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FILED PURSUANT TO RULE 424(b)(3)
OF THE SECURITIES ACT OF 1933
REGISTRATION NO. 333-50306
PROSPECTUS
6,397,632 SHARES
SYMPHONIX DEVICES, INC.
COMMON STOCK
This prospectus relates to the public offering, which is not being
underwritten, of 6,397,632 shares of our common stock which are held by some of
our current stockholders.
The prices at which such stockholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares.
Our common stock is quoted on The Nasdaq National Market under the symbol
"SMPX." On December 6, 2000, the closing price for our common stock was
$3.125.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE THE SECTION ENTITLED
"RISK FACTORS" BEGINNING ON PAGE 3 FOR RISKS AND UNCERTAINTIES THAT YOU SHOULD
CONSIDER.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is December 7, 2000
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TABLE OF CONTENTS
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The Company................................................................. 2
Risk Factors................................................................ 3
Plan of Distribution........................................................ 11
Selling Stockholders........................................................ 13
Legal Matters............................................................... 15
Experts..................................................................... 15
Where You Can Find More Information......................................... 15
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No person has been authorized to give any information or to make any
representations other than those contained in this prospectus in connection with
this offering, and if given or made, such information or representations may not
be relied upon as having been authorized by Symphonix, Inc. (referred to in this
prospectus as "Symphonix," "we," "us," "our," the "registrant" or the
"company"), any selling stockholder or by any other person. Neither the delivery
of this prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that information herein is correct as of any time
subsequent to the date hereof. This prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any security other than the securities
covered by this prospectus, nor does it constitute an offer to or a solicitation
of any person in any jurisdiction in which an offer or solicitation may not
lawfully be made.
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The Company
Symphonix Devices, Inc. develops, manufactures and markets the Vibrant
Soundbridge, a proprietary line of semi-implantable hearing devices for the
management of hearing impairment, a medical disorder that affects approximately
28 million people in the United States alone. Our Soundbridge products employ a
middle ear implant technology designed to vibrate the small bones in the middle
ear, enhancing the natural hearing process. Our Soundbridge products are
currently being marketed in Europe in conjunction with our European distribution
partner, Siemens Audiologische Technik GmbH, and have been approved by the U.S.
Food and Drug Administration for use in the United States. A fully implantable
line of Vibrant Soundbridge devices is currently in development. We believe that
our Soundbridge technology overcomes the inherent limitations of traditional
hearing devices, and represents a novel approach in the management of hearing
loss.
In September 1996, we initiated clinical trials of the first-generation
Vibrant Soundbridge in both the United States and Europe. We received permission
in the European Union to affix the CE mark to the Vibrant Soundbridge in March
1998, and we received FDA approval in August 2000. Through a technology alliance
with Siemens, we have developed our fourth generation Vibrant Soundbridge, based
on 8-channel, digital signal processing. As of October 2000, approximately 400
patients have been implanted with the Vibrant Soundbridge in over 70 centers in
both the United States and Europe.
Symphonix Devices, Inc. was incorporated in California in May 1994 and
reincorporated in Delaware in December 1997. Our principal executive offices
are located at 2331 Zanker Road, San Jose, California 95131-1109 and our
telephone number at that address is (408) 232-0710. Our common stock is traded
on The Nasdaq National Market and is quoted under the symbol "SMPX."
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Risk Factors
You should carefully consider the risks described below, together with all
of the other information included in this prospectus, before deciding whether to
invest in our common stock. If any of the following risks actually materialize,
our business, financial condition or results of operations could be harmed. In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment.
This registration statement contains forward-looking statements.
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements are based upon
current expectations that involve risks and uncertainties. Any statements
contained herein that are not statements of historical facts may be deemed to be
forward-looking statements. For example, words such as "may," "will," "should,"
"estimates," "predicts," "potential," "continue," "strategy," "believes,"
"anticipates," "plans," "expects," "intends," and similar expressions are
intended to identify forward-looking statements. Our actual results and the
timing of events may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause or contribute to such a
discrepancy include, but are not limited to, regulatory delays and issues,
competitive pressures, difficulties in growing our business to meet our
commitments, technical challenges and those discussed in this "Risk Factors"
section and the risks discussed in our other SEC filings, including our Annual
Report on Form 10-K, filed April 13, 2000 with the SEC and amended April 28,
2000.
