<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 12, 1999
REGISTRATION NO. 333-68923
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 3 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PLC SYSTEMS INC.
(Exact name of registrant as specified in its charter)
BRITISH COLUMBIA 04-3153858
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
JENNIFER MILLER, ESQ.
PLC SYSTEMS INC.
10 FORGE PARK
FRANKLIN, MASSACHUSETTS 02038
(508) 541-8800
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
COPY TO:
STEVEN S. SIEGEL
BROWNSTEIN HYATT FARBER & STRICKLAND, P.C.
410 SEVENTEENTH STREET, 22ND FLOOR
DENVER, COLORADO 80202
(303) 534-6335
Approximate date of commencement of proposed sale to public: as soon as
practicable after the registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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 earliest effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================
Title of each class of Proposed maximum Amount of
securities aggregate offering price Registration Fee
- --------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, no par $12,000,000 (1) $3,336.00(1)(2)
================================================================================
</TABLE>
(1) The maximum aggregate offering price of the Common Stock registered
hereunder will not exceed $12,000,000. Pursuant to Rule 457(o), the
registration fee is calculated on the aggregate maximum offering price
of the Common Stock, and the table does not specify information about
the amount of shares to be registered or the proposed maximum offering
price per share.
(2) Registration fee previously paid.
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
will thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
The information 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 it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION. DATED FEBRUARY 12, 1999.
$12,000,000
PLC SYSTEMS INC.
Common Stock
This prospectus will allow us to issue common stock over time. This means:
- we may issue up to $12,000,000 of common stock from time to time.
- we will provide a prospectus supplement each time we issue common stock.
- the prospectus supplement will inform you about the specific terms of
that offering and also may add, update or change information contained in
this document.
- you should read this document and any prospectus supplement carefully
before you invest.
Our common stock is traded on the American Stock Exchange under the symbol
"PLC". On February , 1999, the last reported sale price for the common
stock on the American Stock Exchange was $ per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 2 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE BUYING SHARES OF THE COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is February , 1999.
<PAGE>
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision.
OUR COMPANY HAS A LIMITED OPERATING HISTORY AND A HISTORY OF LOSSES
PLC Systems Inc. was founded in 1987 and is still developing its
principal product. We have incurred operating losses in every year of our
existence except 1995. We incurred net losses of $1,540,000 million for the
year ended December 31, 1996 and $14,404,000 million for the year ended
December 31, 1997. For the nine months ended September 30, 1998, we incurred
a net loss of $13,344,000. As of September 30, 1998, we have an accumulated
deficit of $64,877,000. We have not achieved profitability and expect to
continue to incur net losses for at least the next fiscal year. Moreover,
although our business is not seasonal in nature, our revenues tend to vary
significantly from fiscal quarter to fiscal quarter.
OUR COMPANY IS DEPENDENT ON ONE PRINCIPAL PRODUCT
We develop and market one principal product: a patented high-powered
carbon dioxide laser system know as The Heart Laser System. Approximately
93.2% of our revenue in the fiscal year ended December 31, 1997 and 83.4% in
the nine month period ended September 30, 1998 was derived from The Heart
Laser System.
IN ORDER TO COMPETE EFFECTIVELY, WE NEED TO GAIN COMMERCIAL ACCEPTANCE
The Heart Laser System is designed for use in the treatment of coronary
artery disease in a surgical laser procedure we pioneered know as
transmyocardial revascularization. Transmyocardial revascularization is
commonly referred to in our industry as "TMR." TMR is a new technology that is
only recently becoming known. We may never achieve widespread commercial
acceptance. To be successful, we need to:
- demonstrate to the medical community in general, and to heart surgeons
and cardiologists in particular, that TMR procedures and The Heart
Laser System are effective, relatively safe and cost effective; and
- train heart surgeons to perform TMR procedures using The Heart Laser
System.
To date, we have trained only a limited number of heart surgeons and will need
to expand our marketing and training capabilities.
Over 4,000 patients have been treated with TMR procedures using the
Heart Laser System in the United States and overseas. As of September 30,
1998, we have shipped The Heart Laser System to 36 sites in the United States
and 71 sites overseas. Although a number of research studies, including one
conducted by the Texas Heart Institute, have reported favorably on The Heart
Laser System, we have not yet received widespread commercial acceptance. If
we are unable to maintain regulatory approvals or to achieve widespread
commercial acceptance of The Heart Laser System, our business, financial
condition and results of operations will be materially and adversely affected.
RESULTS OF LONG-TERM CLINICAL STUDIES MAY ADVERSELY AFFECT OUR BUSINESS
Patients have only been treated with The Heart Laser System since
January 1990, and, as a result, there have been few long-term follow-up
studies. If patients suffer harmful, long-term consequences from The Heart
Laser System, our business, financial condition and results of operations
will be materially and adversely affected.
