Filed Pursuant to Rule 424(b)(3)
File No. 333-36655
PROSPECTUS SUPPLEMENT NO. 2 dated March 20, 1998
(To Prospectus dated January 26, 1998)
10,464,708 Shares
LaserSight Incorporated
Common Stock ($.001 par value)
This Prospectus Supplement updates the Prospectus dated January 26,
1998, as updated by the Prospectus Supplement No. 1 dated March 4, 1998 (as so
updated, "Prospectus") of LaserSight Incorporated, a Delaware corporation (the
"Company").
All of Note (1) on the cover page of the Prospectus should be deleted
and replaced with the following:
Note (1):
The number of Conversion Shares offered for sale by this Prospectus
equals the number of Conversion Shares that, based on the Conversion Price (as
defined below) in effect on the date of the Prospectus, the Company's agreements
with the holders of the Series B Preferred Stock required it to cause to be
registered under the Securities Act of 1933 (the "Securities Act"). Such number
of Conversion Shares equals 200% of the 4,837,354 shares of Common Stock that
would have been issuable if the holders of all shares of outstanding Series B
Preferred Stock had elected to convert such shares as of January 23, 1998. The
number of Conversion Shares that will be ultimately issued is not limited,
however, and could be more or less than the number offered by this Prospectus.
If as of any date the number of Shares then eligible for sale by this Prospectus
becomes less than 175% of the number of Shares issuable or outstanding as of
such date, the Company will be required to cause the registration of additional
Shares under the Securities Act.
On February 27, 1998, the Company's shareholders approved the issuance
of a number of a potentially unlimited number of Shares and approved an
amendment to the Company's certificate of incorporation to increase the number
of authorized shares of Common Stock from 20,000,000 to 40,000,000, thereby
allowing the Company to reserve for issuance a number of shares of Common Stock
equal to at least 200% of the number of Shares presently issuable.
On March 13, 1998, the Company entered into an agreement with all the
holders of the Series B Preferred Stock (the "Series B Agreement") pursuant to
which such holders agreed to limit their conversions of Series B Preferred Stock
until June 12, 1998 (the "Initial Restricted Period"), their ability to convert
the Series B Preferred Stock into Common Stock would be limited so that no more
than an aggregate of 1,000,000 shares of Common Stock are issuable upon such
conversion during such period (the "Conversion Limitation"). The duration of the
Conversion Limitation may be extended until September 14, 1998 (the "Extended
Restricted Period") if the Company's shareholders approve certain proposals at
the Company's annual meeting on June 12, 1998 (the "1998 Annual Meeting"). See
"Description of Securities--Preferred Stock--Series B Preferred Stock."
<PAGE>
Upon the expiration of the Initial Restricted Period and the Extended
Restricted Period, if any, the Series B Preferred Stock is convertible at the
option of any holder thereof at any time or from time to time until August 29,
2000, on which date all shares of Series B Preferred Stock then outstanding
will, subject to certain conditions, automatically be converted into Common
Stock. The number of Conversion Shares issuable upon the conversion of each of
the 700 shares of Series B Preferred Stock outstanding as of the date of this
Prospectus Supplement No. 2 equals $10,000 divided by the Conversion Price in
effect as of the date of such conversion. Currently, the Conversion Price equals
the lesser of (i) $6.68 per share (the "Fixed Component"), or (ii) the average
of the three lowest closing bid prices of the Common Stock during the 30
consecutive trading days preceding such conversion date. The Fixed Component of
the Conversion Price may be reduced if the Company's shareholders approve
certain proposals at the 1998 Annual Meeting. See "The Offering," "Selling
Shareholders," "Plan of Distribution," "Risk Factors--Potentially Unlimited
Number of Shares Issuable Upon Conversion of Preferred Stock" and "Description
of Securities--Preferred Stock."
All of the text under the caption "The Offering--Shares Offered by
Selling Shareholders:" should be deleted and replaced with the following:
Shares Offered by Selling Shareholders:
Common Shares outstanding as of March 19, 1998 11,387,306
Conversion Shares issued to date upon conversion
of Series B Preferred Stock 1,402,634
Conversion Shares issuable upon conversion of Minimum: 1,047,904(1)
outstanding Series B Preferred Stock Current estimate: 4,023,952(2)
Maximum: 8,272,074 shares(3)
Warrant Shares issuable upon exercise of Series B
Warrants (with an exercise price of $5.91 per
share)(4) 790,000 shares
- --------------------
(1) Represents the number of shares that would be issuable if all 700
shares of Series B Preferred Stock outstanding on the date of this
Prospectus were converted into Common Stock at the maximum Conversion Price
of $6.68 per share. See "Description of Securities--Preferred Stock--Series
B Preferred Stock."