RISKS RELATED TO OUR BUSINESS
We have a history of losses and negative cash flows, and we may never be
profitable.
We have incurred losses every year since we began operations. At September
30, 2000, we had an accumulated deficit of $61.3 million. This deficit resulted
primarily from expenses we incurred from dedicating, since our inception in
1994, substantially all of our resources to research and development, clinical
trials, establishment of a European sales and marketing organization and the
initiation of sales and marketing activities in Europe. Even though Vibrant P
and Vibrant D Soundbridges became available for sale in the European Union in
1998 and in the United States and Canada in 2000, we have not generated
significant revenues from product sales to date. We may never realize
significant product revenues. Even if we do achieve significant product
revenues, we may never be profitable. We expect our operating losses to
continue at least through the year 2001 as we continue to, among other things:
. attempt to establish sales and marketing capabilities;
. expand research and development activities;
. conduct clinical trials in support of regulatory approvals; and
. establish commercial-scale manufacturing capabilities.
If our Soundbridge products do not achieve market acceptance, our business may
fail.
We have sold the semi-implantable Vibrant Soundbridge in Europe since 1998
and in the United States since 2000 and have sold only 217 units. This product
has not yet achieved market acceptance and may never achieve market acceptance.
Market acceptance of our current and future Soundbridge products will depend
upon their acceptance by the medical community and patients as safe, effective
and cost-effective
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compared to other devices. Our Soundbridge products may not be preferable
alternatives to existing or future products, some of which, such as the acoustic
hearing aid, do not require surgery. Patient acceptance of our Soundbridge
products will depend in part upon physician, audiologist and surgeon
recommendations as well as other factors, including the effectiveness, safety,
reliability and invasiveness of the procedure as compared to established
approaches. Prior to undergoing surgery for the implantation of our Soundbridge,
a patient may speak with a number of medical professionals, including the
patient's primary care physician, an audiologist, an ear, nose and throat
specialist, as well as surgeons who specialize in ear surgery. The failure by
any of these medical professionals to favorably recommend our products and the
surgery required to implant the Soundbridge could limit the number of potential
patients who are introduced to an ear surgeon as candidates for our Soundbridge
products. If our Soundbridge products do not achieve market acceptance, our
business may fail.
If we fail to successfully develop and commercialize our next generation of
Vibrant Soundbridge products, we may not achieve profitability.
Although we have offered the semi-implantable Vibrant Soundbridge for sale
in Europe since 1998, we have not realized significant sales revenues to date.
Our success depends on our ability to successfully commercialize an improved
semi-implantable Soundbridge as well as a totally implantable Soundbridge. Our
Vibrant HF and totally-implantable Soundbridge, currently under development,
will require additional development, clinical trials and regulatory approval
prior to commercialization. Successful completion of clinical trials for the
Vibrant HF and totally-implantable Soundbridge products may never occur.
Completion of clinical trials may be delayed by many factors, including research
and development difficulties, slower than anticipated patient enrollment or
adverse events occurring during clinical trials. Any delays in our clinical
trials or any failure to obtain regulatory approval for these next generation
Soundbridge products would impair our ability to achieve profitability.
If we do not receive and maintain regulatory approvals for new products, we will
not be able to manufacture or market new products.
Approval from the FDA is necessary to manufacture and market medical
devices in the United States. Other countries have similar requirements. Since
we have not realized significant revenues from sales of our current products, we
must receive and maintain regulatory approval for new products or our business
will fail.
