<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 2000
REGISTRATION NO. 333 -____________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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COMPUTER MOTION, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 77-0458805
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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130-B CREMONA DRIVE, GOLETA, CALIFORNIA 93117
(805) 968-9600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-----------
ROBERT W. DUGGAN
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
COMPUTER MOTION, INC.
130-B CREMONA DRIVE, GOLETA, CALIFORNIA 93117
(805) 968-9600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
-----------
COPIES TO:
LAWRENCE B. COHN
STRADLING YOCCA CARLSON & RAUTH
660 NEWPORT CENTER DRIVE, SUITE 1600
NEWPORT BEACH, CALIFORNIA 92660
(949) 725-4000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE 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. [ ]
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 the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock ($.001 par value) issuable
upon exercise of warrants by Selling
Stockholders 594,891 shares $8.09375 $4,814,899 $1,272
===============================================================================================================================
</TABLE>
(1) In the event of a stock split, stock dividend, or similar transaction
involving the Registrant's common stock, in order to prevent dilution, the
number of shares registered shall automatically be increased to cover the
additional shares in accordance with Rule 416(a) under the Securities Act.
(2) The offering price is estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c), and is based upon the
average of the high and low prices reported on the Nasdaq National Market
on August 18, 2000 which average was $7.9375 per share.
(3) Pursuant to Rule 429, the Prospectus includes as part of this Registration
Statement also relates to the Registration Statement No. 333-37406
effective May 31, 2000.
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WE ORIGINALLY REGISTERED FOR RESALE BY OUR SECURITY HOLDERS 1,308,852
SHARES OF OUR COMMON STOCK UNDER REGISTRATION NO. 333-37406 ON FORM S-3.
PURSUANT TO RULE 429, THE PROSPECTUS INCLUDED AS PART OF THIS REGISTRATION
STATEMENT ALSO RELATES TO THE RESALE OF SUCH PREVIOUSLY REGISTERED SHARES. THE
REGISTRANT HAS PREVIOUSLY PAID A REGISTRATION FEE OF $2,640 WITH RESPECT TO SUCH
SHARES.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
1,903,743 SHARES
COMPUTER MOTION, INC.
COMMON STOCK
--------------------------
This Prospectus relates to the sale of up to 1,903,743 shares of common
stock by existing holders of warrants to buy our common stock. The shares may
not be sold until the warrants are exercised. We will not receive any proceeds
from the sale of the shares, but will receive proceeds from the exercise of the
warrants before those sales.
This Prospectus also relates to the sale of up to 1,903,743 shares of
our common stock by certain of our stockholders. The selling stockholders may
sell the shares from time to time in transactions in the Nasdaq-National Market,
in negotiated transactions, or otherwise, of by a combination of these methods,
at fixed prices that may be changed at market prices prevailing at the time of
the sale, at prices related to such market prices or at negotiated prices. The
selling stockholder may effect these transactions by selling shares to or
through broker-deals, who may receive compensation in the form of discounts or
commissions from the selling stockholders or from the purchasers of the shares
for whom the broker-dealer, may act as an agent or to whom they may sell as a
principal, or both. The Company will not receive any part of the proceeds from
the sale of these shares. The selling stockholders and such broker-dealers may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933,
in connection with such sales. The Company has agreed to bear all of the
expenses in connection with the registration and sale of the shares (other than
selling commissions and the fees and expenses of counsel or other advisors to
the selling stockholders).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Our common stock is listed on the Nasdaq - National Market under the
symbol "RBOT." On August 18, 2000, the last reported sale price of our common
stock was $7.9375 per share.
--------------------------
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
--------------------------
This prospectus is dated August 22, 2000
--------------------------
No person has been authorized 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 Company. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities offered hereby by anyone 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 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
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to the date hereof.
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<PAGE> 3
TABLE OF CONTENTS
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS 2
COMPANY OVERVIEW 2
RISK FACTORS THAT MAY AFFECT FUTURE RESULTS 4
USE OF PROCEEDS 8
SELLING STOCKHOLDERS 8
PLAN OF DISTRIBUTION 12
INTERESTS OF NAMED EXPERTS AND COUNSEL 13
LIMITATION ON LIABILITY AND DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 13
WHERE YOU CAN FIND MORE INFORMATION 14
LEGAL MATTERS 15
EXPERTS 15
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
The information contained in or incorporated by reference in this
prospectus discusses our plans and strategies for our business or state other
forward-looking statements that involve a number of risks and uncertainties.
Forward-looking statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should," "seeks," or
"anticipates," or other variations thereof (including their use in the
negative), or by discussions of strategies, plans or intentions. These
forward-looking statements reflect the current views of our management; however,
various risks, uncertainties and contingencies could cause our actual results,
performance or achievements to differ materially from those expressed in, or
implied by, these statements.
