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As filed with the Securities and Exchange Commission on August 10, 2000
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PLC SYSTEMS INC.
(Exact name of registrant as specified in its charter)
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YUKON TERRITORY, CANADA 04-3153858
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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)
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MARK R. TAUSCHER
CHIEF EXECUTIVE OFFICER
PLC SYSTEMS INC.
10 FORGE PARK
FRANKLIN, MASSACHUSETTS 02038
(508) 541-8800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Steven D. Singer, Esq.
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Tel: (617) 526-6000
Fax: (617) 526-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this 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 earlier
effective registration statement for the same offering. / / 333-_______.
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. / / 333-__________.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
to be Price Offering Registration
Title of Shares to be Registered Registered Per Share(1) Price(1) Fee
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Common Stock, no par value per share.......... 154,864 $1.1875 $183,901 $48.55
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(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act and based upon the
average of the high and low prices on the American Stock Exchange on
August 4, 2000.
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THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY 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),
SHALL 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 WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 10, 2000
PROSPECTUS
PLC SYSTEMS INC.
154,864 SHARES OF COMMON STOCK
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This prospectus relates to resales of shares of common stock of PLC
Systems Inc. which are issuable upon the exercise of warrants to purchase an
aggregate of 154,864 shares of our common stock. We issued these warrants in
connection with the private placement of convertible debt in 1997 and 1998.
We will not receive any proceeds from the sale of the shares.
The selling stockholders identified in this prospectus, or their
pledgees, donees, transferees or other successors-in-interest, may offer the
shares from time to time through public or private transactions at prevailing
market prices, at prices related to prevailing market prices or at privately
negotiated prices.
Our common stock is traded on the American Stock Exchange under the
symbol "PLC." On August 4, 2000, the closing sale price of the common stock on
the American Stock Exchange was $1.25 per share.
----------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 4.
----------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED 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 _______________,______.
<PAGE>
TABLE OF CONTENTS
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PROSPECTUS SUMMARY............................................3
THE OFFERING..................................................3
RISK FACTORS..................................................4
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION...........11
USE OF PROCEEDS..............................................12
SELLING STOCKHOLDERS.........................................12
DESCRIPTION OF CAPITAL STOCK.................................13
PLAN OF DISTRIBUTION.........................................15
LEGAL MATTERS................................................16
EXPERTS......................................................16
WHERE YOU CAN FIND MORE INFORMATION..........................16
INCORPORATION OF DOCUMENTS BY REFERENCE......................16
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PLC System Inc.'s executive offices are located at 10 Forge Park,
Franklin, Massachusetts 02038, our telephone number is (508) 541-8800 and our
Internet address is bloodlinelaser.com or plcmed.com. The information on our
Internet website is not incorporated by reference in this prospectus. Unless the
context otherwise requires references in this prospectus to "PLC," "we," "us,"
and "our" refer to PLC Systems Inc. and its subsidiaries.
PLC Medical Systems, Inc. and design and The Heart Laser and design are
our registered trademarks.
We have not authorized anyone to provide you with information different
from that contained or incorporated by reference in this prospectus. The selling
stockholders are offering to sell, and seeking offers to buy, shares of our
common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of common stock.
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PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS IMPORTANT FEATURES OF THIS OFFERING AND THE
INFORMATION INCLUDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. THIS
SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE
INVESTING IN OUR COMMON STOCK. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY,
ESPECIALLY THE RISKS OF INVESTING IN OUR COMMON STOCK DISCUSSED UNDER "RISK
FACTORS."
PLC Systems Inc.
We design, manufacture and market a patented high-powered carbon
dioxide laser system for use in the treatment of severe coronary artery disease,
a form of heart disease caused by the blockage of blood flow into the coronary
arteries which supply oxygen-rich blood to the heart. Typically, patients
suffering from severe coronary artery disease experience excruciating spasmodic
attacks of chest pain, know as angina, and often experience shortness of breath
and fatigue.
We designed our laser system, known as The Heart Laser System, for use
in a surgical laser procedure known as transmyocardial revascularization, or
TMR, which can relieve the often debilitating pain associated with severe
coronary artery disease. In a TMR procedure, a cardiovascular surgeon uses a
laser to create between 20 and 40 tiny channels in the heart wall of a patient
suffering from severe coronary artery disease, thereby allowing oxygen-rich
blood to reach the heart muscle. The procedure does not require a heart-lung
bypass machine and is performed through a small incision between the patient's
ribs while the patient's heart is beating.
We developed The Heart Laser System specifically for TMR, and we
believe that it is the only TMR system that can create a channel completely
through the heart wall with a single laser pulse. In addition, our laser system
uses patented technology to fire this single laser pulse in the fraction of a
second between a patient's heartbeats, a relatively safe point in a patient's
heartbeat cycle when the heart is relatively still and unresponsive to stimuli.
The FDA has approved the use of The Heart Laser System for patients who have
severe, stable angina and who have areas of their heart not suitable for
coronary bypass surgery, and for whom other surgical or interventional
techniques may not be available or advisable to alleviate the effects of severe
coronary artery disease.
We market our laser system to hospitals worldwide. We offer our
customers the option of purchasing The Heart Laser System as a piece of capital
equipment or paying us a procedural fee each time they use a system which we
own. As of June 30, 2000, over 6,000 patients have been treated with our Heart
Laser System.
THE OFFERING
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<S> <C>
Common Stock offered by selling stockholders......... 154,864 shares
Use of proceeds...................................... PLC Systems Inc. will not receive any proceeds from
the sale of shares in this offering
American Stock Exchange symbol....................... PLC
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RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW BEFORE
PURCHASING OUR COMMON STOCK. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT
THE ONLY ONES FACING OUR COMPANY. ADDITIONAL RISKS AND UNCERTAINTIES MAY ALSO
IMPAIR OUR BUSINESS OPERATIONS. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR,
OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS WOULD LIKELY SUFFER.
IN THAT CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD FALL, AND YOU MAY LOSE
ALL OR PART OF THE MONEY YOU PAID TO BUY OUR COMMON STOCK.
WE DEPEND ON THE HEART LASER SYSTEM FOR SUBSTANTIALLY ALL OF OUR REVENUE, AND IF
THIS PRODUCT DOES NOT GAIN WIDESPREAD MARKET ACCEPTANCE, OUR REVENUE WILL NOT
GROW AND COULD DECLINE.
We develop and market one principal product, a patented high-powered
carbon dioxide laser system known as The Heart Laser System and related
disposable accessories. The Heart Laser System is designed for use in the
treatment of coronary artery disease in a relatively new surgical laser
procedure known as transmyocardial revascularization, or TMR.
We began marketing The Heart Laser System in Europe in 1995 and in the
United States in 1998. This product has not yet achieved 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;
- train heart surgeons to perform TMR procedures using The Heart Laser
System; and
- obtain widespread insurance reimbursement for the TMR procedure.
To date, we have trained only a limited number of heart surgeons and will need
to expand our marketing and training capabilities.
