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As filed with the Securities and Exchange Commission on August 6, 1997
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
PHOTOELECTRON CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 04-3035323
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5 Forbes Road
Lexington, Massachusetts 02173
(Address of Principal Executive Offices, Including Zip Code)
1989 STOCK OPTION PLAN
EMPLOYEE STOCK PURCHASE PLAN
1996 EQUITY INCENTIVE PLAN
(Full Title of the Plans)
PETER E. OETTINGER, PH.D.
Vice President and Chief Operating Officer
PHOTOELECTRON CORPORATION
5 Forbes Road
Lexington, Massachusetts 02173
(617) 861-2069
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)
________________________
Copy to:
LESTER J. FAGEN, ESQ.
GOULSTON & STORRS, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110
__________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered (1) Offering Price Per Aggregate Offering Registration Fee
Share Price
================================================================================================
<S> <C> <C> <C> <C>
Common Stock,
par value $.01 per 594,725 (1) $4.487662365 $2,668,925 (2) $808.77
share
================================================================================================
Common Stock,
par value $.01 per 127,750 (3) $8.38148728 $1,070,735 (4) $324.47
share
================================================================================================
Common Stock,
par value $.01 per 386,525 (5) $6.875 $2,657,359 (6) $805.26
share
================================================================================================
TOTAL 1,109,000 $6,397,019 $1,938.50 (7)
================================================================================================
</TABLE>
(1) Subtotal represents the shares issuable upon exercise of options that have
been previously granted as of the date hereof under the Registrant's 1989
Stock Option Plan. No additional options will be granted under the 1989
Stock Option Plan.
(2) Computed in accordance with Rule 457(h) ("Rule 457 (h)") under the
Securities Act of 1933, as amended, based on the average weighted exercise
price of $4.487662365 per share.
(3) Subtotal represents the shares issuable upon exercise of options that have
been granted as of the date hereof under the Registrant's 1996 Equity
Incentive Plan.
(4) Computed in accordance with Rule 457(h) based on the average weighted
exercise price of $8.38148728 per share.
(5) Subtotal represents the sum of (a) 126,500 shares that previously have been
issued upon exercise of options under the 1989 Stock Option Plan, (b)
139,025 shares issuable upon exercise of options that have not yet been
granted under the Registrant's 1996 Equity Incentive Plan and (c) 121,000
shares that previously have been issued under the Employee Stock Purchase
Plan.
(6) Computed in accordance with Rule 457(h) and (c) based on the average of the
high and the low prices per share of Photoelectron Corporation Common Stock,
par value $.01 per share, on August 4, 1997, as reported on the Nasdaq
National Market.
(7) Estimated pursuant to Rule 457(h) and (c) solely for the purpose of
calculating the Amount of Registration Fee.
================================================================================
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two parts. The first part
contains a prospectus pursuant to Form S-3 (in accordance with Section C of the
General Instructions to Form S-8) which covers reoffers and resales by
affiliates (as that terms is defined in Rule 405 under the Securities Act of
1933, as amended) of the Registrant of shares of Common Stock of the Registrant,
issued upon exercise of options granted pursuant to the Registrant's 1989 Plan,
Employee Stock Purchase Plan and 1996 Plan. Pursuant to the Note to Part I of
Form S-8, plan information specified by Part I is not being filed with the
Securities and Exchange Commission. The second part contains information
required in the Registration Statement pursuant to Part II of Form S-8.
-3-
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PHOTOELECTRON CORPORATION
CROSS-REFERENCE SHEET
Showing the Location in the Prospectus of the Information
Required by the Items of Part I of Form S-3
<TABLE>
<CAPTION>
Item Location in Prospectus
---- -----------------------
<S> <C> <C>
1. Forepart of the Registration Facing Page, Outside
Statement and Outside Front Front Cover Page
Cover Page of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page
Cover Pages of Prospectus
3. Summary Information, Risk Outside Front Cover
Factors and Ratio of Earnings Page, the Company,
to Fixed Charges Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Outside Front Cover
Offering Price Page; Plan of Distribution
6. Dilution Not Applicable
7. Selling Security Holders Selling Shareholders
8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
9. Description of Securities Information Incorporated
to be Registered by Reference; Securities
to be Offered
10. Interests of Named Interests of Named
Experts and Counsel Experts and Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference
13. Disclosure of Commission Indemnification of Directors
Position on Indemnification and Officers
for Securities Act Liabilities
</TABLE>
<PAGE>
PROSPECTUS
PHOTOELECTRON CORPORATION
378,818 SHARES OF COMMON STOCK
($.01 PAR VALUE)
This Prospectus covers an aggregate of 378,818 shares (the "Shares") of
Common Stock, $.01 par value ("Common Stock") of Photoelectron Corporation (the
"Company") which have been issued or are issuable upon exercise of stock options
or upon stock grants under the Company's 1989 Stock Option Plan (the "1989
Plan"), Employee Stock Purchase Plan (the "Employee Plan") and 1996 Equity
Incentive Plan (the "1996 Plan," and together with the 1989 Plan and the
Employee Plan, the "Plans"). This Prospectus also covers the resale of the
restricted Common Stock previously issued under the Plans and the Common Stock
issuable upon exercise of options or upon stock grants under the Plans. The
Company will not receive any part of the proceeds from the sales of the Shares.
All expenses of registration incurred in connection with this offering are being
borne by the Company, but all selling and other expenses incurred by the Selling
Shareholders will be borne by such Selling Shareholders.
The Common Stock of the Company is traded and quoted on The Nasdaq
National Market of the Nasdaq Stock Market (the "Nasdaq National Market"). On
August 4, 1997, the closing sales price of the Company's Common Stock, as
reported by the Nasdaq National Market was as $7 (NASDAQ Symbol: "PECX").
THE PURCHASE OF SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THE 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 IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE INFORMATION HEREIN SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
The date of this Prospectus is August 6, 1997.
<PAGE>
THE COMPANY
AS USED HEREIN, UNLESS THE CONTEXT REQUIRES OTHERWISE, THE TERM ''COMPANY''
INCLUDES PHOTOELECTRON CORPORATION AND ITS SUBSIDIARY, PHOTOELECTRON (EUROPE)
LTD. THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE
INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS SET FORTH UNDER THE HEADING "'RISK
FACTORS."
The Company is engaged in the design, development and commercialization of the
Photon Radiosurgery System (''PRS''), a proprietary, therapeutic device for the
treatment of cancerous tumors through the application of x-ray radiation
directly to the tumor site. The PRS delivers in a single treatment a high dose
of radiation through a thin, minimally invasive, needle-like probe, which emits
from its tip precisely controlled low energy x-rays that irradiate the tumor
from the inside out. The limited penetration of low energy x-rays in tissue
substantially confines the radiation to the tumor site.
