Registration No. 333-36655
As filed with the Securities and Exchange Commission on January 12, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LASERSIGHT INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 3845 65-0273162
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
12161 Lackland Road
St. Louis, Missouri 63146
(314) 469-3220
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Mr. Gregory L. Wilson Copy to:
Chief Financial Officer Jacques K. Meguire, Esq.
LaserSight Incorporated Sonnenschein Nath & Rosenthal
12161 Lackland Road 8000 Sears Tower
St. Louis, Missouri 63146 Chicago, Illinois 60606
(314) 469-3220 (312) 876-8000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Approximate date of commencement of proposed sale to public: From time to
time after the Registration Statement is declared effective.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, 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 to be a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the registration
statement of the earlier effective registration statement for the same offering.
[ ]
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered Registered (1) Offering Price per Aggregate Offering Registration
Share Price (1) Fee (5)
<S> <C> <C> <C> <C>
Common Stock, $.001 par value......... 9,312,358 shs. (2) $2.92 (3) $27,192,085 $8,021.67
Common Stock, $.001 par value......... 790,000 shs. (4) $2.92 (3) $ 2,306,800 680.51
------------ ------
Total............................ 10,102,358 shs. $8,702.18
=============== =========
<FN>
(1) In the event of a stock split, stock dividend, or similar
transaction involving the Common Stock of the Company, the number
of shares registered hereby shall be automatically increased
pursuant to Rule 416 to cover the additional shares of Common
Stock required to prevent dilution.
(2) Equals 200% of the number of shares of Common Stock that would
have been issuable if all 1,295 shares of the Company's Series B
Convertible Participating Preferred Stock, par value $.001 per
share (the "Series B Preferred Stock") had been converted as of
January 8, 1998.
(3) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(c). Based on the average of the high and
low prices reported for the Common Stock on The Nasdaq Stock
Market on January 7, 1998.
(4) Represents shares issuable upon exercise of outstanding warrants
(the "Series B Warrants") issued in connection with the private
placement of the Series B Preferred Stock.
(5) Of which a total of $9,290.93 has been paid on September 29 and
November 20, 1997.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION DATED JANUARY 12, 1998
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
10,102,358 Shares (Note 1)
LASERSIGHT INCORPORATED
Common Stock ($.001 par value)
This Prospectus relates to an aggregate of 10,102,358 shares (the "Shares")
of common stock, $.001 par value ("Common Stock"), of LaserSight Incorporated, a
Delaware corporation (the "Company") being offered for sale from time to time by
the selling shareholders named in this Prospectus (the "Selling Shareholders")
as follows:
(i) up to 9,312,358 shares issuable upon the conversion (such shares,
the "Conversion Shares") from time to time (but not after August 29, 2000)
of the Company's Series B Convertible Participating Preferred Stock, $.001
par value (the "Series B Preferred Stock") (see Note (1) below), and
(ii) up to 790,000 shares (the "Warrant Shares") issuable upon the
exercise of warrants issued in connection with the Company's private
placement of Series B Preferred Stock in August 1997 (the "Series B
Warrants").
If all of the Series B Warrants are exercised, the Company would realize
$4,668,900 in proceeds. See "Use of Proceeds." The Company will not receive any
proceeds from any sale of Conversion Shares or Warrant 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 $70,000.
The Common Stock is traded on The Nasdaq Stock Market under the symbol
"LASE." On January 9, 1998, the closing sale price for the Common Stock was
$3.03 per share.
THE SHARES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE
4.
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 January __, 1998.
(Cover page continued on next page)
<PAGE>
(Cover page continued from preceding page)
Note (1):
The 9,312,358 Conversion Shares offered for resale by this Prospectus equals the
number of Conversion Shares that, based on an assumed Conversion Price (as
defined below) of $2.78125, the Company's agreements with the holders of the
Series B Preferred Stock require it to cause to be registered under the
Securities Act of 1933 for sale pursuant to this Prospectus, assuming that the
Company obtains the shareholder approval described below. Such number of
Conversion Shares equals 200% of the 4,656,179 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 8, 1998 and if
such shareholder approval had been obtained. If as of any date, such number of
shares (4,656,179) were to become less than 175% of the number of Conversion
Shares that would then be issuable as of such date, then the Company would be
required to cause the registration of a sufficient number of additional
Conversion Shares to cause the number of registered Conversion Shares to equal
200% of the number of Conversion Shares issuable as of such date. The number of
Conversion Shares that will be ultimately issued is not limited, however, and
could be significantly more than (or less than) 4,656,179. However, the Company
will not issue more than 1,995,534 Shares without the prior approval of the
Company's shareholders as required by the listing rules of the NASDAQ National
Market and the terms governing the Series B Preferred Stock.
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. The number of Conversion Shares issuable upon the
conversion of each of the 1,295 shares of Series B Preferred Stock outstanding
as of the date of this Prospectus equals $10,000 divided by the Conversion Price
in effect as of the date of such conversion. As of any conversion date, the
Conversion Price equals the lesser of (i) $6.68 per share or (ii) the average of
the three lowest closing bid prices of the Common Stock during the 20 (30 after
February 25, 1998 under certain conditions) consecutive trading days preceding
such conversion date. See "The Offering," "Selling Shareholders," "Plan of
Distribution," "Risk Factors--Effect of Conversion of Series B Preferred Stock"
and "Description of Securities."
<PAGE>
TABLE OF CONTENTS
Documents Incorporated by Reference Description of Securities
The Company Plan of Distribution
The Offering Selling Shareholders
Risk Factors Legal Matters
Use of Proceeds Experts
Recent Developments Available Information
Capitalization
--------------------------
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 offering
described herein. 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 or sale made
hereunder shall, under any circumstances, imply 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 "SEC") 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, 1996, as amended by a Form 10-K/A filed on December 12, 1997;
B. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, and June 30, 1997 (each as amended by a Form 10-Q/A filed on
December 11, 1997);
C. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 (as amended by Form 10-Q/A's filed on December 11,
1997 and January 9, 1998);
D. The Company's Current Reports on Form 8-K filed on February 25, March
18, March 27, April 8, April 25, July 1, July 31, August 13, September
2, September 11, September 15, September 29, November 7, and December
29, 1997, and January 2 and January __, 1998; and
E. The description of the Common Stock contained in the Company's Form
8-A/A (Amend. No. 3) filed on September 29, 1997.
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 Shares 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.
<PAGE>
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: (314) 469-3220.
THE COMPANY
LaserSight Incorporated and its subsidiaries operate in two major operating
segments: technology and health care services.
The Company's technology segment includes LaserSight Technologies, Inc.
("LaserSight Technologies"), LaserSight Patents, Inc. ("LaserSight Patents") and
LaserSight Centers Incorporated ("LaserSight Centers"). LaserSight Technologies
develops, manufactures and markets ophthalmic lasers with a galvanometric
scanning system primarily for use in performing PRK (photorefractive
keratectomy) which 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. LaserSight Patents licenses various
patents related to the use of excimer lasers to ablate biological tissue and to
keratome design and usage. LaserSight Centers is a developmental-stage company
through which the Company may provide PRK, LASIK (Laser In Situ Keratomileusis)
and other eyecare surgical services.
