<PAGE>
As filed with the Securities and Exchange Commission on June 24, 1999
Registration Statement No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CAMBRIDGE HEART, INC.
(Exact Name of Registrant as Specified in its Charter)
---------------
DELAWARE 13-3679946
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
1 Oak Park Drive
Bedford, Massachusetts 01730
(781) 271-1200
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------
Jeffrey M. Arnold
Chairman of the Board and Chief Executive Officer
1 Oak Park Drive
Bedford, Massachusetts 01730
(781) 271-1200
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Approximate date of commencement of proposed sale to public: From time to
time after 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. [_]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
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- ------------------------------------------------------------------------------
<CAPTION>
Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
Title of Shares to be Offering Price Offering Registration
to be Registered Registered Per Share(1) Price(1) Fee
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par
value per share......... 1,047,618(2) $6.11 $6,400,946 $1,780
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
(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 reported sale price per share of Common Stock on the Nasdaq
National Market on June 18, 1999.
(2) Includes 95,238 shares of common stock issuable upon the exercise of common
stock purchase warrants. Pursuant to Rule 416 there are also registered an
indeterminate number of shares of common stock which may be issued pursuant
to the anti-dilution provisions applicable to the common stock purchase
warrants.
---------------
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>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. The +
+selling stockholders may not sell these securities until the registration +
+statement filed with the Securities and Exchange Commission is declared +
+effective. This prospectus is not an offer to sell these securities, and it +
+is not soliciting an offer to buy these securities, in any state where the +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 24, 1999
PROSPECTUS
Cambridge Heart, Inc.
1,047,618 SHARES OF COMMON STOCK
------------
In June 1999, Cambridge Heart, Inc. issued 952,380 shares of common stock and
warrants for the purchase of 95,238 shares of common stock to a group of
investors led by the Tail Wind Fund Ltd. This prospectus relates to the resale
of all of the 1,047,618 shares of common stock by those investors, referred to
in this prospectus as the selling stockholders. We will not receive any of the
proceeds from the sale of these shares.
We have agreed to pay certain expenses of registering the shares being
offered by the selling stockholders. The selling stockholders will pay all
underwriting discounts and selling commissions, if any, in connection with the
sale of the shares.
The selling stockholders, or their pledgees, donees, transferees or other
successors in interest, may sell the shares in 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 Nasdaq
National Market under the symbol CAMH. On June 23, 1999, the last reported sale
price of our common stock on the Nasdaq National Market was $7.06 per share.
------------
The securities offered hereby involve a high degree of risk. See "Risk
Factors" beginning on page 6.
------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The date of this Prospectus is , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where to Find More Information............................................. 3
Incorporation of Certain Documents by Reference............................ 3
Special Note Regarding Forward-looking Information......................... 4
Summary Description of Our Business........................................ 5
Risk Factors............................................................... 6
Use of Proceeds............................................................ 11
Selling Stockholders....................................................... 11
Plan of Distribution....................................................... 12
Legal Matters.............................................................. 13
Experts.................................................................... 13
</TABLE>
You should rely only on the information either contained in this prospectus
or expressly incorporated by reference into this prospectus. We have not
authorized anyone to provide you with information different from that contained
in this prospectus or expressly incorporated by reference into 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 the shares.
2
<PAGE>
WHERE TO FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements and other
documents with the Securities and Exchange Commission and with the Nasdaq
National Market. This additional information is also available to you on the
SEC's Internet web site. Here are ways you can access these resources:
<TABLE>
<CAPTION>
What is available Where to get it
----------------- ---------------
<S> <C>
Paper copies of in-
formation SEC's Public Reference Room
Judiciary Plaza Building
450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549
The Nasdaq Stock Market, Inc.
1735 K Street, N.W.
Washington, D.C. 20006
On-line information SEC's Internet website at
http://www.sec.gov
Information about
the SEC's Call the SEC at 1-800-SEC-0330
Public Reference
Room
</TABLE>
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC. The registration statement contains more information than
this prospectus regarding Cambridge Heart and its common stock, including
certain exhibits and schedules. You can get a copy of the registration
statement from any of the sources shown above or by contacting Cambridge
Heart, Inc. at the address or telephone number set forth on the following
page.