The process that medical devices must undergo to receive necessary approval
is extensive, time-consuming and costly, and there is no guarantee that
regulatory authorities will approve any of our product candidates. FDA approval
can be delayed, limited or not granted for many reasons, including:
. a product candidate may not be safe or effective;
. even if we believe data from preclinical testing and clinical trials
should justify approval, FDA officials may disagree;
. the FDA might not approve our manufacturing processes or facilities or
the processes or facilities of our contract manufacturers or raw material
suppliers;
. the FDA may change its approval policies or adopt new regulations; and
. the FDA may approve a product candidate for indications that are narrow,
which may limit our sales and marketing activities.
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The process of obtaining approvals in foreign countries is subject to delay
and failure for the same reasons.
We face intense competition in our current and potential markets and if we
cannot demonstrate the superiority of our products, we may fail to achieve
profitability.
The medical device industry and the acoustic hearing aid market are subject
to intense competition in the United States and abroad. We believe our products
will compete primarily with hearing aids. Principal manufacturers of acoustic
hearing aids include Siemens Hearing Instruments, Inc., Starkey Laboratories
Inc., Dahlberg Inc., GN ReSound Inc., Oticon, Inc., Widex Hearing Aid Co., Inc.,
Sonic Innovations and Phonak Inc. Our products may not be as reliable or
effective as established hearing aid products. If our products are not
perceived as high quality, reliable and effective alternatives to conventional
hearing aids, we may not successfully compete with established hearing aid
products. Our competitors may also develop technologies and products in the
future that are more reliable and effective and less expensive than those being
developed by us or that do not require surgery.
Several university research groups and development-stage companies have
active research or development programs related to direct drive devices for
sensorineural hearing loss. One such company, IMPLEX AG Hearing Technology, was
authorized by its European reviewing body on November 15, 1999 to affix the CE
mark on its totally integrated cochlear amplifier. IMPLEX has reported its
intent to pursue a clinical investigation in the United States to support FDA
regulatory requirements. A U.S.-based company, Otologics, LLC, is developing a
semi-implantable direct drive device for sensorineural hearing loss called the
middle ear transducer. This device has begun the FDA regulatory process and
initiated multicenter clinical trials. The Company believes St. Croix has begun
clinical trials in Europe. Soundtec, Inc. is doing clinical trials in the
United States on a hybrid implantable/ear canal based hearing aid. In addition,
some large medical device companies, some of which are currently marketing
implantable medical devices, may develop programs in hearing management. Many
of these companies have substantially greater financial, technical,
manufacturing, marketing and other resources than we have. If we fail to
compete effectively with any or all of these companies and products, we will not
achieve profitability.
Our lack of sales, marketing and distribution experience could delay and
increase the costs of introducing our Soundbridge products into those markets
where we have received regulatory approvals.
In the United States, a direct sales force is concentrating our product
marketing efforts on approximately 400 specialists in ear surgery. In Europe,
our sales and marketing effort is conducted through a distribution partnership
with Siemens. In other international markets, including Japan, we intend to
establish either a network of distributors or a strategic partner.
We may fail to build a direct sales force or marketing organization that
is cost effective or successful in one or more countries. In addition, we have
entered into distribution agreements with only a limited number of international
distributors. There can be no assurance that we will be able to enter into
similar agreements with other qualified distributors on a timely basis on terms
acceptable to us, or at all, or that such distributors will devote adequate
resources to selling our products. If we fail to establish an adequate direct
sales force domestically and in select international markets, and to enter into
successful distribution relationships, we will have difficulty selling our
products and our business may fail.
Since third-party reimbursement is not currently available for procedures using
our Soundbridge products, our products may not achieve market acceptance.
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In the United States and abroad, patients generally rely on third-party
payors, principally Medicare, Medicaid, private health insurance plans, health
maintenance organizations and other sources of reimbursement, to pay health care
expenses, including reimbursement of all or part of the cost of the procedure in
which our medical device is being used. These third-party payors are
increasingly attempting to limit both the coverage and the level of
reimbursement of procedures involving new devices. Currently, no third party-
payors will pay for procedures using our products, and patients must bear the
total cost of the procedures themselves. If third-party payors do not establish
adequate levels of reimbursement for procedures using our products, we may not
achieve market acceptance.