The Company believes that the PRS offers a number of advantages over
conventional radiation therapies by allowing higher radiation doses with shorter
patient treatment times. Substantial confinement of the radiation to the tumor
boundaries significantly reduces the risk of radiation exposure to the
surrounding healthy tissue and important organs or critical structures.
To date, the Company has focused its clinical efforts primarily on the
treatment of metastatic brain tumors. However, the PRS is being developed for a
variety of applications, including the treatment of primary brain tumors as well
as breast, prostate, bladder, skin and other cancers. The method of treatment
will depend on the application. The Company expects that the three basic PRS
treatment methods will be: (i) the ''interstitial'' irradiation of localized
tumors from the inside out; (ii) the ''intracavitary'' irradiation of body
cavities; and (iii) the ''intraoperative'' irradiation of tumors during surgery
or of the beds of surgically removed tumors in order to destroy remaining
cancerous cells.
Because of the particularly sensitive nature of the brain and its surrounding
organs and critical structures, such as the optic nerves, damage from external
radiation and surgical procedures can severely harm the patient. Accordingly,
aggressive treatment of brain cancers has historically been limited. The PRS,
however, has been used to treat brain tumors in approximately 90 patients in its
clinical trials. Although the studies are not yet complete, in the Company's
opinion, based primarily on two autopsies, the PRS has destroyed all cancerous
tissue which has been targeted with an adequate dose of radiation. Based on
these results, the Company believes that the PRS can be applied to treat primary
brain tumors and other cancerous tumors throughout the body, with reduced risk
of damage to surrounding tissue. On June 20, 1997, the Company received
clearance from the U.S. Food and Drug Administration (''FDA'') to market Model 3
of the PRS for the treatment of intracranial tumors. The Company is currently
preparing to submit an additional application under Section 510(k) of the
Federal Food, Drug and Cosmetic Act, as amended (the ''FDC Act'') to the FDA
seeking clearance to commercialize the current model of the PRS ("PRS 400") for
treatment of intracranial tumors. Although there can be no assurance, the
Company currently believes, based on the prior 510(k) clearance of the Model 3
and the similarity of the PRS 400 to the Model 3, that the PRS 400 will also
receive 510(k) clearance to be marketed for treatment of intracranial tumors.
Locally approved clinical trials for the treatment of brain tumors are also
being performed at sites in Europe and Japan. The Company currently anticipates
that two clinical trials to determine the safety of the PRS for treatment of
breast cancer will begin in late 1997 in England. A protocol for human clinical
trials of the PRS to treat prostate tumors has been approved by the ethics
committee of a London hospital and animal trials relating to the use of the PRS
in treating bladder tumors in the U.S. have been performed. The Company will
consider the use of the PRS for other potential applications on an ongoing
basis.
The Company was formed in 1989 as a joint venture between Thermo Electron
Corporation (''Thermo Electron'') and an investment entity organized by Peter M.
Nomikos, the Company's President and Chief
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Executive Officer. Mr. Nomikos co-founded Thermo Electron with George N.
Hatsopoulos, Ph.D., a director of the Company.
The Company was incorporated in Massachusetts in 1989. The Company's principal
executive offices are located at 5 Forbes Road, Lexington, Massachusetts 02173,
and its telephone number is (617) 861-2069.
RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK BEING OFFERED HEREBY INVOLVES A
HIGH DEGREE OF RISK. IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS,
THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN INVESTMENT
IN THE SHARES.
EARLY STAGE OF THE COMPANY AND ITS PRODUCTS
The PRS, is still in development and no revenues have been generated from
product sales of the PRS to date, nor has the PRS 400 been approved for
commercial use in the U.S. or elsewhere. The PRS and its related accessories and
components are currently the Company's only products. No assurance can be given
that the Company's development efforts will be successfully completed, that
required regulatory approvals will be obtained, or that the PRS, if introduced
to the commercial market, will be marketed successfully.
HISTORY OF SIGNIFICANT OPERATING LOSSES; EXPECTATION OF FUTURE SUBSTANTIAL
LOSSES
The Company has experienced significant operating losses in each year since
its inception, due primarily to substantial research and development
expenditures, and as of December 28, 1996 the Company had an accumulated deficit
of approximately $17.4 million. The continued development and commercialization
of the PRS will likely result in substantial losses through at least the middle
of 1998. There can be no assurance that the PRS will ever gain commercial
acceptance, or that the Company will ever generate revenues or achieve
profitability. The Company's ability to achieve profitable operations will be
dependent in large part on whether it can successfully develop and commercialize
the PRS and/or any other products and make the transition to a manufacturing and
marketing company.
PRODUCT DEVELOPMENT RISKS; UNCERTAINTIES RELATING TO CLINICAL TRIALS
The PRS is new and, accordingly, its safety and efficacy have not yet been
fully established, and further development will be required to use the PRS in
the full range of intended applications. The PRS is still in the clinical
testing stage and such clinical testing has focused on only one application of
the PRS, the treatment of brain tumors.
Results from Phase II trials of the PRS as a treatment for metastatic brain
tumors may not be predictive of results for other specific applications. It is
not uncommon for medical device companies to suffer significant setbacks in
other clinical trials, even after obtaining promising results in prior trials.
In addition, clinical trials of the PRS are likely to be conducted with patients
in advanced stages of cancer. These patients could die or suffer adverse effects
for reasons unrelated to the PRS, but such events could nevertheless negatively
impact clinical trial results or regulatory approvals.
The Company has relied and will continue to rely on unaffiliated medical
institutions to perform its clinical trials in accordance with the approval
process of the FDA. There can be no assurances that additional work carried out
at the institutions currently performing Phase II clinical trials, or that
additional
3
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work carried out at any institutions performing clinical trials in the future,
will be satisfactory, or that those institutions will not cancel, suspend or
delay such trials.
Clinical trials may be delayed for a variety of reasons, including the
inability to ensure sufficient numbers of enrolled patients to meet the clinical
trial protocols. This inability can be influenced or caused by, among other
things, the rigidity of the protocols, the size of the overall patient
population, and the locations of clinical sites. The number of patients that
have completed the Company's clinical trials has been limited by a number of
factors, including the reluctance of patients or physicians to participate in
experimental clinical trials. In addition, the Company's collection of
randomized data has been made difficult by the defection from the clinical
trials of patients that wanted to receive the PRS treatment but were assigned to
the trials' non-PRS control groups. Any delays in or termination of the
Company's clinical trials could have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that clinical trials will be successful, that clinical trials will not
be delayed, or that the PRS or any other product will be safe or effective or
capable of being successfully developed for all intended applications.
