Registration No. 333-________
As filed with the Securities and Exchange Commission on April 28, 2000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LASERSIGHT INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 3845 65-0273162
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
3300 University Boulevard, Suite 140
Winter Park, Florida 32792
(407) 678-9900
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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Mr. Gregory L. Wilson Copy to:
Chief Financial Officer Mark L. Dosier, Esq.
LaserSight Incorporated Sonnenschein Nath & Rosenthal
3300 University Boulevard, Suite 140 8000 Sears Tower
Winter Park, Florida 32792 Chicago, Illinois 60606
(407) 678-9900 (312) 876-8000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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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. [ ]____
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If the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Each Class of Amount to be Proposed Maximum Offering Proposed Maximum Amount of
Securities to be Registered Registered (1) Price per Share (2) Aggregate Offering Price (2) Registration Fee
--------------------------- -------------- ------------------- ---------------------------- -----------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par 1,346,030 $4.06 $5,464,882 $1,442.73
value(3) shares
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(1) In the event of a stock split, stock dividend, or similar transaction
involving the Common Stock of the Company, in order to prevent
dilution, the number of shares of Common Stock registered hereby shall
be automatically increased to cover the additional shares of Common
Stock in accordance with Rule 416.
(2) Estimated solely for purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
Based on the average high and low prices reported for the Common Stock
on The Nasdaq Stock Market on April 24, 2000.
(3) Includes the associated preferred stock purchase rights (the "Rights")
to purchase one one-thousandth of a share of Series E Junior
Participating Preferred Stock. The Rights initially are attached to and
trade with the Common Stock of the Registrant. The value attributable
to such Rights, if any, is reflected in the offering price of the
Common Stock.
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.
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The information contained in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION DATED APRIL 28, 2000
PROSPECTUS
1,346,030 Shares
LASERSIGHT INCORPORATED
Common Stock
This prospectus relates to the following 1,346,030 shares of common
stock of LaserSight Incorporated being offered for sale by the selling
stockholders named in this prospectus:
o 1,269,841 shares of LaserSight common stock that were issued
to the investors in connection with LaserSight's January 2000
private placement transaction.
o 76,189 shares of LaserSight common stock that were issued to
the investors in connection with LaserSight's February 2000
private placement transaction.
We have agreed to pay certain expenses in connection with the
registration of the common stock by this prospectus and to indemnify the selling
stockholders named in this prospectus against certain liabilities, including
liabilities under the Securities Act.
We have been advised by the selling stockholders named in this
prospectus that there are no underwriting arrangements with respect to the sale
of the common stock being registered by this prospectus, and that the selling
stockholders may offer the shares 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. LaserSight common stock is
traded on The Nasdaq Stock Market under the symbol "LASE." On April 27, 2000,
the last reported sale price for LaserSight common stock was $4.47 per share.
Investing in these securities involve a high degree of risk. See "Risk
Factors" beginning on page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ________________, 2000.
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TABLE OF CONTENTS
Overview of LaserSight Incorporated Selling Stockholders
Risk Factors Plan of Distribution
Forward-Looking Statements Legal Matters
Use of Proceeds Experts
Capitalization Where to Find More Information
Description of Capital Stock Documents Incorporated by Reference
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with information that is different. We are not making
an offer of the securities in any jurisdiction where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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OVERVIEW OF LASERSIGHT INCORPORATED
Operating Segment Information
LaserSight Incorporated operates in three major operating segments:
refractive products, patent services and health care services. Our refractive
products segment includes LaserSight Technologies, Inc. and LaserSight Centers
Incorporated. LaserSight Technologies develops, manufactures and markets
ophthalmic lasers designed to correct common vision disorders. These lasers
utilize a one millimeter scanning laser beam to remove microscopic layers of
corneal tissue in order to reshape the cornea and to correct the eye's point of
focus in persons with nearsightedness, farsightedness and astigmatism.
LaserSight Centers is a developmental-stage company through which we may, in the
future, provide laser surgery and other related eye care surgical services.
Our patent services segment consists of LaserSight Patents, Inc.,
which licenses various patents related to the use of excimer lasers to remove
biological tissue.
Since December 31, 1997, our health care services segment has consisted
of MRF, Inc. which operates under the name of 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. and LSI Acquisition, Inc. Under LaserSight's ownership,
MEC was a vision managed care company which managed vision care programs for
health maintenance organizations 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".
Organizational Information
We were incorporated in Delaware in 1987 but were inactive until 1991.
In April 1993, we 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, LaserSight acquired The Farris Group. In July 1994,
we were reorganized as a holding company. In October 1995, we acquired MEC. In
July 1996, our LSIA subsidiary acquired the assets of the Northern New Jersey
Eye Institute. In August of 1997 we formed LaserSight Patents which then
acquired certain patents from International Business Machines Corporation. On
December 30, 1997, we sold MEC and LSIA in a transaction that was effective as
of December 1, 1997. In April 1998, we acquired the assets of the medical
products division of Schwartz Electro-Optics, Inc. In March 2000, we acquired
from Premier Laser Systems, Inc. the intellectual property relating to a
technology development project under design to provide an integrated refractive
diagnostic work station that includes front-to-back analysis of aberrations
within the total eye.
Principal Office
Our principal office and mailing address are 3300 University Boulevard,
Suite 140, Winter Park, Florida 32792. Our telephone number at that address is
(407) 678-9900.
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RISK FACTORS
In addition to the other information we provide or incorporate by
reference in this prospectus, you should carefully consider the following risks
before deciding whether to invest in our common stock. In evaluating the risks
of investing in our common stock, you should also evaluate the other information
set forth or incorporated by reference in this prospectus, including our
financial statements and the notes accompanying them.
Industry and Competitive Risks
WE CANNOT ASSURE YOU THAT OUR LASERSCAN LSX LASER SYSTEM WILL ACHIEVE
MARKET ACCEPTANCE IN THE U.S., AND OUR BUSINESS MODEL FOR SELLING OUR LASER
SYSTEM IN THE U.S. IS NEW AND UNPROVEN.
We only recently received the Food & Drug Administration approval
necessary for the commercial marketing and sale of our LaserScan LSXTM excimer
laser system in the U.S. and commercial shipments to customers in the U.S. began
in March 2000. Our previous experience marketing and selling our LaserScan LSX
excimer laser system in the U.S. had been limited to cost-recovery sales to
refractive surgeons participating in our FDA clinical trials.
The required level of per procedure fees payable to us by the
refractive surgeon may not be accepted by the marketplace or may exceed those
charged by our competitors. While we believe that gaining access to our
recently-approved scanning narrow beam laser technology justifies the required
per procedure fee levels, we cannot assure you that this business model will be
accepted by a large number of refractive surgeons. If our competitors reduce or
do not charge per procedure fees to users of their systems, we could be forced
to reduce or eliminate the fees charged under this business model, which could
significantly reduce our revenues. For example, Nidek Co., Ltd., one of our
competitors, has publicly stated that it does not intend to charge per procedure
fees to users of its laser systems in the U.S. and internationally.
Successful implementation of this business model is crucial to the
commercial launch of our LaserScan LSX laser system in the U.S. and may require
the expenditure of significant financial and other resources to create awareness
of the LaserScan LSX laser system and create demand by refractive surgeons. If
our laser system fails to achieve market acceptance in the U.S., we may not be
able to execute our business plan, which would have a material adverse effect on
our business, financial condition and results of operations.
WE CANNOT ASSURE YOU THAT OUR KERATOME PRODUCTS WILL ACHIEVE MARKET
ACCEPTANCE, AND WE ARE SIGNIFICANTLY DEPENDENT UPON OUR MARKETING ALLIANCE WITH
BECTON DICKINSON WITH RESPECT TO THE SALE OF OUR KERATOME PRODUCTS.
Keratomes are surgical devices used to create a corneal flap
immediately prior to LASIK laser vision correction procedures. We began to roll
out our MicroShapeTM family of keratome products only recently with the
commercial launch of our UltraEdgeTM keratome blades in July 1999 and of our
UniShaperTM single-use keratomes and control consoles in December 1999. We
anticipate the commercial launch of our UltraShaperTM durable keratomes during
the second quarter of 2000. We cannot assure you that there will not be
unanticipated delays in the launch of our UltraShaper durable keratome. Our
UniShaper single-use keratome is the first disposable keratome product to be
commercially marketed, and we cannot assure you that refractive surgeons,
including in particular refractive surgeons who perform a large volume of LASIK
procedures, will accept our UniShaper product as either a replacement for or a
supplement to the durable keratomes traditionally used to create corneal flaps.
Our UltraShaper durable keratome incorporates the features found in the
Automated Corneal Shaper keratome previously marketed by Bausch & Lomb with new
enhancements and features. However, Bausch & Lomb has not aggressively marketed
or serviced the ACS since 1997 when we licensed the rights to commercially
market keratomes based on the same technology, and has successfully transitioned
a large number of refractive surgeons from the ACS to its Hansatome durable
keratome product. We believe that many refractive surgeons learned to perform
the LASIK procedure using the ACS and prefer the surgical technique required by
the ACS, which is also used to operate our UltraShaper durable keratome, to that
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required to operate the Hansatome keratome product. However, we cannot assure
you that we will be successful in achieving broad market acceptance of our
UltraShaper durable keratome or our other keratome products.
Successful implementation of our keratome product sales strategy is
significantly dependent upon our marketing and distribution alliance with Becton
Dickinson. Pursuant to our October 1999 agreement, Becton Dickinson is, subject
to limited exceptions, the exclusive distributor of our keratomes and keratome
related products in the U.S., the U.K., Ireland and Japan, and has a
non-exclusive right to distribute kits including keratome products in other
countries. While our agreement with Becton Dickinson has a five-year term, it is
subject to early termination in certain circumstances, including the failure of
Becton Dickinson to achieve minimum sales levels. If we cannot successfully
market and sell our keratome products or if our marketing and distribution
alliance with Becton Dickinson fails to benefit us as expected, we may not be
able to execute our business plan, which would have a material adverse effect on
our business, financial condition and results of operations. See also "--Company
and Business Risks -- Required minimum payments under our keratome license
agreement may exceed our gross profits from sales of our keratome products."
THE VISION CORRECTION INDUSTRY CURRENTLY CONSISTS OF A FEW ESTABLISHED
PROVIDERS WITH SIGNIFICANT MARKET SHARES AND WE MAY ENCOUNTER DIFFICULTIES
COMPETING IN THIS HIGHLY COMPETITIVE ENVIRONMENT.
The vision correction industry is subject to intense, increasing
competition, and we do not know if we will be able to compete successfully
against our current and future competitors. Many of our competitors have
established products, distribution capabilities and customer service networks in
the U.S. marketplace, are substantially larger and have greater brand
recognition and greater financial and other resources than we do. Visx,
Incorporated, the current industry leader for excimer laser system sales in the
U.S., sold laser systems which performed a significant majority of the laser
vision correction procedures performed in the U.S. in 1998 and 1999. Similarly,
Bausch & Lomb sold a significant majority of the keratomes used by refractive
surgeons in the U.S. in 1998 and 1999. Two of our other competitors, Summit
Technology, Inc. and Autonomous Technology Corporation merged in April 1999. The
merger resulted in a combined entity with enhanced market presence, technology
base and distribution capabilities and provided Summit with a narrow beam laser
technology platform which will enable Summit to compete more directly with our
narrow beam LaserScan LSX excimer laser system. In addition, as a result of the
merger, the combined entity will be able to sell narrow beam laser systems under
a royalty-free license to certain Visx patents without incurring the expense and
uncertainty associated with intellectual property litigation with Visx.
MANY OF OUR COMPETITORS RECEIVED EARLIER REGULATORY APPROVALS THAN US
AND MAY HAVE A COMPETITIVE ADVANTAGE OVER US DUE TO THE SUBSEQUENT EXPANSION OF
THEIR REGULATORY APPROVALS AND THEIR SUBSTANTIAL EXPERIENCE IN THE U.S. MARKET.
We received the FDA approval necessary for the commercial sale of our
LaserScan LSX excimer laser system in the U.S. in November 1999, and commercial
shipments to customers in the U.S. began in March 2000. Our direct competitors
include large corporations such as Visx and Summit, each of whom received FDA
approval of excimer laser systems more than three years ago and has substantial
experience manufacturing, marketing and servicing laser systems in the U.S. In
addition to Visx, Summit, and Nidek, Bausch & Lomb recently obtained FDA
approval for their laser system.