COMPANY OVERVIEW
We develop, manufacture and market proprietary robotic and computerized
surgical systems that are intended to enhance a surgeon's performance and
centralize and simplify the surgeon's control of the operating room. Our offices
are located at 130-B Cremona Drive, Goleta, CA 93117, our telephone number is
(805) 968-9600, and our internet address is http://www.computermotion.com.
We believe that our products have the potential to revolutionize
surgery and the operating room by providing surgeons with the precision and
dexterity necessary to perform complex, minimally invasive surgical procedures,
and by enabling surgeons to control critical devices in the operating room
through simple verbal commands. We also believe that our products have the
potential to broaden the scope and increase the effectiveness of minimally
invasive surgery, improve patient outcomes and create a safer, more efficient
and cost effective operating room.
Traditionally, the vast majority of all surgeries have been open,
requiring large incisions measuring up to 18 inches to access the operative
site. Although this approach can be highly effective,
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<PAGE> 4
it often results in significant trauma, pain and complications, as well as
significant costs related to lengthy recovery periods for the patient. To reduce
these negative factors, minimally invasive surgical techniques and related
methods have been developed. Minimally invasive techniques are as effective as
traditional open surgery while offering patients substantially reduced pain and
trauma, shortened recovery periods and decreased overall patient care costs.
While these benefits are significant, the minimally invasive approach presents
challenges to surgeons, including the intricate reconstruction of patient tissue
by suturing, delicate manipulation of small anatomical features and constrained
access to, and limited visualization of, the operative site.
Our vision is to bring the power of computers and robotics to the
operating room to facilitate a surgeon's ability to perform complex surgical
procedures and enable new, minimally invasive microsurgical procedures that are
currently very difficult or impossible to perform. Our products are intended to
provide better visualization and improved dexterity for the surgeon,
particularly for minimally invasive techniques.
We currently market AESOP, a surgical robot that moves an endoscope in
response to a surgeon's verbal commands. AESOP operates similarly to a human arm
and eliminates the need for a member of a surgical staff to manually control the
endoscope, while providing a more stable and sustainable endoscopic image. The
Company estimates that over 60,000 minimally invasive procedures have been
successfully assisted by AESOP in over 400 hospitals and surgery centers around
the world.
Our product development strategy is intended to leverage AESOP's
broad-based technology platform, and lead to a family of products that improve
the control of devices in the operating room and enable new minimally invasive
surgical procedures. To centralize and simplify control of the operating room,
we are developing the HERMES(TM) Control Center for the voice control of other
medical devices in the operating room. The ZEUS(TM) Robotic Surgical System
enables new minimally invasive microsurgery procedures, such as endoscopic
coronary artery bypass.
The modernization of the operating room has resulted in numerous
medical devices that aid a surgeon, but also increase the complexity and costs
of the operating room. In many instances, these devices are manually controlled
and monitored by someone other than a surgeon in response to a surgeon's spoken
commands and request for status. The HERMES Control Center is designed to enable
a surgeon to directly control multiple operating room devices, including the
Company's AESOP, through simple verbal commands. HERMES provides standardized
visual and digitized voice feedback to a surgical team. We believe that the
enhanced control and feedback provided by HERMES can improve safety, increase
efficiency, shorten procedure times and reduce costs.
Our ZEUS Robotic Surgical System is designed to improve a surgeon's
ability to perform complex surgical procedures and enable new, minimally
invasive microsurgical procedures that are currently impossible or very
difficult to perform. We believe that ZEUS will improve a surgeon's dexterity
and precision and enhance visualization of, and access to, confined operative
sites. We believe that new surgical procedures performed with ZEUS can, like
currently available minimally invasive procedures, result in reduced pain and
trauma, fewer complications, and shortened recovery periods and will increase
the number of patients qualified for certain surgical procedures.
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RISK FACTORS THAT MAY AFFECT FUTURE RESULTS
We are in a rapidly changing industry that involves a number of risks,
some of which are beyond our control. A number of these risks are highlighted
below. These risks could affect our actual future results and could cause them
to differ materially from any forward-looking statements we have made.
WE HAVE A HISTORY OF LOSSES, EXPECT TO INCUR LOSSES IN THE FUTURE AND MAY NEVER
ACHIEVE PROFITABILITY.
From our formation, we have incurred significant losses. Further, we
expect to incur additional losses as we increase spending for research and
development efforts, clinical trials, manufacturing capacity and sales force
improvement. As a result, we will need to generate significant revenues to
achieve and maintain profitability. We can not assure you that we will ever
achieve significant commercial revenues, particularly from sales of our HERMES
or ZEUS product lines, both of which are still under development, or that we
will become profitable. It is possible that we may encounter substantial delays
or incur unexpected expenses related to the market introduction and acceptance
of HERMES and ZEUS, or any future products.
Our growth and operating results could be impaired if we are unable to
meet our future capital requirements.