ABSENCE OF REGULATORY CLEARANCES; UNCERTAINTY OF OBTAINING SECTION 510(K)
CLEARANCE
Although Model 3 of the PRS has received 510(k) clearance from the FDA to be
marketed for the treatment of intracranial tumors, the PRS 400 has not been
approved or cleared for commercial use in the U.S. or in any foreign country.
The PRS is subject to extensive regulation in the U.S. by the FDA and, in many
instances, by comparable agencies in foreign countries where the PRS is to be
manufactured or distributed. Under the FDC Act and the Safe Medical Devices Act
of 1990 (the ''SMDA''), manufacturers of medical devices must comply with
applicable provisions of the FDC Act and the SMDA and certain associated
regulations governing the safety, design, testing, manufacturing, labeling,
marketing and distribution of medical devices and the reporting of certain
information regarding the safety of medical devices. Both the FDC Act and the
SMDA require certain clearances from the FDA before medical devices, such as the
PRS, can be marketed.
Sales of medical devices outside the U.S. are subject to regulatory
requirements that vary widely from country to country. The length of time needed
to obtain approval for the sale of a particular medical device in a foreign
country may be longer, and the requirements may be more burdensome or expensive,
than that required for FDA approval. Furthermore, the export of products
manufactured by the Company will be subject to receipt of export licenses from
the U.S. Government. Such licenses are required for equipment use in foreign
clinical trials. The Company has requested and been granted export licenses and
corresponding foreign import licenses for clinical trials in England, Japan,
Australia and Germany.
The Company expects that the PRS 400 will be the first version of the PRS to
be made commercially available, and there can be no assurances that Section 510
(k) clearance will be obtained. In addition, even if the Company were to obtain
all Section 510(k) clearances with respect to the use of the PRS in the
treatment of brain tumors, there can be no assurances that the Section 510(k)
procedures would be applicable to any other treatment modality. The inability of
the Company to obtain clearance under Section 510(k) with respect to any
particular treatment modality would have a material adverse effect on the
Company's business, financial condition and results of operations.
There can be no assurances that regulatory clearances will be granted for the
PRS or any other future products, that the length of time for clearance will not
be extensive, or that the cost of attempting to obtain any such clearances will
not be prohibitive. Failure to obtain or maintain requisite governmental
approvals could delay or preclude the Company from further developing and
marketing the PRS and other products. Such delays could impair the Company's
ability to generate funds from operations, which in turn would have a material
adverse effect on the Company's business, financial condition and results of
operations.
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EXTENSIVE ONGOING GOVERNMENT REGULATION
Even if regulatory clearances are obtained, such clearances may include
significant limitations on particular uses, and the FDA strictly prohibits the
marketing or sale of approved medical devices for unapproved uses. In addition,
there can be no assurance that the FDA will not impose strict labeling
requirements that limit the use of the PRS, burdensome training requirements or
other requirements as a condition of its Section 510(k) clearance or PMA, under
the FDC Act, any of which could limit the Company's ability to market the PRS.
The current 510(k) clearance granted by the FDA allows the Company to market the
PRS (Model 3) for use in irradiating intracranial tumors. Further, in order to
change or modify a product following FDA clearance, additional clearances may be
required from the FDA. In addition, any FDA clearances may be withdrawn or
limited for non-compliance with regulatory standards or the occurrence of
unforeseen problems following the initial clearance, either of which could
result in restrictions, including withdrawal of the product from the market or
sanctions or fines being imposed on the Company, which could have a material
adverse effect on the Company's business, financial condition and results of
operations.
Manufacturers of medical devices are subject to strict federal regulations
regarding quality of manufacturing, including periodic FDA inspections of
manufacturing facilities to determine compliance with Good Manufacturing
Practice (''GMP'') regulations, but the Company has not to date undergone such
an inspection. These regulations include design, testing, production, control,
documentation and other requirements. The FDA has publicly stated that recent
proposed changes to the GMP regulations are intended to reduce potential design-
related problems with medical devices. In addition, in order to obtain a
Communaut Europenne Mark (a ''CE Mark'') for the PRS, which is required to
market the PRS within the European Union, the Company will need to comply with
standards administered by the International Standards Organization (''ISO'').
There can be no assurance that the Company will be able to attain or maintain
compliance with GMP or ISO standards, or that the Company will be able to
identify and retain manufacturers on commercially acceptable terms, or at all,
or that such manufacturers, if identified, will be adequate for the Company's
long-term needs, or that they will be able to meet all relevant regulatory
requirements. Moreover, changes in methods of manufacture may require the
performance of new clinical studies under certain circumstances. Failure of the
Company to comply with, and maintain continuing compliance with, these
regulations could result in restrictions, including withdrawal of any given
product from the market or sanctions or fines being imposed on the Company, any
of which could have a material adverse effect on the Company's business,
financial condition and results of operations.
RAPID, UNPREDICTABLE AND SIGNIFICANT TECHNOLOGICAL CHANGE; HIGHLY COMPETITIVE
INDUSTRY
The medical device industry is subject to rapid, unpredictable and significant
technological change. The Company is subject to competition in the U.S. and
abroad from a variety of sources, including universities, research institutions
and medical device, chemical and biotechnology companies, many of which have
substantially greater technical, financial, and regulatory resources than the
Company and are better equipped to develop, manufacture and market their
products. These companies may develop and introduce products and processes
competitive with or superior to those of the Company.
DEPENDENCE ON ONE PRODUCT
The Company expects to derive substantially all of its future revenues from
the PRS. The PRS and its related accessories and components are currently the
Company's only products. The PRS and any other products will require further
development, study and regulatory approvals before they can be marketed in the
U.S. or internationally. The Company has never commercially sold any products,
and there can be no assurance that the Company's efforts will be successful or
that the PRS and its related accessories or any other product developed by the
Company will be safe or effective, approved by regulatory authorities, capable
of being manufactured in commercial quantities at acceptable costs, or
successfully introduced to
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the marketplace. Although the Company expects to use its core technology to
develop products in addition to the PRS and its related accessories and
components, all of such additional products are in early stages of development,
and there can be no assurance that the Company will be able to continue as a
going concern if it is forced to rely on sales of such other additional products
as its primary source of revenues.