In the U.S., a manufacturer of excimer laser vision correction systems
gains a competitive advantage by having its systems approved by the FDA for a
wider range of treatments. Initial FDA approvals of excimer laser vision
correction systems historically have been limited to PRK treatment of low to
moderate nearsightedness, with additional approvals for other and broader
treatments granted only as a result of subsequent FDA applications and clinical
trials. Our LaserScan LSX is currently approved only for the PRK treatment of
low to moderate nearsightedness (up to -6.0 diopters) without astigmatism using
a pulse repetition rate of 100 Hz, and its use for the treatment of higher
levels of nearsightedness (up to -10.0 diopters) is allowed only if the
refractive surgeon deems it to be reasonable. Currently, excimer laser vision
correction systems manufactured by Visx, Summit and Nidek have been approved for
higher levels of nearsightedness than the LaserScan LSX and are also approved
for the treatment of nearsightedness with astigmatism for which the LaserScan
LSX currently does not have approval. The Visx excimer laser system is also
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approved for the treatment of moderate farsightedness. In March 2000, the FDA
Ophthalmic Advisory Panel recommended approval for Summit's Ladarvision system
for farsightedness of up to +6 diopters and an astigmatism range of up to -6
diopters. Although we have submitted applications to the FDA for approval for
the treatment of nearsightedness with astigmatism and to permit our laser
systems sold to customers in the U.S. to operate at a 200 Hz pulse rate, if the
FDA does not approve our pending and expected applications in a timely manner or
at all, our ability to compete effectively in the U.S. may be severely impaired.
Summit's Apex Plus Excimer Laser Workstation and Visx's Star S2 Excimer
Laser System have received FDA approval for the LASIK treatment of myopia
(nearsightedness) with or without astigmatism. The approvals are for the
correction of myopia in the range of 0D to -14.0D and myopia with astigmatism in
the range of -0.5D to -5.0D. Bausch & Lomb's Technolas 217 excimer laser also
recently received FDA approval for the treatment of myopia up to -7.0D with up
to -3.0D of astigmatism. These laser systems are currently the only laser
systems commercially available in the U.S. with FDA approval for use in LASIK.
Laser systems manufactured by other companies approved by FDA for PRK, including
Nidek and LaserSight, are routinely used off-label to perform LASIK. A physician
may decide, as part of the practice of medicine, to use a medical device outside
of its FDA-approved indications for an unapproved or "off-label" use. Prior to
these laser approvals, all LASIK procedures performed in the U.S. with
commercially available lasers were performed as the practice of medicine.
Competitors' receipt of LASIK-specific FDA regulatory approval could be a
significant competitive advantage which could impede our ability to successfully
introduce our LaserScan LSX system in the U.S. or discourage physicians from
using our or other manufacturers' lasers off-label. Our failure to successfully
effect our product introduction in a timely manner could have a material adverse
effect on our business, financial condition and results of operations.
All of our principal competitors in the keratome business, including
current market leader Bausch & Lomb, received FDA clearance prior to the
commercialization of our keratome products and have substantial experience
marketing their keratome products. The established market presence in the U.S.
of previously-approved laser systems and keratome products, as well as the entry
of new competitors into the market upon receipt of new or expanded regulatory
approvals, could impede our ability to successfully introduce our LaserScan LSX
system in the U.S. and our keratome products worldwide and may have a material
adverse effect on our business, financial condition and results of operations.
WE DEPEND UPON OUR ABILITY TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS.
We believe that our ability to establish and maintain strategic
relationships will have a significant impact on our ability to meet our business
objectives. These strategic relationships are critical to our future success
because we believe that these relationships will help us to:
o extend the reach of our products to a larger number of
refractive surgeons;
o develop and deploy new products;
o further enhance the LaserSight brand; and
o generate additional revenue.
Entering into strategic relationships is complicated because some of
our current and future strategic partners may decide to compete with us in some
or all of our markets. In addition, we may not be able to establish
relationships with key participants in our industry if they have relationships
with our competitors, or if we have relationships with their competitors.
Moreover, some potential strategic partners have resisted, and may continue to
resist, working with us until our products and services have achieved widespread
market acceptance. Once we have established strategic relationships, we will
depend on our partners' ability to generate increased acceptance and use of our
products and services. To date, we have established only a limited number of
strategic relationships, and many of these relationships are in the early stages
of development. There can be no assurance as to the terms, timing or
consummation of any future strategic relationships. If we lose any of these
strategic relationships or fail to establish additional relationships, or if our
strategic relationships fail to benefit us as expected, we may not be able to
execute our business plan, and our business will suffer.
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BECAUSE THE SALE OF OUR PRODUCTS IS DEPENDENT ON THE CONTINUED MARKET
ACCEPTANCE OF LASER-BASED REFRACTIVE EYE SURGERY USING THE LASIK PROCEDURE, THE
LACK OF BROAD MARKET ACCEPTANCE WOULD HURT OUR BUSINESS.
We believe that whether we achieve profitability and growth will
depend, in part, upon the continued acceptance of laser vision correction using
the LASIK procedure in the U.S. and other countries. We cannot be certain that
laser vision correction will continue to be accepted by either the refractive
surgeons or the public at large as an alternative to existing methods of
treating refractive vision disorders. The acceptance of laser vision correction
and, specifically, the LASIK procedure may be adversely affected by:
o possible concerns relating to safety and efficacy, including
the predictability and stability
of results;
o the public's general resistance to surgery;
o the effectiveness and lower cost of alternative methods of
correcting refractive vision
disorders;
o the lack of long-term follow-up data;
o the possibility of unknown side effects;
o the lack of third-party reimbursement for the procedures;
o the cost of the procedure; and
o possible future unfavorable publicity involving patient
outcomes from the use of laser vision correction.
Unfavorable side effects and potential complications which may result
from the use of laser vision correction systems manufactured by any manufacturer
may broadly affect market acceptance of laser-based vision correction surgery.
Potential patients may not distinguish between our narrow beam scanning
technology and the laser technology incorporated by our competitors in their
laser systems, and customers may not differentiate laser systems and procedures
that have not received FDA approval from FDA-approved systems and procedures.
Any adverse consequences resulting from procedures performed with a competitor's
systems or an unapproved laser system could adversely affect consumer acceptance
of laser vision correction in general. In addition, because laser vision
correction is an elective procedure which is not typically covered by insurance
and which involves more significant immediate expense than eyeglasses or contact
lenses, adverse changes in the U.S. or international economy may cause consumers
to reassess their spending choices and to select lower-cost alternatives for
their vision correction needs. Any such shift in spending patterns could reduce
the volume of LASIK procedures performed which would, in turn, reduce our
revenues from per procedure fees and sales of single-use products such as our
UniShaper keratome and our UltraEdge keratome blades.
The failure of laser vision correction to achieve continued market
acceptance could have a material adverse effect on our business prospects. Even
if laser vision correction achieves and sustains market acceptance, sales of our
keratome products could be adversely impacted if a laser procedure which does
not require the creation of a corneal flap were to emerge as the procedure of
choice.
NEW PRODUCTS OR TECHNOLOGIES COULD ERODE DEMAND FOR OUR PRODUCTS OR
MAKE THEM OBSOLETE, AND OUR BUSINESS COULD BE HARMED IF WE CANNOT KEEP PACE WITH
ADVANCES IN TECHNOLOGY.
In addition to competing with eyeglasses and contact lenses, excimer
laser vision correction competes or may compete with newer technologies such as
intraocular lenses, corneal rings and surgical techniques using different or
more advanced types of lasers. Two products that may become competitive within
the near term are intraocular lenses, which are pending FDA approval, and
corneal rings, which were recently approved by the FDA. Both of these products
require procedures with lens implants, and their ultimate market acceptance is
unknown at this time. To the extent that any of these or other new technologies
are perceived to be clinically superior or economically more attractive than
currently marketed excimer laser vision correction procedures or techniques,
they could erode demand for our excimer laser and keratome products, cause a
reduction in selling prices of such products or renders such products obsolete.
In addition, if one or more competing technologies achieves broader market
acceptance or render laser vision correction procedures obsolete, it would have
a material adverse effect on our business, financial condition and results of
operations.
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As is typical in the case of new and rapidly evolving industries, the
demand and market for recently-introduced products and technologies is
uncertain, and we cannot be certain that our LaserScan LSX laser system,
UniShaper single-use keratome, UltraShaper durable keratome, UltraEdge keratome
blades or future new products and enhancements will be accepted in the
marketplace. In addition, announcements or the anticipation of announcements of
new products, whether for sale in the near future or at some later date, may
cause customers to defer purchasing our existing products.
If we cannot adapt to changing technologies, our products may become
obsolete, and our business could suffer. Our success will depend, in part, on
our ability to continue to enhance our existing products, develop new technology
that addresses the increasingly sophisticated needs of our customers, license
leading technologies and respond to technological advances and emerging industry
standards and practices on a timely and cost-effective basis. The development of
our proprietary technology entails significant technical and business risks. We
may not be successful in using new technologies effectively or adapting our
proprietary technology to evolving customer requirements or emerging industry
standards.
Company and Business Risks
WE ARE SUBJECT TO RISKS AND UNCERTAINTIES RELATING TO OUR PATENT
LITIGATION WITH VISX.
Visx Incorporated commenced a lawsuit in November 1999 in the United
States District Court, District of Delaware, against the Company alleging that
our LaserScan LSX laser system infringes one of Visx's U.S. patents for
equipment used in ophthalmic surgery. The LaserScan LSX is the only laser system
we are currently marketing and is the only laser system manufactured by us which
is approved for sale to U.S. customers. The suit requests, among other things,
injunctive relief, treble damages and attorneys' fees and expenses. Management
does not believe that our LaserScan LSX laser system infringes the asserted Visx
patent. However, we agreed to a stay of such litigation to pursue license
negotiations with Visx in an effort to help facilitate commercialization of the
LaserScan LSX in the U.S. market. We withdrew from license negotiations with
Visx in February 2000, and after the stay of the litigation was lifted, we filed
suit against Visx claiming non-infringement and invalidity of the Visx patent
and asserting that Visx infringes our TLC Patent. We also began to sell and ship
our LaserScan LSX laser systems in the U.S. during March 2000.
We believe that the Visx lawsuit is without merit and intend to
vigorously contest it. However, if we are unsuccessful in defending this
lawsuit, we may be enjoined from manufacturing and selling our LaserScan LSX
laser system in the U.S. without a license from Visx. In addition, we may be
subject to damages for past infringement. No assurance can be given as to
whether we will be subject to such damages or, if so, the amount of damages
which we may be required to pay. In addition, such patent litigation could be
time-consuming, result in costly litigation, divert management's attention and
resources, cause product shipment delays or require us to develop non-infringing
technology or enter into license agreements in order to market our products.
Such license agreements, if required, may not be available on acceptable terms,
or at all. The outcome of patent litigation, particularly in jury trials, is
inherently uncertain, and an unfavorable outcome in the Visx litigation could
have a material adverse effect on our business, financial condition and results
of operations.
WE WILL BE REQUIRED TO SIGNIFICANTLY EXPAND OUR U.S. MANUFACTURING
OPERATIONS TO MEET OUR BUSINESS PLAN AND MUST COMPLY WITH STRINGENT REGULATION
OF OUR MANUFACTURING OPERATIONS.
We intend to manufacture our LaserScan LSX laser systems for sale in
the U.S. at our manufacturing facility in Winter Park, Florida, and to continue
to manufacture our laser systems for sale in international markets at our
manufacturing facility in Costa Rica. Our U.S. personnel have limited experience
manufacturing laser systems. We cannot, therefore, assure you that we will not
encounter difficulties in scaling up production of our laser systems at our
Florida facility, including problems involving production delays, quality
control or assurance, component supply and lack of qualified personnel. In
addition, we may in the future move our U.S. manufacturing operations to another
location leased by us in Winter Park, Florida, which could result in
unanticipated problems and production delays. Any products manufactured or
distributed by us pursuant to FDA clearances or approvals are subject to
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extensive regulation by the FDA, including recordkeeping requirements and
reporting of adverse experience with the use of the product. Our manufacturing
facilities are subject to periodic inspection by the FDA, certain state agencies
and international regulatory agencies. We require that our key suppliers comply
with recognized standards as well as our own quality standards, and we regularly
test the components and sub-assemblies supplied to us. Any failure by us or our
suppliers to comply with applicable regulatory requirements, including the FDA's
quality systems/good manufacturing practice (QSR/GMP) regulations, could cause
production and distribution of our products to be delayed or prohibited, either
of which could have a material adverse effect on our business, financial
condition and results of operations.
REQUIRED MINIMUM PAYMENTS UNDER OUR KERATOME LICENSE AGREEMENT MAY
EXCEED OUR GROSS PROFITS FROM SALES OF OUR KERATOME PRODUCTS.