We derived approximately 89% of our revenue in fiscal 1999 and 90% in
fiscal 1998 from The Heart Laser System. Because we currently depend on The
Heart Laser System and related disposable accessories for substantially all of
our revenue and we have no other significant products, if this product fails to
achieve widespread market acceptance we will not be able to sustain or grow our
product revenue.
WE EXPECT TO INCUR LOSSES IN THE FUTURE.
We have incurred operating losses in each year since our inception,
except fiscal 1995. We expect to continue to incur operating losses at least
through 2001 as we expand our sales and marketing programs and research and
development efforts. We will spend these amounts before we receive any
incremental revenue from these efforts. Therefore, our losses will be greater
than the losses we would incur if we developed our business more slowly. In
addition, we may find that these efforts are more expensive than we currently
anticipate, which would further increase our losses. Our failure to become or
remain profitable may depress the market price of our common stock and our
ability to raise capital and continue our operations.
WE MAY NEED ADDITIONAL FINANCING TO CONTINUE OPERATIONS WHICH COULD BE DIFFICULT
TO OBTAIN.
As of June 30, 2000, we had cash and cash equivalents totaling
$7,429,000. We expect that our existing capital resources will be sufficient to
fund our operations at least through December 31, 2000. However, our future
capital requirements will depend upon a number of factors, including:
- the availability of capital resources required to fund future operating
losses, expand our sales and marketing programs and research and
development efforts, and meet market demand for The Heart Laser System;
- the progress of our research and development programs;
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- the resources we devote to developing, manufacturing and marketing The
Heart Laser System,
- the market acceptance of TMR and The Heart Laser System; and
- the resources, if any, we may devote to the expansion of our business,
including through the possible acquisition of businesses, technologies
or other intellectual property rights.
We may require additional funds, and we cannot be certain that
additional funding will be available when needed or on terms acceptable to us.
Further, if we issue additional equity securities, stockholders may experience
additional dilution, or the new equity securities may have rights, preferences
or privileges senior to those of existing holders of our common stock. If we
cannot raise funds on acceptable terms, if and when needed, we may not be able
to develop or enhance our products, take advantage of future opportunities, grow
our business or respond to competitive pressures or unanticipated requirements.
RESULTS OF LONG-TERM CLINICAL STUDIES OF THE HEART LASER SYSTEM MAY ADVERSELY
AFFECT OUR BUSINESS.
Surgeons began testing The Heart Laser System on humans in 1990. As a
result, few clinical studies exist on the long-term effectiveness of TMR or The
Heart Laser System. The emergence of harmful, long-term consequences arising
from the TMR or the use of The Heart Laser System may materially and adversely
affect our business and financial condition.
WE MAY BE UNABLE TO KEEP UP WITH NEW PRODUCTS OR ALTERNATIVE TECHNIQUES
DEVELOPED BY OTHERS, WHICH COULD IMPAIR OUR ABILITY TO REMAIN COMPETITIVE AND
ACHIEVE FUTURE GROWTH.
The medical industry in which we market our products is characterized
by rapid product development and technological advances. Our current or planned
products are at risk of obsolescence from:
- new devices and procedures to treat coronary artery disease;
- the development of less invasive methods of performing TMR procedures;
and
- advances in drugs or genetic engineering to prevent or treat coronary
artery disease.
We may not be able to improve our products or develop new products or
technologies quickly enough to maintain a competitive position in our market and
continue to sustain or grow our business.
IF WE DO NOT DEVELOP AND IMPLEMENT A SUCCESSFUL SALES AND MARKETING STRATEGY,
OUR BUSINESS WILL SUFFER.
We have recently shifted our sales and marketing approach from one
where we emphasize selling The Heart Laser System to hospitals as a piece of
capital equipment to one where we offer the hospital the alternative of paying
us a procedural fee each time they use our system. If this sales and marketing
approach is not widely accepted, we will not reach the level of sales necessary
to achieve profitability. In addition, this sales and marketing approach
generally defers the receipt of cash over a longer period than with a direct
sale, and we may not be able to adequately fund this strategy without additional
financing, which we may not be able to obtain. Our cash position and need for
additional financing to fund operations will be dependent in part upon the
number of hospitals that acquire The Heart Laser System on a fee per use basis
and the number and frequency of procedures performed by these hospitals using
our laser system.
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY, WHICH COULD RESULT IN PRICE
REDUCTIONS AND A DECREASED DEMAND FOR OUR PRODUCTS.
We may face substantial competition from larger medical device
companies that may have greater financial, technical, marketing and other
resources than we do. We face competition from companies that manufacture
competing products that use different types of lasers than we use in The Heart
Laser System, including holmium and
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excimer lasers. These types of lasers may gain broader market acceptance than
The Heart Laser System. In addition, we may face competition from large
pharmaceutical companies that are developing drug therapies to treat severe
coronary artery disease as an alternate to bypass surgery or TMR. Other
companies may develop TMR laser systems or alternate therapies that treat severe
coronary artery disease more effectively than The Heart Laser System and/or cost
less. In addition, one or more of our competitors may develop products that are
substantially equivalent to our FDA-approved products, in which case they may be
able to use our clinical data to more quickly obtain FDA approval of their
competing products. Competition in the sale of TMR devices and other therapies
to treat severe coronary artery disease could result in price reductions, fewer
orders, reduced gross margins and loss of market share.
OUR ABILITY TO MARKET AND SELL OUR PRODUCTS AND GENERATE REVENUE IN THE UNITED
STATES DEPENDS UPON FDA APPROVAL OF OUR PRODUCTS AND MANUFACTURING OPERATIONS.
Before we can market new products in the United States, we must obtain
clearance from the United States Food and Drug Administration, or FDA. In August
1998, the FDA approved The Heart Laser System for sale in the United States.
However, the FDA did not approve The Heart Laser System for use with patients
whose condition is amenable to conventional treatments, such as heart bypass
surgery and angioplasty.
If the FDA concludes that any of our products do not meet the
requirements to obtain clearance of a premarket notification under Section
510(k) of the Food, Drug and Cosmetic Act, then we would be required to file a
premarket approval application. The approval process for a premarket approval
application is lengthy, expensive and typically requires extensive preclinical
and clinical trial data. We may not obtain clearance of a 510(k) notification or
approval of a premarket approval application with respect to any of our product
candidates on a timely basis, if at all. If we fail to obtain timely clearance
or approval for our products, we will not be able to market and sell our
products, which will limit our ability to generate revenue. We may also be
required to obtain a pre-market approval supplement from the FDA before we can
market some enhancements to our currently marketed products that we modify after
initial approval. We have filed and have received pre-market approval
supplements for some improvements to The Heart Laser System. We have also made
enhancements to The Heart Laser System that we have determined do not
necessitate the filing of a pre-market approval supplement. However, if the FDA
does not agree with our determination, it will require us to file a pre-market
approval supplement for the modification and may prohibit us from marketing the
device until the FDA approves the supplement.