Since December 31, 1997, the health care services segment has consisted of
MRF, Inc. ("MRF" or "The Farris Group"). The Farris Group provides health care
and vision care consulting services to hospitals, managed care companies and
physicians. Until that date, this segment had also included MEC Health Care,
Inc. ("MEC") and LSI Acquisition, Inc. ("LSIA"). See "Recent Developments--Sale
of MEC and LSIA." Under the Company's ownership, MEC was a vision managed care
company which managed vision care programs for health maintenance organizations
(HMOs) and other insured enrollees and LSIA was a physician practice management
company which managed the ophthalmic practice known as the "Northern New Jersey
Eye Institute" under a management services agreement.
The Company was incorporated in Delaware in 1987, but was inactive until
1991. In April 1993, the Company acquired LaserSight Centers in a
stock-for-stock exchange with additional shares issued in March 1997 pursuant to
an amended purchase agreement. In February 1994, the Company acquired MRF, Inc.
In July 1994, the Company was reorganized as a holding company. In October 1995,
the Company acquired MEC. In July 1996, the Company's LSIA subsidiary acquired
the assets of the Northern New Jersey Eye Institute. On December 30, 1997, the
Company sold MEC and LSIA, effective as of December 1, 1997. See "Recent
Developments--Sale of MEC and LSIA."
As used herein, the term the "Company" refers to LaserSight Incorporated
and its subsidiaries, unless the context otherwise requires. The Company's
principal office and mailing address are 12161 Lackland Road, St. Louis,
Missouri 63146, and its telephone number is (314) 469-3220.
<PAGE>
THE OFFERING
Common Stock outstanding as of January 7, 1998 9,984,672 shares
Shares Offered by Selling Shareholders:
Common Stock issued to date upon conversion of
Series B Preferred Stock None.
Common Stock issuable upon conversion of Minimum: 1,938,622 shares(1)
outstanding Series B Preferred Stock Maximum: To be determined(2)
Common Stock issuable upon exercise of Series B 790,000 shares
Warrants
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 Series B Warrants $4,668,900
are exercised in full
Use of proceeds from exercise of Series B Working capital; general
Warrants corporate purposes.
Nasdaq Stock Market trading symbol LASE
- -------------------------------
(1) Represents the number of shares that would be issuable if all 1,295
shares of Series B Preferred Stock outstanding on the date of this
Prospectus were to be converted into Common Stock at the maximum Conversion
Price of $6.68 per share.
(2) The actual number of shares of Common Stock issuable upon the
conversion of the Series B Preferred Stock will equal (i) the original
purchase price of the shares of Preferred Stock ($10,000 per share) being
converted divided by (ii) a Conversion Price equal to the lesser of $6.68
per share or the average of the three lowest closing bid prices of the
Common Stock during the 20 consecutive trading days preceding such
conversion (30 trading days if the five-day average closing bid price of
the Common Stock on February 25, 1998 is less than $5.14), but in no event
more than 1,995,534 shares without shareholder approval. See "Description
of Securities--Preferred Stock--Series B Convertible Participating
Preferred Stock."
For the foreseeable future, the Company does not anticipate paying
dividends on the Common Stock or any participating dividends on the Series
B Preferred Stock. If, however, any participating dividends are paid on the
Series B preferred Stock, such dividends would be paid in Common Stock. In
such case, the number of shares of Common Stock to be issued would equal
the amount of all dividends paid on the Common Stock through the date of
the conversion thereof, divided by the market price of the Common Stock on
the date preceding such event. See "Description of Securities--Preferred
Stock."
<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. Included 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,
purchasers of the Shares should carefully consider the following risk factors:
Potential Obligation to Redeem Preferred Stock if Stockholder Approval Not
Obtained. If for any reason the Company's shareholders do not approve by
February 28, 1998 the possible issuance of an indefinite number of shares of
Common Stock upon the conversion of the Company's outstanding Series B Preferred
Stock, any holder of Series B Preferred Stock will have the right to require the
Company to redeem a portion of such holder's Series B Preferred Stock for cash
in an amount equal to the Special Redemption Price. 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 125% or (ii) the current value
of the Common Stock, using the price per share of Common Stock, which the
holders of such shares of Series B Preferred Stock would otherwise be entitled
to receive upon conversion. A holder could elect to require the Company to
redeem whatever portion of its Series B Preferred Stock is necessary to cause
the number of shares of Common Stock that would be issuable if such holder were
to convert all of its remaining Series B Preferred Stock and exercise all of its
Series B Warrants to equal no more than 50% of such holder's pro rata portion of
the 1,995,534 shares of Common Stock that the Company can issue without prior
shareholder approval. The lower the price of the Company's Common Stock at the
time of a holder's conversion of its Series B Preferred Stock, the greater would
be the number of shares of Common Stock that would be issuable to such holder
upon such conversion and thus the greater the portion of such holder's Series B
Preferred Stock that it could elect to require the Company to redeem. See
"Description of Securities--Preferred Stock--Series B Convertible Participating
Preferred Stock."
All of the holders of the Series B Preferred Stock have consented to an
extension from December 26, 1997 to February 28, 1998 of the deadline for the
Company to obtain the shareholder approval needed to avoid giving such holders
the right to require the Company to redeem a portion of their shares of Series B
Preferred Stock. There can be no assurance as to whether, when or on what terms
the Company could obtain any further extension of this deadline should an
extension become necessary. If the Series B Preferred Stock were to become
redeemable and if the holders of the Series B Preferred Stock were thereafter to
exercise their right to require the Company to redeem a portion of their shares,
the Company does not expect to have sufficient cash or marketable securities to
fund such redemption, resulting in a material adverse effect on the Company's
financial position and liquidity. Such material adverse effect could be
increased by the default in the Company's credit facility with Foothill Capital
Corporation ("Foothill") that would result from any required redemption of the
Series B Preferred Stock. If an extension of the shareholder approval deadline
beyond February 28, 1998 were to become necessary, but holders of the Series B
Preferred Stock were to refuse to grant such further extension and were instead
to require the Company to redeem the full amount of Series B Preferred Stock
that such holders would then be entitled to demand, the Company estimates, based
on the average of the three lowest closing bid prices of the Common Stock during
the 20-trading day period preceding January 8, 1998 ($2.78125), that the amount
of its redemption obligation could equal at least $15.5 million, including a
premium of 25% or approximately $3.1 million. These amounts would be greater to
<PAGE>
the extent that (i) the highest closing bid price of the Common Stock during the
period beginning 10 trading days before the redemption event and ending five
business days after such event exceeds the Conversion Price that would have been
applicable if the preferred shares had been converted instead of redeemed, or
(ii) the required redemption were to occur more than five business days after
the Company's receipt of a conversion request (in which case interest would
begin to accrue on the redemption price at an annual rate equal to the prime
rate plus 5%).
Potential Obligation to Redeem Preferred Stock if Conversion Shares and
Warrant Shares Not Registered for Resale. Any holder of Series B Preferred Stock
will also have the right to require the Company to redeem all or a portion of
such holder's Series B Preferred Stock for cash in an amount equal to the
Special Redemption Price under any of the following circumstances:
* If for any reason the registration statement which includes this
Prospectus is not declared effective by the SEC on or before January
26, 1998,
* Subject to certain limited exceptions, if such registration statement
is declared effective but subsequently becomes unavailable for the
resale of Conversion Shares or Warrant Shares by the holders thereof,
or
* The Company becomes required to register additional conversion shares,
but for any reason fails to have a registration statement relating to
such shares declared effective by the SEC within 30 days after such
obligation first arises.