2
<PAGE>
RAPID TECHNOLOGICAL CHANGES IN OUR INDUSTRY COULD MAKE THE HEART LASER SYSTEM
OBSOLETE
Our industry is characterized by rapid technological change and intense
competition. New technologies and products and new industry standards will
develop at a rapid pace. They could make The Heart Laser System obsolete. The
advent of new devices and procedures and advances in new drugs and genetic
engineering are especially threatening. Our future success will depend upon our
ability to develop and introduce a variety of product enhancements to address
the increasingly sophisticated needs of our customers. Material delays in
introducing product enhancements may cause customers to forego purchases of our
product and purchase those of our competitors.
Many of our competitors have substantially greater financial resources and
are in a better financial position to exploit marketing and research and
development opportunities. Most of our direct competitors are using a different
type of laser than ours, including holmium and excimer lasers. Several of the
companies that have entered the market are developing less invasive methods of
performing TMR procedures. These new methods may eliminate the need to make an
incision in the patient's chest, reducing costs and speeding recovery.
WE MUST RECEIVE AND MAINTAIN GOVERNMENT APPROVAL IN ORDER TO MARKET OUR PRODUCT
GENERAL
The Heart Laser System and our manufacturing activities are subject to
extensive, rigorous and changing federal and state regulation in the United
States and to similar regulatory requirements in other major markets,
including the European Community and Japan. To date, we have received
regulatory approval in the United States and the European Community, but not
in Japan. Without regulatory approval, we cannot market The Heart Laser
System in Japan. Even if granted, regulations may significantly restrict the
use of The Heart Laser System. The process of obtaining and maintaining
required regulatory approval is lengthy, expensive and uncertain.
UNITED STATES -- ALTHOUGH WE HAVE RECEIVED FDA APPROVAL, THE FDA HAS
RESTRICTED THE USE OF THE HEART LASER SYSTEM AND COULD REVERSE ITS APPROVAL AT
ANY TIME
In August 1998, we became the first company to receive FDA approval to
market a laser system for TMR procedures. However, the FDA:
- has not allowed us to market the Heart Laser System to treat patients
whose condition is amenable to conventional treatments, such as heart
bypass surgery and angioplasty; and
- could reverse its ruling and prohibit use of The Heart Laser System at
any time.
EUROPE -- ALTHOUGH WE HAVE RECIEVED REGULATORY APPROVAL FROM THE
EUROPEAN COMMUNITY, THE EUROPEAN COMMUNITY COULD REVERESE ITS APPROVAL AT ANY
TIME AND FRANCE HAS PROHIBITED USE OF THE HEART LASER SYSTEM
The Heart Laser System received the CE Mark, which is similar to FDA
approval, from the European Community in 1995. The CE Mark allows us to
market The Heart Laser System in all European Community countries. However:
- The European Community could reverse its ruling and prohibit use of
The Heart Laser System at any time; and
- We cannot market The Heart Laser System in France.
Despite receiving the CE Mark, The French Ministry of Health instituted a
commercial moratorium on TMR in October 1997. In its opinion, the procedure
is considered to be experimental and should only be performed within the
context of a clinical study. An evaluation of the safety of The Heart Laser
System is currently under review by a panel of French experts. We have
provided our clinical results to the panel and are actively working to have
this moratorium lifted. There is no assurance when or if we will be
successful.
3
<PAGE>
ASIA -- WE CANNOT MARKET OUR PRODUCT IN MAJOR ASIAN MARKETS UNTIL WE
RECEIVE GOVERNMENT APPROVAL
We believe that Japan represents the largest potential market for The
Heart Laser System in Asia. Prior to marketing The Heart Laser System in
Japan, we must receive approval from the Japanese Ministry of Health and
Welfare. This approval requires a clinical study in Japan with at least 60
patients. We submitted the results of this study to the Japanese Ministry of
Health and Welfare in December 1998. We do not know whether the clinical
study will be sufficient or when, if ever, we will receive approval from the
Japanese Ministry of Health.
Additional regulatory applications are pending in China, Taiwan and
South Korea. We cannot be sure when, if at all, we will obtain regulatory
approval in any particular country.
ASSERTING AND DEFENDING INTELLECTUAL PROPERTY RIGHTS MAY IMPACT RESULTS OF
OPERATION REGARDLESS OF SUCCESS
In our industry, competitors often assert intellectual property
infringement claims against one another. The success of our business depends
on our ability to successfully defend our intellectual property. Future
litigation may have a material impact on our financial condition even if we
are successful in marketing The Heart Laser System. We may not be successful
in defending or asserting our intellectual property rights.