The FDA also requires us to adhere to current Good Manufacturing
Practices regulations, which include production design controls, testing,
quality control, storage and documentation procedures. The FDA may at any time
inspect our facilities to determine whether we adequately comply with these
regulations. Compliance with current Good Manufacturing Practices regulations
for medical devices is difficult and costly. In addition, we may not continue to
be compliant as a result of future changes in, or interpretations of,
regulations by the FDA or other regulatory agencies. If we do not achieve
continued compliance, the FDA may withdraw marketing clearance or require
product recall. When any change or modification is made to a device or its
intended use, the manufacturer may need to reassess compliance with current Good
Manufacturing Practices regulations, which may cause interruptions or delays in
the marketing and sale of our products.
The federal and state laws and regulations regarding the manufacture
and sale of our products are subject to future changes, as are administrative
interpretations of regulatory agencies. If we fail to comply with applicable
federal or state laws or regulations, we could be subject to enforcement
actions, including product seizures, recalls, withdrawal of clearances or
approvals and civil and criminal penalties.
OUR ABILITY TO MARKET AND SELL OUR PRODUCTS AND GENERATE REVENUE INTERNATIONALLY
DEPENDS UPON FOREIGN REGULATORY APPROVAL OF OUR PRODUCTS.
Sales of our products outside the United States are subject to foreign
regulatory requirements that vary from country to country. The time required to
obtain approvals from foreign countries may be longer or shorter than that
required for FDA approval, and requirements for foreign licensing may differ
from FDA requirements. In 1995, The Heart Laser System received the CE Mark,
which allows us to market this product in all European Community countries. In
October 1997, however, the French Ministry of Health instituted a commercial
moratorium on TMR procedures, because it considered TMR an experimental
procedure that should only be performed within the context of a clinical study.
In 1998, we completed a clinical study of The Heart Laser System and filed for
governmental
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approval in Japan. We do not know whether this clinical study will be sufficient
or when, if ever, we will receive approval to sell The Heart Laser System in
Japan.
Foreign laws and regulations regarding the manufacture and sale of our
products are subject to future changes, as are administrative interpretations of
foreign regulatory agencies. If we fail to comply with applicable foreign laws
or regulations, we could be subject to enforcement actions, including product
seizures, recalls, withdrawal of clearances or approvals and civil and criminal
penalties.
WE DEPEND ON THIRD PARTY REIMBURSEMENT TO OUR CUSTOMERS FOR MARKET ACCEPTANCE OF
OUR PRODUCTS. OUR PROFITABILITY WOULD SUFFER IF THIRD PARTY PAYORS FAIL TO
PROVIDE APPROPRIATE LEVELS OF REIMBURSEMENT FOR THE PURCHASE AND USE OF OUR
PRODUCTS.
Sales of medical products largely depend on the reimbursement of
patients' medical expenses by government health care programs and private health
insurers. The cost of The Heart Laser System is substantial. Without the
financial support of the government or third party insurers, the market for some
of our products will be limited. Medical products and devices incorporating new
technologies are closely examined by governments and private insurers to
determine whether the products and devices will be covered by reimbursement, and
if so, the level of reimbursement which may apply. We cannot be sure that third
party payors will reimburse medical procedures that utilize our products under
development, or enable us to sell them at profitable prices. We also cannot be
sure that third party payors will continue the current level of reimbursement to
physicians and medical centers for use of The Heart Laser System. Any reduction
in the amount of this reimbursement could harm our business.
The federal government and private insurers have considered ways to
change, and have changed, the manner in which health care services are provided
and paid for in the U.S. In the future, it is possible that the government may
institute price controls and further limits on Medicare and Medicaid spending.
These controls and limits could affect the payments we collect from product
sales. Internationally, medical reimbursement systems vary significantly, with
some medical centers having fixed budgets, regardless of levels of patient
treatment, and other countries requiring application for, and approval of,
government or third party reimbursement. Even if we succeed in bringing our new
products to market, uncertainties regarding future health care policy,
legislation and regulation, as well as private market practices, could affect
our ability to sell our products in commercially acceptable quantities at
profitable prices.
WE MAY BE REQUIRED TO BRING LITIGATION TO ENFORCE OUR INTELLECTUAL PROPERTY
RIGHTS, WHICH MAY RESULT IN SUBSTANTIAL EXPENSE AND MAY DIVERT OUR ATTENTION
FROM THE IMPLEMENTATION OF OUR BUSINESS STRATEGY.
We believe that the success of our business depends, in part, on
obtaining patent protection for our products, defending our patents once
obtained and preserving our trade secrets. We rely on a combination of
contractual provisions, confidentiality procedures and patent, trademark and
trade secret laws to protect the proprietary aspects of our technology. These
legal measures afford only limited protection and competitors may gain access to
our intellectual property and proprietary information. Litigation may be
necessary to enforce our intellectual property rights, to protect our trade
secrets and to determine the validity of the scope of our proprietary rights.
Any litigation could result in substantial expense and diversion of our
attention from the growth of the business and may not adequately protect our
intellectual property rights.
WE MAY BE SUED BY THIRD PARTIES WHICH CLAIM THAT OUR PRODUCTS INFRINGE ON THEIR
INTELLECTUAL PROPERTY RIGHTS, PARTICULARLY BECAUSE THERE IS SUBSTANTIAL
UNCERTAINTY ABOUT THE VALIDITY OR BREADTH OF MEDICAL DEVICE PATENTS.
We may be exposed to future litigation by third parties based on claims
that our products infringe the intellectual property rights of others, The risk
is exacerbated by the fact that the validity and breadth of claims covered in
medical technology patents involve complex legal and factual questions for which
important legal principles are unresolved. Any litigation or claims against us,
whether or not valid, could result in substantial costs, could place a
significant strain on our financial resources and could harm our reputation. In
addition, intellectual property litigation or claims could force us to do one or
more of the following:
- cease selling, incorporating or using any of our products that
incorporate the challenged intellectual property, which would adversely
affect our revenue;
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- obtain a license from the holder of the infringed intellectual property
right, which license may not be available on reasonable terms, if at
all; and
- redesign our products, which would be costly and time-consuming.
WE COULD BE EXPOSED TO SIGNIFICANT PRODUCT LIABILITY CLAIMS WHICH COULD DIVERT
MANAGEMENT ATTENTION AND ADVERSELY AFFECT OUR CASH BALANCES, OUR REPUTATION AND
OUR ABILITY TO OBTAIN AND MAINTAIN INSURANCE COVERAGE AT SATISFACTORY RATES OR
IN ADEQUATE AMOUNTS.
The manufacture and sale of The Heart laser System and any other
products we may develop expose us to product liability claims and product
recalls, including those which may arise from misuse or malfunction of, or
design flaws in, our products or use of our products with devices and
accessories not manufactured or sold by us. Product liability claims or product
recalls, regardless of their ultimate outcome, could require us to spend
significant time and money in litigation or to pay significant damages, We
currently maintain insurance; however, it might not cover the costs of any
product liability claims made against us. Furthermore, we may not be able to
obtain insurance in the future at satisfactory rates or in adequate amounts.