We believe that our current cash balances and the proceeds from the
exercise of the warrants will allow us to fund our operations through December
31, 2000. However, we may require substantial working capital to fund our
business after December 31, 2000 and will need to raise additional capital. It
is anticipated that additional funding, as needed, to support operations through
and after December 31, 2000 will be obtained from the following sources: current
cash balances, the proceeds from the exercise of the warrants, the issuance of
additional debt or equity securities and the negotiation of a new credit
facility. We cannot assure you that additional capital will be available on
terms favorable to us, or at all. If adequate funds are not available or are not
available on acceptable terms, our ability to fund our operations would be
significantly limited. Our business, results of operations and financial
condition would be materially adversely affected by any such limitation.
The various elements of our business and growth strategies, including
our introduction of new products, the expansion of our marketing distribution
activities and obtaining regulatory approval or market acceptance will require
additional capital. If we are unable to raise additional necessary capital in
the future, we may be required to significantly curtail our operations or obtain
funding through the relinquishment of significant technology or markets.
OUR SUCCESS RELIES ON FUTURE PRODUCTS WHICH MAY NOT OBTAIN REGULATORY APPROVAL
OR MARKET ACCEPTANCE.
We anticipate that ZEUS will comprise a substantial majority of our
sales in the future. ZEUS has not yet achieved regulatory clearance and is
currently undergoing clinical evaluation in United States Food and Drug
Administration (FDA)-approved clinical studies conducted under an
Investigational Device Exemption (IDE). Accordingly, our future success depends
on the successful development, regulatory clearance or approval,
commercialization and market acceptance of this product. Even if we are
successful in obtaining the necessary regulatory clearances or approvals for
ZEUS, its successful commercialization will depend upon our ability to
demonstrate the clinical safety and efficacy, ease-of-use, reliability and
cost-effectiveness of these products in a clinical setting. We can not assure
you that the FDA will allow us to conduct further clinical trials or that ZEUS
will prove to be safe and effective in clinical trials under United States or
international regulatory requirements. It is also possible that we may encounter
problems in clinical testing that cause a delay in or prohibit commercialization
of ZEUS. Moreover, the clinical trials may identify significant technical or
other obstacles to overcome prior to obtaining necessary regulatory or
reimbursement approvals, resulting in
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significant additional product development expense and delays. Even if the
safety and efficacy of procedures using ZEUS is established, surgeons may elect
not to recommend the use of these products for any number of reasons, including
inadequate levels of reimbursement. Broad use of our products will require
significant surgeon training and practice, and the time and expense required to
complete such training and practice could adversely affect market acceptance.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION.
Our products in the United States are regulated as medical devices by
the FDA. The process of obtaining United States regulatory approvals and
clearances is lengthy, expensive and uncertain. Commercial distribution of our
products in foreign countries is also subject to varying government regulations
which could delay or restrict marketing of our products in those countries. In
addition, such regulatory authorities may impose limitations on the use of our
products. We have obtained the CE mark for all of our products which means these
products can be sold in all the member countries of the European Union. Our
manufacturing operations are subject to the FDA's Quality System Regulations and
similar regulations in other countries regarding the manufacturing, testing,
labeling, recordkeeping and storage of devices and the failure to maintain
compliance would have an adverse effect on our operations.
WE ENCOUNTER INTENSE COMPETITION IN OUR INDUSTRY.
The minimally invasive surgery market has been, and will likely
continue to be, highly competitive. Many competitors in this market have
significantly greater financial resources and experience than us. Many medical
conditions that can be treated using our products, particularly ZEUS, can also
be treated by pharmaceuticals or other medical devices and procedures. Many of
these alternative treatments are widely accepted in the medical community and
have a long history of use. In addition, technological advances with other
procedures could make such therapies more effective or less expensive than using
our products and could render our products obsolete or unmarketable. We can not
be certain that physicians will use our products to replace or supplement
established treatments or that our products will be competitive with current or
future technologies.
ACCEPTANCE OF OUR PRODUCTS WILL BE SUBJECT TO LIMITATIONS ON THIRD-PARTY
REIMBURSEMENT.
In the United States, we anticipate that our products will be acquired
primarily by medical institutions which then bill various third-party payors,
such as Medicare, Medicaid and other government programs and private insurance
plans for the healthcare services they provide their patients. Government
agencies, certain private insurers and certain other payors generally reimburse
hospitals for medical treatment at a fixed rate based on schedules established
by the Health Care Finance Administration. We believe that the procedures using
our products will be eligible for reimbursement under existing reimbursement
schedules. However, Medicare and other third-party payors are increasingly
scrutinizing whether to cover new products and the level of reimbursement. Even
if a procedure is covered by such schedules, payors may deny reimbursement if
they determine that the device used in the treatment was unnecessary,
inappropriate, not cost-effective, experimental or used for a non-approved
indication. Many international markets have government managed healthcare
systems that control reimbursement for new products and procedures. In most
markets, there are private insurance systems, as well as governmental managed
systems, that control reimbursement for new products and procedures. Market
acceptance of our products may depend on the availability and level of
reimbursement in international markets we target. We can not be certain that we
will obtain reimbursement in any country within a particular time, or at all.