WE MAY BE SUBJECT TO PRODUCT LIABILITY LAWSUITS; OUR INSURANCE MAY NOT BE
SUFFICIENT TO COVER DAMAGES
We may be subject to product liability claims. A recent United States
Supreme Court decision held that compliance with FDA regulations will not
shield a company from common-law negligent design claims or manufacturing and
labeling claims based on state rules. Although we have product liability
insurance with an yearly aggregate maximum of $10 million, we cannot be sure
that our insurance is adequate to cover any product liability law suits. Our
insurance is expensive and in the future may not be available on acceptable
terms, if at all. If a successful product liability claim or series of claims
exceeded our insurance coverage, it would divert the attention of our key
personnel, degrade the reputation and marketability of our technology and
products, and could have a material adverse effect on our business, financial
condition and results of operations.
WE HAVE BEEN SUED FOR ALLEGED VIOLATIONS OF SECURITIES LAW
In July 1997, an FDA advisory panel recommended against approval of our
application to market The Heart Laser System. Following this recommendation,
we were named as defendant in 21 purported class action lawsuits filed
between August 1997 and November 1997 in the United States District Court for
the District of Massachusetts. The lawsuits seek an unspecified amount of
damages in connection with alleged violations of the federal securities laws
based on our failure to obtain a favorable FDA panel recommendation in 1997.
Nineteen of these complaints have been consolidated by the court into a
single action for pretrial purposes and two suits have been dismissed. We
have filed motions to dismiss all of the remaining claims. However, our
motions to dismiss these claims may not be successful. We have also been
named as a defendant in a lawsuit filed in Massachusetts Superior Court in
September 1998. This suit seeks over $2 million in damages for alleged
negligent misrepresentations and fraud arising from our failure to obtain a
favorable FDA recommendation in 1997. We cannot make a meaningful estimate of
the amount or range of loss that could result from an unfavorable outcome of
these lawsuits, but an unfavorable outcome could have a material adverse
affect on our business, financial position and results of operations. We may
not be able to pay the amount of any judgment against us. We believe that
we have valid defenses to these litigation matters and intend to conduct a
vigorous defense.
WE MAY NOT EARN A FAVORABLE RETURN WITH THE PROCEEDS OF THIS OFFERING
Our management can spend most of the proceeds from this offering in ways
with which you may not agree. We cannot predict that the proceeds will be
invested to yield a favorable return.
4
<PAGE>
BECAUSE WE ARE INCORPORATED IN BRITISH COLUMBIA, YOU ARE RESTRICTED IN
ELECTING DIRECTORS
We are currently incorporated under the laws of British Columbia. Under
British Columbia law, a majority of our directors must be residents of Canada
and at least one director must be a resident of British Columbia. As a
result, you may be limited with respect to the persons that you can nominate
and elect as directors.
We plan to change our place of incorporation from British Columbia,
Canada to the Yukon Territory, Canada, by May of 1999 to eliminate the
restrictions on who may be a director. Our stockholders have already approved
the change in our place of incorporation.
BECAUSE WE ARE INCORPORATED IN CANADA, YOU MAY NOT BE ABLE TO ENFORCE
JUDGMENTS AGAINST US AND OUR CANADIAN DIRECTORS
Under Canadian law, you may not be able to enforce a judgment issued by
courts in the United States against us or our Canadian directors. The status
of the law in Canada is unclear as to whether a U.S. citizen can enforce a
judgment from a U.S. court in Canada for violations of U.S. securities laws.
A separate suit may need to be brought directly in Canada. You will still be
subject to this risk even after we change the place of our incorporation to
the Yukon Territory.
ANTITAKEOVER PROVISIONS MAY PREVENT YOU FROM REALIZING A PREMIUM RETURN
Provisions of British Columbia law could make it more difficult for a
third party to acquire us, even if the acquisition would be beneficial to
you. Specifically, British Columbia law requires any person who makes a
tender offer that would increase the person's stock ownership to more than
20% of our outstanding common stock to make a tender offer for all of our
common stock. These provisions could prevent you from realizing the premium
return that stockholders may realize in conjunction with corporate takeovers.
You will still be subject to this risk even after we change the place of our
incorporation to the Yukon Territory.
In addition, Our Articles provide for three classes of directors, with
one-third elected each year for a three year term. These provisions may have
the effect of delaying or preventing a corporate takeover or a change in our
management. This could adversely affect the market price of your common stock.
MARKET PRICE OF OUR STOCK MAY FALL IF OTHER STOCKHOLDERS SELL THEIR STOCK
If our stockholders sell substantial amounts of our common stock in the
public market following this offering, the market price of our common stock
could fall. Such sales also might make it more difficult for us to sell
equity or equity-related securities in the future at a price we deem
appropriate.