OUR BUSINESS COULD SUFFER DUE TO POTENTIAL DEFECTS IN SOFTWARE CONTAINED IN THE
HEART LASER SYSTEM.
The Heart Laser System incorporates sophisticated computer software which we
have developed or licensed from third parties. Software as complex as that
incorporated into this product frequently contain errors or failures, especially
when first introduced. In addition, new products or enhancements may contain
undetected errors or performance problems that, despite testing, are discovered
only after commercial shipment. Because The Heart Laser System is used with
critically ill patients, we expect that our customers will have an increased
sensitivity to software defects than the market for software products generally.
Any errors or performance problems that arise may cause delays in product
shipments, loss of revenue, delays in market acceptance of our products,
diversion of management's time, damage to our reputation and increased service
or warranty costs.
OUR DEPENDENCE ON SOLE SUPPLIERS COULD ADVERSELY AFFECT OUR ABILITY TO MEET OUR
CUSTOMERS' DEMANDS FOR OUR PRODUCTS IN A TIMELY MANNER OR WITHIN BUDGET.
We believe that some of the components that are necessary for the
assembly of The Heart Laser System , including some of the components used in
the laser, are currently provided to us by separate sole suppliers or a limited
group of suppliers. We purchase components through purchase orders rather than
long-term supply agreements and generally do not maintain large volumes of
inventory. We have experienced shortages and delays in obtaining some of the
components of The Heart Laser System and may experience similar delays or
shortages in the future. The disruption or termination in the supply of
components could cause a significant increase in the costs of these components,
which could affect our profitability. A disruption or termination in the supply
of components could also result in our inability to meet demand for our
products, which could lead to customer dissatisfaction and damage to our
reputation. Furthermore, if we are required to change the manufacturer of a key
component of The Heart Laser System, we may be required to verify that the new
manufacturer maintains facilities and procedures that comply with quality
standards and with all applicable regulations and guidelines. The delays
associated with the verification of a new manufacturer could delay our ability
to manufacture products in a timely manner or within budget.
FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS COULD CAUSE OUR STOCK PRICE TO
DECREASE.
Our operating results have fluctuated significantly from quarter to
quarter in the past and are likely to vary in the future. These fluctuations are
due to several factors relating to the sale of our products, including the
timing and volume of customer orders for The Heart Laser System, customer
cancellations and the timing and amount of our expenses. Because of these
fluctuations, it is likely that in some future quarter or quarters our operating
results could fall below the expectations of securities analysts or investors.
If so, the market price of our stock would likely decrease.
In addition, because we do not have a significant backlog of customer
orders for The Heart Laser System, revenue in any quarter depends on orders
received in that quarter. Our quarterly results may also be adversely affected
because some customers may have inadequate financial resources to purchase our
products or may fail to pay for our products after receiving them. In
particular, hospitals are increasingly experiencing financial constraints,
consolidations
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and reorganizations as a result of cost-containment measures and declining third
party reimbursement for services, which may result in decreased product orders
or an increase in bad debts in any quarter.
WE MAY NOT BE ABLE TO MEET THE UNIQUE OPERATIONAL, LEGAL AND FINANCIAL
CHALLENGES THAT WE WILL ENCOUNTER IN OUR INTERNATIONAL OPERATIONS, WHICH MAY
LIMIT THE GROWTH OF OUR BUSINESS.
Product sales outside of the U.S. account for a portion of our
revenues. Establishing and expanding international sales can be expensive,
managing and overseeing foreign operations may be difficult, and products may
not receive market acceptance. We are increasingly subject to a number of
challenges which specifically relate to our international business activities.
These challenges include:
- failure of local laws to provide the same degree of protection against
infringement of our intellectual property;
- protectionist laws and business practices that favor local competitors,
which could slow our growth in international markets;
- less acceptance by foreign cardiac surgeons of the use of TMR in
general and The Heart Laser System in particular for the treatment of
severe coronary artery disease;
- difficulties in obtaining licenses to export technologies and products
from the United States;
- longer sales cycles to sell products like The Heart Laser System to
hospitals, which could slow our revenue growth from international
operations; and
- longer accounts receivable payment cycles and difficulties in
collecting accounts receivable.
If we are unable to meet and overcome these challenges, our
international operations may not be successful, which would limit the growth of
our business.
WE HAVE BEEN SUED FOR ALLEGED VIOLATIONS OF SECURITIES LAWS, AND THE OUTCOME OF
THESE SUITS MAY ADVERSELY AFFECT OUR BUSINESS.
In July 1997, an FDA advisory panel recommended against approval of our
application to market The Heart Laser System in the United States. 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. The court consolidated nineteen of these complaints into
a single action for pretrial purposes, and two suits were voluntarily dismissed.
We moved to dismiss all of the remaining claims. On March 26, 1999, the court
issued an order dismissing some, but not all of the remaining claims. The
parties both filed motions for reconsideration and on October 12, 1999, the
court dismissed additional, but not all remaining claims. We cannot make a
meaningful estimate of the amount or range of loss that could result from an
unfavorable outcome of these lawsuits. We may not be able to pay the amount of
any judgment against us. An unfavorable outcome in this litigation could
adversely affect our business, financial position and results of operations.
BECAUSE WE ARE INCORPORATED IN CANADA, YOU MAY NOT BE ABLE TO ENFORCE JUDGMENTS
FROM COURTS IN THE UNITED STATES 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.
WE MAY INCUR SIGNIFICANT COSTS FROM CLASS ACTION LITIGATION DUE TO OUR EXPECTED
STOCK VOLATILITY.
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Our stock price may fluctuate for many reasons, including the addition
or departure of key employees, variations in our quarterly operating results and
changes in market valuations of medical device companies. Recently, when the
market price of a stock has been volatile as our stock price may be, holders of
that stock have occasionally instituted securities class action litigation
against the company that issued the stock. If any of our stockholders we to
bring a lawsuit of this type against us, even if the lawsuit is without merit,
we could incur substantial costs defending the lawsuit. The lawsuit could also
divert the time and attention of our management.
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS COULD PREVENT OR DELAY
TRANSACTIONS THAT STOCKHOLDERS MAY FAVOR.
Provisions of our articles of continuance and by-laws may discourage,
delay or prevent a merger or acquisition that stockholders may consider
favorable, including transactions in which you might otherwise receive a premium
for your shares. These provisions include:
- authorizing the issuance of "blank check" preferred stock without any
need for action by stockholders; and
- providing for a board of directors with staggered terms of up to three
years.
OUR STOCK PRICE COULD BE DEPRESSED IF OTHER STOCKHOLDERS SELL THEIR STOCK.
If our stockholders sell substantial amounts of our common stock in the
public market, 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.
THE VALUE OF YOUR COMMON STOCK MAY DECREASE IF OTHER SECURITY HOLDERS EXERCISE
THEIR OPTIONS AND WARRANTS.