In addition to the risk that the UniShaper single-use keratome or
UltraShaper durable keratome will not be accepted in the marketplace, we are
required to make certain minimum payments to the licensor under our keratome
limited exclusive license agreement, unless the January 2000 amendment, as
described below, is triggered by May 31, 2000. Under the original agreement, we
are required to provide an excimer laser system and pay a total of $300,000 to
the licensor in two equal installments due six and 12 months after the date of
our receipt of the production molds for the UniShaper product. We provided the
laser system to the licensor during the quarter ended June 30, 1998, and we
received the molds in October 1999. We shipped the first UniShaper single-use
keratome in December 1999. In addition, beginning seven months after the first
commercial shipment, we will be required to make royalty payments equal to 50%
of our defined gross profits from the sale of our UniShaper and UltraShaper
keratomes, with a minimum royalty of $400,000 per calendar quarter for a period
of eight quarters. As a result of our obligations under this license
arrangement, the minimum royalty payments we are required to make to the
licensor may exceed our gross profits from sales of our UniShaper and
UltraShaper keratome products. On January 18, 2000, the Company entered into a
first amendment to a license and royalty agreement related to certain keratome
related products. Under the terms of the amendment 555,552 shares of Common
Stock were placed in escrow and are included in common shares issued and
outstanding on that date. If we raise equity capital totaling $15 million from
January 18, 2000 to May 31, 2000, or we otherwise elect in our sole discretion
to proceed with the amendment, the shares will be released from escrow and we
will be obligated to pay $7.6 million in cash within the next six months.
Otherwise, the shares will be returned to the Company. To date, we have raised
equity capital totaling $13.25 million. In addition, the Company paid the
licensors $200,000 upon execution of the amendment and $200,000 on April 1,
2000. The amendment eliminates the restriction on the Company manufacturing,
marketing and selling other keratomes, but the sale of such other keratomes is
included in the gross profit to be shared with the licensors. The licensor's
share of the gross profit, as defined in the agreement, will be 50% if the
amendment is not triggered or 10% if the amendment is triggered. The Company
agreed to pay the costs of the UniShaper final production molds.
OUR FAILURE TO TIMELY OBTAIN OR EXPAND REGULATORY APPROVALS FOR OUR
PRODUCTS AND TO COMPLY WITH REGULATORY REQUIREMENTS COULD ADVERSELY AFFECT OUR
BUSINESS.
Our excimer laser systems and keratome products are subject to strict
governmental regulations which materially affect our ability to manufacture and
market these products and directly impact our overall business prospects. FDA
regulations impose design and performance standards, labeling and reporting
requirements, and submission conditions in advance of marketing for all medical
laser products in the U.S. New product introductions, expanded treatment types
and levels for approved products, and significant design or manufacturing
modifications require a premarket clearance or approval by the FDA prior to
commercialization in the U.S. The FDA approval process, which is lengthy and
uncertain, requires supporting clinical studies and substantial commitments of
financial and management resources. Failure to obtain or maintain regulatory
approvals and clearances in the U.S. and other countries, or significant delays
in obtaining these approvals and clearances, could prevent us from marketing our
products for either approved or expanded indications or treatments, which could
substantially decrease our future revenues. Additionally, product and procedure
labeling and all forms of promotional activities are subject to examination by
the FDA, and current FDA enforcement policy prohibits the marketing by
manufacturers of approved medical devices for unapproved uses. Noncompliance
with these requirements may result in warning letters, fines, injunctions,
recall or seizure of products, suspension of manufacturing, denial or withdrawal
of PMAs, and criminal prosecution. 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. Future
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legislative or administrative requirements, in the U.S. or elsewhere, may
adversely affect our ability to obtain or retain regulatory approval for our
products. The failure to obtain approvals for new or additional uses on a timely
basis could have a material adverse effect on our business, financial condition
and results of operations.
OUR BUSINESS DEPENDS ON OUR INTELLECTUAL PROPERTY RIGHTS, AND IF WE ARE
UNABLE TO PROTECT THEM, OUR COMPETITIVE POSITION MAY BE ADVERSELY AFFECTED.
Our business plan is predicated on our proprietary systems and
technology, including our narrow-beam scanning laser systems. We protect our
proprietary rights through a combination of patent, trademark, trade secret and
copyright law, confidentiality agreements and technical measures. We generally
enter into non-disclosure agreements with our employees and consultants and
limit access to our trade secrets and technology. We cannot assure you that the
steps we have taken will prevent misappropriation of our intellectual property.
Misappropriation of our intellectual property would have a material adverse
effect on our competitive position. In addition, we may have to engage in
litigation or other legal proceedings in the future to enforce or protect our
intellectual property rights or to defend against claims of invalidity. These
legal proceedings may consume considerable resources, including management time
and attention, which would be diverted from the operation of our business, and
the outcome of any such legal proceeding is inherently uncertain.
We are aware that certain competitors are developing products that may
potentially infringe patents owned or licensed exclusively by us. In order to
protect our rights in these patents, we may find it necessary to assert and
pursue infringement claims against such third parties. We could incur
substantial costs and diversion of management resources litigating such
infringement claims and we cannot assure you that we will be successful in
resolving such claims or that the resolution of any such dispute will be on
terms that are favorable to us. See "--We are subject to risks and uncertainties
relating to our patent litigation with Visx."
PATENT INFRINGEMENT ALLEGATIONS MAY IMPAIR OUR ABILITY TO MANUFACTURE
AND MARKET OUR PRODUCTS.
There are a number of U.S. and foreign patents covering methods and
apparatus for performing corneal surgery that we do not own or have the right to
use. If we were found to infringe a patent in a particular market, LaserSight
and its customers may be enjoined from manufacturing, marketing, selling and
using the infringing product in the market and may be liable for damages for any
past infringement of such rights. In order to continue using such rights, we
would be required to obtain a license, which may require us to make royalty, per
procedure or other fee payments. We cannot be certain if we or our customers
will be successful in securing licenses, or that if we obtain licenses, such
licenses will be available on acceptable terms. Alternatively, we might be
required to redesign the infringing aspects of these products. Any redesign
efforts that we undertake could be expensive and might require regulatory
review. Furthermore, the redesign efforts could delay the reintroduction of
these products into certain markets, or may be so significant as to be
impractical. If redesign efforts were impractical, we could be prevented from
manufacturing and selling the infringing products, which would have a material
adverse effect on our business, financial condition and results of operations.
We are currently involved in patent litigation with Visx, and such
allegations are common in our industry. In 1992, Summit and Visx formed a U.S.
partnership, Pillar Point Partners, to pool certain of their patents related to
corneal sculpting technologies. As part of their agreement to dissolve Pillar
Point in June 1998, Summit and Visx granted each other a worldwide, royalty free
cross-license whereby each party has full rights to license for use with its own
systems all existing patents owned by either company relating to laser vision
correction. In connection with our March 1996 settlement of litigation with
Pillar Point regarding alleged infringement by our lasers of certain U.S. and
foreign patents, we entered into a license agreement with Visx covering various
foreign patents and patent applications pursuant to which we pay royalties to
Visx and agreed to notify Visx before we began manufacturing and selling our
laser systems in the U.S.
While we do not believe our laser systems or keratome products infringe
any valid and enforceable patents held by Visx, Summit or any other person, Visx
has asserted that we infringe their intellectual property and we cannot assure
you that one or more of our other competitors or other persons will not assert
that our products infringe their intellectual property, or that we will not in
the future be deemed to infringe one or more patents owned by them or some other
party. We could incur substantial costs and diversion of management resources
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defending any infringement claims. Furthermore, a party making a claim against
us could secure a judgment awarding substantial damages, as well as injunctive
or other equitable relief that could effectively block our ability to market one
or more of our products. In addition, we cannot assure you that licenses for any
intellectual property of third parties that might be required for our products
will be available on commercially reasonable terms, or at all. See "--We are
subject to risks and uncertainties relating to our patent litigation with Visx."
WE ARE SUBJECT TO CERTAIN RISKS ASSOCIATED WITH OUR INTERNATIONAL
SALES.
Our international sales accounted for 72% and 87% of our total revenues
during the year ended December 31, 1999 and the year ended December 31, 1998,
respectively. In the future, we expect that sales to international accounts will
represent a lower percentage of our total sales as a result of our recent
regulatory approval to market our LaserScan LSX laser system in the U.S., the
anticipated commercial launch of our UltraShaper durable keratome in the second
quarter of 2000, and the recent commercial launch of our UltraEdge keratome
blades and our UniShaper single-use keratome. The majority of our international
revenues for the year ended December 31, 1999 were from customers in Canada,
Mexico, Spain, Italy, Belgium and France, and for the year ended December 31,
1998 were from customers in Canada, China, Brazil, Mexico, Italy, Argentina,
South Africa and Turkey.
International sales of our products may be limited or disrupted by:
o the imposition of government controls;
o export license requirements;
o economic or political instability;
o trade restrictions;
o difficulties in obtaining or maintaining export licenses;
o changes in tariffs; and
o difficulties in staffing and managing international
operations.
Our sales have historically been and are expected to continue to be
denominated in U.S. dollars. The European Economic Union's conversion to a
common currency, the Euro, is not expected to have a material impact on our
business. However, due to our significant export sales, we are subject to
exchange rate fluctuations in the U.S. dollar, which could increase the
effective price in local currencies of our products. This could result in
reduced sales, longer payment cycles and greater difficulty in collecting
receivables relating to our international sales.
OUR SUPPLY OF CERTAIN CRITICAL COMPONENTS AND SYSTEMS MAY BE
INTERRUPTED BECAUSE OF OUR RELIANCE ON A LIMITED NUMBER OF SUPPLIERS.
We currently purchase certain components used in the production,
operation and maintenance of our laser systems and keratome products from a
limited number of suppliers and certain key components are provided by a single
vendor. For example, all of our keratome blades are manufactured exclusively by
Becton Dickinson pursuant to our agreement with them, and all of our UniShaper
single-use keratome products are manufactured exclusively by Frantz Medical
Development Ltd. pursuant to our agreement with them. We do not have written
long-term contracts with providers of some key laser system components,
including TUI Lasertechnik und Laserintegration GmbH, which currently is a
single source supplier for the laser heads used in our LaserScan LSX excimer
laser system. Currently, SensoMotoric Instruments GmbH, Teltow, Germany, is a
single source for the eye tracker boards used in the LaserScan LSX. Any
interruption in the supply of critical laser or keratome components could have a
material adverse effect on our business, financial condition and results of
operations. If any of our key suppliers ceases providing us with products of
acceptable quality and quantity at a competitive price in a timely fashion, we
would have to locate and contract with a substitute supplier and, in some cases,
such substitute suppliers would need to be qualified by the FDA. If substitute
suppliers cannot be located and qualified in a timely manner or could not
provide required products on commercially reasonable terms, it would have a
material adverse effect on our business, financial condition and results of
operations.
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UNLAWFUL TAMPERING OF OUR SYSTEM CONFIGURATIONS COULD RESULT IN REDUCED
REVENUES.
We include a procedure counting mechanism on LaserScan LSX lasers
manufactured for sale and use in the U.S. Users of our LaserScan LSX excimer
laser system could tamper with the software or hardware configuration of the
system so as to alter or eliminate the procedure counting mechanism that
facilitates the collection of per procedure fees. Unauthorized tampering with
our procedure counting mechanism by users could result in the loss of per
procedure fees.
THE LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS.
Our ability to maintain our competitive position depends in part upon
the continued contributions of our executive officers and other key employees,
especially Michael R. Farris, our president and chief executive officer. A loss
of one or more such officers or key employees could have a material adverse
effect on our business. We do not carry "key person" life insurance on any
officer or key employee.
As we commercially launch our laser system and keratome products in the
U.S., we will need to continue to implement and expand our operational, sales
and marketing, financial and management resources and controls. While to date we
have not experienced problems recruiting or retaining the personnel necessary to
expand our business, we cannot assure you that we will not have such problems in
the future. If we fail to attract and retain qualified individuals for necessary
positions, and if we are unable to effectively manage growth in our domestic or
international operations, it could have a material adverse effect on our
business, financial condition and results of operations.
INADEQUACY OR UNAVAILABILITY OF INSURANCE MAY EXPOSE US TO SUBSTANTIAL
PRODUCT LIABILITY CLAIMS.