We have limited manufacturing experience and if we are not able to expand our
manufacturing capabilities sufficiently, we may not develop and deliver
sufficient quantities of products in a timely manner.
We currently manufacture our products in small quantities for laboratory
testing, for clinical trials and for limited commercial sales. The manufacture
of our Soundbridge products is a complex operation involving a number of
separate processes, components and assemblies. We have no experience
manufacturing our products in the volumes or with the yields that will be
necessary for us to achieve significant commercial sales, and there can be no
assurance that we can establish high volume manufacturing capacity or, if
established, that we will be able to manufacture our products in high volumes
with commercially acceptable yields. We will need to expend significant capital
resources and develop manufacturing expertise to establish commercial-scale
manufacturing capabilities. If we are not able to successfully manufacture our
Soundbridge products in a timely manner, our business will suffer.
If Siemens does not perform its obligations under our agreements, our ability to
commercialize our products may be impaired.
We have entered into a collaboration with Siemens Audiologische Technik
GmbH. As a result of our agreements, we depend on Siemens to market and
distribute our products in Europe. We also depend on Siemens to provide
integrated circuits and software for use in our Soundbridge products. Any
breach or termination by Siemens of our agreements could delay or stop the
commercialization of our products.
We rely on several sole source or limited source suppliers, and our production
will be seriously harmed if these suppliers are not able to meet our demand and
alternative sources are not available.
A number of components and subassemblies, such as silicone, signal
processing electronics implant packaging, as well as sterilization services are
provided by single source suppliers. Furthermore, the key analog and digital
signal processing microcircuits of the Vibrant P, Vibrant D and Vibrant HF
Soundbridges are provided by sole source suppliers. None of our suppliers is
contractually obligated to continue to supply us nor are we contractually
obligated to buy from a particular supplier. For some of these components and
subassemblies, there are relatively few alternative sources of supply, and we
cannot quickly establish additional or replacement suppliers for such components
and subassemblies. In addition, additional approvals will be required from the
FDA before we can significantly modify our manufacturing processes or change the
supplier of a critical component. Because of the long lead time for some
components and subassemblies that are currently available from a single source,
a supplier's inability or failure to supply such components or subassemblies in
a timely manner or our decision to change suppliers could have a material
adverse effect on our business, financial condition and results of operations.
If we are unable to protect our intellectual property our competitors could
develop and market products with similar features that may reduce demand for our
products.
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Our success depends in part on our ability to protect our issued and
pending patents, trade secrets and other intellectual property. The strength of
this protection is uncertain. Our competitors could challenge, invalidate or
circumvent our issued patents as well as any future patents. Even if upheld,
our issued patents may not exclude competitors or otherwise provide competitive
advantages to us.
In addition, a competitor may obtain patents that will interfere with our
ability to make, use or sell our products either in the United States or in
international markets. There may be pending applications, which if issued, might
provide proprietary rights to third parties relating to products or processes
used or proposed to be used by us. We may be required to obtain licenses to
patents or proprietary rights of others. Further, the laws of some foreign
countries do not protect our intellectual property rights to the same extent as
do the laws of the United States. Litigation or regulatory proceedings, which
could result in substantial cost and uncertainty to us, may also be necessary to
enforce our patent or other intellectual property rights or to determine the
scope and validity of other parties' proprietary rights. We may not have the
financial resources to defend our patents from infringement or claims of
invalidity.
We also rely upon trade secrets and other unpatented proprietary
technology. Our competitors may independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to or disclose
our proprietary technology. Our policy is to require each of our employees,
consultants, investigators and advisors to execute a confidentiality agreement
upon the commencement of an employment or consulting relationship with us.
However, these agreements may not provide meaningful protection for our
proprietary information in the event of unauthorized use or disclosure of such
information.
Title 35, Section 287 of the United States Code limits the enforcement of
patents relating to the performance of surgical or medical procedures on a body.