ADVERSE EFFECT OF PATIENT LIFE EXPECTANCIES ON MARKETS FOR SPECIFIC PRODUCT
APPLICATIONS
To date, the Company has focused its efforts on one specific application of
the PRS, the treatment of metastatic brain tumors. Patients with metastatic
brain tumors already suffer from primary cancer which is separate from the
metastatic brain tumors themselves. The average life expectancy of patients with
metastatic brain tumors is very short. Although the PRS has been designed to
provide either curative or palliative cancer treatment, health care providers
and third party payors may be reluctant to undertake or authorize, or provide
reimbursement for, PRS treatment of patients whose anticipated life expectancies
are below certain levels. While the Company believes that the PRS can be used
for a variety of curative applications, such as primary brain, breast, prostate,
bladder or skin cancer, where patient life expectancies may be increased more
than those for patients with metastatic brain tumors, the Company has not yet
begun U.S. human clinical trials for any of those other applications.
PATENTS AND PROPRIETARY TECHNOLOGY
The Company's ability to compete effectively in the marketplace will depend,
in part, on its ability to maintain the proprietary nature of its technology.
The Company will rely on patents, trade secrets and know-how to establish and
maintain a competitive position in the marketplace. The enforceability of
medical device patents can be highly uncertain, and relevant federal court
decisions establishing the legal standards for determining the validity and
scope of patent protection are currently in transition. In a case now pending
before the United States Supreme Court, the Court has been requested to consider
whether to alter or replace the traditional standards for determining patent
infringement under the ''doctrine of equivalents.'' There can be no assurance
that the historical legal standards applied to questions of validity and scope
of patent protection will continue to be applied or that current defenses (as to
issued patents in the field) will offer protection in the future. Any limitation
or reduction in the Company's rights to obtain or enforce its patents could have
a material adverse effect on the Company's ability to maintain the proprietary
nature of its technology.
The Company has been issued twelve U.S. patents covering the PRS and ancillary
test and calibration devices and holds one U.S. patent application. The Company
has filed foreign patent applications in selected foreign countries which
correspond to certain of its U.S. patent applications. There can be no
assurance, however, that any applications will result in issued patents, or that
once issued, the U.S. Patent and Trademark Office or a court would resolve
issues relating to the validity and scope of the patents in a manner favorable
to the Company. Also, there can be no assurance that any current or future
patents, trade secrets or know-how will afford protection against competitors
with similar technologies or processes or that any patents issued to the Company
will not be infringed upon or designed around by others, nor can there be any
assurance that others will not independently develop proprietary technologies or
processes which are the same as or substantially equivalent to those of the
Company. In addition, there can be no assurance that the Company will not become
subject to patent infringement claims or litigation initiated by third parties.
The defense and prosecution of intellectual property suits, and related legal
and administrative proceedings, are very costly and time-consuming, and any such
litigation or proceeding would result in substantial expense to the Company and
a significant diversion of effort by the Company's technical and management
personnel. Further, any adverse determination in such litigation or proceeding
could subject the Company to significant liabilities to the third party
claimants and could prevent the Company from manufacturing or marketing its
products.
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UNCERTAINTY OF REIMBURSEMENT BY THIRD PARTY PAYORS
The extent to which reimbursement levels for the cost of the Company's
products and related treatment are obtained from third party payors will have a
significant impact on the Company's ability to commercialize its products. These
third party payors include private insurance companies, self-insured employers,
health maintenance organizations, federal and state sources of payment under the
Medicare and Medicaid programs, and other sources. There is no uniform policy on
reimbursement among third party payors, nor are there any assurances that the
PRS or any other Company product will qualify for reimbursement from third party
payors. Foreign countries also have their own health care reimbursement systems,
and there can be no assurance that third party reimbursement will be made
available with respect to the Company's products under any foreign reimbursement
system.
In addition, the Company's business, financial condition and results of
operations could be adversely affected by the continuing efforts of many third
party payors to reduce the costs of health care by decreasing reimbursement
rates, or limiting or prohibiting reimbursement for certain services or devices
or through other means. Furthermore, legislative proposals to reform government
health care insurance programs, including the Medicare and Medicaid programs,
could significantly impact the purchase of health care services and products and
could result in lower prices and reduced demand for the Company's products. The
Company is unable to predict whether such proposals will be enacted, whether
other health care legislation or regulation affecting the Company's business,
financial condition and results of operations may be proposed or enacted in the
future, or what effect any such legislation or regulation would have on the
Company's business, financial condition and results of operations.
CONTROL BY PETER M. NOMIKOS, HIS AFFILIATES AND OTHER EXISTING STOCKHOLDERS
After completion of this offering, Mr. Peter M. Nomikos, Chairman of the
Board, President, Chief Executive Officer and Treasurer of the Company will
beneficially own 48.3% of the outstanding shares of Common Stock, and the
Company's principal stockholders and certain of their affiliates (including Mr.
Nomikos) will beneficially own in the aggregate 48.3% of the outstanding shares
of Common Stock. Certain principal stockholders serve as directors or have
representatives who serve as directors of the Company. As a result of Mr.
Nomikos' ownership of Common Stock coupled with the positions he holds in the
Company, Mr. Nomikos, alone or with the other principal stockholders, will have
the ability to significantly influence all matters requiring approval by the
stockholders of the Company, including the election of all directors,
acquisitions or sales of all or substantially all of the Company's stock or
assets and other extraordinary transactions.
LIKELIHOOD OF SIGNIFICANT FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL
FUNDING
The Company has expended and will continue to expend substantial funds to
continue the research and development of the PRS and other potential products,
conduct clinical trials, pursue regulatory approvals, establish commercial scale
manufacturing in its own facilities or in the facilities of others, and market
the PRS or other products.
The Company's future capital requirements will depend on a variety of factors,
including the time and costs involved in obtaining FDA and other regulatory
approvals, the results of the Company's ongoing clinical trials, the market
acceptance of the PRS and any other Company products, the expense and results of
the Company's continued scientific research and development programs, the time
and costs expended in filing, prosecuting and enforcing patent claims, and the
development of competing technologies. No assurance can be given that the
necessary funds will be available to the Company on acceptable terms, if at all.
Insufficient funds may cause the Company to delay, scale back or eliminate some
or all of its research and development, clinical marketing and manufacturing
programs or to cease operations entirely. In
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addition, any equity financings may be dilutive to the Company's stockholders,
including investors in this offering.
LIMITED MANUFACTURING EXPERIENCE
To achieve profitability, the Company's product or products must be
manufactured in commercial quantities, in compliance with all applicable
regulatory requirements, and at acceptable costs. Production of the PRS or other
products in commercial quantities may create technical challenges for the
Company. The Company does not have and has no immediate plans to construct a
commercial scale manufacturing facility. In order to manufacture its products in
commercial quantities, the Company would have to build or gain access to
adequate facilities or would be required to enter into agreements with other
manufacturers at significant cost. The Company intends to continue its practice
of sub-contracting the fabrication of most of its electrical and mechanical
components, while maintaining internal responsibility for unit assembly and for
manufacture of certain proprietary components. To date, the Company's
manufacturing activities have consisted only of manufacturing investigational
devices and prototype devices for use in clinical trials. As a result, the
Company has no experience manufacturing its products in the volumes that will be
necessary for the Company to achieve significant commercial sales, and there can
be no assurance that reliable, high-volume manufacturing can be established or
maintained at commercially reasonable costs, or that the Company will be able to
make the transition to commercial production successfully.