(2) Represents the number of Conversion Shares that would have been
owned by the Selling Shareholders if they had converted all of their
outstanding shares of Series B Preferred Stock into Common Stock as of
March 19, 1998. Currently, the actual number of Conversion Shares issuable
upon any conversion date will equal (i) the original purchase price
($10,000 per share) of the preferred shares being converted on such date
divided by (ii) a Conversion Price equal to the lesser of the Fixed
Component or the average of the three lowest closing bid prices of the
Common Stock during the 30 consecutive trading days preceding such
conversion date. The actual number of Conversion Shares ultimately issued
will depend on, among other things, when the holders of Series B Preferred
Stock elect to convert their shares and the closing bid prices of the
Common Stock prior to each such conversion election and if the Company's
shareholders approve a reduction in the Fixed Component of the Conversion
Price at the 1998 Annual Meeting. See "Description of Securities--Preferred
Stock--Series B Preferred Stock." Additional shares of Common Stock may
from time to time be issued as dividends on, or as payments of amounts due
to the holders of, the Series B Preferred Stock.
<PAGE>
(3) Represents the number of Conversion Shares offered by this
Prospectus reduced by Conversion Shares issued to date. This number could
be less or more than the number of Conversion Shares that are ultimately
issued. If, as of any date, the number of Conversion Shares then eligible
for sale pursuant to this Prospectus becomes less than 175% of the number
of Conversion Shares issuable or outstanding as of such date, the Company
will be required to cause the registration of additional Conversion Shares
under the Securities Act. See "Description of Securities--Preferred Stock."
(4) This exercise price of $5.91 may be reduced if the Company's
shareholders approve certain proposals at the 1998 Annual Meeting. See
"Description of Securities--Preferred Stock."
All of the text in the second paragraph immediately following the caption
"Description of Securities" should be deleted and the replaced with the
following:
The authorized capital stock of the Company consists of 40,000,000 shares
of Common Stock and 10,000,000 shares of preferred stock, $.001 par value,
issuable in series. As of March 19, 1998, 11,387,306 shares of Common Stock were
outstanding (not including shares issuable upon the exercise of outstanding
stock options or upon the conversion of outstanding preferred stock). As of such
date, the only shares of preferred stock outstanding were 700 shares of the
Series B Preferred Stock.
All of the text under the caption "Description of Securities--Preferred
Stock--Series B Preferred Stock" should be deleted and the replaced with the
following:
Series B Preferred Stock
On August 29, 1997, the Company issued 1,600 shares of Series B Preferred
Stock. On October 28, 1997, the Company completed an optional redemption of 305
of such shares. The Company's option to redeem additional shares of Series B
Preferred Stock expired in January 1998. Pursuant to an agreement dated February
4, 1998 between the Company and the holders of the Series B Preferred Stock, the
Company has repurchased an additional 351 shares tendered by such preferred
holders. On March 13, 1998, three of the four holders of the Series B Preferred
Stock converted 244 shares of their shares into Common Stock. As of the date of
this Prospectus Supplement, 700 shares of Series B Preferred Stock remain
outstanding.
Upon the expiration of the Initial Restricted Period and the Extended
Restricted Period, if any, the Series B Preferred Stock is convertible at the
option of any holder thereof at any time or from time to time until August 29,
2000, on which date all shares of Series B Preferred Stock then outstanding will
automatically be converted into Common Stock, provided that all shares of Common
Stock issuable upon conversion of all outstanding shares of Preferred Stock are
then (i) authorized and reserved for issuance, (ii) registered under the
Securities Act for resale and (iii) eligible to be traded on either the Nasdaq
National Market, the Nasdaq Small Cap Market, the New York Stock Exchange or the
American Stock Exchange. Until the proposals described below are approved by the
Company's shareholders at the 1998 Annual Meeting, the Conversion Price will
equal the lesser of the Fixed Component or the average of the three lowest
closing bid prices of the Common Stock during the 30 trading days preceding such
conversion date. If a conversion occurs when the Common Stock is not listed on
the Nasdaq National Market, the American Stock Exchange or the New York Stock
Exchange, the otherwise-applicable Conversion Price will be multiplied by 0.93.