As of February 12, 1999 and before this offering, we have 19,739,647
shares of common stock outstanding. Of these shares, approximately
18,550,000 shares are eligible for sale in the public market. An
undetermined number of shares may be issued as part of this offering.
5
<PAGE>
THE VALUE OF YOUR COMMON STOCK MAY DECREASE IF OTHER SECURITY HOLDERS
EXERCISE THEIR OPTIONS AND WARRANTS OR CONVERT THEIR DEBT INTO COMMON STOCK
As shown in the table below, we have reserved an additional 3,126,291
shares of common stock for future issuance upon exercise or conversion of
outstanding options, redeemable warrants and convertible debt.
<TABLE>
<CAPTION>
Weighted Average Shares Reserved
Range of Exercise/ Exercise/ for Future
Conversion Prices Conversion Price Issuance
------------------ ---------------- ---------------
<S> <C> <C> <C>
Options $3.69 - $8.88 $5.26 2,808,162
Redeemable Warrants $15.78 - $27.81 $21.33 154,864
Convertible Debt $6.125 $6.125 163,265
---------------
Total 3,126,291
===============
</TABLE>
We plan to issue additional options and warrants in the future. If any of
these securities are exercised or converted, you may experience significant
dilution in the market value and earnings per share of your common stock.
IF WE ARE UNABLE TO RAISE NEEDED FUNDS, YOUR INVESTMENT COULD BE ADVERSELY
AFFECTED
We believe that the proceeds from this offering and existing revenues
will be sufficient to meet our cash requirements for the next 12 months.
However, we may be unable to raise the total amount of proceeds covered by
this prospectus. Furthermore, we may have unforeseen problems in obtaining
government approval and commercial acceptance of The Heart Laser System or we
may incur unanticipated decreases in operating revenues or increases in
expenses. Any of these events may adversely impact our capital resources,
requiring us to raise additional funds to finance continued research and
development, production, and sales efforts. In such an event, we will need
to obtain financing through sale of debt or equity securities, bank
financing, joint ventures or other means. We may not be able to raise
additional capital upon satisfactory terms and our business, financial
condition and results of operations could be materially and adversely
affected.
WE HAVE NO INTENTION TO PAY DIVIDENDS
We have never paid any cash dividends on our common stock. We currently
intend to retain all future earnings, if any, for use in our business and do
not expect to pay any dividends in the foreseeable future.
THE YEAR 2000 PROBLEM COULD CAUSE US TO EXPERIENCE MANUFACTURING DELAYS
The Year 2000 problem is the result of computer programs that use two
digits rather than four to define the applicable year. On January 1, 2000,
computer equipment and programs that have time-sensitive software may not be
able to distinguish whether "00" means 1900 or 2000. This could cause a
major system failure or could create erroneous results. We could be unable
to process transactions, send invoices, or engage in similar business
activities. We may also be vulnerable to other companies' Year 2000 issues.
In the last two months, we formed a task force to determine what if any
Year 2000 compliance issues we face. The task force has developed and
implemented a Year 2000 readiness plan that defines compliance and sets
critical milestones to identify any deficiencies and correct them. We
identified three basic operational areas that have been and will continue to
be examined:
- Products -- products we sell, products we have sold previously, and
products of our most significant suppliers;
6
<PAGE>
- Business Systems -- computer hardware and software we use to operate
our business, including purchasing, manufacturing, sales and finance;
and
- Peripherals -- our telephone, e-mail, security and shipping systems.
In 1998, we tested The Heart Laser System and believe that it is Year
2000 compliant. In addition, we spent approximately $200,000 on new
enterprise resource planning system software that the vendor has represented
is Year 2000 compliant. This new software system replaced substantially all
of our previous financial software system. Our current estimates of the
impact of the Year 2000 problem on our operations and financial results do
not include costs and time that may be incurred as a result of our vendors'
or customers' failure to become Year 2000 compliant.
Despite investigation and testing by us and our business partners,
our products may contain errors or defects associated with Year 2000 date
functions. We believe that our new enterprise resource planning software
substantially addresses our material Year 2000 risks; however, we are
continuing to test our secondary systems and continuing to investigate third
party compliance efforts. On a worst case scenario, known and unknown errors
and defects that affect the operation of our products or software could
result in:
- delay or loss or revenue;
- cancellation of customer contracts;
- diversion of product development resources;
- damage to our reputation; and
- increased service, warranty and litigation costs.
Furthermore, we have not developed a Year 2000 contingency plan to
address any failure of our Year 2000 compliance review to identify and
correct significant Year 2000 risks. Development of contingency plans is in
progress and will continue during calendar year 1999. Such plans could
include stockpiling inventory parts and raw materials, accelerating
replacement of affected equipment or software, using back-up equipment and
software, developing temporary manual procedures to compensate for system
deficiencies, and identifying alternative Year 2000 capable suppliers. We
cannot be sure that our contingency plans will adequately address the year
2000 problem. Any of these occurrences could have a material adverse effect
on our business, financial condition and results of operations.
OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN
FORWARD-LOOKING STATEMENTS
This prospectus and information incorporated by reference contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements deal with our current plans and expectations and
involve known and unknown risks and uncertainties. Statements containing
terms such as:
- believes
- does not believe
- plans
- expects
- intends
- estimates
- anticipates
and other phrases of similar meaning are considered to contain uncertainty
and are forward-looking statements.
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No forward-looking statement is a guarantee of future performance. Our
actual results could differ materially from those anticipated in these
forward-looking statements. We make cautionary statements in certain sections
of this prospectus, including in the risk factors identified above, and in
materials incorporated by reference into this prospectus. You should read
these cautionary statements as being applicable to all related
forward-looking statements, wherever they appear in this prospectus, in the
materials referred to in this prospectus, in the materials incorporated by
reference into this prospectus, or in our press releases. You should not
place undue reliance on any forward-looking statement.
HIGHLIGHTS OF OUR COMPANY
OUR PRINCIPAL PRODUCT -- THE HEART LASER SYSTEM.
We believe that The Heart Laser System may:
- be used to treat patients who cannot be helped by conventional
treatments
- provide an additional or alternative therapy to conventional
treatments of coronary artery disease, such as coronary artery
bypass graft surgery and balloon angioplasty; and
- lead to lower treatment costs, decreased hospital stays, quicker
recovery, reduced trauma and side effects, and improved quality of
life for patients who suffer from severe heart disease.
HOW THE HEART LASER SYSTEM WORKS
TMR procedures, performed with The Heart Laser System, create new
channels in the heart. These channels are believed to permit oxygenated blood
to flow from the inside of the heart to areas of the heart muscle that are
not fully functional because of coronary artery disease. Through a small
incision between a patient's ribs, a heart surgeon uses The Heart Laser
System to make 20 to 40 tiny channels from the outside of the heart muscle
into the cavity of the heart holding oxygenated blood. Because we designed
The Heart Laser System to used on a beating heart, it doesn't require the use
of a heart-lung machine or a blood transfusion. The Heart Laser System also
utilizes patented technology to synchronize the firing of the laser with the
patient's heartbeat. The laser fires when the heart is relatively still,
reducing the risk of harm that has occurred when TMR procedures are performed
without synchronization.
OUR PRODUCT AND SURGICAL PROCESS ARE PATENTED
Since April 1992, we have received 17 United States patents, including
12 which relate to TMR procedures performed with The Heart Laser System and
related technologies. Twelve additional United States patent applications are
pending. We have also received eight patents internationally and have a
number of patent applications pending in international patent offices. We
expect to continue to file domestic and foreign patent applications on
various enhancements of The Heart Laser System.
GENERAL INFORMATION AND WEB SITE ADDRESS
We incorporated pursuant to the Company Act of British Columbia, Canada
on March 3, 1987. Our principal offices are located at 10 Forge Park,
Franklin, Massachusetts 02038. Our telephone number is (508)541-8800. For
more information, please refer to our web site at www.plcmed.com.
8
<PAGE>
RECENT DEVELOPMENTS
FAVORABLE SETTLEMENT OF PATENT LITIGATION
In January 1999, we settled all outstanding litigation between our
company and a competitor. Under the settlement, CardioGenesis Corporation
agreed that patents covering our heart-synchronized laser system are valid
and enforceable. The United States patent and related international patents
cover our synchronization technology, a critical factor in ensuring the
safety of TMR procedures. As part of the settlement, CardioGenesis must pay:
- a minimum of $2.5 million to us over the next 42 months; and
- so long as the patents remain valid, license fees and ongoing
royalties through at least 2009.
INSURANCE REIMBURSEMENT OF TMR PROCEDURES
HCFA RECOMMENDS MEDICARE COVERAGE FOR TMR PROCEDURES
On January 26, 1998, the Health Care Financing Administration (HCFA)
released a draft decision memorandum recommending that Medicare provide
coverage for TMR procedures performed with FDA approved devices. The Heart
Laser System is the only device that has obtained FDA approval for commercial
use. Although HCFA's recommendation is a significant step that will lead to
Medicare reimbursement of TMR procedures, there may be a delay before
hospitals and other health care providers actually receive reimbursement for
TMR procedures. Moreover, there is no assurance that Medicare reimbursement,
when provided, will be adequate to cover the cost of TMR procedures.
BLUE CROSS/BLUE SHIELD PASSES FAVORABLE TECHNOLOGY REVIEW FOR TMR
PROCEDURES
On January 25, 1999, Blue Cross and Blue Shield Association's Technology
Evaluation Center completed a favorable assessment of TMR procedures.