As of June 30, 2000, we had reserved 2,819,438 shares of common stock
for future issuance upon exercise or conversion of outstanding options and
redeemable warrants. Our equity incentive and stock purchase plans authorize the
issuance of an additional 1,150,581 shares of common stock. We may issue
additional options and warrants in the future. If any of these securities are
exercised, you may experience significant dilution in the market value and
earnings per share of your common stock.
OUR STOCK PRICE WILL FLUCTUATE, WHICH MAY CAUSE YOUR INVESTMENT IN OUR STOCK TO
SUFFER A DECLINE IN VALUE.
The stock market in general has recently experienced extreme price and
volume fluctuations. In addition, the market prices of securities of technology
and medical device companies have been extremely volatile and have experienced
fluctuations that often have been unrelated or disproportionate to the operating
performance of these companies. These broad market fluctuations could result in
extreme fluctuations in the price of our common stock, which could cause a
decline in the value of your shares.
WE MAY NOT RESERVE AMOUNTS ADEQUATE TO COVER PRODUCT OBSOLESCENCE CLAIMS AND
RETURNS, WHICH COULD RESULT IN UNANTICIPATED EXPENSES AND FLUCTUATIONS IN
OPERATING RESULTS.
Depending on factors such as the timing of our introduction of new
products, as well as warranty claims and product returns, we may need to reserve
amounts in excess of those currently reserved for product obsolescence, excess
inventory, warranty claims and product returns. These reserves may not be
adequate to cover all costs associated with these items. If these reserves are
inadequate, we would be required to incur unanticipated expenses which could
result in unexpected fluctuations in quarterly operating results.
IF WE DO NOT RETAIN OUR SENIOR MANAGEMENT AND OTHER KEY EMPLOYEES, WE MAY NOT BE
ABLE TO SUCCESSFULLY IMPLEMENT OUR BUSINESS STRATEGY.
Although our President and Chief Executive Officer, Mark Tauscher, and
our Chief Financial Officer, James Thomasch, joined PLC within the last year,
they, as well as other members of our management and key employees, have
extensive experience with the medical device industry. Our success is
substantially dependent on the ability, experience and performance of these
members of our senior management and other key employees. Because of their
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ability and experience, if we lose one or more of the members of our senior
management or other key employees, our ability to successfully implement our
business strategy could be seriously harmed.
WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.
We do not anticipate paying any cash dividends on our common stock in
the foreseeable future. We intend to retain future earnings to fund our growth.
Accordingly, our stockholders will not receive a return on their investment in
our common stock through the payment of dividends in the foreseeable future and
may not realize a return on their investment even if they sell their shares. As
a result, our stockholders may not be able to resell their shares at or above
the price they paid for them. Any future payment of dividends to our
stockholders will depend on decisions that will be made by our board of
directors and will depend on then existing conditions, including our financial
condition, contractual restrictions, capital requirements and business
prospects.
THIS PROSPECTUS STATEMENT CONTAINS FORWARD LOOKING STATEMENTS WHICH MAY NOT
PROVE TO BE ACCURATE, AND SUCH INACCURACY COULD MATERIALLY AND ADVERSELY AFFECT
THE MARKET PRICE OF OUR COMMON STOCK.
This prospectus also contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ significantly from those
anticipated in these forward-looking statements as a result of the risks
described above and elsewhere in this prospectus and in the documents
incorporated in this prospectus by reference.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus includes and incorporates 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. All statements, other than statements of
historical facts, included or incorporated in this prospectus regarding our
strategy, future operations, financial position, future revenues, projected
costs, prospects, plans and objectives of management are forward-looking
statements. The words "anticipates," "believes," "estimates," "expects,"
"intends," "may," "plans," "projects," "will," "would" and similar expressions
are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. We cannot guarantee
that we actually will achieve the plans, intentions or expectations disclosed in
our forward-looking statements and you should not place undue reliance on our
forward-looking statements. Actual results or events could differ materially
from the plans, intentions and expectations disclosed in the forward-looking
statements we make. We have included important factors in the cautionary
statements included or incorporated in this prospectus, particularly under the
heading "Risk Factors", that we believe could cause actual results or events to
differ materially from the forward-looking statements that we make. Our
forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments we may make.
We do not assume any obligation to update any forward-looking statements.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling
stockholders.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by the selling stockholders for brokerage,
accounting, tax or legal services or any other expenses incurred by the selling
stockholders in disposing of the shares. We will bear all other costs, fees and
expenses incurred in effecting the registration of the shares covered by this
prospectus, including, without limitation, all registration and filing fees,
American Stock Exchange listing fees and fees and expenses of our counsel and
our accountants.
SELLING STOCKHOLDERS
We may issue the shares of common stock covered by this prospectus upon
the exercise of warrants which we issued in connection with the private
placement of convertible debt in 1997 and 1998. The following table sets forth,
to our knowledge, certain information about the selling stockholders as of
August 1, 2000.
Beneficial ownership is determined in accordance with the rules of the
SEC, and includes voting or investment power with respect to shares. Shares of
common stock issuable under warrants that are exercisable within 60 days after
August 1, 2000 are deemed outstanding for computing the percentage ownership of
the person holding the warrants but are not deemed outstanding for computing the
percentage ownership of any other person. Unless otherwise indicated below, to
our knowledge, all persons named in the table have sole voting and investment
power with respect to their shares of common stock. The inclusion of any shares
in this table does not constitute an admission of beneficial ownership for the
person named below.
<TABLE>
<CAPTION>
Shares of Common Stock Number of Shares Shares of Common Stock to be
Beneficially Owned Prior to of Common Stock Beneficially Owned After
Name of Selling Stockholder Offering Being Offered Offering (1)
--------------------------- -------- ------------- ------------
Number Percentage Number Percentage
---------------------------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
HBK Master Fund L.P. 72,264 (2) * 72,264 (2) 0 0%
Strong River Investments , 76,155 (2) * 76,155 (2) 0 0%
Inc.
Brown Simpson ORD Investments 6,445 (2) * 6,445 (2) 0 0%
LLC
</TABLE>
--------------------------
* Less than one percent.
(1) We do not know when or in what amounts a selling stockholder may offer
shares for sale. The selling stockholders may not sell any or all of
the shares offered by this prospectus. Because the selling stockholders
may offer all or some of the shares pursuant to this offering, and
because there are currently no agreements, arrangements or
understandings with respect to the sale of any of the shares, we can
not estimate the number of the shares that will be held by the selling
stockholders after completion of the offering. However, for purposes of
this table, we have assumed that, after completion of the offering,
none of the shares covered by this prospectus will be held by the
selling stockholders.
(2) Consists of shares of our common stock issuable upon the exercise of
outstanding warrants.