Potentially Unlimited Number of Common Shares Issuable Upon Conversion of
Preferred Stock. The number of shares of Common Stock issuable upon each
conversion of the Series B Preferred Stock will depend on the average of the
three lowest closing bid prices of the Common Stock during the period
immediately preceding such conversion and will increase as the market price of
the Common Stock declines below $6.68 per share (the maximum Conversion Price of
the Series B Preferred Stock). There is no limit on the number of shares of
Common Stock issuable in connection with the conversions of Series B Preferred
Stock, except that the issuance of more than 1,995,534 shares of Common Stock in
connection with such conversions is subject to the approval of the Company's
shareholders at a special meeting of shareholders scheduled for February ___,
1998. The table below illustrates how changes in the market price of the Common
Stock could effect the number of shares issuable upon such conversions:
Assumed Number of As % of Common Shares
Conversion Conversion Assumed Outstanding
Price (1) Shares Issuable After Conversion (2)
--------- --------------- --------------------
$0.50 25,900,000 72.2%
$1.00 12,950,000 56.5%
$2.00 6,475,000 39.3%
$2.78125 (3) 4,656,179 31.8%
$3.00 4,316,666 30.2%
$4.00 3,237,500 24.5%
$5.00 2,590,000 20.6%
$6.00 2,158,333 17.8%
$6.68 1,938,622 16.3%
(maximum Conversion Price)
- -----------------------
<PAGE>
(1) Based on the lesser of (A) $6.68 per share or (B) the average of the
three lowest closing bid prices of the Common Stock during the 20
trading days (30 trading days after February 25, 1998 under certain
conditions) immediately preceding the applicable conversion date
(subject to equitable adjustment for any stock splits, stock dividends,
reclassifications or similar events during such period). See
"Description of Securities--Preferred Stock--Series B Convertible
Participating Preferred Stock."
(2) Assumes that the number of shares outstanding at the time of conversion
equals the 9,984,672 shares of Common Stock outstanding on January 7,
1998 plus the number of shares issuable in connection with such
conversion. Also assumes that all shares of Preferred Stock are
converted at the Conversion Price indicated.
(3) Equals the Conversion Price that would have been applicable if all of
the Series B Preferred Stock had been converted as of January 8, 1998.
In addition, in the event of a liquidation of the Company, the holders of the
Series B Preferred Stock would be entitled to receive distributions in
preference to the holders of the Common Stock.
Past and Expected Future Losses and Operating Cash Flow Deficits; No
Assurance of Future Profits or Positive Operating Cash Flows. The Company
incurred losses of $4.1 million and $5.5 million during 1996 and the first nine
months of 1997, respectively. During such 1996 and 1997 periods, the Company had
a deficit in cash flow from operations of $4.2 million and $3.0 million,
respectively. Although the Company achieved profitability during 1995 and 1994,
it had a deficit in cash flow from operations of $1.9 million during 1995. In
addition, the Company incurred losses in 1991 through 1993. As of September 30,
1997, the Company had an accumulated deficit of $10.1 million. The Company
expects to report a loss and a deficit in cash flow from operations for the
fourth quarter of 1997. Under the terms of the Company's sale of its MEC and
LSIA subsidiaries on December 30, 1997, the operating income of such
subsidiaries ceased to be for the account of the Company effective after
November 30, 1997. As a result, the Company's losses and deficits in cash flow
from operations for the fourth quarter of 1997 have been, and future periods may
be, greater than if the Company had not sold MEC and LSIA. There can be no
assurance that the Company can regain or sustain profitability or positive
operating cash flow in any subsequent fiscal period.
Uncollectible Receivables Could Exceed Reserves. At September 30, 1997, the
Company's trade accounts and notes receivable aggregated approximately
$11,090,000, net of total allowances for collection losses and returns of
approximately $1,650,500. Accrued commissions, the payment of which generally
depends on the collection of such net trade accounts and notes receivable,
aggregated approximately $1,551,000 at September 30, 1997. At December 31, 1996,
the Company had restructured laser customer accounts in the aggregate amount of
approximately $1,785,000 (14.5% of the gross receivables as of such date),
resulting in the extension of the original payment terms by periods ranging from
12 to 60 months. The Company's liquidity and operating cash flow will be
adversely affected if additional extensions become necessary in the future.
Exposure to collection losses on technology-related receivables is principally
dependent on the Company's customers ongoing financial condition and their
ability to generate revenues from the Company's laser systems. Approximately 87%
of net receivables at September 30, 1997 relate to international accounts. The
Company's ability to evaluate the financial condition and revenue generating
ability of its prospective customers located outside of the United States is
generally more limited than for customers located in the United States. Although
the Company monitors the status of its receivables and maintains a reserve for
estimated losses, there can be no assurance that the Company's reserves for
estimated losses ($1,393,000 at September 30, 1997) will be sufficient to cover
<PAGE>
actual write-offs over time. Actual write-offs that materially exceed amounts
reserved could have a material adverse effect on the Company's consolidated
financial condition and results of operations.
Potential Liquidity Problems. During the quarter ended September 30, 1997,
the Company experienced a $2.2 million deficit in cash flow from operations (73%
of the year-to-date deficit), largely resulting from the low level of laser
system sales and the increase in the Company's research, development and
regulatory expenses. During the quarter, the Company also experienced
significant decreases in the amount of working capital (from $6.4 million to
$4.5 million) and cash and cash equivalents (from $3.1 million to $1.2 million).
Although the Company expects cash flow from operations to improve somewhat in
the fourth quarter of 1997 and the first quarter of 1998 relative to the level
for the third quarter of 1997, the Company expects to continue to incur deficits
in operating cash flow during such quarters. The Company expects that any such
improvements in cash flow from operations will depend on, among other things,
the Company's ability to sell and produce its new LaserScan LSX laser systems
and its Automated Disposable Keratome ("ADK") product on a commercial basis. See
"--New Products" below. As of December 31, 1997, the ADK product had not yet
been shipped on a commercial basis and the LSX laser system had not made any
significant contribution to the Company's revenue. Subject to these factors, the
Company believes that its balances of cash and cash equivalents, together with
expected operating cash flows and the availability of up to $2.0 million under
its revolving credit facility with Foothill will be sufficient to fund its
anticipated working capital requirements for the next 12-month period based on
modest growth and anticipated collection of receivables. However, a failure to
collect timely a material portion of current receivables or significant delays
in the shipment of the Company's LaserScan LSX or ADK products could have a
material adverse effect on the Company's liquidity.
Uncertainty Regarding Availability or Terms of Capital to Satisfy Possible
Additional Needs. The Company may need additional capital, including to fund the
following:
(i) any future negative cash flow from operations,
(ii) the amounts payable to the holders of the Series B
Preferred Stock as a result the failure of the Company to cause the
registration of the Shares on or before November 27, 1997 (based on the
1,295 shares of Series B Preferred Stock outstanding as of the date of
this Prospectus, such amounts have accrued in the amount of $129,500
through December 27, 1997 and at the rate of $259,000 per month (pro
rated daily) thereafter until the effective date of the registration
statement that includes this Prospectus,
(iii) the introduction of its laser systems into the U.S.
market after receiving FDA approval (the Company believes the earliest
these expenses might occur is the second half of 1998), and
(iv) to satisfy certain cash payment obligations under its PMA
acquisition agreement of July 1997. (Such cash payment obligations
include $1.75 million payable in the event the FDA approves the PMA
before July 29, 1998 and $1.0 million payable in the event that the FDA
approves the Company's scanning laser for commercial sale in the U.S.
before April 1, 1998.)