Although the Blue Cross and Blue Shield finding does not guarantee
reimbursement by third-party payers, it is a significant step that could
eventually lead to reimbursement of TMR procedures by third-party payers.
USE OF PROCEEDS
We plan to use the net proceeds from the sale of the common stock for
general corporate purposes, including working capital, capital expenditures
and the repayment or refinancing of debt. Each time we sell the common
stock, we will provide a prospectus supplement that will contain information
about how we intend to use the net proceeds from the common stock sold at
that time.
PLAN OF DISTRIBUTION
We may offer the common stock:
- directly to purchasers;
- to or through underwriters;
- through dealers, agents or institutional investors; or
- through a combination of such methods.
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<PAGE>
Regardless of the method used to sell the common stock, we will provide a
prospectus supplement that will disclose:
- the identity of any underwriters, dealers, agents or institutional
investors who purchase the common stock;
- the material terms of the distribution, including the number of shares
sold and the consideration paid;
- the amount of any compensation, discounts or commissions to be
received by the underwriters, dealers, or agents;
- the terms of any indemnification provisions, including indemnification
from liabilities under the federal securities laws; and
- the nature of any transaction by an underwriter, dealer or agent
during the offering that is intended to stabilize or maintain the
market price of the common stock.
LEGAL MATTERS
Certain legal matters with respect to the common stock offered hereby will
be passed upon for us by Brownstein Hyatt Farber & Strickland, P.C. of Denver,
Colorado, and DuMoulin Black of Vancouver, British Columbia.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended December 31, 1997, as set forth in their report, which is
incorporated in this prospectus by reference. Our consolidated financial
statements are incorporated by reference in reliance on their report, given on
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
internet at the SEC's web site at www.sec.gov. You may also read and copy any
document we file at the SEC's Public Reference Rooms in Washington, D.C., New
York, New York and Chicago, Illinois. The Public Reference Room in Washington,
D.C. is located at 450 Fifth Street, N.W. Please call the SEC at 1-800-SEC-0330
for further information on the Public Reference Rooms.
Our common stock is listed on the American Stock Exchange, 86 Trinity
Place, New York, New York 10006. Reports, proxy statements and other
information concerning our Company can be reviewed at the American Stock
Exchange.
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 Securities
Exchange Act of 1934 until we sell all of the common stock:
- Annual Report on Form 10-K for the year ended December 31, 1997;
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- Quarterly Reports on Form 10-Q for the quarters ended March 31, June
30 and September 30, 1998;
- Current Reports on Form 8-K, filed August 21, and January 13, 25, and
26, 1999; and
- The description of our common stock contained in our registration
statement on Form 8-A, filed August 21, 1992, and amended September 11
and October 19, 1992.
We have also filed a registration statement on Form S-3 with the SEC under
the Securities Act of 1933. This prospectus does not contain all of the
information set forth in the registration statement. You should read the
registration statement for further information about our company and the
common stock. You may request a copy of these filings at no cost. Please
direct your requests to:
Jennifer Miller, Esq.
General Counsel
PLC Systems Inc.
10 Forge Park
Franklin, Massachusetts 02038
(508) 541-8800
You may also want to refer to our web site at www.plcmed.com.
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 different information. We are not
making an offer of the common stock in any state 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 page of those documents.
11
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Highlights of Our Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Recent Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Where You Can Find More Information. . . . . . . . . . . . . . . . . . . . . .10
</TABLE>
COMMON STOCK,
NO PAR VALUE
PLC SYSTEMS INC.
PROSPECTUS
FEBRUARY __, 1999
12
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses incurred in connection with the sale of the
securities being registered will be borne by the Registrant. Other than the SEC
registration fee, the amounts stated are estimates.
<TABLE>
<S> <C>
SEC Registration Fee........................... $ 10,008.00
AMEX Filing Fee................................ 17,500.00
Legal Fees and Expenses........................ 40,000.00
Accounting Fees and Expenses................... 5,000.00
----------
TOTAL.......................................... $72,508.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The British Columbia Company Act (the "Company Act"), Section 128,
enables a corporation, with the approval of the British Columbia court, to
indemnify a director or a former director of the Registrant, or a director or
a former director of a corporation of which the Registrant is or was a
shareholder, and his heirs and personal representatives, against all costs,
charges and expenses, including an amount paid to settle an action or to
satisfy a judgment, actually and reasonably incurred by him, including an
amount paid to settle an action or satisfy a judgment in a civil, criminal or
administrative action, or proceeding to which he is made a party by reason of
being or having been a director, including an action brought by the
Registrant or corporation if:
(a) he acted honestly and in good faith with a view to the best
interest of the corporation of which he is or was a director; and
(b) in the case of a criminal or administrative action or proceeding,
he had reasonable grounds for believing that his conduct was lawful.