LIMITED MARKETING EXPERIENCE
The Company currently has no marketing or sales staff, and significant
additional expenditures, management resources and time would be required to
develop such a sales staff, or to make arrangements for sale or lease of the
Company's products through third parties. As a result, the Company's current
marketing and sales strategy will rely substantially on unaffiliated third
parties to effect the sales of its products. There can be no assurance that the
Company will be able to establish a sales force or make adequate third party
arrangements for product leasing or sales or that the Company will not have to
incur significant additional expenditures, which may include the employment of
sales personnel, in order to effect the sales of its products.
HIGH DEPENDENCE ON KEY PERSONNEL
The Company is highly dependent on its scientific personnel and senior
management. The loss of any key personnel could significantly and adversely
impact the Company's research and development efforts or strategic objectives.
Competition among medical device companies for highly skilled scientific and
management personnel is increasingly intense. In order to achieve and maintain
the Company's commercialization of the PRS, the Company will need to attract and
retain additional key personnel, and there can be no assurance that the Company
will be able to do so. The Company has no employment agreements with any of its
employees, nor has it purchased insurance on the lives of any of its key
employees.
POTENTIAL COMPONENT SHORTAGES; DEPENDENCE ON LIMITED SOURCES OF SUPPLY
The Company expects that it will manufacture its products based on anticipated
product orders. The different lead times for the supply and delivery of
materials and components ordered by the Company for its products can vary
significantly, and the relative availability and cost of those materials and
components can fluctuate. The Company has built up and maintains an inventory of
certain components for the PRS, and seeks, where feasible, to identify multiple
suppliers of materials and components. However, the Company acquires certain
supplies over time from the same vendors. While the Company intends to
8
<PAGE>
negotiate, where appropriate, supply contracts with certain of its key suppliers
in the future, the Company currently procures its supplies through open purchase
orders, and there can be no assurance that the Company's vendors will continue
to provide such supplies on terms acceptable to the Company, if at all. In
addition, if forecasted product orders prove to be different than actual product
orders, the Company may have excess or inadequate inventory. There can be no
assurance that alternative suppliers for components can be found on a timely
basis, or at all, in the event that such alternative suppliers are needed. Any
significant delay or interruption in the Company's ability to acquire product
components and materials could have a material adverse effect on the Company's
ability to manufacture its products and therefore on its business, financial
condition and results of operations.
PRODUCT LIABILITY EXPOSURE; POTENTIAL UNAVAILABILITY OF INSURANCE
Use of the PRS or other products, whether for commercial applications or
during clinical trials, exposes the Company to risk of medical product liability
claims in the event that such products cause injury or result in adverse
effects. There can be no assurance that the Company would have sufficient
resources to satisfy any liability resulting from these claims. Although the
Company has obtained medical product liability insurance with respect to the
clinical testing of the PRS, there can be no assurance that the level or breadth
of such insurance coverage will be sufficient to fully cover potential claims.
Such insurance is expensive, and there can be no assurance that it will continue
to be available at an acceptable cost, if at all, or that a medical product
liability claim would not adversely affect the financial condition of the
Company. Prior to commercial sale of its products, the Company will be required
to obtain product liability insurance covering the commercial use of its
products, however, there can be no assurance that the Company will be able to
obtain commercially reasonable product liability insurance for the commercial
sale or use of any product.
ANTI-TAKEOVER PROVISIONS; EFFECTS OF ISSUANCE OF PREFERRED STOCK
Certain provisions of the Company's Articles of Organization and By-Laws are
intended to enhance the likelihood of continuity and stability in the
composition of the Company's Board of Directors and in the policies formulated
by the Board and to delay or prevent a change in control of the Company if the
Board determines that such a change in control is not in the best interest of
the Company. These provisions could have the effect of discouraging certain
attempts to acquire the Company or to remove incumbent management even if some
or a majority of the Company's stockholders deem such an attempt to be in the
Company's best interest. As a result, these provisions could limit the price
that investors might be willing to pay in the future for shares of Common Stock,
thereby depriving stockholders of certain opportunities to sell their stock at
temporarily higher prices.
In addition, the Company will be covered by the provisions of Chapter 110F of
the Massachusetts General Laws, the Business Combination Statute. This statute
would prohibit the Company from engaging in a ''business combination'' with an
''interested stockholder'' for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a manner prescribed by the statute. A
''business combination'' includes a merger, a stock or asset sale, and other
transactions resulting in a financial benefit to the interested stockholder. The
application of this statute could have the effect of delaying or preventing a
change of control of the Company.
The Board of Directors of the Company is authorized, subject to certain
limitations, to cause the Company to issue one or more series of Preferred Stock
and, to the extent permitted by Massachusetts law, to designate variations in
the relative rights and preferences between different series. In the event of
issuance, the Preferred Stock could be utilized, under certain circumstances, as
a method of discouraging, delaying or preventing a change of control of the
Company. The Company has no current plans to issue
9
<PAGE>
any shares of Preferred Stock; however, there can be no assurance that the
Company's Board of Directors will not do so at some time in the future.
NASDAQ LISTING REQUIREMENTS
In order to maintain a company's listing on the Nasdaq National Market, a
company must satisfy certain criteria. There can be no assurance that the
Company will not fail to satisfy one or more of these criteria at some future
time. In such event, Company's listed securities will be subject to delisting.
Trading, if any, in the listed securities would therefore be conducted in the
over-the-counter market in what are commonly referred to as the "pink sheets."
As a result, an investor may find it more difficult to dispose of, or to obtain
accurate quotations as to the value of, the Company's securities. In addition,
if the Company's securities are delisted, they would be subject to a Securities
and Exchange Commission rule that imposes additional sales practice
requirements, including suitability determinations, on broker-dealers who sell
such securities to persons other than established customers and accredited
investors. Consequently, the rule may effect the ability of broker-dealers to
sell the Company's securities and may affect the ability of purchasers in this
offering to sell their securities in the secondary market.
POTENTIAL VOLATILITY OF STOCK PRICE
The stock markets have experienced price and volume fluctuations that have
particularly affected medical device companies, resulting in changes in the
market prices of the stocks of many companies which may not have been directly
related to the operating performance of those companies. Such broad market
fluctuations may adversely affect the market price of the Common Stock following
this offering.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Common Stock in the public market following
the offering made hereby could have an adverse effect on the price of the Common
Stock, and future sales of Common Stock by existing stockholders could also have
an adverse effect on such price and on the Company's ability to raise capital.