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WE DEPEND ON PATENTS AND PROPRIETARY TECHNOLOGY TO PROTECT OUR TECHNOLOGY.
Our success will depend, in part, on our ability to obtain and maintain
patent protection for our products, to preserve our trade secrets, and to
operate without infringing the proprietary rights of others. We seek to protect
our proprietary positions by filing United States and foreign patent
applications related to our technology, inventions and improvements that are
important to the development of our business. We cannot be certain that our
issued patents or any patents that may be issued will not be challenged,
invalidated or circumvented in the future. Further, it is possible that our
competitors, many of which have substantially more resources than us and have
made substantial investments in competing technologies, will apply for and
obtain patents that will prevent, limit or interfere with our ability to make,
use or sell our products either in the United States or internationally. We can
not assure you that we will not become subject to patent infringement claims or
litigation.
On May 10, 2000, we filed a patent infringement lawsuit against
Intuitive Surgical Inc. alleging that certain products of Intuitive infringe our
patents. We cannot assure you that we will prevail in this lawsuit. On June 30,
2000, Intuitive answered our complaint and filed a counterclaim alleging
non-infringement of each patent-in-suit, patent invalidity and unenforceability.
We cannot assure you that we would be successful in defending against such
claims. Furthermore, the prosecution of this lawsuit, and the defense against
any claims Intuitive may make, may be costly in both legal fees and management
time.
OUR INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE AND NEW PRODUCT
DEVELOPMENT.
The market for our products is characterized by rapidly changing
technology and new product introductions and enhancements. Our success will
depend to a significant extent upon our ability to enhance and expand the
utility of our products so that they gain market acceptance. We maintain
research and development programs to continually improve and refine our current
product offerings and develop new products. We can not assure you that we will
be successful in identifying, developing, manufacturing and marketing new
products or enhancing our existing products on a timely or cost-effective basis.
Moreover, we may encounter technical problems in connection with our product
development efforts that could delay the introduction of new products or product
enhancements.
WE NEED TO EXPAND OUR MARKETING DISTRIBUTION ACTIVITIES.
We anticipate significantly increasing the number of sales personnel to
more fully cover our target markets, particularly as we expand our product
offerings. It is possible we will be unable to compete effectively in
attracting, motivating and retaining qualified sales personnel. We currently
intend to market and sell our products outside the United States and Europe
principally through distributors. In order to accomplish this, we will be
required to expand our distributor network. We may not be able to identify
suitable distributors or negotiate acceptable distribution agreements. Any such
distribution agreements may not result in significant sales.
OUR DIRECTORS AND OFFICERS OWN A SUBSTANTIAL PERCENTAGE OF OUR STOCK.
Our present directors and executive officers beneficially own
approximately 30% of the Company's outstanding common stock. These Stockholders,
acting together, have the ability to significantly influence the election of the
Company's directors and other Stockholder actions and, as a
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result, direct the operation of our business, including delaying or preventing a
proposed acquisition of the Company.
WE DEPEND ON A FEW KEY PERSONNEL.
Our future business and operating results depend in significant part on
our key management, scientific, technical and sales personnel, many of whom
would be difficult to replace, and future success will depend partially upon our
ability to retain these persons and recruit additional qualified management,
technical, marketing, sales, regulatory, clinical and manufacturing personnel.
Competition for such personnel is intense, and we may have difficulty in
attracting or retaining such personnel.
OUR OPERATING RESULTS WILL VARY.
Our results of operations may vary significantly from quarter to
quarter depending upon numerous factors, including the following: (i) delays
associated with the FDA and other regulatory clearance and approval processes;
(ii) healthcare reimbursement policies; (iii) timing and results of clinical
trials; (iv) demand for our products; (v) changes in pricing policies by us or
our competitors; (vi) the number, timing and significance of our competitors'
product enhancements and new products; and (vii) product quality issues.
THE PRICE OF OUR STOCK WILL VARY.
The market price of our common stock is likely to be volatile and may
be affected by: (i) actual or anticipated decisions by the FDA with respect to
approvals or clearances of our or our competitors' products; (ii) actual or
anticipated fluctuations in our operating results; (iii) announcements of
technological innovations; (iv) new commercial products announced or introduced
by us or our competitors; (v) changes in third party reimbursement policies;
(vi) developments concerning our or our competitors' proprietary rights; (vii)
conditions and trends in the medical device industry; (viii) governmental
regulation; (ix) changes in financial estimates by securities analysts; and (x)
general stock market conditions.
WE DEPEND ON INDEPENDENT CONTRACT MANUFACTURERS AND HAVE ONLY LIMITED
MANUFACTURING EXPERIENCE.