In addition, the Company may seek alternative sources of capital to fund its
product development activities and to consummate future strategic acquisitions.
Except for additional borrowing available (as of December 31, 1997, up to
$2.0 million) under its revolving credit facility with Foothill through June 15,
1998 and approximately $6.5 million (subject to certain post-closing
<PAGE>
adjustments) scheduled to be received from the sale or redemption of shares of
the common stock of Vision Twenty-One, Inc. ("Vision 21") received by the
Company in connection with its December 1997 sale of MEC and LSIA (see "Recent
Developments--Sale of MEC and LSIA"), the Company has no present commitments to
obtain additional capital, and no assurance can be given as to whether or on
what terms the Company will be able to obtain additional capital. On December
30, 1997, the Company and Foothill amended the Foothill loan facility (i) to
make the term loan ($2.0 million at December 31, 1997) payable in full on June
15, 1998 (rather than in monthly installments of $1.33 million beginning on May
1, 1998) and (b) to make availability of all borrowings under the revolving loan
facility terminate on June 15, 1998 (rather than declining by $1.33 million per
month beginning on August 1, 1998).
To the extent that the Company satisfies its future financing requirements
through the sale of equity securities, holders of Common Stock may experience
significant dilution in earnings per share and in net book value per share. Such
dilution may be more significant if the Company were again to sell additional
preferred stock with a conversion price linked to the market price of the Common
Stock at the time of conversion. The Foothill financing or other 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.
Risks Relating To Vision 21. As described in more detail under "Recent
Developments--Sale of MEC and LSIA," Vision 21 has agreed to pay to the Company
on May 29, 1998 an amount equal to the amount (the "Shortfall Payment"), if any,
by which the gross proceeds of sales of shares of Vision 21 stock received by
the Company in connection with its sale of MEC and LSIA fall short of $6.5
million (subject to certain post-closing adjustments). Both the value of the
Vision 21 Shares and the ability of Vision 21 to make the Shortfall Payment (if
any is required) is subject to risks, including without limitation the risks
disclosed in Vision 21's filings with the SEC and the following risks included
in Vision 21's press release dated December 31, 1997 relating to its acquisition
of MEC and LSIA:
[R]isks associated with [Vision 21]'s ability to finance future growth;
[Vision 21]'s ability to successfully and profitably to manage its
managed care practices; [Vision 21]'s ability to retain key employees
and agents of acquired businesses and managed practices; the loss of
significant management contract(s); profitability at sites managed by
Vision Twenty-One; the ability of [Vision 21] to successfully integrate
its acquisitions; the ability of [Vision 21] to effectively manage the
cost of its acquisitions; any material impact on future revenues of its
acquired businesses; changes in insurance coverage, government laws and
regulations regarding health care or managed care contracting; the
ability of [Vision 21] to retain managed care contracts with acceptable
terms; and other risks, including those identified in [Vision 21]'s
most recent 10-Q and S-1 registration statement and in other documents
filed by [Vision 21] with the [SEC]."
Possible Dilutive Issuance of Common Stock--LaserSight Centers. The Company
has agreed, based on a previously-reported acquisition agreement (the "Centers
Agreement") entered into in 1993 and modified in July 1995 and March 1997, to
issue to the former shareholders and option holders (including two trusts
related to the Chairman of the Board of the Company and certain former officers
and directors of the Company) of LaserSight Centers, the Company's
development-stage subsidiary, up to 600,000 unregistered shares of Common Stock
(the "Centers Contingent Shares") based on the Company's future pre-tax
operating income through March 2002 from performing PRK, PTK or other refractive
laser surgical procedures. The Centers Contingent Shares are to be issued at the
<PAGE>
rate of one share per $4.00 of such operating income. As of September 30, 1997,
the Company had not accrued any amount of such pre-tax operating income. There
can be no assurance that any issuance of Centers Contingent Shares will be
accompanied by an increase in the Company's per share operating results. The
Company is not obligated to pursue strategies that may result in the issuance of
Centers Contingent Shares. It may be in the interest of the Chairman of the
Board for the Company to pursue business strategies that maximize the issuance
of Centers Contingent Shares.
Possible Dilutive Issuance of Common Stock--Florida Laser Partners. Based
on a previously-reported royalty agreement entered into in 1993 and modified in
July 1995 and March 1997, the Company is obligated to pay to a partnership whose
partners include the Chairman of the Board of the Company and certain former
officers and directors of the Company a royalty of up to $43 (payable in cash or
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 on an excimer laser system owned or operated by LaserSight Centers or
its affiliates. No such payment obligation has arisen as of September 30, 1997
because royalties do not begin to accrue until the earlier of March 2002 or the
delivery of an additional 600,000 Centers Contingent Shares (none of which had
accrued as of such date). There can be no assurance that any issuance of Royalty
Shares will be accompanied by an increase in the Company's per share operating
results. It may be in the interest of the Chairman of the Board for the Company
to pursue business strategies that maximize the issuance of Royalty Shares.
Possible Dilutive 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 annual 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) up to 750,000 shares of Common Stock (collectively,
"Farris Contingent Shares"). To date, 406,700 Farris Contingent Shares have been
issued based on the operating results of the Farris Group through December 31,
1995. As a result of the losses The Farris Group incurred during 1996 and
expects to incur during 1997, no Farris Contingent Shares became issuable for
1996 or are expected to become issuable for 1997. If additional Farris
Contingent Shares become issuable, goodwill and the resulting amortization
expense will increase. There can be no assurance that any issuance of Farris
Contingent Shares will be accompanied by an increase in the Company's per share
operating results.
Acquisition- and Financing-Related Contingent Commitments to Issue
Additional Common Shares. In connection with the acquisition of the assets of
the Northern New Jersey Eye Institute by the Company's LSIA subsidiary in July
1996, the Company agreed to issue up to 102,798 additional shares of Common
Stock if the fair market value of the Common Stock in July 1998 is less than $15
per share. The Company's recent sale of LSIA (see "Recent Developments--Sale of
MEC and LSIA") does not affect this contingent obligation. The Company may from
time to time include similar provisions in future acquisitions and financings.
Persons who are the beneficiaries of such provisions effectively receive some
protection from declines in the market price of the Common Stock, but other
shareholders of the Company can expect to incur additional dilution of their
ownership interest in the event of a decline in the price of the Common Stock.
The factors to be considered by the Company in including such provisions may
include the Company's cash resources, the trading history of Common Stock, the
negotiating position of the selling party or the investors, as applicable, and
the extent to which the Company estimates that the expected benefit from the
acquisition or financing exceeds the expected dilutive effect of the
price-protection provision.