INCORPORATION OF CERTAIN 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 such
information. The information incorporated by reference is considered to be a
part of this prospectus, and information that we file after June 24, 1999 (the
initial filing date of this prospectus) with the SEC will automatically update
and may supersede this information. We are incorporating 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, as
amended, prior to the sale of all the shares covered by this prospectus.
The following documents filed by Cambridge Heart with the SEC are
incorporated herein by reference:
. Our Annual Report on Form 10-K for the year ended December 31, 1998, as
filed with the SEC on March 31, 1999.
. Our definitive proxy statement for the 1999 Annual Meeting of
Stockholders, as filed with the SEC on April 30, 1999.
. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999,
as filed with the SEC on May 17, 1999.
. Our Current Report on Form 8-K, as filed with the SEC on June 16, 1999.
. The description of our common stock contained in our Registration
Statement on Form 8-A, as amended, as filed with the SEC on July 10,
1996, including any amendments or reports filed for the purpose of
updating such description.
3
<PAGE>
You may request a copy of these documents, at no cost, by telephone or email
or by writing to:
Cambridge Heart, Inc.
1 Oak Park Drive
Bedford, Massachusetts 01730
Attention: Robert B. Palardy
(781) 271-1200
[email protected]
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus contains or 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. You can identify these forward-looking
statements by our use of the words "believes," "anticipates," "plans,"
"expects," "may," "will," "intends," "estimates" and similar expressions,
whether in the negative or affirmative. Although we believe that these forward-
looking statements reasonably reflect our current plans, intentions and
expectations, we can not assure you that we will actually achieve these plans,
intentions or expectations on a timely basis, if at all. Our actual results
could differ materially from the plans, intentions and expectations disclosed
in these forward-looking statements. We have included important factors in the
cautionary statements below that we believe could cause our actual results to
differ materially from our forward-looking statements. We do not intend to
update information contained in any of our forward-looking statements.
4
<PAGE>
SUMMARY DESCRIPTION OF OUR BUSINESS
Cambridge Heart is engaged in the research, development and
commercialization of products for the non-invasive diagnosis of cardiac
disease, the leading cause of death in the United States and many other
developed countries. Using innovative technologies, including our proprietary
disposable electrodes, we are addressing such key problems in cardiac diagnosis
as:
. the identification of those at risk of sudden cardiac death, accounting
for approximately 50% of all deaths due to heart attack;
. the early detection of coronary artery disease; and
. the prompt and accurate diagnosis of heart attack.
Our lead product, the CH 2000 System incorporates our proprietary technology
to non-invasively measure extremely low levels of T-wave alternans, a beat-to-
beat alternation in a portion of the electrocardiogram. Clinical research
published to date has demonstrated that by measuring T-wave alternans we can
assess vulnerability to the ventricular arrhythmias responsible for sudden
cardiac death to a degree comparable to electrophysiology testing, the most
accurate invasive test. The CH 2000 System is also able to perform conventional
cardiac stress tests.
Our CH 2000 System and Hi-Resolution electrodes have received clearance from
the U.S. Food and Drug Administration for sale in the United States, have
received certification for sale in Europe and have been approved for sale by
the Ministry of Health in Japan. The FDA clearance for the CH 2000 System
includes the claim that the CH 2000 System can measure T-wave alternans and the
presence of T-wave alternans in patients with known, suspected or at risk of
ventricular tachyarrhythmia predicts increased risk of ventricular
tachyarrhythmia or sudden death.
Our executive offices are located at 1 Oak Park Drive, Bedford,
Massachusetts 01730 and our telephone number is (781) 271-1200. Our Internet
web site is www.cambridgeheart.com. Information contained on our web site is
not a part of this prospectus.
5
<PAGE>
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. If any of the events described below actually occur, our
business, financial condition or results of operations could be materially
adversely affected. In such case, the market price of our common stock could
decline and you could lose all or part of your investment. In evaluating an
investment in the shares of common stock offered hereby, you should consider
carefully the following risk factors in addition to the other information
presented elsewhere in, or incorporated by reference into, this prospectus.