We rely on independent contract manufacturers, some of which are single
source suppliers, for the manufacture of the principal components of AESOP.
Shortages of raw materials, production capacity constraints or delays on the
part of our contract manufacturers could negatively affect our ability to ship
products and derive revenue. We do not have experience manufacturing our
products in commercial quantities. Our manufacturing experience to date has been
focused primarily on assembling components produced by third party manufacturers
for AESOP. Our manufacturing activities to date with respect to HERMES and ZEUS
have consisted primarily of manufacturing a limited number of products. In
scaling up manufacturing of new products, we may encounter difficulties
involving quality control and assurance, component availability, adequacy of
control policies and procedures, lack of qualified personnel and compliance with
FDA's Quality System Regulations requirements. We may elect to internally
manufacture components currently provided by third parties or to implement new
production processes. We can not assure you that manufacturing yields or costs
will not be adversely affected by a transition to in-house production or to new
production processes if such efforts are undertaken.
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WE ARE SUBJECT TO PRODUCT LIABILITY CLAIMS.
We face an inherent business risk of financial exposure to product
liability claims in the event that the use of our products results in personal
injury or death. We also face the possibility that defects in the design or
manufacture of our products might necessitate a product recall. It is possible
that we will experience losses due to product liability claims or recalls in the
future. We currently maintain product liability insurance with coverage limits
of $5,000,000, but future claims may exceed these coverage limits.
WE NEED TO CONTROL AND EFFECTIVELY MANAGE OUR GROWTH.
Our growth will continue to place significant demands on our management
and resources. In order to compete effectively against current and future
competitors, prepare products for clinical trials and develop future products,
we believe we must continue to expand our operations, particularly in the areas
of research and development and sales and marketing. It is likely that we will
be required to implement additional operating and financial controls, hire and
train additional personnel, install additional reporting and management
information systems and expand our physical operations. Our future success will
depend, in part, on our ability to manage future growth and we can not assure
you that we will be successful.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares.
SELLING STOCKHOLDERS
Between November 6, 1995 and June 2, 1997, we issued warrants to
purchase an aggregate of 1,657,919 shares of our common stock, of these
1,252,652 have an exercise price of $4.57 per share and 405,267 have an exercise
price of $7.71 per share. As of the date of this prospectus, 349,067 warrants
have been exercised, leaving a balance of 1,308,852 warrants outstanding. We
also issued 594,891 shares of common stock to the selling stockholders on June
29, 2000 at an offering price per share of $7.669. Included in the June 29, 2000
offering we issued 271,371 shares to Robert W. Duggan and 260,790 shares to
Patricia Duggan upon the conversion of a $3 million Convertible Promissory Note
we issued to Mr. Duggan on March 31, 2000 and additional cash contribution of
$1,032,812. Pursuant to the terms of the Note, the conversion price per share
was to be derived from the price per share of the next private placement of our
securities, or $7.669. Mr. Duggan is currently our Chairman of the Board of
Directors and our Chief Executive Officer and beneficially owns 9.2% of our
common stock. In connection with the private offering and the issuance of Mr.
Duggan's Note, we agreed to register the shares purchased by the selling
stockholders and issued upon the conversion of the Note.
The warrant holders may sell the shares under the registration
statement of which this prospectus is a part. The following table sets forth
certain information with respect to the selling stockholders and the beneficial
ownership of Common Stock by them before and after this offering as of May 10,
2000.
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The following table sets forth the following information as of
August 18, 2000:
o names of the selling stockholders;
o number of shares of common stock beneficially owned by each selling
stockholder;
o number of shares each selling stockholder may offer to sell; and
o number of shares of common stock beneficially owned by each selling
stockholder upon completion of this offering, assuming all of the
offered shares are sold.
Other than as set forth in the footnotes to the table below, none of
the selling stockholders has or during the past three year has had, any
position, office or other material relationship with us or any of our
predecessors or affiliates.
As of August 18, 2000 we had 9,436,081 shares of common stock
outstanding. For purposes of computing the number and percentage of shares
beneficially owned by each selling stockholder as of August 11, 2000, only
shares which such stockholder has the right to acquire on or before October 10,
2000 are deemed outstanding, but are not deemed outstanding for the purpose of
computing the percentage ownership of any other selling stockholder.