Dependence on Key Personnel. The Company is dependent on its executive
officers and other key employees, especially Michael R. Farris, its President
and Chief Executive Officer, and J. Richard Crowley, the President of its
<PAGE>
LaserSight Technologies subsidiary. A loss of one or more such officers or key
employees, especially of Mr. Farris or Mr. Crowley, could have a material
adverse effect on the Company's business. The Company does not carry "key man"
insurance on Mr. Farris, Mr. Crowley or any other officers or key employees.
Risks Associated with Past and Possible Future Acquisitions. The Company
has made several significant corporate acquisitions in the last four years,
including MRF in 1994, Photomed in 1997, and the IBM laser patents in 1997.
These prior acquisitions, as well as any future acquisition, may not achieve
adequate levels of revenue, profitability or productivity or may not otherwise
perform as expected. Acquisitions involve special risks, including risks
associated with unanticipated liabilities and contingencies, diversion of
management attention and possible adverse effects on earnings resulting from
increased goodwill amortization, increased interest costs, the issuance of
additional securities and difficulties related to the integration of the
acquired businesses. Although the Company is currently focusing on its existing
operations, the future ability of the Company to achieve growth through
acquisitions will depend on a number of factors, including the availability of
attractive acquisition opportunities, the availability of funds needed to
complete acquisitions, the availability of working capital needed to fund the
operations of acquired businesses and the effect of existing and emerging
competition on operations. Should additional acquisitions be sought, there can
be no assurance that the Company will be able to successfully identify
additional suitable acquisition candidates, complete additional acquisitions or
integrate acquired businesses into its operations.
Amortization of Significant Intangible Assets. Of the Company's total
assets at September 30, 1997, approximately $31.1 million (57%) were intangible
assets, of which approximately $14.8 million reflects goodwill (which is being
amortized using an estimated life ranging from 12 to 25 years), approximately
$11.5 million reflects the cost of patents (which are being amortized over a
period ranging from 8 to 17 years), and approximately $4.8 million reflects the
cost of licenses and technology acquired (which is being amortized over a period
ranging from 31 months to 12 years). Upon the Company's sale of its MEC and LSIA
subsidiaries in December 1997 (see "Recent Developments--Sale of MEC and LSIA"),
such intangible assets were reduced by approximately $7.5 million. Goodwill is
an intangible asset that represents the difference between the total purchase
price of the acquisitions and the amount of such purchase price allocated to the
fair value of the net assets acquired. Goodwill and other intangibles are
amortized over a period of time, with the amount amortized in a particular
period constituting a non-cash expense that reduces the Company's net income (or
increases the Company's net loss) in that period. A reduction in net income
resulting from the amortization of goodwill and other intangibles may have an
adverse impact upon the market price of the Company's Common Stock. In addition,
in the event of a sale or liquidation of the Company or its assets, there can be
no assurance that the value of such intangible assets would be recovered.
In accordance with SFAS 121, the Company reviews intangible assets for
impairment whenever events or changes in circumstances, including a history of
operating or cash flow losses, indicate that the carrying amount of an asset may
not be recoverable. In such cases, the carrying amount of the asset is compared
to the estimated undiscounted future cash flows expected to result from the use
of the asset and its eventual disposition. If the sum of the expected
undiscounted future cash flows is less than the carrying amount of the asset, an
impairment loss will be computed and recognized in accordance with SFAS 121.
Expected cash flows are based on factors including historical results, current
operating budgets and projections, industry trends and expectations, and
competition.
Year 2000 Concerns. The Company believes that it has prepared its computer
systems and related applications to accommodate date-sensitive information
relating to the Year 2000. The Company expects that any additional costs related
to ensuring such systems to be Year 2000 compliant will not be material to the
<PAGE>
financial condition or results of operations of the Company. Such costs will be
expensed as incurred. In addition, the Company is discussing with its vendors
and customers the possibility of any interface difficulties which may affect the
Company. To date, no significant concerns have been identified. However, there
can be no assurance that no Year 2000-related operating problems or expenses
will arise with the Company's computer systems and software or in their
interface with the computer systems and software of the Company's vendors and
customers.
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 require
pre-market approval by the FDA before they can be 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.
The Company has completed clinical studies in Phase 2a and 2b for PRK. Such
data were presented to the FDA and on September 17, 1997 the Company was granted
permission to expand into Phase 3 Myopic PRK studies. The Phase 3 PRK clinical
investigation is now under way. The Company is also conducting a Phase 2 trial
for PARK (Photo-Astigmatic Refractive Keratectomy). The FDA has informed the
Company that it may combine the results from all its studies in its PMA
application. That application is being prepared for submission in early 1998.
The Company also has an Investigational Device Exemption approved by the FDA for
the treatment of glaucoma by laser trabeculodissection. The Company has recently
completed a Phase 1 study in blind eyes and will submit the results to the FDA
to request expansion into a small population of sighted glaucoma patients.
The Company has requested a 510(k) approval from the FDA for its
recently-announced ADK product. The Company expects to receive a response from
the FDA in early 1998.
Uncertainty Concerning Patents--International. Should LaserSight
Technologies' lasers infringe upon any valid and enforceable patents in
international markets, then LaserSight Technologies may be required to obtain
licenses for such patents. Should such licenses not be obtained, LaserSight
Technologies might be prohibited from manufacturing or marketing its PRK-UV
lasers in those countries where patents are in effect. The Company's
international sales accounted for 47% and 42%, of the Company's total revenues
during 1996 and the nine months ended September 30, 1997, respectively. Such
percentages are expected to increase in future periods as a result of the
Company's recent sales of its MEC and LSIA subsidiaries. See "Recent
Developments--Sale of MEC and LSIA."
Uncertainty Concerning Patents--U.S. Should LaserSight Technologies' lasers
infringe upon any valid and enforceable patents held by Pillar Point Partners (a
partnership of which the general partners are subsidiaries of Visx and Summit
Technologies) in the U.S., then LaserSight Technologies may be required to
<PAGE>
obtain a license for such patents. In connection with its March 1996 settlement
of litigation with Pillar Point Partners, the Company agreed to notify Pillar
Point Partners before the Company begins manufacturing or selling its laser
systems in the United States. Should such licenses be required but not obtained,
LaserSight Technologies might be prohibited from manufacturing or marketing its
PRK-UV lasers in the U.S.
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 have existing products and distribution systems in the marketplace
and are substantially larger, better financed, and better known. 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 or develop 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.
New Products. There can be no assurance that the Company will not
experience difficulties that could delay or prevent the successful development,
introduction and marketing of its new LaserScan LSX excimer laser, its
recently-announced ADK product, and other new products and enhancements, or that
its new products and enhancements will be accepted in the marketplace. As is
typical in the case of new and rapidly evolving industries, demand and market
acceptance for recently-introduced technology and products are subject to a high
level of uncertainty. In addition, announcements of new products (whether for
sale in the near future or at some later date) may cause customers to defer
purchasing existing Company products.
Uncertainty of Market Acceptance of Laser-Based Eye Treatment. The Company
believes that its achievement of profitability and growth will depend in part
upon broad acceptance of PRK or LASIK in the United States and other countries.