The Company Act also provides that a company may purchase and maintain
insurance for a director or former director of the Registrant, or a director
or former director of a corporation of which it is or was a shareholder, and
his heirs and personal representatives, against liability incurred by him as
a director or officer.
The Memorandum and Articles of the Registrant provide that the
Registrant shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or
proceeding whether or not brought by the Registrant or by a corporation or
other legal entity or enterprise whether civil, criminal or administrative,
because he is or was a director, officer, employee or agent of the
Registrant, or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise in accordance with Section 128 of
the Company Act.
The Memorandum and Articles of the Registrant also provide that the
Registrant shall indemnify any person other than a director with respect to
any loss, damage, costs or expenses whatsoever incurred by him while acting
as an officer, employee or agent for the Registrant unless such loss, damage,
cost or expense shall arise out of failure to comply with instructions,
willful act, or default or fraud by such person in any of which events the
Registrant shall only indemnify such persons if the directors in their
absolute discretion so decide, or the Registrant by ordinary resolutions
shall so direct.
II-1
<PAGE>
The indemnification provided by the Memorandum and Articles of the
Registrant shall continue as to a person who has ceased to be a director,
officer, employee or agent, and shall benefit such person's heirs, executors
and administrators.
The Memorandum and Articles of the Registrant authorize the directors from
time to time to cause the Registrant to give indemnities to any director,
officer, employee, agent or other person who has undertaken or is about to
undertake any liability on behalf of the Registrant or any corporation
controlled by it.
The Memorandum and Articles of the Registrant further provide that, subject
to the Company Act, no director, officer or employee for the time being of the
Registrant shall be liable for the acts, receipts, neglects or defaults of any
other director, officer, or employee or for joining in any receipt or act for
conformity, or for any loss, damages or expense happening to the Registrant
through insufficiency or deficiency of title to any property acquired by order
of the board for the Registrant, or for the insufficiency or deficiency of any
security in or upon which any monies of or belonging to the Registrant shall be
invested or for any loss or damages arising from the bankruptcy, insolvency or
tortuous act of any person, firm or corporation with whom or which any monies,
securities or effects shall be lodged or deposited or for any loss occasioned by
any error of judgment or oversight on his part, or for any loss, damage or
misfortune whatever which may happen in the execution of the duties of his
respective office or trust or in relation thereto unless the same shall happen
by or through his own willful act of default, negligence, breach of trust or
breach of duty.
The Memorandum and Articles of the Registrant provide that the directors of
the Registrant may rely upon the accuracy of any statement of fact represented
by an officer of the Registrant to be correct, or upon statements in a written
report of the auditor of the Registrant, and shall not be reasonable or held
liable for any loss or damage resulting in the paying of any dividends or
otherwise acting in good faith upon any such statement.
The Memorandum and Articles of the Registrant permit the directors to cause
the Registrant to purchase and maintain insurance for the benefit of any person
who was or is a director, officer, employee or agent of the Registrant or is or
was serving at the request of the Registrant as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability incurred by him as a director, officer,
employee or agent.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Registrant, the Registrant has been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. No dealer, salesman or any
other person has been authorized in connection with this Offering to give any
information or to make any representations other than those contained in this
prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Registrant. This
prospectus does not constitute an offer to sell or a solicitation of an offer
to buy any of the securities offered hereby in any jurisdiction in which such
offer or solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such an offer or solicitation. Neither the delivery of
this prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that there has been no change in the circumstances of
the Registrant or the facts herein set forth since the date hereof.
II-2
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
- -------
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
3.1 Certificate of Incorporation, incorporated by reference to the
Registrant's registration statement on Form S-1 (SEC File No. 33-48340),
as previously filed with the Securities and Exchange Commission.
3.2 Memorandum and Articles (Bylaws), incorporated by reference to the
Registrant's registration statement on Form S-1 (SEC File No. 33-48340),
as previously filed with the Securities and Exchange Commission.
4.1 Form of Common Stock Certificate, incorporated by reference to the
Registrant's registration statement on Form S-1 (SEC File No. 333-37335)
and amendments thereto, as previously filed with the Securities and
Exchange Commission.
5.1 Opinion of DuMoulin Black.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of DuMoulin Black (included in Exhibit 5.1).
24.1 Power of Attorney (included in Part II of this registration statement
under the caption "Signatures").
27.1 Financial Data Schedule, incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the Quarter ended September 30, 1998
(File No. 1-11388), as previously filed with the Securities and
Exchange Commission.
99.1 Convertible Debenture Purchase Agreement dated as of April 23, 1998
between Southbrook International Investment, Ltd., Brown Simpson
Strategic Growth Fund, L.P. and Brown Simpson Strategic Growth Fund,
Ltd. and the Registrant, incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the Quarter ended March 31, 1998 (File
No. 1-11388), as previously filed with the Securities and Exchange
Commission.