Except as set forth below, none of the selling stockholders has held
any position or office with, or has otherwise had a material relationship with,
us or any of our subsidiaries within the past three years. Brown Simpson, LLC,
an affiliate of Brown Simpson ORD Investments LLC, acted as a financial advisor
to PLC in connection with the private placement of approximately $20.1 million
of 5% convertible debentures and related warrants on July 17 and August 14,
1997. In addition, affiliates of Brown Simpson ORD Investments LLC and HBK
Master Fund L.P. participated in the private placement of 5% convertible
debentures in July and August, 1997 and an affiliate of Brown Simpson ORD
Investments LLC participated in the private placement of approximately $5.0
million of non-interest bearing convertible debentures on April 23, 1998.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of an unlimited number of common
shares without par value and an unlimited number of preferred shares, issuable
in series, without par value. We also have issued the warrants described below.
The following summary describes the material terms of our capital stock
as of the date of this prospectus. However, you should refer to the actual terms
of the capital stock contained in our articles of continuance and by-laws which
are filed as exhibits to the registration statement of which this prospectus is
part.
COMMON STOCK
As of June 30, 2000, 23,906,385 shares of our common stock were
outstanding. In addition, as of June 30, 2000, options to purchase a total of
2,603,248 shares of our common stock were outstanding with a weighted average
exercise price of $3.64 per share.
Holders of common stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Two stockholders or proxyholders holding not less than ten
percent (10%) of our outstanding shares entitled to vote at a meeting constitute
a quorum for stockholder action at such meeting. Directors are elected by a
majority of the votes of the voting shares present in person or by proxy at a
meeting. Holders of common stock are entitled to receive ratably such dividends,
if any, as may be declared by our board of directors out of funds legally
available, subject to any preferential dividend rights of outstanding preferred
stock. Upon the liquidation or dissolution of PLC, the holders of our common
stock are entitled to receive ratably our net assets available after the payment
of all our debts and other liabilities, subject to the prior rights of any
outstanding preferred stock. Holders of our common stock have no preemptive,
subscription, redemption or conversion rights, nor are they entitled to the
benefit of any sinking fund. The rights, powers, preferences and privileges of
holders of our common stock are subject to, and may be adversely affected by,
the rights of the holders of shares of any series of preferred stock which we
may designate and issue in the future.
WARRANTS
As of June 30, 2000, a total of 216,190 shares of our common stock were
issuable upon the exercise of outstanding warrants at a weighted average
exercise price of $16.17 per share. These warrants contain a cashless exercise
feature which could result in the issuance of shares of common stock with no
additional proceeds to PLC.
PREFERRED STOCK
Our articles of continuance authorizes our board of directors, subject
to any limitations prescribed by law, without further stockholder approval, to
issue from time to time an unlimited number of shares of preferred stock, in one
or more series. Each series of preferred stock will have the number of shares,
designations, preferences, voting powers, qualifications and special or relative
rights or privileges as are determined by our board of directors, which may
include, among others, dividend rights, voting rights, redemption provisions,
liquidation preferences, conversion rights and preemptive rights.
Our stockholders have granted our board of directors authority to issue
the preferred stock and to determine its rights and preferences in order to
eliminate delays associated with a stockholder vote on specific issuances. The
rights of the holders of common stock will be subject to the rights of holders
of any preferred stock issued in the future. The issuance of preferred stock,
while providing desirable flexibility in connection with possible acquisitions
and other corporate purposes, could adversely affect the voting power or other
rights of the holders of our common stock, and could make it more difficult for
a third party to acquire, or discourage a third party from attempting to
acquire, a majority of our outstanding voting stock.
YUKON BUSINESS CORPORATIONS ACT, CHARTER AND BY-LAW PROVISIONS; ANTI-TAKEOVER
EFFECTS
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Our board of directors is classified into three classes, as nearly
equal in size as possible, with staggered three-year terms. In addition, our
by-laws provide that directors may be removed only by a majority of the votes of
the shares present and entitled to vote at a meeting of stockholders or by
unanimous written consent of stockholders. Under our by-laws, any vacancy on our
board of directors may be filled by a vote of a majority of the directors then
in office. Our charter provides that the board may appoint additional directors,
provided that the number of directors appointed by our board may not exceed
one-third of the number of directors in office at the end of our last annual
meeting of stockholders. Any director appointed by our board of directors,
however, may only serve until the next annual meeting of our stockholders. The
classification of our board of directors and the limitations on the removal of
directors and the filling of vacancies could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring, control.
Our by-laws provide that our stockholders may act by written consent
only if such consent is unanimous. Our by-laws further provide that special
meetings of the stockholders may only be called by our board of directors,
except that, in limited circumstances, a stockholder may call a special meeting
to fill a vacancy in our board of directors following a failure of our board to
fill such vacancy. Further, the holders of not less than 5% of our outstanding
voting stock may requisition the directors to call a meeting of stockholders.
The foregoing provisions could have the effect of delaying until the next
stockholders' meeting stockholder actions which are favored by the holders of a
majority of our outstanding voting securities. These provisions may also
discourage another person or entity from making a tender offer for our common
stock, because such person or entity, even if it acquired a majority of our
outstanding voting securities, would be able to take action as a stockholder,
such as electing new directors or approving a merger, only at a duly called
stockholders meeting, and not by written consent.
The Yukon Business Corporations Act provides generally that the
affirmative vote of two-thirds of the shares entitled to vote on any matter is
required to amend a corporation's articles of incorporation and that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's by-laws. The stockholder vote is in addition
to any separate class vote that might in the future be required pursuant to the
terms of any series preferred stock that might be outstanding at the time any
such amendments are submitted to stockholders.
LIMITATION OF LIABILITY AND INDEMNIFICATION
Our by-laws provide that, subject to any limitations contained in the
Yukon Business Corporations Act, we will indemnify our directors and officers
against all expenses and liabilities reasonably incurred in connection with the
service for us or on our behalf, provided that :
- such director acted honestly and in good faith with a view to the best
interests of PLC; and
- in the case of a criminal or administrative proceeding or a proceeding
seeking a monetary penalty, such director had reasonable grounds to
believe that his conduct was lawful.
Our by-laws further provide that our directors and officers will not be
personally liable to PLC for any liabilities arising from their service to us,
unless such liability results from such director's or officer's willful neglect
or default or from a failure to act in accordance with the Yukon Business
Corporations Act.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is U.S. Stock
Transfer Corporation.
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<PAGE>
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time
to time by the selling stockholders. The term "selling stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. Such sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
in negotiated transactions. The selling stockholders may sell their shares by
one or more of, or a combination of, the following methods:
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- block trades in which the broker-dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
- an over-the-counter distribution in accordance with the rules of the
Nasdaq National Market;
- in privately negotiated transactions;
- in options transactions;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- short sales;
- broker-dealers may agree with the selling stockholders to sell a
specified number of shares at a stipulated price per share; and
- any other method permitted by law.
In addition, any shares that qualify for sale pursuant to Rule 144 may
be sold under Rule 144 rather than pursuant to this prospectus.
To the extent required, this prospectus may be amended or
supplemented from time to time to describe a specific plan of distribution.
In connection with distributions of the shares or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers
or other financial institutions may engage in short sales of the common stock
in the course of hedging the positions they assume with selling stockholders.