On August 1, 1997 certain lock-up agreements between the Company's stockholders
and the underwriters of the Company's initial public offering will expire and
the shares subject to such lock-up agreements will be eligible for sale in the
public market subject in some cases to the volume and other restrictions of Rule
144 under the Act.
ABSENCE OF DIVIDENDS
The Company has never paid any dividends on its capital stock, including its
Common Stock, and it is currently anticipated that no cash dividends will be
paid to the holders of the Common Stock in the foreseeable future.
AVAILABLE INFORMATION
A Registration Statement on Form S-8 in respect of the Shares offered by
this Prospectus (the "Registration Statement") has been filed with the
Securities and Exchange Commission (the "Commission"), 450 Fifth Street, N.W.,
Washington, D.C. 20549, under the Securities Act of 1933, as amended (the
"Act").
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy and information
10
<PAGE>
statements and other information with the Commission. These reports and other
information may be inspected and copies at the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission at 7 World Trade Center, 13th Floor, New
York, New York 10048, and Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661-2511. Copies of such material can be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains a web site that contains reports, proxy and
information statements and other information regarding the Company; the address
of such site is http://www.sec.gov.
The Company's securities are listed on the Nasdaq National Market.
Reports, proxy and information statements and other information about the
Company may be inspected at the offices maintained by the National Association
of Securities Dealers, Inc., NASDAQ Reports Section, at 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents and information heretofore filed with the Commission:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1996, filed pursuant to Section 13(a) or 15(d) of the Exchange Act.
(b) The Company's Quarterly Reports on Form 10-Q for the quarter ended
March 28, 1996 and for the quarter ended June 28, 1996 which are the only
reports filed by the Company pursuant to Section 13(a) or 15(d) of the 1934 Act
since the end of the Company's last fiscal year.
(c) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A (File No. 0-29200) dated January 16, 1997,
filed with the Commission pursuant to Section 12 of the Exchange Act, there
being no amendment or report filed for the purpose of updating such description.
(d) In addition, all documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such documents.
Any statement contained in a document, all or a portion of which is
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained or
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the written or oral request of any such person, a copy of any or
all such documents which are incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into the documents that this Prospectus incorporates). Written or
oral requests for copies should be directed to: John Crowley, Controller,
Photoelectron Corporation, 5 Forbes Road, Lexington, Massachusetts 02173,
telephone number (617) 861-2069.
11
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Organization provide that the Company's Directors
shall not be liable to the Registrant or its stockholders for monetary damages
for breach of fiduciary duty as a director, except to the extent that
exculpation for liabilities is not permitted under the Massachusetts Business
Corporation Law as in effect at the time such liability is determined. The By-
laws provide for a contract right to indemnification and advancement of expenses
to its directors and officers to the full extent permitted by the laws of the
Commonwealth of Massachusetts.
The Underwriting Agreement between the Company and the underwriters of the
Company's initial public offering (filed as Exhibit 1.1 to the Company's
Registration Statement on Form S-1 (Registration No. 333-14541)) provides for
indemnification of the Company's directors and officers in certain
circumstances.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth the name of certain Selling Shareholders
and the number of shares of Common Stock which each such Selling Shareholder (1)
beneficially owned of record as of July 28, 1997 (including shares of Common
Stock underlying exercisable options); (2) may acquire pursuant to the exercise
of a previously granted option or options under the Plans, all of which shares
may be sold pursuant to this Prospectus; (3) the amount of Common Stock to be
beneficially owned by each Selling Shareholder assuming the sale of all shares
acquired upon the exercise of such options granted under the Plans; (4) the
percentage of shares to be beneficially owned by each Selling Shareholder after
the exercise of the options granted and the sale thereof. Excluded from this
table are non-affiliates who, as of July 28, 1997 hold less than the lesser of
1,000 shares or one percent of the shares issuable under the Plans. Each of
such non-affiliates may use this reoffer prospectus to reoffer and resell up to
1,000 shares of Common Stock.
<TABLE>
<CAPTION>
Amount of
Expected to Acquire Common Stock Percentage of Outstanding
Shares Beneficially Pursuant to the Plans to be Beneficially Common Stock to be
Owned as of and Offered Pursuant Owned After Beneficially Owned Upon
Name July 28, 1997 (1) to the Prospectus Exercise and Sale Exercise and Sale
- ---- -------------------- --------------------- ------------------ --------------------------
<S> <C> <C> <C> <C>
Peter M. Nomikos
Chairman of the
Board, President,
Chief Executive
Officer and Treasurer 4,493,894 (2) 28,500 4,465,394 48.3%
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Peter E. Oettinger, Ph.D.
Vice President,
Chief Operating
Officer and Director 191,700 (3) 189,500 2,200 *
George Hatsopoulos
Director 17,500 (4) 12,500 5,000 *
Roger Wellington
Director 17,500 (5) 12,500 5,000 *
Ken Harte 64,900 (6) 56,500 8,400 *
Seigo Matsuda 16,000 (7) 7,500 8,500 *
Jim Dodge 27,100 (8) 5,000 22,100 *
Alan Sliski 39,918 (9) 3,818 36,100 *
Mark Dinmore 24,950 (10) 1,000 23,950 *
Anthonius Boom 17,800 (11) 4,500 13,300 *
John Crowley
Controller 23,300 (12) 10,000 13,300 *
Walter Pearlman 9,700 (13) 2,500 7,200 *
Michael Dalterio 28,200 (14) 15,500 12,700 *
Monica Hall 6,600 (15) 2,000 4,600 *
Jacquelyn Yanch 10,800 (16) 7,000 3,800 *
Francis Feda 26,500 (17) 20,000 6,500 *
- ----------------
</TABLE>
* Less than 1%
(1) Includes the number of shares and percentage ownership represented by
such shares determined to be beneficially owned by a person in accordance
with the rules of the Securities and Exchange Commission. Such shares,
however, are not deemed outstanding for the purposes of computing the
percentage ownership of each other person. The number of shares
beneficially owned by a person includes shares of Common Stock subject to
options held by that person that are currently exercisable or exercisable
within 60 days of July 28, 1997. Such exercisable options are shown in the
footnotes to this table for each such person. The persons named in this
table have voting and investment power with respect to all shares of Common
Stock shown as owned by them, subject to community property laws where
applicable.
(2) Includes 16,000 shares subject to options granted by the Company, and
479,468 shares issuable upon conversion of convertible debt. Also includes
1,417,334 shares issuable upon exercise of outstanding warrants owned by
PYC Corporation, of which Mr. Nomikos is the President. Mr. Nomikos has
been granted investment power and the authority to vote such shares by PYC
Corporation.