Our business exposes us to potential product liability risks and
possible adverse publicity that are inherent in the development, testing,
manufacture, marketing and sale of medical devices for human use. These risks
increase with respect to our products that receive regulatory approval for
commercialization. We have agreed in the past, and we will likely agree in the
future, to indemnify certain medical institutions and personnel who conduct and
participate in our clinical studies. While we maintain product liability
insurance, we cannot be certain that any such liability will be covered by our
insurance or that damages will not exceed the limits of our coverage. Even if a
claim is covered by insurance, the costs of defending a product liability,
malpractice, negligence or other action, and the assessment of damages in excess
of insurance coverage in the event of a successful product liability claim,
could have a material adverse effect on our business, financial condition and
results of operations. Further, product liability insurance may not continue to
be available, either at existing or increased levels of coverage, on
commercially reasonable terms.
Financial and Liquidity Risks
WE HAVE EXPERIENCED SIGNIFICANT LOSSES AND OPERATING CASH FLOW DEFICITS
AND WE EXPECT THAT OPERATING CASH FLOW DEFICITS WILL CONTINUE THROUGH AT LEAST
THE SECOND QUARTER OF 2000.
We experienced significant net losses and deficits in cash flow from
operations for the years ended December 31, 1997, 1998 and 1999, as set forth in
the following table. We cannot be certain that we will be able to achieve or
sustain profitability or positive operating cash flow in the future.
Year Ended December 31,
1997 1998 1999
---- ---- ----
Net Loss $ 7.3 million $ 11.9 million $ 14.4 million
Deficit in Cash
Flow from
Operations $ 4.4 million $ 14.3 million $ 11.7 million
As of December 31, 1999, we had an accumulated deficit of $38.2
million.
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IF OUR UNCOLLECTIBLE RECEIVABLES EXCEED OUR RESERVES WE WILL INCUR
ADDITIONAL UNANTICIPATED EXPENSES, AND WE MAY EXPERIENCE DIFFICULTY COLLECTING
RESTRUCTURED RECEIVABLES WITH EXTENDED PAYMENT TERMS.
Although we monitor the status of our receivables and maintain a
reserve for estimated losses, we cannot be certain that our reserves for
estimated losses, which were approximately $3.9 million at December 31, 1999,
will be sufficient to cover the amount of our actual write-offs over time. At
December 31, 1999, our net trade accounts and notes receivable totaled
approximately $13.2 million, and accrued commissions, the payment of which
generally depends on the collection of such net trade accounts and notes
receivable, totaled approximately $2.0 million. Actual write-offs that exceed
amounts reserved could have a material adverse effect on our consolidated
financial condition and results of operations. The amount of any loss that we
may have to recognize in connection with our inability to collect receivables is
principally dependent on our customer's ongoing financial condition, their
ability to generate revenues from our laser systems, and our ability to obtain
and enforce legal judgments against delinquent customers.
Our ability to evaluate the financial condition and revenue generating
ability of our prospective customers located outside of the U.S., and our
ability to obtain and enforce legal judgments against customers located outside
of the U.S., is generally more limited than for our customers located in the
U.S. Our agreements with our international customers typically provide that the
contracts are governed by Florida law. We have not determined whether or to what
extent courts or administrative agencies located in foreign countries would
enforce our right to collect such receivables or to recover laser systems from
customers in the event of a customer's payment default. When a customer is not
paying according to established terms, we attempt to communicate and understand
the underlying causes and work with the customer to resolve any issues we can
control or influence. In most cases, we have been able to resolve the customer's
issues and continue to collect our receivable, either on the original schedule
or under restructured terms. If such issues are not resolved, we evaluate our
legal and other alternatives based on existing facts and circumstances. In most
such cases, we have concluded that the account should be written off as
uncollectible.
At December 31, 1999, we had extended the original payment terms of
laser customer accounts totaling approximately $1.4 million by periods ranging
from 12 to 60 months. Such restructured receivables represent approximately 8%
of our gross receivables as of that date. Our liquidity and operating cash flow
would be adversely affected if additional extensions become necessary in the
future. In addition, it would be more difficult to collect laser system
receivables if the payment schedule extends beyond the expected or actual
economic life of the system, which we estimate to be approximately five to seven
years. To date, we do not believe any payment schedule extends beyond the
economic life of the applicable laser system.
WE COULD REQUIRE ADDITIONAL FINANCING WHICH MIGHT NOT BE AVAILABLE IF
WE NEED IT.
During the years ended December 31, 1999 and 1998, we experienced
deficits in cash flow from operations of $11.7 million and $14.3 million,
respectively. We believe that the proceeds from our January 2000 private
placement of common stock, together with our existing balances of cash and cash
equivalents and our cash flows from operations, should be sufficient to fund our
anticipated working capital requirements for the next 12 months in accordance
with our current business plan. Our belief regarding future working capital
requirements is based on various factors and assumptions including the
commercial acceptance of our LaserScan LSX excimer laser system, our UltraEdge
keratome blades and our UniShaper single-use keratomes, the successful validity
testing and subsequent commercial acceptance of our UltraShaper durable
keratome, the anticipated timely collection of receivables, and the absence of
unanticipated product development and marketing costs. These factors and
assumptions are subject to certain contingencies and uncertainties, some of
which are beyond our control. If we do not collect a material portion of current
receivables in a timely manner, or experience less market demand for our
products than we anticipate, our liquidity could be materially and adversely
affected.
We cannot be certain that we will not seek additional debt or equity
financing in the future to implement our business plan or any changes thereto in
response to future developments or unanticipated contingencies. Other than the
$2.5 million credit facility signed in June 1999 with The Huntington National
Bank which expires in June 2000, we currently do not have any commitments for
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additional financing. We cannot be certain that additional financing will be
available in the future to the extent required or that, if available, it will be
on commercially acceptable terms. If we raise additional funds by issuing equity
or convertible debt securities, the terms of the new securities could have
rights, preferences and privileges senior to those of our common stock. If we
raise additional funds through debt financing, the terms of the debt could
require a substantial portion of our cash flow from operations to be dedicated
to the payment of principal and interest and may render us more vulnerable to
competitive pressures and economic downturns.
COMMON STOCK RISKS
VARIATIONS IN OUR SALES AND OPERATING RESULTS MAY CAUSE OUR STOCK PRICE
TO FLUCTUATE.
Our operating results have fluctuated in the past, and may continue to
fluctuate in the future, as a result of a variety of factors, many of which are
outside of our control. For example, historically a significant portion of our
laser system orders for a particular quarter have been received and shipped near
the end of the quarter. As a result, our operating results for any quarter often
depend on the timing of the receipt of orders and the subsequent shipment of our
laser systems. Other factors that may cause our operating results to fluctuate
include:
o timing of regulatory approvals and the introduction or delays
in shipment of new products;
o reductions, cancellations or fulfillment of major orders;
o the addition or loss of significant customers;
o the relative mix of our business;
o changes in pricing by us or our competitors;
o costs related to expansion of our business; and
o increased competition.
As a result of these fluctuations, we believe that period-to-period
comparisons of our operating results cannot be relied upon as indicators of
future performance. In some quarters our operating results may fall below the
expectations of securities analysts and investors due to any of the factors
described above.
THE MARKET PRICE OF OUR COMMON STOCK MAY CONTINUE TO EXPERIENCE EXTREME
FLUCTUATIONS DUE TO MARKET CONDITIONS THAT ARE UNRELATED TO OUR OPERATING
PERFORMANCE.
The stock market, and in particular the securities of technology
companies like us, could experience extreme price and volume fluctuations
unrelated to our operating performance. Our stock price has historically been
volatile. Factors such as announcements of technological innovations or new
products by us or our competitors, changes in domestic or foreign governmental
regulations or regulatory approval processes, developments or disputes relating
to patent or proprietary rights, public concern as to the safety and efficacy of
refractive vision correction procedures, and changes in reports and
recommendations of securities analysts, have and may continue to have a
significant impact on the market price of our common stock.
THE SIGNIFICANT NUMBER OF SHARES ELIGIBLE FOR FUTURE SALE AND DILUTIVE
STOCK ISSUANCES MAY ADVERSELY AFFECT OUR STOCK PRICE.
Sales, or the possibility of sales, of substantial amounts of our
common stock in the public market could adversely affect the market price of our
common stock. Substantially all of our 19,803,663 shares of common stock
outstanding at April 27, 2000 were freely tradable without restriction or
further registration under the Securities Act of 1933, except to the extent such
shares are held by "affiliates" as that term is defined in Rule 144 under the
Securities Act or subject only to the satisfaction of a prospectus delivery
requirement.
Shares of common stock which we may issue in the future in connection
with acquisitions or financings or pursuant to outstanding warrants or
agreements could also adversely affect the market price of our common stock and
cause significant dilution in our earnings per share and net book value per
share. We may be required to issue more than eight million additional shares of
common stock upon the conversion of outstanding preferred stock, the exercise of
outstanding warrants and stock options, and the satisfaction of certain
contingent contractual obligations. See "Capitalization--Description of Capital
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Stock--Warrants and Other Agreements to Issue Shares."
The anti-dilution provisions of certain of our existing securities and
obligations require us to issue additional shares if we issue shares of common
stock below specified price levels. If a future share issuance triggers these
adjustments, the beneficiaries of such provisions effectively receive some
protection from declines in the market price of our common stock, while our
other stockholders incur additional dilution of their ownership interest. We may
include similar anti-dilution provisions in securities issued in connection with
future financings.
ANTI-TAKEOVER PROVISIONS UNDER DELAWARE LAW AND IN OUR CERTIFICATE OF
INCORPORATION, BY-LAWS AND STOCKHOLDER RIGHTS PLAN MAY MAKE AN ACQUISITION OF
LASERSIGHT MORE DIFFICULT AND COULD PREVENT YOU FROM RECEIVING A PREMIUM OVER
THE MARKET PRICE OF OUR STOCK.
Certain provisions of our certificate of incorporation, by-laws,
stockholder rights plan and Delaware law could delay or frustrate the removal of
incumbent directors, discourage potential acquisition proposals and delay, defer
or prevent a change in control of LaserSight, even if such events could be
beneficial, in the short term, to the economic interests of our stockholders.
For example, our certificate of incorporation allows us to issue preferred stock
with rights senior to those of the common stock without stockholder action, and
our by-laws require advance notice of director nominations or other proposals by
stockholders. LaserSight also is subject to provisions of Delaware corporation
law that prohibit a publicly-held Delaware corporation from engaging in a broad
range of business combinations with a person who, together with affiliates and
associates, owns 15% or more of the corporation's common stock (an interested
stockholder) for three years after the person became an interested stockholder,
unless the business combination is approved in a prescribed manner. We also have
adopted a stockholder rights agreement, or "poison pill," and declared a
dividend distribution of one preferred share purchase right for each share of
common stock. The rights would cause substantial dilution to a person or group
that attempts to acquire 15% or more of our common stock on terms not approved
by our board of directors.
Acquisition Risks
PAST AND POSSIBLE FUTURE ACQUISITIONS THAT ARE NOT SUCCESSFULLY
INTEGRATED WITH OUR EXISTING OPERATIONS MAY ADVERSELY AFFECT OUR BUSINESS.
We have made several significant acquisitions since 1994, and we may in
the future selectively pursue strategic acquisitions of, investments in, or
enter into joint ventures or other strategic alliances with, companies whose
business or technology complement our business. We may not be able to identify
suitable candidates to acquire or enter into joint ventures or other
arrangements with entities, and we may not be able to obtain financing on
satisfactory terms for such activities. In addition, we could have difficulty
assimilating the personnel, technology and operations of any acquired companies,
which could prevent us from realizing expected synergies, and may incur
unanticipated liabilities and contingencies. This could disrupt our ongoing
business and distract our management and other resources.
AMORTIZATION AND CHARGES RELATING TO OUR SIGNIFICANT INTANGIBLE ASSETS
COULD ADVERSELY AFFECT OUR STOCK PRICE AND REPORTED NET INCOME OR LOSS.
Of our total assets at December 31, 1999, approximately $13.9 million,
or 28%, were goodwill or other intangible assets. Any reduction in net income or
increase in net loss resulting from the amortization of goodwill and other
intangible assets resulting from future acquisitions by us may have an adverse
impact upon the market price of our common stock. In addition, in the event of a
sale of LaserSight or our assets, we cannot be certain that the value of such
intangible assets would be recovered.
In accordance with SFAS 121, we review 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. If we determine that an intangible asset is impaired, a non-cash
impairment charge would be recognized. We continue to assess the current results
and future prospects of MRF, Inc., d/b/a The Farris Group (TFG), our subsidiary
which provides health care and vision care consulting services, in view of the
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substantial reduction in the subsidiary's operating results in 1997. Though
TFG's operating results improved in 1998 when compared to 1997, operating losses
similar to those incurred during the first half of 1998 continued during 1999.
In 1999, two senior consultants joined who are expected to develop new business
and help lead TFG towards financial improvement during 2000. If TFG is
unsuccessful in improving its financial performance, some or all of the carrying
amount of goodwill recorded, $3.5 million at December 31, 1999, may be subject
to an impairment adjustment.