Risks Related to Our Operations
We may never generate substantial revenues
We are engaged primarily in the commercialization, manufacture, research and
development of our products for the non-invasive diagnosis of cardiac disease.
We have incurred substantial and increasing net losses through March 31, 1999.
There can be no assurance that we will ever generate substantial revenues or
achieve profitability on a quarterly or annual basis. We believe that our
research and development expenses will increase in the future as we develop
additional products and fund clinical trials of our product candidates. Our
research and development expenses may also increase in the future as we
supplement our internal research and development with additional third party
technology licenses and potential acquisition of complimentary products and
technologies. We also expect that our selling, general and administrative
expenses will continue to increase in connection with the continued expansion
of our sales and marketing activities. Revenues generated from the sale of our
products will depend upon numerous factors, including:
. the timing of regulatory actions;
. progress of product development;
. the extent to which our products gain market acceptance;
. varying pricing promotions and volume discounts to customers;
. competition; and
. the availability of third party reimbursement.
Our technology may never achieve market acceptance
We believe that our future success will depend, in large part, upon the
successful commercialization and market acceptance of our T-wave alternans
technology. Market acceptance will depend upon our ability to demonstrate the
diagnostic advantages and cost-effectiveness of this technology. There can be
no assurance that we will be able to successfully commercialize or achieve
market acceptance of our T-wave alternans technology or that our competitors
will not develop competing technologies that are superior to our technology.
The results of future clinical studies may not support the accuracy of our
technology
We have sponsored and are continuing to sponsor clinical studies relating to
our T-wave alternans technology and Hi-Resolution electrodes to establish the
prognostic value of such technology. While studies on high risk patients to
date have indicated that the measurement of T-wave alternans to predict the
vulnerability of ventricular arrhythmia is comparable to electrophysiology
testing, there can be no assurances that the results of such studies,
particularly studies involving patients who are not high risk, will continue to
be favorable. Any clinical studies or trials which fail to demonstrate that T-
wave alternans is at least comparable in accuracy to
alternative diagnostic tests, or which otherwise call into question the cost-
effectiveness, efficacy or safety of our technology, would have a material
adverse effect on our business, financial condition and results of operations.
6
<PAGE>
We may not receive necessary foreign regulatory approvals
A significant portion of our revenue is dependent upon sales of our products
outside the United States. Foreign regulatory bodies have established varying
regulations. Specifically, the European Union has promulgated rules which
require that medical products receive the right to affix the CE mark, an
international symbol of adherence to quality assurance standards and compliance
with applicable European medical device directives. There is no assurance that
we will be able to obtain European Union approval for any future products. Our
inability or failure, or the inability or failure of our international
distributors, to comply with varying foreign regulations or the imposition of
new regulations could restrict or, in certain countries, result in the
prohibition of the sale of our products, and thereby adversely affect our
business, financial condition and results of operations.
We may have difficulty responding to changing technology
The medical device market is characterized by rapidly advancing technology.
Our future success will depend, in large part, upon our ability to anticipate
and keep pace with advancing technology and competitive innovations. However,
there can be no assurance that we will be successful in identifying, developing
and marketing new products or enhancing our existing products. In addition,
there can be no assurance that new products or alternative diagnostic
techniques will not be developed that will render our current or planned
products obsolete or inferior. Rapid technological development by competitors
may result in our products becoming obsolete before we recover a significant
portion of the research, development and commercialization expenses incurred
with respect to such products.
We have significant competition from a variety of sources
Competition from competitors' medical devices that diagnose cardiac disease
is intense and likely to increase. We compete with manufacturers of
electrocardiogram stress tests, the conventional method of diagnosing ischemic
heart disease, as well as with manufacturers of other invasive and non-invasive
tests, including EP testing, electrocardiograms, Holter monitors, ultrasound
tests and systems of measuring cardiac late potentials. Many of our competitors
and prospective competitors have substantially greater capital resources, name
recognition, research and development experience and regulatory, manufacturing
and marketing capabilities. Many of these competitors offer broad, well
established product lines and ancillary services not offered by Cambridge
Heart. Some of our competitors have long-term or preferential supply
arrangements with physicians and hospitals which may act as a barrier to market
entry.