This law precludes medical practitioners and health care entities, which
practice these procedures, from being sued for patent infringement. Therefore,
depending upon how these limitations are interpreted by the courts, they could
have a material adverse effect on our ability to enforce any of our proprietary
methods or procedures deemed to be surgical or medical procedures on a body. In
some countries other than the United States, patent coverage relating to the
performance of surgical or medical procedures is not available. Therefore,
patent coverage in such countries will be limited to the Floating Mass
Transducer, the patented core direct drive technology upon which all of our
Soundbridge products are based, or to narrower aspects of the Floating Mass
Transducer.
The medical device industry in general has been characterized by
substantial litigation. Litigation regarding patent and other intellectual
property rights, whether with or without merit, could be time-consuming and
expensive to respond to and could distract our technical and management
personnel. We may become involved in litigation to defend against claims of
infringement, to enforce patents issued to us or to protect our trade secrets.
If any relevant claims of third-party patents are held as infringed and not
invalid in any litigation or administrative proceeding, we could be prevented
from practicing the subject matter claimed in such patents, or would be required
to obtain licenses from the patent owners of each such patent, or to redesign
our products or processes to avoid infringement. In addition, in the event of
any possible infringement, there can be no assurance that we would be successful
in any attempt to redesign our products or processes to avoid such infringement
or in obtaining licenses on terms acceptable to us, if at all. Accordingly, an
adverse determination in a judicial or administrative proceeding or failure by
us to redesign our products or processes or to obtain necessary licenses could
prevent us from manufacturing and selling our products, which would have a
material adverse effect on our business, financial condition and results of
operations. Although we have not been involved in any litigation to date, in
the future, costly and time-consuming litigation brought by us may be necessary
to enforce patents issued to us, to protect our trade secrets or know-how, or to
determine the enforceability, scope and validity of the proprietary rights of
others.
We may not be able to secure additional funding to support our substantial
future capital requirements.
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We will expend substantial funds in the future for research and
development, preclinical and clinical testing, capital expenditures and the
manufacturing, marketing and sale of our products. The timing and amount of
spending of such capital resources cannot be accurately predicted and will
depend upon several factors not within our control, including:
. market acceptance and demand for our products in the United States and
internationally;
. the progress of our research and development efforts and preclinical
and clinical activities;
. competing technological and market developments;
. the time and costs involved in obtaining regulatory approvals;
. the time and costs involved in filing, prosecuting and enforcing
patent claims; and
. the progress and cost of commercialization of products currently under
development.
While we believe that the net proceeds of approximately $5.0 million from
the recent private placement offering to Siemens Audiologische Technik GmbH and
the approximately $26.0 million from the recent private placement to other
investors, together with our previously existing capital resources and projected
interest income, will be sufficient to fund our operations and capital
investments through 2001, we may require additional financing after that time.
Such additional financing, if required, may not be available on a timely basis
on terms acceptable to us, or at all. If adequate funds are not available, we
could be required to delay development or commercialization of some of our
products, to license to third parties the rights to commercialize some products
or technologies that we would otherwise seek to commercialize for ourselves, or
to reduce the marketing, customer support or other resources devoted to some of
our products, any of which could have a material adverse effect on our business,
financial condition and results of operations.
If we cannot retain or hire key personnel our business will suffer.
Our future success depends in significant part upon the continued service
of key scientific, technical, sales and marketing, and management personnel.
Competition for such personnel is intense. There can be no assurance that we
can retain our key scientific, technical, sales and marketing and managerial
personnel or that we can attract, assimilate or retain other highly qualified
scientific, technical sales and marketing, and managerial personnel in the
future. The loss of key personnel, especially if without advance notice, or the
inability to hire or retain qualified personnel could impair our ability to
commercialize our Vibrant Soundbridge products and develop future products.
Complications may result from the use of our Soundbridge products, and insurance
may be insufficient or unavailable to cover potentially significant product
liability expenses if we are sued.
Our business involves the inherent risk of product liability claims. We
maintain limited product liability insurance at coverage levels which we believe
to be commercially reasonable and adequate given our current operations.
However, this insurance may not to be available in the future on commercially
reasonable terms, or at all. Even if it is available, it may not be adequate to
cover liabilities that may arise. If we are sued for an injury caused by our
products, the resulting liability could result in significant expense, which
would harm our business and financial condition.