<TABLE>
<CAPTION>
Shares Owned Shares Being
Before Offering Offered(1) Shares Owned After Offering(2)
--------------- ------------ ------------------------------
NAME Number Number Number Percent
---- ------ ------ ------ -------
<S> <C> <C> <C>
Andrews, Harold Wayne Jr. 7,131 5,186 1,945 --
Arington, Brian and Renee 128 64 64 --
Arington, Marita 1,945 1,945 0 --
Arington, Michael, as custodian
for Alyssa Arington 64 64 0 --
Arington, Richard 1,945 1,945 0 --
Arington Richard and Marita 2,593 2,593 0 --
Assiter, Shanna 1,231 1,231 0 --
Barber, William 16,509 16,379 130 --
Beheko Corp, Attn: Charles Barlow 194,910 163,790 31,120 --
Ben, Christopher A. 648 648 0 --
Ben, Mike S. 648 648 0 --
Bennett, J.C. 1,363 1,363 0 --
Bermant, Jeffrey C. 6,483 6,483 0 --
Blazon Profit Sharing 262,721 202,076 60,645 --
</TABLE>
9
<PAGE> 11
<TABLE>
<CAPTION>
Shares Owned Shares Being
Before Offering Offered(1) Shares Owned After Offering(2)
--------------- ------------ ------------------------------
NAME Number Number Number Percent
---- ------ ------ ------ -------
<S> <C> <C> <C>
Braswell: Laura Burnam Braswell & Ann Bennett 3,241 3,241 0 --
Buntz, Mark Alan 3,241 3,241 0 --
Cannon, Peter A. 3,890 1,945 1,945 --
Carlson: California Central Trust Bank TTEE
Craig Carlson #1050184743 2,106 1,053 1,053 --
Chan, Michael 16,596 6,483 10,113 --
Chavarria, Greg J. 4,537 4,537 0 --
Chewakin, Bradley & Kathleen 828 414 414 --
Chewakin, Kathleen as custodian for
Eric Lee Chewakin 128 64 64 --
Chewakin, Kathleen as custodian for
Reed Chewakin 128 64 64 --
Cohn: California Central Trust Bank TTEE
Lawrence Cohn #1050184761 2,106 1,053 1,053 --
Community Investment Partners II,L.P.
(CIP II,L.P.) Attn: Dan Burkhardt 68,364 57,156 11,208 --
Doiron, Daniel R. and Pamela G., as
joints tenants 53,504 53,504 0 --(A)
Doiron Family Trust 5,186 5,186 0 --
Doiron, Paul R. and Peggy 12,966 6,483 6,483 --
Dorr, Frederick Charles Dorr and Emily
Jean Hass Revocable Trust 6,483 6,483 0 --
Dorr, Turtle Trust #2 c/o Emily Hass Dorr 16,379 16,379 0 --
Duggan, Patricia 405,489 267,273 138,216 1.56%
Duggan, Robert W. 1,140,753 334,429 806,324 9.12%(B)
Dunne, Caren L. 4,538 4,538 0 --
Dunne, James D. 12,966 6,483 6,483 --
Evans, Donald and Diana 1,296 648 648 --
Feuchter: California Central Trust Bank TTEE
Bruce Feuchter #1050184789 2,106 1,053 1,053 --
Frydman: California Central Trust Bank TTEE
Ben Frydman #1050184798 2,106 1,053 1,053 --
Gale: California Central Trust Bank TTEE
Paul Gale #1050184805 2,106 1,053 1,053 --
</TABLE>
10
<PAGE> 12
<TABLE>
<CAPTION>
Shares Owned Shares Being
Before Offering Offered(1) Shares Owned After Offering(2)
--------------- ------------ ------------------------------
NAME Number Number Number Percent
---- ------ ------ ------ -------
<S> <C> <C> <C>
Ghodoussi, Modjtaba and Maryam Fetrossi 9,827 9,827 0 --
Glenn, Paul F. Glenn Revocable Trust,
Paul F. Glenn Trustee 12,966 12,966 0 --
Goodman: California Central Trust Bank TTEE
Rich Goodman #1050184814 2,106 1,053 1,053 --
Heftel, Cecil 51,866 25,933 25,933 --
Heftel, Richard Heftel Living Trust
dated Jan 9, 1996 25,932 12,966 12,966 --
Hower, Thomas R. 21,241 21,241 0 --
Ilvento, Joseph P., MD., Judy C. Dean, MD., Inc.
Money Purchase Pension Plan 16,379 16,379 0 --
Ireland: California Central Trust Bank TTEE
John Ireland #1050184565 648 324 324 --
Jones, Iain 5,067 5,067 0 --
Jurkowitz, Morris M. 40,000 40,000 0 --
Laby: Jordan M. Laby & Sandra Laby
Trustees of the Laby Family Trust dated
November 10, 1997 35,112 12,966 22,146 --
Laby: Todd Mitchell Laby 1,516 1,296 220 --
Lamey, Bryan A. 5,315 5,315 0 --
Lincoln American Investment, Inc.
