to purchase an aggregate of 17,509 shares of Common Stock at an
exercise price of $13.25 per share. The 1996 Warrants may be exercised at any
time through January 10, 1999.
In connection with the Company's initial public offering in 1991, the
Company issued to the underwriter for such offering, Kashner Davidson Securities
Corporation ("Kashner Davidson"), the IPO Warrants to purchase an aggregate of
180,000 shares of Common Stock at an exercise price of $3.00 per share (as
adjusted for a 2-for-1 stock split). Kashner Davidson subsequently assigned the
IPO Warrants to certain of its affiliates and other persons.
-11-
<PAGE>
PLAN OF DISTRIBUTION
--------------------
Sale by the Selling Shareholders--Conversion Shares. The Company will
issue the Conversion Shares upon the conversion from time to time of the 104
shares of Preferred Stock presently outstanding by the holders thereof pursuant
to the terms of the Preferred Stock. The Company may at its option on or after
January 10, 1997 require the holders of any shares of Preferred Stock then
outstanding to exchange such shares for Conversion Shares. Any shares of
Preferred Stock not so converted or exchanged before January 10, 1998 will be
automatically converted into Conversion Shares on such date. The Company will
receive no proceeds from the resale of the Conversion Shares.
Sale by the Selling Shareholders--1996 Warrant Shares. The Company will
issue Shares from time to time upon the exercise of the 1996 Warrants by the
holders thereof. The Company will receive from such holders the exercise price
of the 1996 Warrants upon such exercise. The Company will not receive any of the
proceeds from resales of the 1996 Warrant Shares. The Preferred Stock and 1996
Warrants were issued by the Company in a private placement in January 1996. See
"Description of Capital Stock." for purposes of the Securities Act.
Sale by the Selling Shareholders--Dividend Shares. The Company will
issue the Dividend Shares in accordance with the terms of the Preferred Stock.
The Dividend Shares accrue from the date of issuance of the Preferred Stock and
will become payable either (i) upon the voluntary or automatic conversion of
Preferred Stock by a holder thereof or (ii) the exchange of the Preferred Stock
by the Company as provided by the terms of the Preferred Stock. See "Description
of Capital Stock."
Sale by the Selling Shareholders--Issued Shares. As of the date of this
Prospectus, the Company has issued 65,643 shares of Common Stock (the Issued
Shares) upon the conversion of twelve shares of Preferred Stock and as dividends
upon such converted shares of Preferred Stock. See "The Offering."
Sale by the Selling Shareholders--MEC Shares. In October 1995, the
Company acquired all of the issued and outstanding shares of the common stock of
MEC. As part of the consideration for that acquisition, the Company issued
543,464 shares of restricted Common Stock to two persons then-unrelated to the
Company. Only 320,218 of such shares are being offered for resale pursuant to
this Prospectus (the MEC Shares).
The Conversion Shares, the 1996 Warrant Shares, the Dividend Shares the
Issued Shares and the MEC Shares are collectively referred to in this Prospectus
as the "Resale Shares". The Resale Shares are, or upon issuance will be,
"restricted securities" for purposes of the Securities Act.
Pursuant to this Prospectus, holders of the Resale Shares may resell
from time to time all or a portion of such Resale Shares. The Company has been
advised by the Selling Shareholders that there are no underwriting arrangements
with respect to the sale of Common Stock and that such resales may occur in
transactions on The Nasdaq Stock Market, in negotiated transactions or through a
combination of both, at prices related to such prevailing market prices at the
time of sale, or at negotiated prices. The Selling Shareholders may effect such
transactions by selling the Resale Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Resale
Shares for which such broker-dealers may act as agent or to whom they sell as
principal, or both (which compensation may be in excess of customary
commissions).
-12-
<PAGE>
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and complied with by the Company and the Selling
Shareholders.
The Selling Shareholders and any broker-dealer who acts in connection
with the resale of the Resale Shares hereunder, may be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act, and any
commissions received by them and/or profit on any resale thereof as principal
might be deemed to be underwriting discounts and commissions under the
Securities Act.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the shares may not simultaneously engage
in market making activities with respect to the Common Stock of the Company for
a period of two business days prior to the commencement of such distribution. In
addition and without limiting the foregoing, each Selling Shareholder will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of shares of the
Company's Common Stock by the Selling Shareholders.
A supplement to this Prospectus will be filed, if required, pursuant to
Rule 424 under the Securities Act disclosing (a) the name of the participating
broker-dealer(s); (b) the number of Resale Shares involved; (c) the price at
which such shares were sold; (d) the commissions paid or discounts or
concessions allowed to such broker-dealer(s), where applicable; and (e) other
facts material to the transaction, including the name(s) and other information
regarding the applicable Selling Shareholder(s).
Sale by the Company--IPO Warrant Shares. The Company will issue Shares
from time to time upon the exercise of the IPO Warrants by the holders thereof.
The Company will receive from such holders the exercise price of the IPO
Warrants upon such exercise. The IPO Warrant Shares will be freely transferable
by the holders thereof not affiliated with the Company. Holders who are
affiliates of the Company will be subject to volume restrictions and certain
other requirements of Rule 144 of the Securities Act of 1933 (the "Securities
Act"), without regard to its holding period requirements, in connection with the
subsequent resale of the IPO Warrant Shares. The Company will not receive any of
the proceeds from resales of the IPO Warrant Shares. The IPO Warrants were
originally issued by the Company to Kashner Davidson as the underwriter of the
Company's initial public offering of Common Stock in 1991.