Other Risks
The risks described above are not the only risks facing LaserSight.
There may be additional risks and uncertainties not presently known to us or
that we have deemed immaterial which could also negatively impact our business
operations. If any of the foregoing risks actually occur, it could have a
material adverse effect on our business, financial condition and results of
operations. In that event, the trading price of our common stock could decline,
and you may lose all or part of your investment.
New Accounting Pronouncement
In December 1999, the SEC issued Staff Accounting Bulletin (SAB) No.
101, Revenue Recognition in Financial Statements. SAB No. 101 provides guidance
on applying generally accepted accounting principles to revenue recognition
issues in financial statements. We will adopt SAB No. 101 as required in the
second quarter of 2000 and are evaluating the effect, if any, that SAB No. 101
may have on our consolidated financial statements.
FORWARD-LOOKING STATEMENTS
This prospectus, and the documents incorporated by reference, contain
certain "forward-looking" statements as described in Section 27A of the
Securities Act and Section 21E of the Exchange Act. These statements involve
known and unknown risks, uncertainties and other factors that may cause our
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among other things, those listed under "Risk Factors" and
elsewhere in this prospectus and the documents incorporated by reference.
In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "could," "expects," "plans,"
"intends," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of such terms and other comparable terminology.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable based on currently available
information, we cannot guarantee future results, levels of activity, performance
or achievements. Moreover, neither we nor anyone else assumes responsibility for
the accuracy and completeness of such statements. We are under no duty to update
any of the forward-looking statements after the date of this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
being offered by the selling stockholders pursuant to this prospectus.
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CAPITALIZATION
The following table sets forth LaserSight's actual capitalization at
December 31, 1999 and proforma capitalization on that date assuming the January
2000 and February 2000 private placements of common stock.
Actual Proforma
------ --------
Long-term obligations $ 100,130 $ 100,130
Stockholders' equity:
Convertible Preferred Stock, Series C,
par value $.001 per share, authorized
10,000,000 total preferred shares;
issued and outstanding 2,000,000 2,000 2,000
shares
Convertible Preferred Stock, Series
D, par value $.001 per share,
authorized 10,000,000 total preferred
shares; issued and outstanding
2,000,000 shares 2,000 2,000
Common Stock, par value $.001 per
share authorized 40,000,000 shares;
actual 18,040,313 shares; proforma
19,386,343 shares 18,040 19,386
Additional paid-in capital 82,346,811 95,548,465
Issued shares held in escrow (2,936,250) (2,936,250)
Stock subscription receivable (1,140,000) (1,140,000)
Accumulated deficit (38,172,283) (38,172,283)
Treasury stock, at cost 145,200 shares (542,647) (542,647)
------------ ------------
Total capitalization and
stockholders' equity $ 39,677,801 $ 52,880,801
============ ============
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DESCRIPTION OF CAPITAL STOCK
Capital Stock Overview
As of the date of this prospectus, LaserSight is authorized to issue up
to 40,000,000 shares of common stock, $.001 par value, and 10,000,000 shares of
preferred stock, $.001 par value, issuable in series. As of April 27, 2000,
LaserSight had the following shares of capital stock issued and outstanding:
o 19,803,663 shares of common stock, not including any shares of
common stock issuable upon the conversion of preferred stock
or the exercise of outstanding options and warrants to acquire
common stock
o 2,000,000 shares of series C convertible participating
preferred stock
o 2,000,000 shares of series D convertible participating
preferred stock.
All references to our common stock in this prospectus include the
associated preferred stock purchase rights issued pursuant to the stockholder
rights agreement described below between LaserSight and American Stock Transfer
& Trust Company, as rights agent.
Common Stock
Holders of our 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. Holders of a majority of the shares of capital stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of our common stock are entitled to share pro
rata in such dividends and other distributions as may be declared by our board
of directors out of funds legally available for that purpose. Upon the
liquidation or dissolution of LaserSight, the holders of common stock are
entitled to share proportionally in all assets available for distribution to
such holders subject to the rights and preferences of any holder of outstanding
preferred stock. Holders of common stock have no preemptive, redemption or
conversion rights. The issued and outstanding shares of our common stock fully
paid and nonassessable.
Preferred Stock
Our certificate of incorporation authorizes our board of directors,
without further stockholder approval, to issue up to an aggregate of 10,000,000
shares of preferred stock in one or more series. The board of directors may fix
or alter the designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each series of preferred stock,
including:
o dividend rights
o dividend rates
o conversion rights
o voting rights
o terms of redemption
o redemption price or prices
o liquidation preferences
The rights, preferences and privileges of holders of our common stock
may be adversely affected by the rights of the holders of shares of any series
of preferred stock which LaserSight may designate and issue in the future. The
issuance of preferred stock could also, under some circumstances, have the
effect of making it more difficult for a third party to acquire, or discouraging
a third party from acquiring, a majority of our outstanding common stock or
otherwise adversely affect the market price of our common stock.
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Series A and Series B Preferred Stock
All previously issued and outstanding shares of our series A preferred
stock, par value $.001 per share, and series B preferred stock, par value $.001
per share, have been converted, redeemed or repurchased.
Series C Preferred Stock
On June 5, 1998, we issued 2,000,000 shares of series C convertible
participating preferred stock. The series C preferred stock is convertible on a
share-for-share basis into common stock at the option of the holder at any time
until June 5, 2001. After June 5, 2001, all shares of series C preferred stock
then outstanding will automatically convert into an equal number of shares of
common stock. The series C preferred stockholders are entitled to vote on all
matters submitted to a vote of common stockholders, and are entitled to a number
of votes equal to the largest number of full shares of common stock into which
the shares of the series C preferred stock could be converted as of the record
date for any such stockholder vote.
The series C preferred stockholders receive dividends only if dividends
are payable on our common stock. Each outstanding share of series C preferred
stock entitles its holder to a liquidation preference equal to $4.00. The series
C preferred stockholders also have the right to nominate one candidate to stand
for election to our board of directors. This nomination right will continue for
as long as the series C preferred stockholders own any combination of our common
stock and series C preferred stock (applied as if converted into common stock)
equal to at least 7.5% of our outstanding common stock on the record date for a
meeting of stockholders at which directors will be elected.
For as long as the series C preferred stockholders own of record any
combination of our common stock and series C preferred stock (applied as if
converted into common stock) equal to at least 5% of our outstanding common
stock, such holders have the right, subject to the exceptions noted below, to
participate in any below-market equity financing transaction so as to maintain
their percentage ownership level of common stock at the same level as
immediately prior to the closing of any such financing. This right to
participate in certain below-market third party financings does not include:
o the grant of options or warrants, or the issuance of
securities, under any employee or director stock
option, stock purchase or restricted stock plan,
o the issuance of common stock pursuant to any contingent
obligation existing as of June 5, 1998,
o the issuance of securities upon the exercise or conversion of
options, warrants or other convertible securities outstanding
as of June 5, 1998,
o the declaration of a rights dividend to holders of common stock
in connection with the adoption of a stockholder rights plan,
o the issuance of securities in connection with a merger,
acquisition, joint venture or similar arrangement,
o the issuance of the series D preferred stock, or
o a public offering of our securities.
Series D Preferred Stock
On June 12, 1998, we issued 2,000,000 shares of series D convertible
participating preferred stock. The series D preferred stock is convertible on a
share-for-share basis into common stock at the option of the holder at any time
until June 12, 2001. After June 12, 2001, all shares of series D preferred stock
then outstanding will automatically convert into an equal number of shares of
common stock. The series D preferred stockholders are entitled to vote on all
matters submitted to a vote of common stockholders, and are entitled to a number
of votes equal to the largest number of full shares of common stock into which
the shares of the series D preferred stock could be converted as of the record
date for any such stockholder vote.
The series D preferred stockholders receive dividends only if dividends
are payable on our common stock. Each outstanding share of series D preferred
stock entitles its holder to a liquidation preference equal to $4.00. The series
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D preferred stockholders are entitled to anti-dilution adjustments if we issue
or sell any shares of common stock, or securities convertible into or
exercisable for common stock, before June 12, 2001 at a price per share, or
having a conversion or exercise price per share, less than $4.00. This
anti-dilution adjustment only relates to the conversion price of the series D
preferred stock that has not been converted and does not result in adjustments
to the number of shares of common stock, if any, held by former series D
preferred stockholders.
Until June 12, 2001, as long as the series D preferred stockholders own
of record any combination of our common stock and series D preferred stock
(applied as if converted into common stock) equal to at least 5% of our
outstanding common stock, such holders have the right, subject to the exceptions
noted below, to participate in any equity financing transaction so as to
maintain their percentage ownership level of common stock at the same level as
immediately prior to the closing of any such financing. This right to
participate in third party financings does not include:
o the grant of options or warrants, or the issuance of
securities, under any employee or director stock option,
stock purchase or restricted stock plan,
o the issuance of common stock pursuant to certain obligations
existing as of June 12, 1998, o the issuance of securities
upon the exercise or conversion of options, warrants and other
convertible securities outstanding as of June 12, 1998,
o the declaration of a rights dividend to holders of common
stock in connection with the adoption of a stockholder rights
plan which has been approved by the majority of our
non-employee directors,
o the issuance of securities in connection with a merger,
acquisition, joint venture or similar arrangement,
o the issuance of securities in connection with the establishment
of strategic relationship which has been approved by a
majority of our non-employee directors, or
o a public offering of our securities.
The series D preferred stockholders have the exclusive right, voting
separately as a single class, to elect one member to our board of directors. The
right to elect a director terminates if, on any record date for a meeting of
stockholders at which directors will be elected, that number of full shares of
common stock into which all then outstanding shares of series D preferred stock
could be converted is less than 7.5% of all of our outstanding shares of common
stock.
At the time the series D preferred stockholders' right to elect a
director terminates, the director previously elected by the series D preferred
stockholders then in office will serve until the date of the Company's next
meeting at which directors are elected. Thereafter, so long as the series D
preferred stockholders own in the aggregate at least 7.5% of our outstanding
common stock as of the record date for a meeting of stockholders at which
directors will be elected, the series D preferred stockholders have the right to
designate a nominee to stand for election as a director at the next meeting of
stockholders at which directors will be elected. If such nominee is elected but
does not serve a complete term on our board of directors by reason of the
resignation, death, removal or inability to serve, then the series D preferred
stockholders may designate a successor to fill such vacancy until the next
meeting for the election of directors. If such nominee is not elected to the
board of directors, the series D preferred stockholders will, in addition to
those rights described in the following paragraph, be entitled to appoint an
additional non-voting observer.
If the director elected by the series D preferred stockholders director
is not an employee of Dawson Samberg Capital Management, Inc., then the series D
preferred stockholders, collectively, have the right to designate a non-voting
observer to attend and participate in, but not to vote at, all meetings of our
board of directors and any committee thereof. The non-voting observer has the
same rights with respect to meeting notices and access to information concerning
the business and operations of LaserSight as members of our board of directors,
and is entitled to participate in discussions and consult with the board of
directors.
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Series E Preferred Stock
Our board of directors designated 500,000 shares of our preferred stock
as series E junior participating preferred stock in connection with the adoption
of the stockholders rights agreement described below. Because of the nature of
the dividend, liquidation and voting rights of the series E preferred stock, the
value of each one one-thousandth interest in a share of series E preferred stock
purchasable upon exercise of a preferred share purchase right should approximate
the value of one share of common stock. The series E preferred stock purchasable
upon exercise of the preferred share purchase rights will not be redeemable.
Each share of series E preferred stock will be entitled to the greater of (1) a
preferential quarterly dividend payment of $1.00 per share, or (2) an aggregate
dividend of 1,000 times the dividend declared per share of common stock. In the
event of liquidation, the holders of the series E preferred stock will be
entitled to a preferential liquidation payment of $1,000 per share, plus an
amount equal to 1,000 times the aggregate amount to be distributed per share of
common stock. Each share of series E preferred stock will have 1,000 votes, and
will vote on all matters submitted to a vote of the holders of our common stock
except as otherwise required by law. Finally, in the event of any merger,
consolidation or other transaction in which shares of common stock are
exchanged, each share of series E preferred stock will be entitled to receive
1,000 times the amount of consideration received per share of common stock.
Stockholder Rights Agreement
Our board of directors adopted a rights agreement in July 1998 and
declared a dividend of one right on each outstanding share of common stock.
Subject to certain exceptions, each right, when exercisable, entitles the holder
thereof to purchase from LaserSight one-thousandth of a share of series E
preferred stock of LaserSight at an exercise price of $20.00 per one-thousandth
of a preferred share, subject to adjustment. The terms of the rights are set
forth in the rights agreement between LaserSight and American Stock Transfer &
Trust Company, as the rights agent.