We depend heavily on independent manufacturers representatives and foreign
distributors
We currently market our products in the United States through a small direct
sales force and independent manufacturers' representatives. There can be no
assurance that we will be able to continue to recruit and retain skilled sales
management, direct sales persons or independent manufacturers' representatives.
We market our products internationally through independent distributors. These
distributors also distribute competing products under certain circumstances.
The loss of a significant international distributor could have a material
adverse effect on our business if a new distributor, sales representative or
other suitable sales organization cannot be found on a timely basis in the
relevant geographic market. To the extent that we rely on sales in certain
territories through distributors, any revenues we receive in those territories
will depend upon the efforts of our distributors. Furthermore, there can be no
assurance that a distributor will market our products successfully or that the
terms of any future distribution arrangements will be acceptable to us.
7
<PAGE>
Risks Related to the Market for Cardiac Diagnostic Equipment
Our business could be subject to product liability claims
The testing, manufacture, marketing and sale of medical devices entail the
inherent risk of liability claims or product recalls. Although we maintain
product liability insurance in the United States and in other countries in
which we conduct business, including clinical trials and product marketing and
sales, there can be no assurance that such coverage is adequate or will
continue to be available. Product liability insurance is expensive and in the
future may not be available on acceptable terms, if at all. A successful
product liability claim or product recall could inhibit or prevent
commercialization of the CH 200 System or cause a significant financial burden
on Cambridge Heart, or both, and could have a material adverse effect on our
business, financial condition and ability to market the CH 2000 System as
currently contemplated.
Our business could be adversely affected if we are unable to protect our
proprietary technology
Our success will depend, in large part, on our ability to develop patentable
products, enforce our patents and obtain patent protection for our products
both in the United States and in other countries. However, the patent positions
of medical device companies, including Cambridge Heart, are generally uncertain
and involve complex legal and factual questions. No assurance can be given that
patents will issue from any patent applications we own or license or that, if
patents do issue, the claims allowed will be sufficiently broad to protect our
proprietary technology. In addition, no assurance can be given that any issued
patents we own or license will not be challenged, invalidated or circumvented,
or that the rights granted thereunder will provide us with competitive
advantages. We also rely on unpatented trade secrets to protect our proprietary
technology, and no assurance can be given that others will not independently
develop or otherwise acquire substantially equivalent techniques or otherwise
gain access to our proprietary technology or disclose such technology or that
we can ultimately protect meaningful rights to such unpatented proprietary
technology.
Others could claim that we infringe their intellectual property rights
Our commercial success will depend in part on our neither infringing patents
issued to others nor breaching the licenses upon which our products might be
based. Our licenses of patents and patent applications impose various
commercialization, sublicensing, insurance, royalty and other obligations on
our part. Our failure to comply with these requirements could result in
conversion of the licenses from being exclusive to nonexclusive in nature or
termination of the licenses.
We could become involved in litigation over intellectual property rights
The medical device industry has been characterized by extensive litigation
regarding patents and other intellectual property rights. Litigation, which
would likely result in substantial cost to us, may be necessary to enforce any
patents issued or licensed to us and/or to determine the scope and validity of
others' proprietary rights. In particular, our competitors and other third
parties hold issued patents and are assumed to hold pending patent applications
which may result in claims of infringement against us or other patent
litigation. We also may have to participate in interference proceedings
declared by the United States Patent and Trademark Office, which could result
in substantial cost, to determine the priority of inventions. Furthermore, we
may have to participate at substantial cost in International Trade Commission
proceedings to abate importation of products which would compete unfairly with
our products.
We may not be able to protect our trade secrets
We rely on confidentiality agreements with our collaborators, employees,
advisors, vendors and consultants. There can be no assurance that these
agreements will not be breached, that we would have adequate remedies for any
breach or that our trade secrets will not otherwise become known or be
independently developed by competitors. Failure to obtain or maintain patent
and trade secret protection, for any reason, could have a material adverse
effect on Cambridge Heart.
8
<PAGE>
We may not be able to obtain third-party reimbursement
Our revenues currently depend and will continue to depend, to a significant
extent, on sales of the CH 2000 System. Our ability to successfully
commercialize the CH 2000 System depends in part on the availability of, and
our ability to obtain, adequate levels of third-party reimbursement for use of
the CH 2000 System. Reimbursement is not currently available for the use of the
CH 2000 System for measuring T-wave alternans.
