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As filed with the Securities and Exchange Commission on May 7, 1999
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_______________________
Date of Report (Date of earliest event reported): May 7, 1999
PHOTOELECTRON CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 0-21667 04-3035323
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
_______________________________
5 FORBES ROAD
Lexington, Massachusetts 02421
(Address, including zip code of registrant's principal executive offices)
Item 5. Other Events
On May 6, 1999, the Registrant announced a major restructuring and reduction in
size of its workforce. The Registrant stated that the objectives of the
restructuring include (1) a dramatic reduction in operating costs, (2) a re-
focusing of development efforts on its key products, and (3) a remodeling of the
Registrant's approach to sales and marketing. A copy of the press release issued
by the Registrant on May 6, 1999 regarding the foregoing is filed herewith as
Exhibit 5.1 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(a) Exhibits
Exhibit Number
5.1 Press Release dated May 6, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the under-
signed hereunto duly authorized.
PHOTOELECTRON CORPORATION
REGISTRANT
DATED: MAY 7, 1999
By: /s/ Euan Thomson
Euan Thomson
President and Chief Operating Officer
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PHOTOELECTRON CORPORATION ANNOUNCES
RESTRUCTURING
LEXINGTON, Mass., May 6--Photoelectron Corporation (Nasdaq: PECX) a medical
device and technology company serving the cancer treatment market, today
announced a major restructuring and reduction in size of its workforce. The
objectives of the restructuring are:
--A dramatic reduction in operating costs
--A re-focusing of development efforts on its key products
--A remodeling of the Company's approach to sales and marketing
The reduction in staff numbers amount to about 25 people, representing
approximately 50% of the total workforce. The accompanying reduction in
operating costs is expected to be in the order of 65%. Mr. Peter M. Nomikos,
Chairman of the Board and Chief Executive Officer of the Company stated, "We are
indeed sorry to part with some of our talented and hard working colleagues.
However, it was judged necessary to reduce costs to a bearable level and to
concentrate our efforts on critical product development areas".
The critical development areas are those intended to broaden the clinical
applicability of the Company's main product, the Photon Radiosurgery System
(PRS). In the United States, the system is currently marketed for treatment of
brain tumors. A new range of treatment "applicators" are scheduled to be
released, subject to FDA clearance, towards the end of 1999 which should broaden
the range of recognized treatments to tumors throughout the body. In conjunction
with "applicators" designed to be placed inside tumor cavities after surgery,
the system has already been used in clinical trials to treat tumors of the
breast and bowel. Dr Euan Thomson, President and Chief Operating Officer of the
Company, added "We are confident that we are retaining an excellent team,
capable of manufacturing to our current requirements and continuing development
of the system".
Part of the reorganization includes a new approach to sales and marketing.
Strategic partners will now be sought to manage distribution of the PRS.
Dr. Thomson stated: "It is difficult for a small company such as Photoelectron
to achieve the global sales coverage necessary to successfully market such a
high technology product. We feel that our best approach will be to link our
efforts with one or more established companies who already support a broad
product range". The Company is engaged in discussions with several companies
concerning distribution arrangements.
The Company had previously disclosed that as of January 2, 1999 the Company had
cash on hand sufficient to permit it to continue operations for approximately
six months. The reduction in cash expenditures announced today is expected to
extend operations through December 31, 1999, without factoring in any additional
revenues that are expected to be derived from sales of the PRS.
Photoelectron intends to engage the services of an investment banker to advise
the Company with respect to strategic alternatives intended to enhance
stockholder value and to investigate possibilities for raising supplementary
funds.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995: Any statements which are not historical facts contained in this release
are forward looking statements that involve risk and uncertainties, including
but not limited to those relating to product demand, pricing, market acceptance,
the effect of economic conditions, the validity and enforceability of
intellectual property technology development, the ability to complete
transactions, and other risks identified in the Company's Securities and
Exchange Commission filings.