Until the first to occur of (1) 10 days following a public announcement
that a person or group of affiliated or associated persons has become an
"acquiring person"(as defined below), or (2) 10 business days (or such later
date as may be determined by action of our board of directors prior to such time
as any person or group becomes an acquiring person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in a person or group becoming an
acquiring person (the earlier of such dates being called the "distribution
date"), the rights will be evidenced by common stock certificates.
Subject to certain exceptions, an "acquiring person" is a person or
group of affiliated or associated persons who have acquired beneficial ownership
of 15% or more of our outstanding common stock. In no event however, will
LaserSight, any subsidiary of LaserSight, or any employee benefit plan of
LaserSight or its subsidiaries be deemed to be an acquiring person. In addition,
no person shall become an acquiring person as the result of an acquisition of
common stock by LaserSight which by reducing the number of our common shares
outstanding increases the proportionate number of shares beneficially owned by
such person and its affiliates and associates to 15% or more of the common stock
then outstanding. If a person becomes the beneficial owner of 15% or more of the
common stock then outstanding by reason of share acquisitions by LaserSight and,
after such share acquisitions, (1) acquires beneficial ownership of an
additional number of shares of common stock which exceeds the lesser of 10,000
shares of common stock or 0.25% of the then-outstanding common stock, and (2)
beneficially owns after such acquisition 15% or more of the aggregate number of
common stock then outstanding, then such person shall be deemed to be an
acquiring person. Moreover, if our board of directors determines in good faith
that a person who would otherwise be an acquiring person has become such
inadvertently, and such person divests as promptly as practicable a sufficient
number of shares of common stock so that such person would no longer be an
acquiring person, then such person shall not be deemed to be an acquiring person
for any purposes of the rights agreement.
The rights are not exercisable until the distribution date. The rights
will expire on July 2, 2008, unless the Rights are earlier redeemed or exchanged
by LaserSight, as described below.
To prevent dilution the exercise price payable and the number of shares
of series E preferred stock or other securities or property issuable upon
exercise of the rights are subject to adjustment from time to time:
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o in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the series E preferred
stock;
o upon the grant to holders of the series E preferred stock of
certain rights or warrants to subscribe for or purchase series
E preferred stock at a price, or securities convertible into
series E preferred stock with a conversion price, less than
the then-current market price of the series E preferred stock;
or
o upon the distribution to holders of the series E preferred
stock of evidences of indebtedness, assets or capital stock
(excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in shares
of series E preferred stock) or of subscription rights or
warrants other than those referred to above.
With certain exceptions, no adjustment in the exercise price will be required
until cumulative adjustments require an adjustment of at least 1% of such
exercise price. LaserSight will not be required to issue fractional shares of
common stock or series E preferred stock other than fractions which are integral
multiples of one-thousandth of a share of series E preferred Stock, which may,
at the election of LaserSight, be evidenced by depositary receipts. In lieu of
such issuance of fractional shares, an adjustment in cash may be made based on
the market price of common stock or series E preferred Stock on the last trading
day prior to the date of exercise.
Subject to certain exceptions described in the rights agreement, if any
person or group becomes an acquiring person, then each holder of a right will
have the right to receive upon exercise of such right that number of common
stock or, in certain circumstances, cash, property or other securities of
LaserSight, having a market value of two times the exercise price of the right.
If at any time after the time that any person or group becomes an
acquiring person, LaserSight is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a right,
other than rights beneficially owned by the acquiring person, any associate or
affiliate thereof, and certain transferees thereof, which will be void, will
thereafter have the right to receive, upon the exercise thereof at the
then-current exercise price of the right, that number of shares of common stock
of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the right.
At any time after the time that a person or group becomes an acquiring
person and prior to the acquisition by such person or group of 50% or more of
the outstanding common stock, our board of directors may exchange the rights,
subject to certain exceptions, in whole or in part, at an exchange ratio of one
share of common stock or one-thousandth of a share of series E preferred stock
per right.
At any time prior to the time that a person or group becomes an
acquiring person, our board of directors may redeem the rights in whole, but not
in part, at a price of $.01 per right, subject to adjustment which may at
LaserSight's option be paid in cash, common stock or other consideration deemed
appropriate by the board of directors. The redemption of the rights may be made
effective at such time, on such basis and with such conditions as the board of
directors in its sole discretion may establish; provided, however, that no
redemption will be permitted or required after the time that any person becomes
an acquiring person. Immediately upon any redemption of the rights, the right to
exercise the rights will terminate and the only right of the holders of the
rights will be to receive the redemption price.
The terms of the rights may be amended by our board of directors
without the consent of the holders of the rights, except that from and after
such time as any person becomes an acquiring person no such amendment may make
the rights redeemable if the rights are not then redeemable in accordance with
the terms of the rights agreement or may adversely affect the interests of the
holders of the rights.
Until a right is exercised, the holder thereof, as such, will have no
rights as a LaserSight stockholder, including the right to vote or to receive
dividends. The rights will have anti-takeover effects. The rights, if exercised,
would cause substantial dilution to a person or group that attempts to acquire
LaserSight on terms not approved by our board of directors.
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Warrants and Other Agreements to Issue Shares
In connection with the establishment of its credit facility with
Foothill Capital Corporation in March 1997, we issued warrants to purchase
shares of LaserSight common stock to Foothill. We are required to make
anti-dilution adjustments to both the number of warrant shares and the warrant
exercise price if we issue securities at a price per share that is (or could be)
less than the fair market value of our common stock at the time of such sale (a
"below-market issuance"). To date, such anti-dilution adjustments have resulted
in (1) an increase in the number of Foothill warrants to approximately 594,562,
and (2) a reduction to the exercise price of the Foothill warrants to
approximately $5.10 per share from an initial exercise price of $6.06 per share.
Additional anti-dilution adjustments to the Foothill warrants could also result
from any future below-market issuance of common stock by us, including in
connection with this offering. The Foothill warrants may be exercised at any
time through March 31, 2002. As of April 27, 2000, warrants for 97,562 shares of
our common stock remain outstanding.
In connection with its sale of the series B preferred stock in August
1997, we issued warrants to purchase a total of 750,000 shares of common stock
at a price of $5.91 per share to the former holders of our series B preferred
stock. The series B warrants are exercisable at any time before August 29, 2002.
In connection with a March 1998 agreement whereby we obtained the option to
repurchase the series B preferred stock and a lock-up on conversions, the
exercise price of the series B warrant shares was reduced to $2.753 per share.
We are required to make anti-dilution adjustments to both the number of warrant
shares and the warrant exercise price in the event we make a below-market
issuance. To date, these anti-dilution adjustments and other agreements among
the former holders of the series B preferred stock and us have resulted in (1)
an increase in the number of outstanding series B warrants to approximately
787,998, and (2) a reduction to the exercise price of series B warrants to
approximately $2.60 per share. As of April 27, 2000, 140,625 of such warrants
had been exercised and 647,373 of such warrants remained outstanding. We are
obligated to maintain the effectiveness of the registration of the series B
warrant shares under the Securities Act.
We also issued warrants to purchase a total of 40,000 shares of common
stock at a price of $5.91 per share to four individuals associated with the
placement agent for the series B preferred stock. These warrants are exercisable
at any time before August 29, 2002. We are required to make anti-dilution
adjustments to both the number of warrant shares and the warrant exercise price
in the event we make a below-market issuance. To date, these anti-dilution
adjustments have resulted in (1) an increase in the number of warrants to
approximately 42,254, and (2) a reduction to the exercise price of the warrants
to approximately $5.58 per share. As of April 27, 2000, 8,589 of such warrants
had been exercised and 33,665 of such warrants remained outstanding.
Based on previously-reported agreements entered into in 1993 in
connection with our acquisition of LaserSight Centers, and modified in July 1995
and March 1997, we may be obligated as follows:
o To issue up to 600,000 unregistered shares of common stock to
the former stockholders and option holders of LaserSight
Centers. These former stockholders and option holders include
two trusts related to our chairman of the board and certain of
our former officers and directors. These contingent shares
will be issued only if we achieve certain pre-tax operating
income levels through March 2002. Such income levels must be
related to our use of a fixed or mobile excimer laser to
perform certain specified types of laser surgery, the arranging
for the delivery of certain types of laser surgery or receipt
of license or royalty fees associated with patents held by
LaserSight Centers. The contingent shares are issuable at the
rate of one share per $4.00 of such operating income.
o To pay to a partnership whose partners include our chairman of
the board and certain of our former officers and directors a
royalty of up to $43 for each eye on which certain specified
types of laser surgery is performed on a fixed or mobile
excimer laser system owned or operated by LaserSight Centers
or its affiliates. This royalty may be paid either in cash or
in shares of common stock
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o Royalties do not begin to accrue until the earlier of March
2002 or the delivery of all of the 600,000 contingent shares.
As of December 31, 1999, we have not accrued any obligation to issue
contingent shares or royalty shares described above. We cannot be certain that
any issuance of contingent shares or royalty shares will be accompanied by an
increase in our per share operating results. We are not obligated to pursue
strategies that may result in the issuance of contingent shares or royalty
shares. It may be in the interest of our chairman of the board for us to pursue
business strategies that maximize the issuance of contingent shares and royalty
shares.
If the FDA approves a LaserSight-manufactured laser system for general
commercial use in the treatment of farsightedness that uses part or all of the
know-how of the laser technology we acquired from Photomed, we would be required
to issue to the former Photomed stockholders additional shares of common stock
with a market value of up to $1.0 million. After June 1, 1999, this obligation
decreases by approximately $2,740 per day each day thereafter, and the
obligation will be eliminated entirely on June 1, 2000. As of April 27, 2000,
the number of additional shares to be issued would have been approximately
20,000. Depending on whether and when such FDA approval is received and the
average closing price of LaserSight common stock for the 10-day period
immediately prior to the date of any such approval, the actual number of
additional shares of common stock to be issued could be more or less than this
number.
In connection with our sale of common stock in March 1999, we issued
the purchasers warrants to purchase a total of 225,000 shares of common stock at
an exercise price of $5.125 per share, the closing price of the our common stock
on March 22, 1999. The warrants have a term of five years. As of April 27, 2000,
45,000 of such warrants had been exercised and 180,000 of such warrants remained
outstanding.
On February 22, 1999, in connection with a consulting services
agreement that we entered into with an individual, we issued warrants to
purchase a total of 67,500 shares of our common stock at a price of $5.00 per
share. One-third of the warrants become vested on each annual anniversary of the
grant until all the warrants are vested. To the extent vested, the warrants are
exercisable at any time prior to February 22, 2004. As of April27, 2000, 22,500
of such warrants had vested and all such warrants remained outstanding.
DELAWARE LAW AND CERTAIN CHARTER AND BYLAW PROVISIONS
Certain provisions of our certificate of incorporation, by-laws and
Delaware corporate law described in this section may delay or make more
difficult acquisitions or changes in control of LaserSight that are not approved
by our board of directors.
Section 203 of Delaware General Corporation Law
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. 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 board of
directors or unless:
o the business combination is approved by the corporation's board
of directors prior to the date the interested stockholder
became an interested stockholder;
o the interested stockholder acquired at least 85% of the voting
stock of the corporation (other than stock held by directors
who are also officers or by certain employee stock plans) in
the transaction in which it becomes an interested stockholder;
or
o the business combination is approved by a majority of the
board of directors and by the affirmative vote of 66-2/3% of
the outstanding voting stock that is not owned by the
interested stockholder voting at an annual or special meeting
of stockholders and not by written consent.
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A "business combination" includes mergers, consolidations, asset sales
and other transactions having an aggregate value in excess of 10% of the
consolidated assets of the corporation and certain transactions that would
increase the interested stockholder's proportionate share ownership in the
corporation. 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 the corporation's voting stock.
Indemnification and Limitation of Liability
Our certificate of incorporation contains certain provisions that
eliminate a director's liability for monetary damages for a breach of fiduciary
duty, except in certain circumstances involving certain wrongful acts. These
acts include the breach of a director's duty of loyalty or acts or omissions
which involve intentional misconduct or a knowing violation of law.
Our certificate of incorporation also contains provisions indemnifying
the directors and officers of LaserSight to the fullest extent permitted by the
Delaware General Corporation Law. Our bylaws require that we advance the
expenses of an indemnified person defending a legal proceeding after we receive
an undertaking from the person to repay such advance if a court ultimately
determines that he or she is not entitled to indemnification. Our bylaws also
require us to pay any expenses of an indemnified person in connection with such
person enforcing their indemnification rights. We also maintain a directors and
officers liability insurance policy which provides for indemnification of our
directors and officers against certain liabilities incurred in their capacities
as such.