The amount of reimbursement in the United States that will be available for
clinical use of the CH 2000 System, if any, is uncertain and may vary. In the
United States, the cost of medical care is funded, in substantial part, by
government insurance programs, such as Medicare and Medicaid, and private and
corporate health insurance plans. Third-party payors may deny reimbursement if
they determine that a prescribed device has not received appropriate FDA or
other governmental regulatory clearances, is not used in accordance with cost-
effective treatment methods as determined by the payor, or is experimental,
unnecessary or inappropriate. Our ability to commercialize the CH 2000 System
successfully will depend, in large part, on the extent to which appropriate
reimbursement levels for the cost of the use of the CH 2000 System are obtained
from government authorities, private health insurers and other organizations,
such as health maintenance organizations.
There can be no assurance that reimbursement in the United States or foreign
countries will be available for the CH 2000 System, or if available, will not
be decreased in the future or that reimbursement amounts will not reduce the
demand for, or the price of, the CH 2000 System. The unavailability of third-
party reimbursement or the inadequacy of the reimbursement for medical tests
using the CH 2000 System would have a material adverse effect on Cambridge
Heart.
We have a number of risks associated with the year 2000
Although we do not believe that year 2000 issues will have a significant
impact on our internal operations or on our products, there can be no assurance
that we will not experience interruptions of operations because of year 2000
problems. Year 2000 problems could require us to incur unanticipated expenses,
and such expenses could have a material adverse effect on our business,
financial condition and results of operations. Furthermore, the purchasing
patterns of customers or potential customers may be affected by year 2000
issues as companies expend significant resources to correct their current
systems for year 2000 compliance. These expenditures may result in reduced
funds being available to purchase products offered by Cambridge Heart.
9
<PAGE>
Risks Related to the Offering
The market price of our shares has experienced, and may continue to be subject
to, extreme price and volume fluctuations
The stock market has, from time to time, experienced extreme price and
volume fluctuations. The market prices of the securities of medical-device
companies have been especially volatile, including fluctuations that are often
unrelated to the operating performance of the affected companies. Broad market
fluctuations of this type may adversely affect the market price of our common
stock.
The market price of our common stock has experienced, and may continue to be
subject to extreme fluctuations due to a variety of factors, including:
. public announcements concerning us or our competitors, of the medical
device industry;
. fluctuations in operating results;
. introductions of new products or services by us or our competitors;
. changes in analysts' earnings estimates; and
. announcements of technological innovations.
In the past, companies that have experienced volatility in the market price
of their stock have been the object of securities class action litigation. If
we were the object of securities class action litigation, it could result in
substantial costs and a diversion of our management's attention and resources
and have a material adverse effect on our business, financial condition and
results of operations.
A third party could be prevented from acquiring your shares of stock at a
premium to the market price because of our anti-takeover provisions
Various provisions of our certificate of incorporation, by-laws and Delaware
law could make it more difficult for a third party to acquire us, even if doing
so might be beneficial to you and our other stockholders.
The future sale of shares of our common stock may negatively affect our stock
price
If our stockholders sell substantial amounts of our common stock, including
shares issuable upon the exercise of outstanding warrants and options,
following this offering, the market price of our common stock could fall. These
sales also might make it more difficult for us to sell equity securities in the
future at a time and price that we deem appropriate.
10
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the selling
stockholders. Also, we will bear most of the costs of registering the shares
covered by this prospectus. Those costs include:
. registration and filing fees and Nasdaq National Market listing fees,
. fees and expenses of our counsel and accountants, and
. fees and expenses relating to our complying with state securities laws.
However, the selling stockholders will be responsible for any underwriting
discounts and commissions or expenses incurred by the selling stockholders for
brokerage, accounting, tax or legal services.
SELLING STOCKHOLDERS
The following table sets forth, to our knowledge, information about the
selling stockholders as of June 10, 1999. The selling stockholders have not had
a material relationship with Cambridge Heart within the past three years other
than the sale in June 1999 of the shares covered by this prospectus and
warrants for the purchase of shares covered by this prospectus.