<PAGE>
On March 13, 1998, the Company entered into the Series B Agreement whereby
the holders of the Series B Preferred Stock agreed to the Conversion Limitation
during the Initial Restricted Period. In addition to agreeing to such Conversion
Limitation, the holders of the Series B Preferred Stock granted the Company an
option to purchase any or all of the remaining Series B Preferred Stock at a
price equal to 120% of the face amount of the Series B Preferred Stock (the
"Purchase Option") at any time before the expiration of the Initial Restricted
Period. The holders of the Series B Preferred Stock agreed to extend the
duration of the Conversion Limitation and the period during which the Company
may exercise the Purchase Option until the termination of the Extended
Restricted Period if the Company's shareholders approve the proposals described
below.
The first proposal to be considered by the Company's shareholders at the
1998 Annual Meeting with respect to the Series B Preferred Stock includes an
adjustment to the Fixed Component of the Conversion Price. If approved by the
Company's shareholders and if the Conversion Limitation remains in effect
through September 14, 1998, the Fixed Component of the Conversion Price of the
Series B Preferred Stock will be an amount equal to (i) $6.68, or (ii) if the
Extended Restricted Period is not terminated prior to September 14, 1998, the
lesser of (A) $6.68, or (B) 110% of the average closing bid prices of the Common
Stock for the twenty (20) consecutive trading days ending on the last day of the
Extended Restricted Period. Currently, the Conversion Price equals the lower of
the Fixed Component or the average of the three lowest closing bid prices per
share of Common Stock during the preceding 30 trading days.
The second proposal to be considered by the Company's shareholders at the
1998 Annual Meeting with respect to the Series B Preferred Stock includes a
reduction in the exercise price of the warrants issued to the holders of the
Series B Preferred Stock in August 1997 (the "Existing Warrants"). If approved
by the Company's shareholders, the exercise price of the Existing Warrants will
be reduced from $5.91 per share to 115% of the average closing bid price of the
Common Stock for the five trading days immediately following March 17, 1998 (the
"Strike Date"). If the Company issues a press release during such five-day
period, the exercise price of the Existing Warrants would be the lower of 115%
of the average closing bid price of the Common Stock for the five trading days
immediately following the Strike Date or 115% of the average closing bid price
of the Common Stock for the five trading days immediately preceding such date.
The Existing Warrants would remain exercisable at any time through August 29,
2002 and would not be subject to the Conversion Limitation.
If at the 1998 Annual Meeting, the Company's shareholders fail to approve
either of the two proposals, the Company will be required to issue to the
holders of the Series B Stock an aggregate of 750,000 additional warrants (the
"Additional Warrants") to purchase Common Stock at a price equal to 115% of the
average closing bid price of the Common Stock for the five trading days
following the Strike Date. If the Company issues a press release during such
five-day period the exercise price of the Additional Warrants would be the lower
of 115% of the average closing bid price of the Common Stock for the five
trading days immediately following the Strike Date or 115% of the average
closing bid price of the Common Stock for the five trading days immediately
preceding such date. The Additional Warrants would be exercisable at any time
through August 29, 2002 and would not be subject to the Conversion Limitation.
The Initial Restricted Period and the Extended Restricted Period may be
terminated by the holders of the Series B Preferred Stock during either of such
periods under any of the following circumstances:
o As of the end of any month, the Company's current ratio (current assets
divided by current liabilities) falls below 1.1 to 1;
<PAGE>
o As of the end of any quarter, the Company's income or loss from
operations for such quarter has not improved relative to the Company's
results for the prior quarter; or
o At any time, the Company undergoes or announces a material adverse
change in its financial condition, operating results, assets,
liabilities, operations or business prospects of the Company and its
subsidiaries taken as a whole.
If the Initial Restricted Period or the Extended Restricted Period is terminated
as provided for above, the Conversion Limitation and Purchase Option in effect
during such period will be terminated. If the Initial Restricted Period is
terminated prior to June 12, 1998 due to the occurrence of one or more of these
circumstances, then the Company will be required to issue the Additional
Warrants.
Dividends on the Series B Preferred Stock are payable only to the extent
that dividends are payable on the Company's Common Stock. Each outstanding share
of Series B Preferred Stock entitles the holder thereof to a liquidation
preference equal to the sum of $10,000 plus the amount of unpaid dividends, if
any, accrued on such share.
In addition, if the Company were to default on certain of its obligations,
all or a portion of the Series B Preferred Stock would become redeemable at the
option of its holders at the Special Redemption Price (as defined below). Such
defaults include (i) subject to limited exceptions, if the Company's
registration statement under the Securities Act relating to the resale of the
Series B Conversion Shares or Series B Warrant Shares becomes unavailable for
such resales, or (ii) if the Company becomes required to register additional
Series B Conversion Shares, but for any reason fails to cause a registration
statement relating to such shares declared effective by the SEC within 30 days
after such obligation first arises.