Attn: Paul Hopler 49,999 49,999 0 --
Mauerman, George S. 95,820 95,820 0 --
Mauerman, George S. Trustee for
Adrien M Mauerman Testamentary Trust 14,587 14,587 0 --
Mauerman, George W. 3,241 3,241 0 --
Mauerman, William D. 8,298 8,298 0 --
Mitchell, Frank Louis 3,241 3,241 0 --
Murphy: California Central Trust Bank TTEE
John Murphy #1050184912 2,106 1,053 1,053 --
Perez, Roberto J. and Danna 1,296 1,296 0 --
Plucknett, Knoland James Plucknett
Revocable Trust, Knowland James
Plucknett Trustee 25,933 25,933 0 --
Rauth: California Central Trust Bank TTEE
William R. Rauth #1050185387 1,053 1,053 0 --
RGRJ Venture Fund II, L.L.C. 40,862 40,862 0 --
Ruehle, Gregory J. 6,520 6,520 0 --
Sanders, Jeff Barbaro & Brenda Gail 6,225 3,275 2,950 --
Schaaf:California Central Trust Bank TTEE
K,C, Schaaf #1050184958 2,106 1,053 1,053 --
Shields, Michael 6,520 6,520 0 --
Slatkin, Reed 106,327 32,417 73,910 --
Stradling, Yocca, Carlson & Rauth
Investment partnership of 1982 6,483 6,483 0 --
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
Shares Owned Shares Being
Before Offering Offered(1) Shares Owned After Offering(2)
--------------- ------------ ------------------------------
NAME Number Number Number Percent
---- ------ ------ ------ -------
<S> <C> <C> <C>
Stuart: California Central Trust Bank TTEE
Bruce Stuart #1050184994 2,977 1,053 1,924 --
Wang, Gene and Leslie 32,758 32,758 0 --
Wang, Yulun and Susan 937,433 3,931 933,502 10.56%(C)
Whalen: California Central Trust Bank TTEE
Robert Whalen #1050185029 2,106 1,053 1,053 --
Wiggins, Stephen 173,003 173,003 0 --
Wilson, Stephen 32,417 32,417 0 --
Yocca: California Central Trust Bank TTEE
Nick E. Yocca #105018047 2,106 1,053 1,053 --
Zhang, Pei Lun 3,260 3,260 0 --
TOTALS 4,064,014 1,903,743 2,160,271 24.44%
================================================================
</TABLE>
----------
(A) Daniel R. Doiron, PhD has been a director for over the past three years.
(B) Robert W. Duggan is Chief Executive Officer and has been a director for
over the past three years.
(C) Yulun Wang,PhD is the Chief Technical Officer and has been a director for
over the past three years.
(1) Includes shares issuable upon exercise of warrants by the selling
stockholders. The warrants range in exercise price of $4.57 per share to
$7.71 per share. None of the shares stated in the table as Shares Being
Offered will be sold in this offering unless the warrants are first
exercised and the related exercise price is paid to the Company by the
selling stockholders.
(2) Assumes all shares offered under this prospectus are sold.
*Represents less than 1% of the outstanding shares of Common Stock.
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of the shares of
common stock offered hereby on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholders may use any one or more of
the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
12
<PAGE> 14
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser, in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We have agreed to pay all fees and expenses incident to the
registration of the shares. We have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
We will file a supplement to this prospectus when a selling stockholder
notifies us that a donee or pledgee intends to sell more than 500 shares of our
common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Members of Stradling Yocca Carlson & Rauth own, in the aggregate
approximately 12,325 shares of common stock of the Company and warrants to
purchase 19,443 additional shares of Common Stock. All of such warrant shares
may be sold in this offering.
LIMITATION ON LIABILITY AND DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our bylaws provide for indemnification of our directors and officers to
the fullest extent permitted by law. Insofar as indemnification for liabilities
under the Securities Act may be permitted to directors, officers or controlling
persons of the Company pursuant to the Company's Certificate of
13
<PAGE> 15
Incorporation, as amended, bylaws and the Delaware General Corporation Law, the
Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in such Act and is
therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, and Chicago.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public at the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them which means that we can disclose important information to you by
referring you to those documents instead of having to repeat the information in
this prospectus. The information incorporated by reference is considered to be
part of this prospectus, and later information that we file 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
the selling stockholders sell all the shares.
o Our annual report on Form 10-K for the fiscal year ended December
31, 1999;
o Our quarterly report on Form 10-Q for the period ended June 30,
2000;
o Our definitive proxy statement filed pursuant to Section 14 of the
Exchange Act in connection with our June 15, 2000 Annual Meeting of
Stockholders;
o The description of our common stock contained in our Registration
Statement on Form S-1, Registration No. 333-29505 filed pursuant to
the Securities Act of 1933, as amended, including any amendment or
reports filed for the purpose of updating such description.
You can request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Computer Motion, Inc.
130-B Cremona Drive
Goleta, CA 93117
(805) 685-3729
You should rely only on the information contained in this prospectus or
any supplement and in the documents incorporated by reference. We have not
authorized anyone else to provide you with different information. The selling
stockholders will not make an offer of these shares in any state where the offer
is not permitted. You should not assume that the information in this prospectus
or any supplement or in the documents incorporated by reference is accurate on
any date other than the date on the front of those documents.