<TABLE>
<CAPTION>
Percentage Number of Percentage
Number of of Shares of Number Shares of of Shares of
Shares of Common of Shares Common Common
Common Stock of Stock Stock
Stock Beneficially Common Beneficially Beneficially
Beneficially Owned Stock Owned Owned
Owned Prior to Offered After After
Prior to Offering Hereby Offering Offering
Name of Selling Stockholder Offering(1) (1)(2) (2) (1)(2) (1)(2)
- --------------------------- ------------ ------------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
The Tail Wind Fund
Ltd.................... 523,809(3) 4.4% 523,809(3) 0 0%
Special Situations
Private Equity Fund,
L.P.................... 250,800(4) 2.1% 250,800(4) 0 0%
Geoffrey H. Galley...... 209,524(5) 1.8% 209,524(5) 0 0%
Special Situations Fund
III, L.P............... 63,485(6) * 63,485(6) 0 0%
</TABLE>
- --------
* Less than 1%
(1) The number of shares beneficially owned is determined under rules
promulgated by the SEC, and the information is not necessarily indicative
of beneficial ownership for any other purpose. Unless otherwise indicated,
each person or entity named in the table has sole voting power and
investment power (or shares such power with his or her spouse) with respect
to all shares of capital stock listed as owned by such person or entity.
(2) We do not know when or in what amounts the selling stockholders may offer
shares for sale and there can be no assurance that the selling stockholders
will sell any or all of the shares offered hereby. Because the selling
stockholders may offer all or some of the shares pursuant to this offering,
and because, to our knowledge, there are no agreements, arrangements or
understandings with respect to the sale of any of the shares that will be
held by the selling stockholders after completion of this offering, no
estimate can be given as to the amount of the shares that will be held by
each selling stockholder after completion of this offering. However, for
purposes of this table, we have assumed that, after completion of this
offering, none of the shares covered hereby will be held by the selling
stockholders.
(3) Includes 47,619 shares issuable upon exercise of a common stock purchase
warrant.
(4) Includes 22,800 shares issuable upon exercise of a common stock purchase
warrant.
(5) Includes 19,048 shares issuable upon exercise of a common stock purchase
warrant.
(6) Includes 5,771 shares issuable upon exercise of a common stock purchase
warrant.
11
<PAGE>
PLAN OF DISTRIBUTION
We are registering all of the shares on behalf of the selling stockholders.
We will receive no proceeds from this offering. "Selling stockholders," as used
in this prospectus, includes donees, pledgees, transferees or other successors
in interest selling shares received from the named selling stockholders after
the date of this prospectus. The selling stockholders may sell their shares
from time to time. The selling stockholders will act independently of Cambridge
Heart in making decisions with respect to the timing, manner and size of each
sale. The sales may be made on one or more exchanges or in the over-the-counter
market or otherwise, at prices and at 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 the resale by such broker
or dealer for its 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;
. in options transactions; and
. for shares that qualify for resale under Rule 144 of the Securities Act,
under that rule rather than this prospectus.
The selling stockholders may enter into hedging transactions with broker-
dealers in connection with distributions of the shares or otherwise. In these
transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with the selling stockholder. The
selling stockholder also may sell shares short and redeliver the shares to
close out these short positions. The selling stockholder may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer these shares through this prospectus. The selling stockholder also may
loan or pledge the shares to a broker-dealer. The broker-dealer may sell the
shares so loaned, or upon a default the broker-dealer may sell the pledged
shares by use of this prospectus.
In effecting sales, broker-dealers engaged by the selling stockholders may
arrange for other broker-dealers to participate. Broker-dealers will receive
commissions or discounts from the selling stockholders in amounts to be
negotiated immediately prior to the sale. In offering the shares covered
hereby, 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. Because the selling
stockholders may be deemed to be underwriters, they will be subject to the
prospectus delivery requirements of the Securities Act. The selling
stockholders have advised Cambridge Heart that they have not entered into any
agreements, understandings or arrangements with any underwriters or broker-
dealers regarding the sale of the shares. There is no underwriter or
coordinating broker acting in connection with the proposed sale of shares by
the selling stockholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. 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.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days before the commencement of this distribution. In addition, the
selling stockholders will be subject to applicable provisions of the Exchange
Act and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares
12
<PAGE>
of our common stock by the selling stockholders. Cambridge Heart will make
copies of this prospectus available to the selling stockholders and has
informed the selling stockholders of the need for delivery of copies of this
prospectus to potential purchasers at or before the time of any sale of the
shares.