There can be no assurance that PRK or LASIK will be accepted by either the
ophthalmologists or the public as an alternative to existing methods of treating
refractive vision disorders. The acceptance of PRK and LASIK may be affected
adversely by their cost, possible concerns relating to safety and efficacy,
general resistance to surgery, the effectiveness and lower cost of alternative
methods of correcting refractive vision disorders, the lack of long-term
follow-up data, the possibility of unknown side effects, the lack of third-party
reimbursement for the procedures, any future unfavorable publicity involving
patient outcomes from use of PRK or LASIK systems, and the possible shortages of
ophthalmologists trained in the procedures. The failure of PRK or LASIK to
achieve broad market acceptance 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,
<PAGE>
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. This could in
turn result in longer payment cycles and greater difficulty in collection of
receivables. See "--Receivables" above. 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 business practices.
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. An award of
damages in excess of the Company's 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 insurance coverage is limited to $6,000,000, including
up to $5,000,000 of coverage under an excess liability policy.
Manufacturing Risks. The Company contracts with third parties for certain
components used in its lasers. Several of these components are 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. 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.
No 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 or shipments may cause a significant
fluctuation in period-to-period operating results.
USE OF PROCEEDS
If all of the Series B Warrants (with an exercise price of $5.91 per share)
are exercised, the Company will realize proceeds in the amount of $4,668,900.
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 sale of the Shares by the Selling Shareholders.
RECENT DEVELOPMENTS
Sale of MEC and LSIA. On December 30, 1997, the Company sold its MEC and
LSIA subsidiaries to Vision 21 in a transaction which was effective as of
December 1, 1997. The total consideration paid by Vision 21 to the Company
consisted of $6.5 million in cash paid at the closing and 820,085 unregistered
shares of Vision 21 common stock, subject to certain post-closing adjustments
<PAGE>
(such shares, the "Vision 21 Shares"). The Vision 21 Shares are to be liquidated
pursuant to the following schedule (or sooner, at Vision 21's option):
Month Approximate
(1998) Percentage
------ ----------
February........ 21%
March........... 21%
April........... 28%
May............. 30%
---
Total........ 100%
====
Under its agreements with the Company, Vision 21 is to liquidate the Vision 21
Shares by a sale through a market maker designated by Vision 21 pursuant to a
shelf registration statement or a private placement, or its repurchase of the
Vision 21 Shares. The Company is entitled to receive a minimum of $6,500,000 and
a maximum of $7,475,000 from the liquidation of the Vision 21 Shares. If the
Company has not received at least $6,500,000 (subject to certain post-closing
adjustments) from the liquidation of Vision 21 Shares by May 29, 1998, then on
such date Vision 21 is to pay the Company such shortfall in cash. To the extent
that the liquidation of the Vision 21 Shares
Reduction in Foothill Borrowings. The Company used $2.0 million of its cash
proceeds from the sale of MEC and LSIA to reduce the principal balance of the
Company's term loan with Foothill from $4.0 million to $2.0 million. The Company
used approximately $1.5 million of additional cash proceeds from the sale to
repay in full the outstanding balance under its revolving loan facility with
Foothill.
Restructuring of Foothill Loan Facility. Effective as of December 30,
1997, the Company has restructured the terms of its agreements with Foothill as
follows: The maximum amount available under its revolving loan facility has been
reduced to $2.0 million. In addition, the Company pledged its Vision 21 Shares
to Foothill as collateral under the loan facility. Moreover, after the Company
has received aggregate gross proceeds of $2.5 million from the liquidation of
the Vision 21 Shares, any additional proceeds must first be applied to repay the
Company's term loan with Foothill, and any further proceeds to retire any
then-outstanding advances under its revolving loan with Foothill. In any event,
the Company's term loan and revolving loan are to be paid in full by June 15,
1998. Until June 16, 1998, Foothill has waived the Company's compliance with the
financial covenants contained in the agreements between the Company and
Foothill.
<PAGE>
CAPITALIZATION
The following table sets forth (i) the actual capitalization of the Company
at September 30, 1997, (ii) the capitalization of the Company at such date, as
adjusted to reflect the redemption of 305 shares of Series B Preferred Stock on
October 28, 1997 and (iii) the pro forma capitalization of the Company at
September 30, 1997, as adjusted to reflect the sale of the Company's MEC and
LSIA subsidiaries on December 30, 1997. See "Recent Developments--Sale of MEC
and LSIA."
<TABLE>
<CAPTION>
September 30, 1997
------------------
Pro Forma
Actual As Adjusted As Adjusted
------ ----------- -----------
<S> <C> <C> <C>
Current portion of capital lease obligation $ 224,549 $ 224,549 $ --
=========== =========== =============
Long-term obligations $ 971,018 $ 971,018 $ 500,000
Redeemable Convertible Preferred Stock, Series
B, par value $.001 per share; authorized
10,000,000 shares; actual 1,600 shares; as
adjusted and pro forma as adjusted 1,295 shares 14,374,027 11,633,978 11,633,978
Stockholders' equity:
Common Stock, par value $.001 per share
authorized 20,000,000 shares; actual, as
adjusted, and pro forma as adjusted
10,149,872 shares 10,150 10,150 10,150
Additional paid-in capital 40,018,241 39,586,290 39,586,290
Paid-in capital-warrants 592,500 592,500 592,500
Stock subscription receivable (1,140,000) (1,140,000) (1,140,000)
Accumulated deficit (10,112,240) (10,112,240) (__,___,___)
Treasury stock, actual, as adjusted, and
pro forma as adjusted 170,200 shares (632,709) (632,709) (632,709)
------------- ------------- ------------
Total capitalization and stockholders' equity $ 44,080,987 $ 40,908,987 $
============= ============= ============
</TABLE>
<PAGE>
DESCRIPTION OF SECURITIES
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 January 7, 1998, 9,984,672 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 1,295 shares of the
Series B Preferred Stock.
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.
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.
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.
Series A Convertible Preferred Stock
On January 10, 1996, the Company issued 116 shares of Series A Convertible
Preferred Stock, par value $.001 per share (the "Series A Preferred Stock"). All
of such shares had been converted into Common Stock.
<PAGE>
Series B Convertible Participating 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 by paying $3,172,000 (including a 4% redemption premium).
The Series B Preferred Stock is convertible in whole or in part into Common
Stock at the option of any holder of Series B Preferred Stock on any date or
dates until August 29, 2000, on which date all Series B Preferred Stock
remaining outstanding will automatically be converted into Common Stock. As of
any applicable conversion date, the Conversion Price will equal the lesser of
$6.68 per share of Common Stock or the average of the three lowest closing bid
prices of the Common Stock during the 20 trading days preceding such conversion
date (during the 30 trading days preceding the conversion date if the five-day
average closing bid price of the Common Stock on February 25, 1998 is less than
$5.138 per share). 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.
Following its redemption of 305 shares of Series B Preferred Stock in
October 1998, the Company has the option (but only after its sale or license of
the IBM patents to third parties and subject to the absence of any mandatory
redemption events or defaults having occurred, and subject to certain
procedures) to redeem up to an additional 335 shares of the Series B Preferred
Stock (for a total of 640 shares, or 40% of the number issued) for cash by
giving notice to the holders of the Series B Preferred Stock at least 10
business days before the redemption and, in any event, no later than January 12,
1998. The redemption price payable by the Company in the event of such a
voluntary redemption would include a 14% premium. 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, the Series B Preferred Stock is subject to redemption at the
option of its holders should the Company default on certain obligations. Under
these provisions, if for any reason the Company's shareholders do not approve by
February 28, 1998 the possible issuance of an indefinite number of shares of
Common Stock upon conversion of the Series B Preferred Stock, the Company will
be obligated to redeem, at the Special Redemption Price (as defined below), a
number of shares of Series B Preferred Stock sufficient to cause the number of
Shares issuable after giving effect to such partial redemption to equal no more
than 50% of the number of common shares that could then be issued without
breaching the 1,995,534 share limitation resulting from a listing rule of the
Nasdaq National Market. 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 125% or (ii) the current value of the Common Stock, using the
price per share of Common Stock, which the holders of such shares of Series B
Preferred Stock would otherwise be entitled to receive upon conversion. 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>
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.