(3) Includes 114,500 shares subject to options granted by the Company.
Also includes 40,080 shares transferred to the Oettinger Children
Irrevocable Trust.
(4) Includes 5,000 shares subject to options granted by the Company.
(5) Includes 5,000 shares subject to options granted by the Company.
(6) Includes 8,200 shares subject to options granted by the Company.
13
<PAGE>
(7) Includes 2,500 shares subject to options granted by the Company.
(8) Includes 22,100 shares subject to options granted by the Company.
(9) Includes 35,782 shares subject to options granted by the Company.
(10) Includes 23,950 shares subject to options granted by the Company.
(11) Includes 11,300 shares subject to options granted by the Company.
(12) Includes 13,000 shares subject to options granted by the Company.
(13) Includes 7,200 shares subject to options granted by the Company.
(14) Includes 12,200 shares subject to options granted by the Company.
(15) Includes 4,600 shares subject to options granted by the Company.
(16) Includes 3,800 shares subject to options granted by the Company.
(17) Includes 6,500 shares subject to options granted by the Company.
PLAN OF DISTRIBUTION
The Selling Shareholders may sell all or a portion of the shares offered
hereby from time to time in transactions (which may include block transactions)
on the Nasdaq National Market at the market price then prevailing, or in the
over-the-counter market. The Selling Shareholders may also make private sales
directly or through a broker or brokers, who may act as agent or as principal.
The Selling Shareholders will be responsible for payment of any and all
commissions to brokers, which will be negotiated on an individual basis. In
connection with any sales, the Selling Shareholders and any brokers
participating in such sales may be deemed to be underwriters within the meaning
of the Securities Act.
The Company has advised the Selling Shareholders that the anti-
manipulative Rules 10b-2, 10b-6 and 10b-7 under the Exchange Act may apply to
their sales in the market, has furnished the Selling Shareholders with a copy of
these Rules and has informed them of the possible need for delivery of copies of
this Prospectus.
In addition, Selling Shareholders who are officers or directors of the
Company or beneficial owners of more than 10% of the Common Stock have been
advised that Section 16 of the Exchange Act may apply to their transactions
under the Plans. Section 16 requires persons subject to its provisions to file
reports with the Commission of their transactions in the Company's equity
securities. Moreover, persons subject to Section 16 may be required to turn over
to the Company any profits realized upon a purchase and sale of the Company's
equity securities within a period of less than six months.
There can be no assurances that the Selling Shareholders will sell any
or all of the shares of Common Stock offered hereunder.
The Company will pay all expenses incident to the offering and sale of
the Common Stock to the public other than brokerage commissions which will be
paid by the Selling Shareholders.
14
<PAGE>
SECURITIES TO BE OFFERED
The shares offered hereby are shares of Common Stock, $0.01 par
value, of the Company. The holders of the Company's Common Stock are
entitled to receive ratably such dividends as may be declared by the Board
of Directors out of funds legally available therefor, subject to the prior
rights of holders of Preferred Stock of the Company, if any. Upon any
liquidation of the Company, after payment of all indebtedness, the assets
of the Company will be distributed pro rata to the holders of the Common
Stock subject to such rights as may have been granted to the holders of any
outstanding Preferred Stock. Holders of the Common Stock have no
preemptive, subscription, redemption or conversion rights and are entitled
to one vote for each share held of record on each matter submitted to a
vote of stockholders. As of July 25, 1997, all but 12,289 of the
outstanding shares of Common Stock are, and the shares of Common Stock
being sold in this offering will be, upon payment of the full consideration
therefor, fully paid and nonassessable. The remaining 12,289 shares were
issued in 1994 to employees pursuant to the Employee Stock Purchase Plan
and are being paid for in installments.
The American Stock Transfer and Trust Company is the transfer
agent and the registrar of the Company's Common Stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the securities being offered hereby will be
passed on for the Company by Goulston & Storrs, a professional corporation,
Boston, Massachusetts. William O. Flannery, Esq. serves Of Counsel to
Goulston & Storrs, a professional corporation and he has served as Clerk
and General Counsel to the Company since 1992.
LEGAL MATTERS
The validity of the shares of the Company's Common Stock offered
hereby will be passed upon for the Company by Goulston & Storrs, 400
Atlantic Avenue, Boston, Massachusetts 02110.
EXPERTS
The consolidated financial statements of Photoelectron
Corporation as of December 28, 1996 and December 30, 1995 and for each of
the years ended December 28, 1996 and December 30, 1995 have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and are incorporated herein in reliance
upon the authority of said firm as experts in accounting and auditing.
15
<PAGE>
----------------------------
TABLE OF CONTENTS
----------------------------
<TABLE>
<CAPTION>
Page
<S> <C>
The Company 2
Risk Factors 3
Available Information 10
Incorporation of Certain
Documents by Reference 11
Indemnification of Directors
and Officers 12
Use of Proceeds 12
Selling Shareholders 12
Plan of Distribution 14
Securities to be Offered 15
Interests of Named Experts
and Counsel 15
Legal Matters 15
Experts 15
</TABLE>
PHOTOELECTRON CORPORATION
378,818
Shares
of Common Stock,
$.01 par value
-----------------------------------------
PROSPECTUS
August 6, 1997
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
---------------------------------------
The following documents have been filed by Photoelectron Corporation (the
"Company") with the Securities and Exchange Commission (the "Commission")
and are hereby incorporated by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1996, filed pursuant to Section 13(a) or 15(d) of the Exchange Act.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 28, 1996, which is the only report filed by the Company pursuant to
Section 13(a) or 15(d) of the Exchange Act since the end of the Company's last
fiscal year.
(c) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A (File No. 0-29200) dated January 16, 1997,
filed with the Commission pursuant to Section 12 of the Exchange Act, there
being no amendment or report filed for the purpose of updating such description.
(d) In addition, all documents subsequently filed by the Company with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
-------------------------
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
--------------------------------------
The legality of the securities being offered hereby will be passed on
for the Company by Goulston & Storrs, a professional corporation, Boston,
Massachusetts. William O. Flannery, Esq. serves Of Counsel to Goulston &
Storrs, a professional corporation and he has served as Clerk and General
Counsel to the Company since 1992.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
The Company's Articles of Organization provide that the Company's
Directors shall not be liable to the Registrant or its stockholders for
monetary damages for breach of fiduciary duty as a director, except to the
extent that exculpation for liabilities is not permitted under the
Massachusetts Business Corporation Law as in effect at the time such
liability is determined. The By-laws provide a contract right to
indemnification and advancement of expenses to its directors and officers
to the full extent permitted by the laws of the Commonwealth of
Massachusetts.