Cambridge Heart will file a supplement to this prospectus, if required,
under Rule 424(b) under the Securities Act upon being notified by the selling
stockholder that any material arrangement has been entered into with a broker-
dealer for the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker-dealer. Such a
supplement will disclose:
. the name of the selling stockholder and of the participating broker-
dealers;
. the number of shares involved;
. the price at which these shares were sold;
. the commissions paid or discounts or concessions allowed to the broker-
dealer(s), where applicable;
. that the broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and
. other facts material to the transaction.
In addition, upon being notified by a selling stockholder that a donee or
pledgee intends to sell more than 500 shares, Cambridge Heart will file a
supplement to this prospectus.
We have agreed to indemnify in certain circumstances the selling
stockholders against certain liabilities, including liabilities under the
Securities Act. The selling stockholders have agreed to indemnify in certain
circumstances Cambridge Heart and certain related persons against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Hale and Dorr LLP, Boston, Massachusetts, will pass on the validity of the
shares offered by this prospectus.
EXPERTS
The financial statements as of December 31, 1998 and 1997 and for each of
the three years in the period ended December 31, 1998 included in this
registration statement have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
13
<PAGE>
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 the Registrant. All amounts shown are
estimates except the Securities and Exchange Commission registration fee and
the Nasdaq additional listing fee.
<TABLE>
<S> <C>
Filing Fee--Securities and Exchange Commission...................... $ 1,780
Nasdaq additional listing fee....................................... $17,500
Legal fees and expenses of the Company.............................. $25,000
Accounting fees and expenses........................................ $ 3,500
Miscellaneous expenses.............................................. $ 7,220
-------
Total Expenses.................................................... $55,000
=======
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article Nine of the Registrant's Restated Certificate of Incorporation
provides that no director of the Registrant shall be personally liable for any
monetary damages for any breach of fiduciary duty as a director, except to the
extent that the Delaware General Corporation Law prohibits the elimination or
limitation of liability of directors for breach of fiduciary duty.
Article Nine of the Registrant's Restated Certificate of Incorporation
provides that a director or officer of the Registrant (a) shall be indemnified
by the Registrant against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement incurred in connection with any litigation
or other legal proceeding (other than an action by or in the right of the
Registrant) brought against him by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful and (b) shall be
indemnified by the Registrant against all expenses (including attorneys' fees)
and amounts paid in settlement incurred in connection with any action by or in
the right of the Registrant brought against him by virtue of his position as a
director or officer of the Registrant if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Registrant, except that no indemnification shall be made with respect to any
matter as to which such person shall have been adjudged to be liable to the
Registrant, unless a court determines that, despite such adjudication but in
view of all of the circumstances, he is entitled to indemnification of such
expenses. Notwithstanding the foregoing, to the extent that a director or
officer has been successful, on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, he is required to be
indemnified by the Registrant against all expenses (including attorneys' fees)
incurred in connection therewith. Expenses shall be advanced to a director or
officer at his request, provided that he undertakes to repay the amount
advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
Indemnification is required to be made unless the Registrant determines that
the applicable standard of conduct required for indemnification has not been
met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Registrant
notice of the action for which indemnity is sought and the Registrant has the
right to participate in such action or assume the defense thereof.
II-1
<PAGE>
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent
of the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, in any criminal proceeding, if such
person had no reasonable cause to believe his conduct was unlawful; provided
that, in the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such
person shall have been adjudged to be liable to the corporation unless and only
to the extent that the adjudicating court determines that such indemnification
is proper under the circumstances.
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
5 Opinion of Hale and Dorr LLP.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5 filed herewith.
24 Power of Attorney (See page II-4 of this Registration Statement).
</TABLE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in 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 the registration statement or any
material change to such information in the registration statement.