The selling stockholders may also sell the common stock short and redeliver
the shares to close out such short positions. The selling stockholders may
also engage in short sales against the box, puts and calls and other
transactions in our securities or derivatives of our securities and may sell
or deliver their shares in connection with these transactions. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction). The selling stockholders may also pledge shares to a
broker-dealer or other financial institution, and, upon a default, such
broker-dealer or other financial institution, may effect sales of the pledged
shares pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling
stockholders and any broker-dealers who execute sales for the selling
stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. Any profits realized by the
selling stockholders and the compensation of any broker-dealer may be deemed to
be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
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We have advised the selling stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act, which may include delivery through the facilities of the
American Stock Exchange pursuant to Rule 153 under the Securities Act. The
selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
LEGAL MATTERS
The validity of the shares offered by this prospectus has been passed
upon by Anton Campion Macdonald Oyler.
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, 1999, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our consolidated financial statements and schedule are incorporated
by reference in reliance on Ernst & Young's report, given on their authority as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other documents with the
Securities and Exchange Commission. You may read and copy any document we file
at the SEC's public reference room at Judiciary Plaza Building, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549. You should call 1-800-SEC-0330
for more information on the public reference room. Our SEC filings are also
available to you on the SEC's Internet site at http://www.sec.gov.
This prospectus is part of a registration statement that we filed with
the SEC. The registration statement contains more information than this
prospectus regarding us and our common stock, including certain exhibits and
schedules. You can obtain a copy of the registration statement from the SEC at
the address listed above or from the SEC's Internet site.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information
that we file with the SEC in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus. Information contained in this prospectus and information
that we file with the SEC in the future and incorporate by reference in this
prospectus automatically updates and supersedes previously filed information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, prior to the sale of all the shares covered by this
prospectus.
(1) Our Annual Report on Form 10-K for the year ended December 31, 1999;
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(2) Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
(3) Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000;
(4) Our Current Report on Form 8-K dated March 27, 2000;
(5) All of our filings pursuant to the Exchange Act after the date of
filing the initial registration statement and prior to effectiveness of
the registration statement; and
(6) The description of our common stock contained in our Registration
Statement on Form 8-A dated August 20, 1997, as amended to date.
You may request a copy of these documents, which will be provided to
you at no cost, by contacting:
PLC Systems Inc.
10 Forge Park
Franklin, MA 02038
Attention: Chief Financial Officer
Telephone: 508-541-8800
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by PLC Systems Inc. (except any underwriting
discounts and commissions and expenses incurred by the selling stockholders for
brokerage, accounting, tax or legal services or any other expenses incurred by
the selling stockholders in disposing of the shares). All amounts shown are
estimates except the Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
Filing Fee - Securities and Exchange Commission.....................$48.55
American Stock Exchange Listing Fee.................................$1,430.00(1)
Legal fees and expenses.............................................$10,000.00
Accounting fees and expenses........................................$5,000.00
Miscellaneous expenses..............................................$3,521.45
Total Expenses.............................................$20,000.00
=========
</TABLE>
(1) American Stock Exchange listing fee previously paid in connection with
additional listing applications relating to Registration Statement Nos.
333-34315 and 333-53649.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Yukon Business Corporation Act (the "Business Corporations Act"),
Section 126, enables a corporation to indemnify a director or officer or a
former director or officer of the Registrant, or a director or officer or a
former director or officer of a corporation of which it is or was a shareholder
or creditor, 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, including an amount paid to settle an action or satisfy a judgment
reasonably incurred by him, in any civil, criminal or administrative action, or
proceeding to which he is made a party by reason of being or having been a
director or officer if:
a. he acted honestly and in good faith with a view to the best
interest of the corporation; and
b. in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had
reasonable grounds for believing that his conduct was lawful.
The Business Corporations Act also enables a corporation, with the
approval of the Supreme Court of the Yukon Territory, to indemnify such a
director or officer in respect of an action by or on behalf of the corporation
or body corporate to procure a judgment in its favor, to which he is made a
party by reason of having been a director or officer of the corporation or body
corporate, against all costs, charges and expenses reasonably incurred by him in
connection with the action if he fulfils the conditions set forth in
subparagraphs (a) and (b) above.
The Business Corporations Act also provides that a company may purchase
and maintain insurance for the benefit of a director or officer or a former
director or officer of the Company, or a director or officer or a former
director or officer of a corporation of which it is or was a shareholder or
creditor, and his heirs and personal representatives, against liability incurred
by him as:
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a. in his capacity as a director or officer of the corporation,
except where the liability relates to his failure to act
honestly and in good faith with a view to the best interests
of the corporation, or
b. in his capacity as a director or officer of another body
corporate if he acts or acted in that capacity at the
corporation's request; except where the liability relates to
his failure to act honestly and in good faith with a view to
the best interests of the body corporate.
The Registrant's By-Laws provide that no director of the Registrant
shall be liable for the acts, receipts, neglects or defaults of any other
director or officer or employee, or for joining in any receipt or other act for
conformity, or for any loss, damage or expense happening to the Registrant
through the insufficiency or deficiency of title to any property acquired for or
on behalf of the Registrant, or for the insufficiency or deficiency of any
security in or upon which any of the moneys of the Registrant shall be invested,
or for any loss or damage arising from the bankruptcy, insolvency or tortuous
acts of any person with whom any of the moneys, securities or effects of the
Registrant are deposited, or for any loss occasioned by any error of judgement
or oversight on his part, or for any other loss, damage or misfortune whatever
which shall happen in the execution of the duties of his office or in relation
thereto, unless the same are occasioned by his own willful neglect or default or
from any breach of his duty to act in accordance with the Business Corporations
Act and the regulations thereunder.
The Registrant's By-Laws provide that subject to the limitations
contained in the Business Corporations Act, and to the extent he is otherwise
fairly and reasonably entitled thereto, the Registrant shall indemnify a
director or officer, a former director or officer, or a person who acts or acted
at the Registrant's request as a director or officer of a body corporate of
which the Registrant is or was a shareholder or creditor (or a person who
undertakes or has undertaken any liability on behalf of the Registrant or any
such body corporate) and his heirs and legal representatives, against all costs,
charges and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by him in respect of any civil, criminal or
administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of the Registrant or such body
corporate, if
(i) he acted honestly and in good faith with a view to the best
interests of the Registrant; and
(ii) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had
reasonable grounds for believing that his conduct was lawful.
The Registrant's By-Laws also provide that subject to the limitations
contained in the Business Corporations Act, the Registrant may purchase and
maintain insurance for the benefit of its directors and officers as the board
may from time to time determine.
Furthermore, the Registrant's By-Laws provide that directors 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 responsible or held liable for any loss or
damage resulting from the paying of any dividends or otherwise acting in good
faith upon any such statement.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number DESCRIPTION
------ -----------
<S> <C>
4.1 (2) Articles of Continuance of the Registrant.
4.2 (2) By-Laws of the Registrant.
4.3 (1) Specimen Certificate for Common Stock of the Registrant.