Amendment of Certificate of Incorporation and Bylaws
The Delaware General Corporation Law 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 bylaws, unless
a corporation's certificate of incorporation or by-laws, as the case may be,
requires a greater percentage. Our by-laws may, subject to the provisions of
Delaware General Corporation Law, be amended or repealed by a majority vote of
the board of directors or by two-thirds vote of stockholders entitled to vote on
such matter.
Advance Notice Requirements for Stockholder Proposals and Nomination
of Directors
Our bylaws provide that stockholders seeking to bring business before,
or nominate directors to stand for election at, any annual meeting of
stockholders, must provide timely notice in writing. To be timely, a
stockholder's notice generally must be given in writing to the secretary of
LaserSight not less than 90 nor more than 120 days prior to the meeting. The
bylaws also specify requirements for a stockholder's notice to be in proper
written form.
Special Meetings of Stockholders; Procedural Requirements for
Stockholder Action by Written Consent
Our bylaws provide that special meetings of our stockholders may be
called only by our chairman of the board, chief executive officer or by the
board of directors. In addition, our bylaws provide:
o procedures for setting a record date to determine which
stockholders may express written consent;
o that no written consent shall be effective unless, within 60
days of the record date, consents signed by holders of the
requisite minimum number of shares have been delivered to us;
and
o that no action by written stockholder consent could become
effective until the completion of a ministerial review of the
consents within five business days after delivery of the
requisite number of written consents.
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Number of Directors, Stockholder Removal of Directors
Our bylaws provide that we have at least three directors on the board
of directors and currently provides that we have seven directors. The board of
directors may increase or decrease the number of directors, provided that the
board cannot decrease the number directors to fewer than three. A majority of
the directors remaining in office generally can fill any vacancies on the board
of directors.
Our bylaws provide that the stockholders can remove a member of the
board of directors only if two-thirds of the outstanding shares of stock
entitled to vote generally in the election of directors, voting together as a
single class, vote in favor of the removal.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company, New York, New York.
SELLING STOCKHOLDERS
The following table describes the beneficial ownership of LaserSight
common stock by the selling stockholders named in this prospectus, and the
number of shares of common stock to be offered by the selling stockholders.
Unless otherwise indicated, each person has sole investment and voting power
over the shares listed in the table, subject to community property laws, where
applicable. For purposes of this table, a person or group of persons is deemed
to have "beneficial ownership" of any shares which such person has the right to
acquire within 60 days. For purposes of computing the percentage of outstanding
shares held by each person or group of persons named in the table, any security
which such person or group of persons has the right to acquire within 60 days is
deemed to be outstanding for the purpose of computing the percentage ownership
for such person or persons, but is not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person.
<TABLE>
<CAPTION>
Common Stock Beneficially Common Stock Beneficially
Owned Prior To Offering Owned After The Offering
----------------------- Shares of ------------------------
Common Percent of Common Stock Number of Percent of
Stock Outstanding to be Sold Shares Outstanding
------ ----------- ---------- ------ -----------
Selling Stockholder
- -------------------
<S> <C> <C> <C> <C> <C>
TLC Laser Eye Centers Inc. 3,830,673(1) 16.1% 1,015,873 2,814,800(1) 11.8%
BayStar Capital, L.P. 190,476 * 190,476 -- --
BayStar International, Ltd. 63,492 * 63,492
Engmann Options, Inc. 50,793 * 50,793 -- --
MDNH Partners, L.P. 25,396 * 25,396 -- --
</TABLE>
* Less than 1%.
(1) Includes 2,000,000 shares of series C preferred stock which is
convertible into shares of common stock on a one for one basis, and
50,000 shares of common stock issuable to TLC upon the exercise of
vested warrants at a price of $5.125.
26
<PAGE>
PLAN OF DISTRIBUTION
The shares of LaserSight common stock being registered pursuant to this
prospectus are being registered on behalf of the selling stockholders named in
this prospectus. All costs, expenses and fees in connection with registration of
the shares offered by this prospectus will be paid by LaserSight. Brokerage
commissions and similar selling expenses, if any, attributable to the sale of
shares shall be paid by the selling stockholders. The selling stockholders may
sale the shares registered by this prospectus from time to time in one or more
types of transactions including (A) over-the-counter market transactions, (B)
negotiated transactions, (C) through put or call options transactions relating
to the shares, (D) through short sales of shares, or (E) a combination of such
methods of sale. The shares may be sold at market prices prevailing at the time
of sale, or at negotiated prices. These transactions may or may not involve
securities brokers or dealers. The selling stockholders have advised LaserSight
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their securities,
nor is there an underwriter or coordinating broker acting in connection with the
proposed sale of shares by the selling stockholders.
The selling stockholders may sell shares directly to purchasers or to
or through broker-dealers, which may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions,
or commissions from the selling stockholders or the purchasers of shares for
whom such broker-dealers may act agents or to whom they sell as principal, or
both. Any such compensation may be equal to, less than or in excess of customary
amounts.
The selling stockholders named in this prospectus and any
broker-dealers that act in connection with the sale of shares might be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by such broker-dealers and any profit on the resale of
the shares sold by them while acting as principals might be deemed to be
underwriting discounts or commissions under the Securities Act. Because selling
stockholders may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, the selling stockholders will be subject to the
prospectus delivery requirements of the Securities Act. LaserSight has informed
the selling stockholders that the anti-manipulative provisions of Regulation M
promulgated under the Exchange Act may apply to their sales in the market.
Selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
Upon LaserSight being notified by a selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the Act,
disclosing (A) the name of each such selling stockholder and of the
participating broker-dealer(s), (B) the number of shares involved, (C) the price
at which such shares were sold, (D) the commissions paid or discounts or
concessions allowed to such broker-dealer(s), where applicable, (E) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus, and (F) other facts
material to the transaction.
LaserSight has agreed to indemnify each selling stockholder against
certain liabilities, including liabilities arising under the Securities Act. The
selling stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for
LaserSight by Sonnenschein Nath & Rosenthal, Chicago, Illinois.
27
<PAGE>
EXPERTS
The consolidated financial statements of LaserSight and its
subsidiaries as of December 31, 1999 and 1998, and for each of the years in the
three-year period ended December 31, 1999, have been incorporated herein by
reference and in the Registration Statement in reliance upon the report of KPMG
LLP, independent certified public accountants, and upon the authority of said
firm as experts in accounting and auditing.
WHERE TO FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's Pubic Reference Room at 450 Fifth Street, N.W., Washington, D.C.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the Public Reference Room. Our SEC filings are also available to the public
from our Internet site at www.lase.com or at the SEC's Internet site at
http://www.sec.gov. The other information at those Internet sites is not part of
this prospectus. Such reports, proxy statements and other information concerning
LaserSight can also be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
This prospectus is only part of a Registration Statement on Form S-3
that we have filed with the SEC under the Securities Act. We have also filed
exhibits and schedules with the Registration Statement that are not included in
this prospectus, and you should refer to the applicable exhibit or schedule for
a complete description of any statement referring to any contract or other
document. A copy of the Registration Statement, including the exhibits and
schedules thereto, may be inspected without charge at the Public Reference Room
of the SEC described above, and copies of such material may be obtained from
such office upon payment of the fees prescribed by the SEC.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act until the selling
stockholders sell all of the shares being registered by this prospectus:
o Annual Report on Form 10-K for the year ended December 31, 1999
filed on March 30, 2000;
o Definitive Proxy Statement filed on April 28, 2000;
o Current Report on Form 8-K filed on February 8, 2000.
o The description of the Common Stock contained in LaserSight's
Form 8-A/A (Amendment No. 4) filed on June 25, 1998.
You may request a copy of any of these filings, at no cost, by writing
or telephoning us at the following address: LaserSight Incorporated, 3300
University Boulevard, Suite 140, Winter Park, Florida 32792; telephone:
(407) 678-9900; Attn: Corporate Secretary.
28
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
SEC registration fee $ 1,442.73
Legal fees and expenses 30,000.00
Accountants' fees 2,500.00
Nasdaq Listing fees 13,460.30
Miscellaneous 2,596.97
----------
Total $50,000.00
==========
---------------------------------------
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 ("DGCL"), inter
alia, empowers a Delaware corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including attorneys'
fees) actual and reasonably incurred in connection with the defense or
settlement of any such threatened, pending or completed action or suit by or in
the right of the corporation if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and provided further that (unless a court of competent jurisdiction
otherwise provides) such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the shareholders or disinterested
directors or by independent legal counsel in a written opinion that
indemnification is proper because the indemnitee has met the applicable standard
of conduct. The Charter provides that directors and officers shall be
indemnified as described above in this paragraph to the fullest extent permitted
by the DGCL; provided, however, that any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person shall be
indemnified only if such proceeding (or part thereof) was authorized by the
board of directors of LaserSight.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in such capacity,
or arising out of his status as such, whether or not the corporation would
otherwise have the power to indemnify him under Section 145.
The Charter provides that, to the fullest extent permitted by the DGCL,
no director of LaserSight shall be personally liable to LaserSight or its
stockholders for monetary damages for breach of fiduciary as a director. Section
102(b)(7) of the DGCL currently provides that such provisions do not eliminate
the liability of a director (i) for a breach of the director's duty of loyalty
to LaserSight or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the DGCL (relating to the declaration of dividends and
purchase or redemption of shares in violation of the DGCL), or (iv) for any
II-1
<PAGE>
transaction from which the director derived an improper personal benefit.
Reference is made to the Charter and By-laws filed as Exhibits 4.1 and 4.2
hereto, respectively.
LaserSight maintains directors' and officers' liability insurance
policies covering certain liabilities of persons serving as officers and
directors and providing reimbursement to LaserSight for its indemnification of
such persons.
Item 16. Exhibits
The exhibit index set forth on page II-5 of this Registration Statement
is hereby incorporated herein by reference.
Item 17. Undertakings.
(a) Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10
(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
(c) Acceleration of Effectiveness.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<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 on Form S-3 and has duly caused this Registration
Statement to be filed on its behalf by the undersigned, thereunto duly
authorized, in the City of Winter Park, State of Florida, this 28th day of
April, 2000.
LASERSIGHT INCORPORATED
By: /s/ Gregory L. Wilson
------------------------------------------
Gregory L. Wilson, Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities on the dates indicated.
/s/ Michael R. Farris* April 28, 2000
- --------------------------------------------------------
Michael R. Farris, President, Chief Executive
Officer, and Director
/s/ Francis E. O'Donnell, Jr., M.D.* April 28, 2000
- --------------------------------------------------------
Francis E. O'Donnell, Jr., M.D., Chairman of the
Board and Director
/s/ J. Richard Crowley* April 28, 2000
- --------------------------------------------------------
J. Richard Crowley, Chief Operating Officer and Director
/s/ Terry A. Fuller, Ph.D.* April 28, 2000
- --------------------------------------------------------
Terry A. Fuller, Ph.D., Director
/s/ Gary F.Jonas* April 28, 2000
- --------------------------------------------------------
Gary F. Jonas, Director
/s/ David T. Pieroni* April 28, 2000
- --------------------------------------------------------
David T. Pieroni, Director
/s/ D. Michael Litscher* April 28, 2000
- --------------------------------------------------------
D. Michael Litscher, Chief Operating Officer, LaserSight
Technologies, Inc. and Director
/s/ Gregory L. Wilson April 28, 2000
- --------------------------------------------------------
Gregory L. Wilson, Chief Financial Officer
(Principal financial and accounting officer)
- ---------------------
*/ By: /s/ Gregory L. Wilson
- - ----------------------
(Gregory L. Wilson, as Attorney-in-Fact)
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description
--- -----------
4.1 Certificate of Incorporation (incorporated by reference to
Exhibit 1 to the Form 8-A/A (Amendment No. 4)filed by the
Company on June 25, 1998).
4.2 By-laws, as amended (incorporated by reference to Exhibit 3.2 to
the Company's Form 8-K filed on December 20, 1999).
4.3 Rights Agreement, dated as of July 2, 1998, between
LaserSight Incorporated and American Stock Transfer & Trust
Company, as Rights Agent, which includes (i) as Exhibit A
thereto the form of Certificate of Designation of the Series
E Junior Participating Preferred Stock, (ii) as Exhibit B
thereto the form of Right certificate (separate certificates
for the Rights will not be issued until after the
Distribution Date) and (iii) as Exhibit C thereto the
Summary of Stockholder Rights Agreement. (incorporated by
reference to Exhibit 99.1 to the Form 8-K filed by the
Company on July 8, 1998).