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated be reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
II-2
<PAGE>
The undersigned 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 the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
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 information technology is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Bedford, Commonwealth of Massachusetts, on June 24,
1999.
CAMBRIDGE HEART, INC.
By: /s/ Jeffrey M. Arnold
----------------------------------
Jeffrey M. Arnold
Chairman of the Board and
Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Cambridge Heart, Inc., hereby
severally constitute and appoint Jeffrey M. Arnold, Robert B. Palardy and
Joseph E. Mullaney III, 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 any subsequent registration
statement for the same offering which may be filed under Rule 462(b) and
generally to do all such things in our name and behalf in our capacities as
officers and directors to enable Cambridge Heart, Inc. to comply with the
provisions of the Securities Act 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, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey M. Arnold Chairman of the Board and June 23, 1999
______________________________________ Chief Executive Officer
Jeffrey M. Arnold (Principal Executive
Officer)
/s/ Robert B. Palardy Chief Financial Officer June 24, 1999
______________________________________ (Principal Financial and
Robert B. Palardy Accounting Officer)
/s/ Richard J. Cohen Director June 24, 1999
______________________________________
Richard J. Cohen, M.D., Ph.D.
/s/ Harris A. Berman Director June 24, 1999
______________________________________
Harris A. Berman, M.D.
/s/ J. Daniel Cole Director June 23, 1999
______________________________________
J. Daniel Cole
/s/ Laurence J. Blumberg Director June 24, 1999
______________________________________
Laurence J. Blumberg, M.D.
/s/ Rolf S. Stutz Director June 24, 1999
______________________________________
Rolf S. Stutz
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
5 Opinion of Hale and Dorr LLP.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5 filed herewith.
24 Power of Attorney (See page II-4 of this Registration Statement).
</TABLE>
<PAGE>
EXHIBIT 5
HALE AND DORR LLP
COUNSELLORS AT LAW
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
617-526-6000 . FAX 617-526-5000
June 24, 1999
Cambridge Heart, Inc.
1 Oak Park Drive
Bedford, Massachusetts 01730
Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration Statement
on Form S-3 (the "Registration Statement") to be filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), for the registration of an aggregate of
1,047,618 shares of Common Stock, $.001 par value per share (the "Shares"), of
Cambridge Heart, Inc., a Delaware corporation (the "Company"). All of the
Shares are being registered on behalf of certain stockholders of the Company.
We are acting as counsel for the Company in connection with the registration
for resale of the Shares. We have examined signed copies of the Registration
Statement as filed with the Commission. We have also examined and relied upon
the minutes of meetings of the Board of Directors of the Company as provided to
us by the Company, the Certificate of Incorporation and By-Laws of the Company,
each as restated and/or amended to date, and such other documents as we have
deemed necessary for purposes of rendering the opinions hereinafter set forth.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as copies, the authenticity of the originals of such latter
documents and the legal competence of all signatories to such documents.
We assume that the appropriate action will be taken, prior to the offer and
sale of the Shares, to register and qualify the Shares for sale under all
applicable state securities or "blue sky" laws.
We express no opinion herein as to the laws of any state or jurisdiction
other than the state laws of the Commonwealth of Massachusetts, the Delaware
General Corporation Law statute and the federal laws of the United States of
America.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and are validly issued, fully paid and
nonassessable.
It is understood that this opinion is to be used only in connection with the
offer and sale of the Shares while the Registration Statement is in effect.
WASHINGTON, D.C. BOSTON, MA London, UK*
- --------------------------------------------------------------------------------
HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM)
<PAGE>
Please note that we are opining only as to the matters expressly set forth
herein, and no opinion should be inferred as to any other matters.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act and to the use of our
name therein and in the related Prospectus under the caption "Legal Matters."
In giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ HALE AND DORR LLP
HALE AND DORR LLP
2
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors and Stockholders
Cambridge Heart, Inc.
We hereby consent to the incorporation by reference in this Registration
Statement to register 1,047,618 shares of common stock on Form S-3 of our
report dated February 10, 1999, relating to the financial statements which
appears in Cambridge Heart's Annual Report on Form 10-K for the year ended
December 31, 1998. We also consent to the references to us under the headings
"Experts" in such Registration Statement.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
June 24, 1999