Warrants
In connection with the private placement of Series A Preferred Stock on
January 10, 1996, the Company issued to its placement agent and to an assignee
of the placement agent, the 1996 Warrants to purchase a total 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 establishment of its Foothill credit facility in
April 1997, the Company issued to Foothill warrants (the "Foothill Warrants") to
purchase 500,000 shares of Common Stock at an exercise price of $6.0667 per
share. In addition, the Foothill Warrants have certain anti-dilution features
which provide for approximately 50,000 additional shares as a result of the
issuance of the Series B Preferred Stock and a corresponding reduction in the
exercise price to $5.52 per share. The Foothill Warrants may be exercised at any
time after March 31, 1998 but prior to April 1, 2002.
In connection with the 1997 Private Placement, the Company agreed to issue
to the holders and the Placement Agent the Series B Warrants to purchase 750,000
and 40,000 Warrant Shares at a price of $5.91 per share at any time before
August 29, 2002. The Company is obligated to maintain the effectiveness of the
registration of the Warrant Shares under the Securities Act.
<PAGE>
PLAN OF DISTRIBUTION
Conversion Shares. The Company will issue Conversion Shares upon the
conversion from time to time of the outstanding shares of Series B Preferred
Stock pursuant to the terms governing the Series B Preferred Stock.
Warrant Shares. The Company will issue Warrant Shares from time to time
upon the exercise of the Series B Warrants by the holders thereof. The Company
will receive from such holders the exercise price of the Series B Warrants upon
such exercise. The Series B Preferred Stock and Series B Warrants were issued by
the Company in a private placement in August 1997. See "Description of
Securities."
The Company will not receive any proceeds from the resale of the Shares.
Pursuant to this Prospectus, all or a portion of the Shares may be sold
from time to time by the Selling Shareholders or, subject to certain conditions,
their pledgees, donees, transferees or other successors-in-interest, including,
without limitation, Bear, Stearns International Limited. 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 the Shares will be offered for
sale 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 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 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). In addition, any securities covered by this Prospectus which
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus.
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.
The Selling Shareholders and any broker-dealer who acts in connection with
the resale of the 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 for a period of one
business day prior to the commencement of such distribution. In addition and
without limiting the foregoing, the Selling Shareholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Regulation M. These provisions may
limit the timing of purchases and sales of shares of Common Stock by the Selling
Shareholders.
A supplement to this Prospectus will be filed, if required, to disclose (i)
the name of the participating broker-dealer(s), (ii) the number of Shares
involved, (iii) the price at which such Shares were sold, (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, and (v) other facts material to the transaction, including the name
and other information regarding the Selling Shareholders.
<PAGE>
The Company is required to maintain the effectiveness of the Registration
Statement until such time as all of the Shares have been disposed of in
accordance with the intended methods of disposition set forth in the
Registration Statement or the Shares are no longer subject to volume or manner
of sale restrictions under the securities laws.
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 1,295 outstanding shares
of Series B Preferred Stock had been converted into Common Stock as of January
8, 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 Common Stock
Shares of Beneficially Owned Beneficially Owned
Preferred Prior to the Offering Shares of After the Offering
Stock --------------------- Common ------------------
Presently Conversion Warrant Stock Number Percent of
Selling Shareholder Owned (1) Shares(1) Shares(2) to be Sold of Shares Outstanding*
------------------- --------- --------- --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
CC Investments, LDC 404 1,452,584 234,375 1,686,959 -- --
Societe Generale 243 873,708 140,625 1,014,333 -- --
Shepherd Investments 324 1,164,944 187,500 1,352,444 -- --
International, Ltd.
Stark International 324 1,164,944 187,500 1,352,444 -- --
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) As of the date of this Prospectus, no Selling Shareholder owned any
shares of Common Stock. The number of Conversion Shares indicated is the
pro forma number that would have been owned by a Selling Shareholder if
it had converted all of its shares of Series B Preferred Stock into
Common Stock as of January 8, 1998, without giving effect to the NASDAQ
20% Limit. The actual number of Conversion Shares to be received by such
Selling Shareholder, which may be significantly more or less than the
number indicated, will be reflected in a supplement to (or amendment of)
this Prospectus following the conversion of such Series B Preferred
Stock.
(2) Assumes the exercise in full by such Selling Shareholder its Series B
Warrants. See "Description of Securities--Warrants."
</FN>
</TABLE>
<PAGE>
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for the
Company by Sonnenschein Nath & Rosenthal, Chicago, Illinois.
EXPERTS
The consolidated financial statements of LaserSight Incorporated and
subsidiaries as of December 31, 1996 and for each of the years in the two-year
period 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 for the year ended December 31, 1994 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 SEC 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 SEC. For further information with respect to the Company and
the Shares, reference is made to the Registration Statement and the exhibits
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 SEC. A copy of the Registration Statement, including
exhibits and schedules thereto, filed by the Company with the SEC, as well as
other reports, proxy statements and other information filed by the Company may
be inspected without charge at the office of the SEC, 450 Fifth Street, N.W.,
Washington, D.C., and at the following Regional Offices of the SEC: 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 SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. The SEC maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC. The address of such site is
http://www.sec.gov. Such reports, proxy statements and other information
concerning the Company can also be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 "K" Street, N.W., Washington, D.C.
20006.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
SEC registration fee.......................................... $ 8,320.11
Legal fees and expenses....................................... 40,000.00
Accountants' fees............................................. 20,000.00
Miscellaneous................................................. 1,679.89
-----------
Total..................................................... $ 70,000.00
===========
---------------------------------------
The foregoing items, except for the SEC registration fee, are estimated.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a
corporation to indemnify its directors and officers as well as other employees
and individuals in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. In addition, pursuant to the
authority of Delaware law, the Certificate of Incorporation, as amended, of the
Company also eliminates this monetary liability of directors to the fullest
extent permitted by Delaware law.
The Company maintains directors' and officers' liability insurance policies
covering certain liabilities of persons serving as officers and directors and
providing reimbursement to the Registrant for its indemnification of such
persons.
Item 16. Exhibits
The exhibit index set forth on page II-3 of this Registration Statement is
hereby incorporated herein by reference.
<PAGE>
SIGNATURES
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 Form S-3 and has duly caused this Amendment to
Registration Statement to be filed on its behalf by the undersigned, thereunto
duly authorized in the County of St. Louis, State of Missouri, this 9th day of
January, 1998.
LASERSIGHT INCORPORATED
By: /s/ Gregory L. Wilson
-----------------------------
Gregory L. Wilson, Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed by the following persons in the
capacities on the dates indicated.