For this purpose, the "Special Redemption Price" means a cash payment equal
to the greater of (i) the liquidation preference of $10,000 multiplied by 1.25
or (ii) a fraction, the numerator of which would equal the highest closing bid
price of the Common Stock during the period beginning 10 trading days before the
redemption date and ending five business days after such date, and the
denominator of which would equal the Conversion Price (as herein defined) that
would have been applicable if the preferred shares had been converted as of the
redemption date. Such redemption must be completed within five business days of
the event which required such redemption. Any delay in payment beyond such five
business days will cause such redemption amount to accrue interest at the rate
of 1% per month during the first 30 days, pro rated daily (2% monthly, pro rated
daily, thereafter).
<PAGE>
All of the text in the second paragraph immediately following the caption
"Selling Shareholders" should be deleted in its entirety and the following
should be inserted in its place:
SELLING SHAREHOLDERS
The following table sets forth certain information with regard to the
beneficial ownership of Series B 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 if all 700 outstanding shares of
Series B Preferred Stock had been converted into Common Stock as of March 19,
1998), 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."
<TABLE>
<CAPTION>
Common Stock Beneficially Common Stock
Shares of Owned Beneficially Owned
Preferred Prior to the Offering Shares of After the Offering
Stock ------------------------- Common ------------------
Presently Conversion Warrant Stock Number Percent of
Selling Shareholer Owned Shares Shares(1) To be Sold of Shares Outstanding*
------------------ ----- ------ --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
CC Investments, LDC (2) 131 1,695,808 234,375 1,930,183 -- --
Societe Generale (3) 177 1,017,485 140,625 1,158,110 -- --
Shepherd Investments 196 1,356,647 187,500 1,544,147 -- --
International, Ltd.
(4)
Stark International (5) 196 1,356,647 187,500 1,544,147 -- --
Harlan P. Kleiman N/A -- 26,516 26,516 -- --
Robert K. Schacter N/A -- 8,188 8,188 -- --
Thomas J. Griesel N/A -- 1,416 1,416 -- --
Steven Lamar N/A -- 3,880 3,880 -- --
<FN>
- --------------------
* Without giving effect to any exercise of the Series B Warrants.
(1) Assumes the exercise in full by such Selling Shareholder of its Series B
Warrants (with an exercise price of $5.91 per share). See "Description of
Securities--Warrants."
(2) As of the date of this Prospectus Supplement, CC Investments, LDC owns
942,754 shares of Common Stock. The 753,034 share difference between such
number and the number indicated in the table represents the pro forma
number of Conversion Shares that would have been owned by CC Investments,
LDC if it had converted all of its Series B Preferred Stock into Common
Stock as of March 19, 1998. The actual number of Conversion Shares to be
received by CC Investments, LDC, which may be significantly more or less
than 753,034, will be reflected in another supplement to (or amendment of)
the Prospectus following the conversion of such Series B Preferred Stock.
(3) As of the date of this Prospectus Supplement, Societe Generale did not own
any shares of Common Stock. The number of Conversion Shares indicated is
the pro forma number that would have been owned by a Societe Generale if it
had converted all of its Series B Preferred Stock into Common Stock as of
March 19, 1998. The actual number of Conversion Shares to be received by
Societe Generale, which may be significantly more or less than the number
indicated, will be reflected in another supplement to (or amendment of) the
Prospectus following the conversion of such Series B Preferred Stock.
<PAGE>
(4) As of the date of this Prospectus Supplement, Shepherd Investments
International, Ltd. owns 229,940 shares of Common Stock. The 1,126,707
share difference between such number and the number indicated in the table
represents the pro forma number of Conversion Shares that would have been
owned by Shepherd Investments International, Ltd. if it had converted all
of its Series B Preferred Stock into Common Stock as of March 19, 1998. The
actual number of Conversion Shares to be received by Shepherd Investments,
which may be significantly more or less than 1,126,707, will be reflected
in another supplement to (or amendment of) the Prospectus following the
conversion of such Series B Preferred Stock.
(5) As of the date of this Prospectus Supplement, Stark International owns
229,940 shares of Common Stock. The 1,126,707 share difference between such
number and the number indicated in the table represents the pro forma
number of Conversion Shares that would have been owned by Stark
International if it had converted all of its Series B Preferred Stock into
Common Stock as of March 19, 1998. The actual number of Conversion Shares
to be received by Stark International, which may be significantly more or
less than 1,126,707, will be reflected in another supplement to (or
amendment of) the Prospectus following the conversion of such Series B
Preferred Stock.
</FN>
</TABLE>