This prospectus constitutes (i) part of a registration statement we
filed with the SEC (Registration No. ___________) and (ii) part of a
Registration Statement of Form S-3, No. 333-37406,
14
<PAGE> 16
effective May 31, 2000. That registration statement and the exhibits filed along
with the registration statement contain more information about the shares sold
by the selling stockholders. Because information about contracts referred to in
this prospectus is not always complete, you should read the full contracts which
are filed as exhibits to the registration statement. You may read and copy the
full registration statement and its exhibits at the SEC's public reference rooms
or their web site.
LEGAL MATTERS
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport
Beach, California, has issued an opinion about the legality of the common stock
being offered by this prospectus.
EXPERTS
The financial statements and schedules incorporated by reference in
this prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
15
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following sets forth the estimated costs and expenses in connection
with the offering of the shares of common stock pursuant to this Registration
Statement:
Registration fee to the Securities
and Exchange Commission............ $ 1,272
Accounting Fees and Expenses.......... $ 5,000
Legal Fees and Expenses............... $ 5,000
Miscellaneous Expenses................ $ 5,000
-------
Total........................ $16,272
=======
All expenses of the offering, other than selling discounts, commissions
and legal fees and expenses incurred separately by the selling stockholders,
will be paid by the Registrant.
Item 15. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation limits, to the maximum
extent permitted by Delaware law, the personal liability of directors for
monetary damages for breach of their fiduciary duties as a director. The
Registrant's Bylaws provide that the Registrant shall indemnify its officers and
directors and may indemnify its employees and other agents to the fullest extent
permitted by Delaware law.
Section 145 of the Delaware General Corporation Law ("DGCL") provides
that a corporation may indemnify any person made a party to an action (other
than an action by or in the right of the corporation) by reason of the fact that
he or she was a director, officer, employee or agent of the corporation or was
serving at the request of the corporation against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal action
(other than an action by or in the right of the corporation), has no reasonable
cause to believe his or her conduct was unlawful.
Item 16. Exhibits.
5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional
Corporation.
5.2 Opinion of Irell & Manella, LLP, a Professional Corporation.
23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Irell & Manella, LLP, a Professional Corporation
(included in Exhibit 5.2).
II-1
<PAGE> 18
23.3 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on signature page).
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or
sells securities, a post-effective amendment to this
registration statement to:
(i) include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) reflect in the prospectus any facts or
events which, individually or together,
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 the SEC
pursuant to Rule 434(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) include any additional or changed material
information on the plan of distribution.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, treat each
post-effective amendment as a new registration
statement of the securities offered, and the offering
of the securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold
at the end of the offering.
II-2
<PAGE> 19
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 Goleta, State of California, on the 22nd day of
August, 2000.
COMPUTER MOTION, INC.
By: /s/ Robert W. Duggan
--------------------------------------
Robert W. Duggan
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Computer Motion, Inc., do
hereby constitute and appoint Robert W. Duggan and Gordon L. Rogers, and each of
them, our true and lawful attorneys and agents, to do any and all acts and
things in our name and behalf in our capacities as directors and officers and to
execute any and all instruments for us and in our names in the capacities
indicated below, which said attorneys and agents, or either of them, may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Securities and Exchange Commission, in connection with this Registration
Statement, including specifically, but without limitation, power and authority
to sign for us or any of us in our names and in the capacities indicated below,
any and all amendments (including post-effective amendments) to this
Registration Statement, or any related registration statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933,
as amended; and we do hereby ratify and confirm all that the said attorneys and
agents, or either of them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, 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/ Robert W. Duggan Chairman of the Board of Directors and Chief August 22, 2000
------------------------------------ Executive Officer
Robert W. Duggan (Principal Executive Officer)
/s/ Gordon L. Rogers Chief Financial Officer August 22, 2000
------------------------------------ (Principal Financial and Accounting Officer)
Gordon L. Rogers
</TABLE>
II-3
<PAGE> 20
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Daniel R. Doiron Director August 22, 2000
------------------------------------
Daniel R. Doiron
/s/ Robert W. Duggan Director August 22, 2000
------------------------------------
Robert W. Duggan
/s/ W. Peter Geis Director August 22, 2000
------------------------------------
W. Peter Geis
/s/ M. Jacqueline Eastwood Director August 22, 2000
------------------------------------
M. Jacqueline Eastwood
/s/ Yulun Wang Director August 22, 2000
------------------------------------
Yulun Wang
</TABLE>
II-4
<PAGE> 21
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
5.1 Opinion of Stradling Yocca Carlson & Rauth, a Professional
Corporation.
5.2 Opinion of Irell & Manella, LLP, a Professional Corporation.
23.1 Consent of Stradling Yocca Carlson & Rauth, a Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Irell & Manella, LLP, a Professional Corporation
(included in Exhibit 5.2).
23.3 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on signature page).