99.2 Form of Convertible Debenture, incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the Quarter ended March
31, 1998 (File No. 1-11388), as previously filed with the Securities and
Exchange Commission.
99.3 Form of Redeemable Warrant, incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the Quarter ended March
31, 1998 (File No. 1-11388), as previously filed with the Securities and
Exchange Commission.
99.4 Registration Rights Agreement dated as of April 23, 1998 between
Southbrook International Investment, Ltd., Brown Simpson Strategic
Growth Fund, L.P. and Brown Simpson Strategic Growth Fund, Ltd. and the
Registrant, incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the Quarter ended March 31, 1998 (File No. 1-
11388), as previously filed with the Securities and Exchange Commission.
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) 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;
(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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with
II-3
<PAGE>
the Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at 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) 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 1934 Act)
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.
(c) 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 Securities Act
of 1933 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus 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-4
<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 signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Franklin, state of Massachusetts, on February 12,
1999.
PLC SYSTEMS INC.
a British Columbia corporation
By: /s/ WILLIAM C. DOW
-------------------------
Name: William C. Dow
Title: President, Chief Executive Officer and
Director (PRINCIPAL EXECUTIVE OFFICER)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement and Power of Attorney has been signed below by the
following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ WILLIAM C. DOW President, Chief Executive Officer February 12, 1999
- -------------------------- and Director (PRINCIPAL EXECUTIVE
William C. Dow OFFICER)
/s/ ROBERT SVIKHART Chief Financial Officer and February 12, 1999
- -------------------------- Treasurer (PRINCIPAL FINANCIAL
Robert Svikhart OFFICER AND PRINCIPAL ACCOUNTING
OFFICER)
/s/ EDWARD PENDERGAST* Chairman of the Board of Directors February 12, 1999
- --------------------------
Edward Pendergast
/s/ HAROLD P. CAPOZZI* Director February 12, 1999
- --------------------------
Harold P. Capozzi
/s/ H.B. BRENT NORTON* Director February 12, 1999
- --------------------------
H.B. Brent Norton,
M.D.
/s/ KENNETH J. Director February 12, 1999
PULKONIK*
- --------------------------
Kenneth J. Pulkonik
/s/ ROBERT I. RUDKO* Director February 12, 1999
- --------------------------
Robert I. Rudko, Ph.D
II-5
<PAGE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ ROBERTS A. SMITH* Director February 12, 1999
- --------------------------
Roberts A. Smith, Ph.D
</TABLE>
* By William C. Dow, attorney-in-fact.
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
- -------
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
3.1 Certificate of Incorporation, incorporated by reference to the
Registrant's registration statement on Form S-1 (SEC File No. 33-48340),
as previously filed with the Securities and Exchange Commission.
3.2 Memorandum and Articles (Bylaws), incorporated by reference to the
Registrant's registration statement on Form S-1 (SEC File No. 33-48340),
as previously filed with the Securities and Exchange Commission.
4.1 Form of Common Stock Certificate, incorporated by reference to the
Registrant's registration statement on Form S-1 (SEC File No. 333-37335)
and amendments thereto, as previously filed with the Securities and
Exchange Commission.
5.1 Opinion of DuMoulin Black.*
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of DuMoulin Black (included in Exhibit 5.1).
24.1 Power of Attorney (included in Part II of this registration statement
under the caption "Signatures").
27.1 Financial Data Schedule, incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the Quarter ended September 30, 1998
(File No. 1-11388), as previously filed with the Securities and
Exchange Commission.
99.1 Convertible Debenture Purchase Agreement dated as of April 23, 1998
between Southbrook International Investment, Ltd., Brown Simpson
Strategic Growth Fund, L.P. and Brown Simpson Strategic Growth Fund,
Ltd. and the Registrant, incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the Quarter ended March 31, 1998 (File
No. 1-11388), as previously filed with the Securities and Exchange
Commission.
99.2 Form of Convertible Debenture, incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the Quarter ended March
31, 1998 (File No. 1-11388), as previously filed with the Securities and
Exchange Commission.
99.3 Form of Redeemable Warrant, incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the Quarter ended March
31, 1998 (File No. 1-11388), as previously filed with the Securities and
Exchange Commission.
99.4 Registration Rights Agreement dated as of April 23, 1998 between
Southbrook International Investment, Ltd., Brown Simpson Strategic
Growth Fund, L.P. and Brown Simpson Strategic Growth Fund, Ltd. and the
Registrant, incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the Quarter ended March 31, 1998 (File No. 1-
11388), as previously filed with the Securities and Exchange Commission.
</TABLE>
* Previously filed.