4.4 First Amendment to Rights Agreement, dated as of March 22, 1999,
between LaserSight Incorporated and American Stock Transfer &
Trust Company, as Rights Agent (incorporated by reference to
Exhibit 2 to Form 8-A/A filed by the Company on March 29, 1999).
4.5 Second Amendment to Rights Agreement, dated as of January 28,
2000, between LaserSight Incorporated and American Stock
Transfer & Trust Company, as Rights Agent (incorporated by
reference to Exhibit 99.6 to Form 8-K filed by the Company on
February 8, 2000).
5.1 Opinion of Sonnenschein Nath & Rosenthal.
23.1 Consent of KPMG LLP.
23.2 Consent of Sonnenschein Nath & Rosenthal (included in
Exhibit 5.1).
24.1 Powers of Attorney.
- ------------------
II-5
EXHIBIT 5.1
SONNENSCHEIN NATH & ROSENTHAL
8000 SEARS TOWER
CHICAGO, ILLINOIS 60026
April 28, 2000
LaserSight Incorporated
3300 University Boulevard, Suite 140
Winter Park, Florida 32792
Gentlemen:
We have acted as counsel to LaserSight Incorporated, a Delaware
corporation, in connection with the public offering by certain selling
stockholders of an aggregate of up to 1,346,030 shares (the "Shares") of
LaserSight's common stock, par value $.001 per share (including the associated
preferred stock purchase rights, the "Common Stock"), pursuant to a Registration
Statement on Form S-3 filed with the Securities and Exchange Commission under
the Securities Act of 1933 on or about the date of this letter and to which this
opinion is an exhibit (the "Registration Statement"). This opinion is delivered
in accordance with the requirements of Item 601(b)(5) of Regulation S-K under
the Securities Act.
The Shares were issued by LaserSight as follows:
(1) 1,015,873 shares of Common Stock were issued to TLC Laser Eye
Centers Inc. pursuant to that certain Securities Purchase
Agreement dated as of January 31, 2000 (the "TLC Securities
Purchase Agreement");
(2) an aggregate of 253,968 shares of Common Stock were issued to
BayStar Capital, L.P. and BayStar International, Ltd.
pursuant to that certain Securities Purchase Agreement dated
as of January 31, 2000 (the "BayStar Securities Purchase
Agreement"); and
(3) an aggregate of 76,189 shares of Common Stock were issued to
Engmann Options, Inc. and MDNH Partners, L.P. pursuant to that
certain Securities Purchase Agreement dated as of February 18,
2000 (the "Engmann Securities Purchase Agreement").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the TLC Securities
Purchase Agreement, the BayStar Securities Purchase Agreement, the Engmann
Securities Purchase Agreement, the Registration Statement, the certificate of
incorporation of LaserSight as currently in effect, the by-laws of LaserSight as
currently in effect, various resolutions of the board of directors of
LaserSight, and such agreements, instruments, certificates of public officials,
certificates of officers or representatives of LaserSight, the Selling
Stockholders and others, and such other documents, certificates and records, and
<PAGE>
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 LaserSight, 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 LaserSight, the
Selling Stockholders (as defined in the Registration Statement) and others.
Based upon and subject to the foregoing, we are of the opinion that the
Shares, when sold and delivered in the manner contemplated by the Registration
Statement and any Prospectus Supplement relating thereto, will be validly
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange 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 Securities Act.
Very truly yours,
SONNENSCHEIN NATH & ROSENTHAL
By: /s/ Mark L. Dosier
------------------------------
Mark L. Dosier
EXHIBIT 23.1
Independent Auditors' Consent
The Board of Directors
LaserSight Incorporated:
We consent to incorporation by reference in the registration statement on Form
S-3 of LaserSight Incorporated, to be filed with the Securities and Exchange
Commission on April 28, 2000, of our report dated February 11, 2000, relating to
the consolidated balance sheets of LaserSight Incorporated and subsidiaries as
of December 31, 1999 and 1998, and the related consolidated statements of
operations, comprehensive loss, stockholders' equity, and cash flows for each of
the years in the three-year period ended December 31, 1999, which report appears
in the December 31, 1999 annual report on Form 10-K of LaserSight Incorporated
and to the reference to our firm under the heading "Experts" in the prospectus.
/s/KPMG LLP
St. Louis, Missouri
April 28, 2000
EXHIBIT 24.1
POWER OF ATTORNEY
The person whose signature appears below hereby constitutes and
appoints Michael R. Farris and Gregory L. Wilson, and each of them, any one of
whom may act without the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on his behalf the
registration statement on Form S-3 (the "Registration Statement") relating to
the sale of shares of the common stock, $.001 par value (the "Common Stock"), of
LaserSight Incorporated, a Delaware corporation (the "Company"), by certain
shareholders of the Company, including without limitation the following:
(i) all shares of Common Stock that were issued in the
Company's January 2000 and February 2000 private placements
and (ii) shares held by any other shareholder of the Company
who has the right to require the Company to include some or
all of these shares in a Registration Statement (to the extent
such holder elects to have such shares included in the
Registration Statement),
and any and all additional amendments to the Registration Statement, which
amendments may make such changes and additions to the Registration Statement as
such attorney-in-fact may deem necessary or appropriate, and any and all
documents in connection therewith, and to file the same, with all exhibits
thereto, and all documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of April, 2000.
/s/Gregory L. Wilson
-------------------------------------
Name: Gregory L. Wilson
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby constitutes and
appoints Michael R. Farris and Gregory L. Wilson, and each of them, any one of
whom may act without the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on his behalf the
registration statement on Form S-3 (the "Registration Statement") relating to
the sale of shares of the common stock, $.001 par value (the "Common Stock"), of
LaserSight Incorporated, a Delaware corporation (the "Company"), by certain
shareholders of the Company, including without limitation the following:
(i) all shares of Common Stock that were issued in the
Company's January 2000 and February 2000 private placements
and (ii) shares held by any other shareholder of the Company
who has the right to require the Company to include some or
all of these shares in a Registration Statement (to the extent
such holder elects to have such shares included in the
Registration Statement),
and any and all additional amendments to the Registration Statement, which
amendments may make such changes and additions to the Registration Statement as
such attorney-in-fact may deem necessary or appropriate, and any and all
documents in connection therewith, and to file the same, with all exhibits
thereto, and all documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of April, 2000.
/s/Terry A. Fuller, Ph.D.
-------------------------------------
Name: Terry A. Fuller, Ph.D.
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby constitutes and
appoints Michael R. Farris and Gregory L. Wilson, and each of them, any one of
whom may act without the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on his behalf the
registration statement on Form S-3 (the "Registration Statement") relating to
the sale of shares of the common stock, $.001 par value (the "Common Stock"), of
LaserSight Incorporated, a Delaware corporation (the "Company"), by certain
shareholders of the Company, including without limitation the following:
(i) all shares of Common Stock that were issued in the
Company's January 2000 and February 2000 private placements
and (ii) shares held by any other shareholder of the Company
who has the right to require the Company to include some or
all of these shares in a Registration Statement (to the extent
such holder elects to have such shares included in the
Registration Statement),
and any and all additional amendments to the Registration Statement, which
amendments may make such changes and additions to the Registration Statement as
such attorney-in-fact may deem necessary or appropriate, and any and all
documents in connection therewith, and to file the same, with all exhibits
thereto, and all documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of April, 2000.
/s/Francis E. O'Donnell, Jr., M.D.
-------------------------------------
Name: Francis E. O'Donnell, Jr., M.D.
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby constitutes and
appoints Michael R. Farris and Gregory L. Wilson, and each of them, any one of
whom may act without the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on his behalf the
registration statement on Form S-3 (the "Registration Statement") relating to
the sale of shares of the common stock, $.001 par value (the "Common Stock"), of
LaserSight Incorporated, a Delaware corporation (the "Company"), by certain
shareholders of the Company, including without limitation the following:
(i) all shares of Common Stock that were issued in the
Company's January 2000 and February 2000 private placements
and (ii) shares held by any other shareholder of the Company
who has the right to require the Company to include some or
all of these shares in a Registration Statement (to the extent
such holder elects to have such shares included in the
Registration Statement),
and any and all additional amendments to the Registration Statement, which
amendments may make such changes and additions to the Registration Statement as
such attorney-in-fact may deem necessary or appropriate, and any and all
documents in connection therewith, and to file the same, with all exhibits
thereto, and all documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of April, 2000.
/s/D. Michael Litscher
-------------------------------------
Name: D. Michael Litscher
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby constitutes and
appoints Michael R. Farris and Gregory L. Wilson, and each of them, any one of
whom may act without the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on his behalf the
registration statement on Form S-3 (the "Registration Statement") relating to
the sale of shares of the common stock, $.001 par value (the "Common Stock"), of
LaserSight Incorporated, a Delaware corporation (the "Company"), by certain
shareholders of the Company, including without limitation the following:
(i) all shares of Common Stock that were issued in the
Company's January 2000 and February 2000 private placements
and (ii) shares held by any other shareholder of the Company
who has the right to require the Company to include some or
all of these shares in a Registration Statement (to the extent
such holder elects to have such shares included in the
Registration Statement),
and any and all additional amendments to the Registration Statement, which
amendments may make such changes and additions to the Registration Statement as
such attorney-in-fact may deem necessary or appropriate, and any and all
documents in connection therewith, and to file the same, with all exhibits
thereto, and all documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of April, 2000.
/s/J. Richard Crowley
-------------------------------------
Name: J. Richard Crowley
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby constitutes and
appoints Michael R. Farris and Gregory L. Wilson, and each of them, any one of
whom may act without the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on his behalf the
registration statement on Form S-3 (the "Registration Statement") relating to
the sale of shares of the common stock, $.001 par value (the "Common Stock"), of
LaserSight Incorporated, a Delaware corporation (the "Company"), by certain
shareholders of the Company, including without limitation the following:
(i) all shares of Common Stock that were issued in the
Company's January 2000 and February 2000 private placements
and (ii) shares held by any other shareholder of the Company
who has the right to require the Company to include some or
all of these shares in a Registration Statement (to the extent
such holder elects to have such shares included in the
Registration Statement),
and any and all additional amendments to the Registration Statement, which
amendments may make such changes and additions to the Registration Statement as
such attorney-in-fact may deem necessary or appropriate, and any and all
documents in connection therewith, and to file the same, with all exhibits
thereto, and all documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of April, 2000.
/s/Michael R. Farris
-------------------------------------
Name: Michael R. Farris
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby constitutes and
appoints Michael R. Farris and Gregory L. Wilson, and each of them, any one of
whom may act without the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on his behalf the
registration statement on Form S-3 (the "Registration Statement") relating to
the sale of shares of the common stock, $.001 par value (the "Common Stock"), of
LaserSight Incorporated, a Delaware corporation (the "Company"), by certain
shareholders of the Company, including without limitation the following:
(i) all shares of Common Stock that were issued in the
Company's January 2000 and February 2000 private placements
and (ii) shares held by any other shareholder of the Company
who has the right to require the Company to include some or
all of these shares in a Registration Statement (to the extent
such holder elects to have such shares included in the
Registration Statement),
and any and all additional amendments to the Registration Statement, which
amendments may make such changes and additions to the Registration Statement as
such attorney-in-fact may deem necessary or appropriate, and any and all
documents in connection therewith, and to file the same, with all exhibits
thereto, and all documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of April, 2000.
/s/Gary F. Jonas
-------------------------------------
Name: Gary F. Jonas
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby constitutes and
appoints Michael R. Farris and Gregory L. Wilson, and each of them, any one of
whom may act without the other, as his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in his name,
place and stead, in any and all capacities, to sign on his behalf the
registration statement on Form S-3 (the "Registration Statement") relating to
the sale of shares of the common stock, $.001 par value (the "Common Stock"), of
LaserSight Incorporated, a Delaware corporation (the "Company"), by certain
shareholders of the Company, including without limitation the following:
(i) all shares of Common Stock that were issued in the
Company's January 2000 and February 2000 private placements
and (ii) shares held by any other shareholder of the Company
who has the right to require the Company to include some or
all of these shares in a Registration Statement (to the extent
such holder elects to have such shares included in the
Registration Statement),
and any and all additional amendments to the Registration Statement, which
amendments may make such changes and additions to the Registration Statement as
such attorney-in-fact may deem necessary or appropriate, and any and all
documents in connection therewith, and to file the same, with all exhibits
thereto, and all documents in connection therewith with the Securities and
Exchange Commission under the Securities Act of 1933, and hereby ratifies,
approves and confirms all that each of such attorneys-in-fact and agents, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of April, 2000.
/s/David T. Pieroni
-------------------------------------
Name: David T. Pieroni