/s/ Michael R. Farris* January 9, 1998
- ------------------------------------------------
Michael R. Farris, President, Chief Executive
Officer, and Director
/s/ Francis E. O'Donnell, Jr., M.D.* January 9, 1998
- ------------------------------------------------
Francis E. O'Donnell, Jr., M.D., Chairman of the
Board and Director
/s/ J. Richard Crowley* January 9, 1998
- ------------------------------------------------
J. Richard Crowley, Director
January _, 1998
- ------------------------------------------------
Terry A. Fuller, Ph.D., Director
/s/ Richard C. Lutzy* January 9, 1998
- ------------------------------------------------
Richard C. Lutzy, Director
/s/ David T. Pieroni* January 9, 1998
- ------------------------------------------------
David T. Pieroni, Director
/s/ Thomas Quinn* January 9, 1998
- ------------------------------------------------
Thomas Quinn, Director
/s/ Gregory L. Wilson January 9, 1998
- ------------------------------------------------
Gregory L. Wilson, Chief Financial Officer
(Principal financial and accounting officer)
- ---------------------
*/ By: /s/ Gregory L. Wilson
----------------------------------------
(Gregory L. Wilson, as Attorney-in-Fact)
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description
--- -----------
5.1 Opinion of Sonnenschein Nath & Rosenthal.
23.1 Consent of KPMG Peat Marwick LLP.*
23.2 Consent of Lovelace, Roby & Company, P.A.*
23.3 Consent of Sonnenschein Nath & Rosenthal (see Exhibit 5.1).
24.1 Powers of Attorney.*
- ------------------------------------
* Previously filed.
SONNENSCHEIN NATH & ROSENTHAL
8000 SEARS TOWER
CHICAGO, ILLINOIS 60026
Jacques K. Meguire
(312) 876-8169
January 12, 1998
LaserSight Incorporated
12161 Lackland Road
St. Louis, Missouri 63146
Gentlemen:
We have acted as counsel to LaserSight Incorporated, a Delaware
corporation (the "Company"), in connection with the registration by the Company
under the Securities Act of 1933 (the "Act") pursuant to the Company's
Registration Statement on Form S-3 (File No. 333-36655) filed with the
Securities and Exchange Commission (the "Commission") on September 29, 1997, as
amended by Amendment No. 1 thereto filed on November 20, 1997, as further
amended by Amendment No. 2 thereto filed with the Commission on December 15,
1997, and as further amended by Amendment No. 3 thereto filed or to be filed
with the Commission on or about the date of this letter (as so amended, the
"Registration Statement") of an aggregate of up to 10,102,358 shares (the
"Shares") of the Company's common stock, par value $.001 per share (the "Common
Stock") issued or issuable from time to time by the Company as follows:
(i) an aggregate of up to 9,312,358 shares issuable upon the
conversion (such shares, the "Conversion Shares") from time to
time of the Company's Series B Convertible Participating
Preferred Stock, par value $.001 per share (the "Series B
Preferred Stock"); and
(ii) up to 790,000 shares (the "Warrant Shares" and with the
Conversion Shares, collectively, the "Shares") issuable upon
the exercise of outstanding warrants to purchase Common Stock
(such warrants, the "Series B Warrants") issued by the Company
in connection with the private placement of the Series B
Preferred Stock in August 1997.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Certificate of
Incorporation of the Company, as amended to date (the "Certificate"); the Waiver
Agreements dated on or about December 24, 1997 between the Company and each of
<PAGE>
LaserSight Incorporated
January 12, 1998
Page 2
the holders of record of Series B Preferred Stock; the letter agreements dated
December 24, 1997 and January 7, 1998 between the Company and Societe Generale;
the preliminary proxy statement as filed by the Company with the Commission on
December 22, 1997 (the "Preliminary Proxy Statement"); the proposed amendment to
the Certificate described in the Preliminary Proxy Statement (the "Amendment")
that, upon its approval by the holders of a majority of the outstanding shares
of Common Stock and its filing with, and acceptance by, the Secretary of State
of the State of Delaware, would increase the number of authorized shares of
Common Stock from 20,000,000 to 40,000,000; various resolutions of the Board of
Directors of the Company, and such agreements, instruments, certificates of
public officials and others, and such other documents, certificates and records,
and have made such other investigations, as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
We have assumed the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals of
such latter documents. In making our examination of documents executed by
parties other than the Company, we have assumed that such parties had the power,
corporate and otherwise, to enter into and perform their respective obligations
thereunder and have also assumed the due authorization by all requisite action,
corporate and otherwise, and the execution and delivery by such parties of such
documents and the validity and binding effect thereof. As to any facts material
to the opinions expressed herein, we have relied upon oral or written statements
and representations of officers and other representatives of the Company and
others.
We note that (i) the Certificate authorizes the company to issue up to
20,000,000 shares of Common Stock, (ii) the Certificate provides that the
Company shall not issue more than 1,995,534 Conversion Shares and Warrant Shares
in the aggregate without the prior approval of the holders of the Common Stock
as required by the rules of the National Association of Securities Dealers,
Inc. (the "20% NASDAQ Limit"), and (iii) the Certificate requires the Company to
authorize and reserve for issuance an aggregate of not less than 3,750,000
Conversion Shares and Warrant Shares and to take all necessary action
(including, if necessary, the obtaining of shareholder approval) to authorize
the issuance of additional Common Stock in the event that such 3,750,000 share
number shall ever become less than 175% of the aggregate number of Conversion
Shares and Warrants Shares then issuable.
<PAGE>
LaserSight Incorporated
January 12, 1998
Page 3
Based upon and subject to the foregoing, we are of the opinion that:
(i) an aggregate of 1,995,534 Shares has been duly authorized
for issuance upon the conversion of the Series B Preferred Stock in
accordance with the Certificate, or the exercise of the Series B
Warrants in accordance with the terms thereof, as applicable, and will,
when so issued, will be validly issued, fully paid and nonassessable;
and
(ii) upon the approval by the shareholders of the Company of
the elimination of the 20% NASDAQ Limit as contemplated by the
Preliminary Proxy Statement, an aggregate of 3,750,000 Shares (which
number includes the number referenced in clause (i) above) will have
been duly authorized for issuance upon the conversion of the Series B
Preferred Stock in accordance with the Certificate, or the exercise of
the Series B Warrants in accordance with the terms thereof, as
applicable, and will, when so issued, be validly issued, fully paid and
nonassessable; and
(iii) upon the approval by the shareholders of the Company of
both the Amendement and the elimination of the 20% NASDAQ Limit, as
contemplated by the Preliminary Proxy Statement, and the filing of the
Amendment with, and its acceptance by, the Secretary of State of the
State of Delaware, an aggregate of 10,102,358 Shares (which number
includes the numbers referenced in clauses (i) and (ii) above) will
have been duly authorized for issuance upon the conversion of the
Series B Preferred Stock in accordance with the Certificate, or the
exercise of the Series B Warrants in accordance with the terms thereof,
as applicable, and will, when so issued, be validly issued, fully paid
and nonassessable.
<PAGE>
LaserSight Incorporated
January 12, 1998
Page 4
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" in the prospectus contained in the
Registration Statement. We do not, in giving such consent, admit that we are
within the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
SONNENSCHEIN NATH & ROSENTHAL
By: /s/ Jacques K. Meguire
--------------------------
Jacques K. Meguire