SELLING SHAREHOLDERS
--------------------
The following table sets forth certain information with regard to the
beneficial ownership of Preferred Stock by the Selling Shareholders, the
beneficial ownership of Common Stock by the Selling Shareholders (where
indicated by footnote, on a pro forma basis as of June 24, 1996 as if the
outstanding shares of Preferred Stock had been converted into Common Stock as of
such date),and the number of shares of Common Stock to be offered by the Selling
Shareholders(also on a pro forma basis where indicated). The actual number of
shares of Common stock beneficially owned or offered may vary and will be
reflected in a supplement to this Prospectus. See "The Offering."
-13-
<PAGE>
<TABLE>
<CAPTION>
Shares Common Common Stock Beneficially
Preferred Stock Shares of Owned After the Offering
Stock Beneficially Common
Presently Owned Prior Stock Number Percent of
Owned to Offering to be Sold of Shares Outstanding*
----- ----------- ---------- --------- -----------
Selling Shareholder
- -------------------
<S> <C> <C> <C> <C> <C>
Banque Scandinave en Suisse(1)(2) 55 284,270 284,270 -- --
Reg-S Investment Fund Ltd.(1) 6 31,011 31,011 -- --
Wood Gundy London Ltd.(4) 20 157,519 157,519 -- --
OTA Limited Partnership(1) 3 15,506 15,506 -- --
Interportfolio(1) 10 51,685 51,685 -- --
Selfridge Limited Partnership(1) 2 10,337 10,337 -- --
Hull Overseas Ltd.(3) 8 52,843 52,843 -- --
Spencer Trask Securities
Incorporated (5) N/A 9,630 9,630 -- --
Jules Marx (5) N/A 7,879 7,879 -- --
Mark B. Gordon, O.D N/A 271,732 160,109 111,623 1.4%
Howard H. Levin, O.D N/A 271,732 160,109 111,623 1.4%
<FN>
* Without giving effect to the exercise of the IPO Warrants and the 1996
Warrants offered hereby.
1 As of the date of this Prospectus, such Selling Shareholder did not own any
of such shares of Common Stock. Such number of shares is the hypothetical
number that would have been held by such Selling Shareholder if it had
converted all of its shares of Preferred Stock into Common Stock as of June
24, 1996. The actual number of shares of Common Stock to be received by
such Selling Shareholder, which may be more or less than the number
indicated, will be reflected in a supplement to this Prospectus following
the conversion of such Series A Preferred Stock.
2 Based on information available to the Company and the representations of
the Selling Shareholder, such holdings of record of Preferred Stock are
held for the account of certain clients of Banque Scandinave en Suisse.
3 As of June 24, 1996, Hull Overseas Ltd. ("Hull") owned 11,495 shares of
Common Stock. The 41,348 share difference between such number and the
number of shares of Common Stock indicated in the table represents the
hypothetical number that would have been held by Hull if it had converted
all of its shares of Preferred Stock into Common Stock as of June 24, 1996.
The actual number of shares of Common Stock to be received by Hull, which
may be more or less than 41,348, will be reflected in a supplement to this
Prospectus following the conversion by Hull of its remaining 8 shares of
Preferred Stock.
4 As of June 24, 1996, Wood Gundy London Ltd. ("Wood Gundy")owned 54,148
shares of Common Stock. The 103,371 share difference between such number
and the number of shares of Common Stock indicated in the table represents
the hypothetical number that would have been held by Wood Gundy if it had
converted all of its shares of Preferred Stock into Common Stock as of June
24, 1996. The actual number of shares of Common Stock to be received by
Wood Gundy, which may be more or less than 103,371, will be reflected in a
supplement to this Prospectus following the conversion by Wood Gundy of its
remaining 20 shares of Preferred Stock.
5 Assumes the exercise in full by such Selling Shareholder of a warrant to
purchase Common Stock. See "Description of Capital Stock--Warrants."
</FN>
</TABLE>
LEGAL MATTERS
-------------
The legality of the Shares offered hereby has been passed upon for the
Company by Sonnenschein Nath & Rosenthal, Chicago, Illinois.
-14-
<PAGE>
EXPERTS
-------
The consolidated financial statements of LaserSight Incorporated and
subsidiaries as of December 31, 1995 and for the year then ended have been
incorporated herein by reference and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein and in the Registration Statement
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of LaserSight Incorporated and
subsidiaries as of December 31, 1994 and for each of the years in the two-year
period then ended have been incorporated herein and in the Registration
Statement in reliance upon the report of Lovelace, Roby & Company, P.A.,
independent certified public accountants, incorporated by reference herein and
in the Registration Statement upon the authority of said firm as experts in
accounting and auditing.
AVAILABLE INFORMATION
---------------------
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with any amendments thereto, the "Registration Statement")
under the Securities Act with respect to the Shares offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
items of which are contained in schedules and exhibits to the Registration
Statement as permitted by the rules of the Commission. For further information
with respect to the Company and the Shares offered hereby, reference is made to
the Registration Statement and the exhibits and the schedules thereto.
Statements contained in this Prospectus as to the contents of any contract or
any document referred to are not necessarily complete. With respect to each such
contract or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matters
involved, and each such statement shall be deemed qualified in its entirety by
such reference.
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files periodic reports, proxy statements and
other information with the Commission. A copy of the Registration Statement,
including exhibits and schedules thereto, filed by the Company with the
Commission, as well as other reports, proxy statements and other information
filed by the Company may be inspected without charge at the office of the
Commission, 450 Fifth Street, N.W., Washington, D.C., and at the following
Regional Offices of the Commission: 7 World Trade Center, Suite 1300, New York,
New York, and 500 West Madison Street, Suite 1400, Chicago, Illinois. Copies of
such material can be obtained, upon payment of prescribed fees at the Public
Reference Room of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549.
-15-