The Underwriting Agreement between the Company and the underwriters of
the Company's initial public offering (filed as Exhibit 1.1 to the
Company's Registration Statement on Form S-1 (Registration No. 333-14541))
provides for indemnification of the Company's directors and officers in
certain circumstances.
II-1
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
-----------------------------------
Not applicable.
ITEM 8. EXHIBITS.
--------
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<C> <S>
4.1 1989 Employee Stock Option Plan (incorporated herein by reference to
Exhibit 10.4 of the Company's Registration Statement on Form S-1
(Registration No. 333-14541).
4.2 Employee Stock Purchase Plan (incorporated herein by reference to
Exhibit 10.3 of the Company's Registration Statement on Form S-1
(Registration No. 333-14541).
4.3 The Photoelectron Corporation 1996 Equity Incentive Plan (incorporated
herein by reference to Exhibit 10.5 of the Company's Registration
Statement on Form S-1 (Registration No. 333-14541).
5 Opinion of Goulston & Storrs regarding legality of the securities
being registered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Goulston & Storrs (included in Exhibit 5).
24 Powers of Attorney of Directors and Officers of the Company (included on the
signature page hereof).
</TABLE>
ITEM 9. UNDERTAKINGS.
------------
The 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 this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement; and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this Registration Statement; provided however that subparagraphs
(i) and (ii) do not apply if the information required to be included in a post-
effective amendment by those subparagraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(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.
(4) That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) 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 foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lexington, Commonwealth of Massachusetts on this 6th
day of August, 1997.
PHOTOELECTRON CORPORATION
By: /s/ Peter E. Oettinger
------------------------
Peter E. Oettinger
Vice President and Chief
Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Peter E. Oettinger, Ph.D., and Gerald J.
Bojas, and each of them, his true and lawful proxies, attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to (i) act on, sign and file
with the Securities and Exchange Commission any and all amendments (including
post-effective amendments) to this Registration Statement together with all
schedules and exhibits thereto, (ii) act on, sign and file such certificates,
instruments, agreements and other documents as may be necessary or appropriate
in connection therewith, (iii) act on and file any supplement to any prospectus
included in such Registration Statement or any such amendment and (iv) take any
and all actions which may be necessary or appropriate in connection therewith,
granting unto such agents, proxies and attorneys-in-fact, and each of them and
his and their substitute or substitutes, full power and authority to do and
perform each and every act and thing necessary or appropriate
II-3
<PAGE>
to be done in connection therewith, as fully for all intents and purposes as he
might or could do in person, hereby approving, ratifying and confirming all that
such agents, proxies and attorneys-in-fact, any of them or any of his or their
substitute or substitutes may lawfully 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 stated.
Signature Title Date
- --------- ----- ----
/s/ Peter M. Nomikos
- ------------------------- Director, President and August 6, 1997
Peter M. Nomikos Chief Executive Officer
(Principal Executive Officer)
/s/ Peter E. Oettinger
- ------------------------- Director, Vice-President, and August 6, 1997
Peter E. Oettinger Chief Operating Officer
/s/ Gerald J. Bojas
- ------------------------- Chief Financial Officer August 6, 1997
Gerald J. Bojas (Principal Financial
Officer and Principal
Accounting Officer)
/s/ George N. Hatsopoulos
- ------------------------- Director August 6, 1997
George N. Hatsopoulos
/s/ Roger D. Wellington
- ------------------------- Director August 6, 1997
Roger D. Wellington
II-4
<PAGE>
EXHIBIT INDEX
-------------
Sequential
Exhibit Page
Number Description Number
- ------ ----------- ----------
4.1 1989 Employee Stock Option Plan (incorporated herein by
reference to Exhibit 10.4 of the Company's Registration
Statement on Form S-1 (Registration No. 333-14541).
4.2 Employee Stock Purchase Plan (incorporated herein by
reference to Exhibit 10.3 of the Company's Registration
Statement on Form S-1 (Registration No. 333-14541).
4.3 The Photoelectron Corporation 1996 Equity Incentive The
Photoelectron Corporation 1996 Equity Incentive Plan
(incorporated herein by reference to Exhibit 10.5 of the
Company's Registration Statement on Form S-1
(Registration No. 333-14541).
5 Opinion of Goulston & Storrs regarding legality of the
securities being registered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Goulston & Storrs (included in opinion
filed as Exhibit 5).
24 Powers of Attorney of Directors and Officers of the
Company (included on the signature pages hereof).
<PAGE>
EXHIBIT 5
GOULSTON & STORRS
August 6, 1997
Photoelectron Corporation
5 Forbes Road
Lexington, Massachusetts 02173
Ladies and Gentlemen:
We have acted as special counsel to Photoelectron Corporation, a
Massachusetts corporation (the "Company"), in connection with the filing by
the Company of a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"),
covering 1,121,000 shares of Common Stock, par value $.01 per share (the
"Shares"), of the Company issued or issuable pursuant to the Company's 1989
Stock Option Plan, Employee Stock Purchase Plan and 1996 Equity Incentive
Plan (the "Plans").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K promulgated under the Act.
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our
satisfaction of (i) the form of the Registration Statement to be filed with
the Commission on the date hereof; (ii) the Plans; (iii) the Certificate of
Incorporation of the Company, as currently in effect; (iv) the Bylaws of
the Company, as currently in effect; (v) the form of a specimen certificate
representing the Shares; and (vi) such other documents as we have deemed
necessary or appropriate as a basis for the opinions set forth below. In
our examination, we have assumed the legal capacity of all natural persons,
the genuineness of all signatures, the authenticity of all documents
submitted to us as certified or photostatic copies and the authenticity of
the originals of such latter documents. As to any facts material to the
opinions expressed herein which were not independently established or
verified, we have relied upon statements and representations of officers or
other representatives of the Company and others.
Members of our firm are admitted to the Bar in the Commonwealth of
Massachusetts, and we do not express any opinion as to the laws of any
other jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that
when (i) the Registration Statement becomes effective, (ii) the Shares are
issued pursuant to the terms of the Plans and (iii) certificates
representing the Shares are duly executed, countersigned, registered and
delivered, the Shares will be duly authorized by requisite corporate action
on the part of the Company and, when and to the extent issued and paid for
in accordance with the terms of the Plans, will be validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving this consent, we do not thereby admit
that we are included in the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Securities
and Exchange Commission.
Very truly yours,
/s/ Goulston & Storrs
GOULSTON & STORRS
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated March 19, 1997
incorporated by reference in Photoelectron Corporation's Form 10-K for the year
ended December 28, 1996 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 5, 1997