5.1 Opinion of Anton Campion Macdonald and Oyler.
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
23.1 Consent of Anton Campion Macdonald and Oyler (included in Exhibit 5).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included in the signature pages of this Registration Statement).
99.1 (3) Convertible Debenture Purchase Agreement dated as of July 17, 1997 (the "1997 Debenture
Purchase Agreement") between Southbrook International Investment, Ltd., HBK Cayman,
L.P. and HBK Offshore Fund Ltd. and the Registrant.
99.2 (3) First Amendment to 1997 Convertible Debenture Purchase Agreement dated July 22, 1997.
99.3 (3) Second Amendment to 1997 Convertible Debenture Purchase Agreement dated August 14, 1997.
99.4 (3) Form of Warrant issued pursuant to the 1997 Convertible Debenture Purchase Agreement.
99.5 (3) Registration Rights Agreement dated as of July 17, 1997 between Southbrook
International Investment, Ltd., HBK Cayman, L.P. and HBK Offshore Fund Ltd. and the
Registrant.
99.6 (4) Convertible Debenture Purchase Agreement dated as if April 23, 1998 (the "1998
Convertible Debenture Purchase Agreement") between Southbrook International Investment,
Ltd., Brown Simpson Strategic Growth Fund, L.P., Brown Simpson Strategic Growth Fund,
Ltd. and the Registrant.
99.7 (4) Form of Redeemable Warrant issued pursuant to the 1998 Convertible Debenture Purchase
Agreement.
99.8 (4) Registration Rights Agreement dated as if April 23, 1998 between Southbrook
International Investment, Ltd., Brown Simpson Strategic Growth Fund, L.P., Brown
Simpson Strategic Growth Fund, Ltd. and the Registrant.
</TABLE>
------------
(1) Incorporated herein by reference to the exhibits to the Registrant's
Registration Statement on Form S-1, as amended (File No. 333-48340).
(2) Incorporated herein by reference to the exhibits to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1999.
(3) Incorporated herein by reference to the exhibits to the Registrant's
Quarterly Report on Form 10-Q for the period ended June 30, 1997.
(4) Incorporated herein by reference to the exhibits to the Registrant's
Quarterly Report on Form 10-Q for the period ended March 31, 1998.
ITEM 17. UNDERTAKINGS.
ITEM 512(a) OF REGULATION S-K. 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, as amended (the "Securities Act");
II-3
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this 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 this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in the 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 the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included is a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in this Registration
Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, 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 the 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.
ITEM 512(b) OF REGULATION S-K. The Registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein and the
offering of such securities at the time shall be deemed to be the initial BONA
FIDE offering thereof.
ITEM 512(h) OF REGULATION S-K. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
indemnification provisions described herein, 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 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 and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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, Commonwealth of Massachusetts, on
August 10, 2000.
PLC SYSTEMS INC.
By: /s/ MARK R. TAUSCHER
---------------------------------------
Mark R. Tauscher
President and Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of PLC Systems Inc. hereby
severally constitute and appoint Mark R. Tauscher and James G. Thomasch, and
each of them singly, our true and lawful attorneys with full power to any of
them, and to each of them singly, to sign for us and in our names in the
capacities indicated below the Registration Statement on Form S-3 filed herewith
and any and all pre-effective and post-effective amendments to said Registration
Statement and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable PLC Systems Inc. to comply with
the provisions of the Securities Act of 1933, as amended, and all requirements
of the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MARK R. TAUSCHER President, Chief Executive Officer and Director August 10, 2000
-------------------- (Principal Executive Officer)
Mark R. Tauscher
/s/ JAMES G. THOMASCH Chief Financial Officer and Treasurer (Principal August 10, 2000
--------------------- Financial and Accounting Officer)
James G. Thomasch
/s/ EDWARD H. PENDERGAST Chairman of the Board of Directors August 10, 2000
------------------------
Edward H. Pendergast
/s/ KEVIN J. DUNN Director August 10, 2000
-----------------
Kevin J. Dunn
/s/ BENJAMIN HOLMES Director August 10, 2000
-----------------------
Benjamin Holmes
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
/s/ ALAN H. MAGAZINE Director August 10, 2000
--------------------
Alan H. Magazine
/s/ H.B. BRENT NORTON, M.D. Director August 10, 2000
---------------------------
H.B. Brent Norton, M.D.
Director
-----------------------
Kenneth J. Pulkonik
/s/ ROBERT I. RUDKO, PH.D. Director August 10, 2000
--------------------------
Robert I. Rudko, Ph.D.
/s/ ROBERTS A. SMITH, PH.D. Director August 10, 2000
---------------------------
Roberts A. Smith, Ph.D.
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
4.1 (2) Articles of Continuance of the Registrant.
4.2 (2) By-Laws of the Registrant.
4.3 (1) Specimen Certificate for Common Stock of the Registrant.
5.1 Opinion of Anton Campion Macdonald and Oyler.
23.1 Consent of Anton Campion Macdonald and Oyler (included in Exhibit 5).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included in the signature pages of this Registration Statement).
99.1 (3) Convertible Debenture Purchase Agreement dated as of July 17, 1997 (the "1997 Debenture
Purchase Agreement") between Southbrook International Investment, Ltd., HBK Cayman,
L.P. and HBK Offshore Fund Ltd. and the Registrant.
99.2 (3) First Amendment to 1997 Convertible Debenture Purchase Agreement dated July 22, 1997.
99.3 (3) Second Amendment to 1997 Convertible Debenture Purchase Agreement dated August 14, 1997.
99.4 (3) Form of Warrant issued pursuant to the 1997 Convertible Debenture Purchase Agreement.
99.5 (3) Registration Rights Agreement dated as of July 17, 1997 between Southbrook
International Investment, Ltd., HBK Cayman, L.P. and HBK Offshore Fund Ltd. and the
Registrant.
99.6 (4) Convertible Debenture Purchase Agreement dated as if April 23, 1998 (the "1998
Convertible Debenture Purchase Agreement") between Southbrook International Investment,
Ltd., Brown Simpson Strategic Growth Fund, L.P., Brown Simpson Strategic Growth Fund,
Ltd. and the Registrant.
99.7 (4) Form of Redeemable Warrant issued pursuant to the 1998 Convertible Debenture Purchase
Agreement.
99.8 (4) Registration Rights Agreement dated as if April 23, 1998 between Southbrook
International Investment, Ltd., Brown Simpson Strategic Growth Fund, L.P., Brown
Simpson Strategic Growth Fund, Ltd. and the Registrant.
</TABLE>
------------
(1) Incorporated herein by reference to the exhibits to the Registrant's
Registration Statement on Form S-1, as amended (File No. 333-48340).
(2) Incorporated herein by reference to the exhibits to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1999.
(3) Incorporated herein by reference to the exhibits to the Registrant's
Quarterly Report on Form 10-Q for the period ended June 30, 1997.
(4) Incorporated herein by reference to the exhibits to the Registrant's
Quarterly Report on Form 10-Q for the period ended March 31, 1998.