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Our international sales and operations expose us to foreign currency and
political risks.
We desire to continue to expand our operations outside of the United States
and to enter additional international markets, which will require significant
management attention and financial resources and subject us further to the risks
of operating internationally. These risks include:
. unexpected changes in regulatory requirements;
. delays resulting from difficulty in obtaining export licenses for
certain technology;
. tariffs and other barriers and restrictions;
. the burdens of complying with a variety of foreign laws and
regulations; and
. difficulty in staffing and managing international operations.
We are also subject to general political and economic risks in connection with
our international operations, such as political instability, changes in
diplomatic and trade relationships and general economic fluctuations in specific
countries or markets. We cannot predict whether quotas, duties, taxes, or other
charges or restrictions will be imposed by the United States, the European
Union, Japan, or other countries upon the import or export of our products in
the future, or what effect any such actions would have on our business,
financial condition or results of operations. There can be no assurance that
regulatory, geopolitical and other factors will not adversely affect our
business in the future or require us to modify our current business practices.
In addition, because most of our international sales, and a large portion
of the associated expenses, are denominated in foreign currencies, gains and
losses on the conversion to U.S. dollars of accounts receivable and accounts
payable arising from international operations may contribute to fluctuations in
our operating results. Further, fluctuations in currency exchange rates may
negatively impact our ability to compete in terms of price against products
denominated in local currencies. To date, we have not found it appropriate to
hedge the risks associated with fluctuations in exchange rates. However, even if
we undertake such transactions in the future, they may fail.
RISKS RELATED TO THIS OFFERING
Concentration of ownership among our existing executive officers, directors and
principal stockholders may prevent new investors from influencing significant
corporate decisions.
As of November 16, 2000, our directors, entities affiliated with our
directors and our executive officers will beneficially own, in the aggregate,
approximately 51% of our outstanding common stock. These stockholders as a
group will be able to substantially influence our management and affairs. This
concentration of ownership may also delay or prevent a change in our control at
a premium price if these stockholders oppose it.
If the market price of our common stock declines, certain stockholders could
gain control of Symphonix and all other stockholders would be diluted.
We entered into a Common Stock Purchase Agreement with certain investors as
of September 18, 2000. Under the terms of this agreement, if the market price
of our common stock declines, we may be required to issue additional shares of
common stock to the investors at no additional cost to the investors pursuant to
a purchase price adjustment. The purchase price adjustment allows the
investors, at any time until
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November 10, 2002, to calculate an adjusted per share purchase price equal to
the average closing market price of our common stock as reported on the Nasdaq
National Market for the 33 consecutive trading days immediately preceding the
date of the adjustment. Those investors who desire to participate in this
purchase price adjustment will receive additional shares of common stock equal
to the difference between the number of shares which each investor could have
purchased based on the adjusted per share purchase price at the investor's
original investment amount and the number of shares originally purchased by the
investor. Each investor may participate in a purchase price adjustment only once
and only until November 10, 2002. A possible consequence of the investors'
exercise of their purchase price adjustment right is that the investors, who as
of November 10, 2000 held approximately 31% of the total number of shares of our
outstanding common stock, could gain control of a majority of the voting power
of the company.
Our stock price is subject to significant volatility.
Our stock price has been and may continue to be subject to significant
volatility. The trading price of our common stock may be affected significantly
by our quarterly forecasts and results of operations which may vary greatly
based on a number of factors, including:
. the introduction and market acceptance of new products offered by us
and our competitors;
. the receipt and timing of regulatory approvals for new products;
. changes in our product mix;
. our success in expanding our U.S. and international operations;
. the costs of conducting sales, marketing and distribution;
. our ability to continue to attract and retain personnel necessary for
future product development;
. changes in U.S. and international health care regulations and
practices; and
. the costs involved in prosecuting and defending patent claims or other
litigation.
Any shortfall in revenues or earnings from levels expected by securities
analysts could cause the market price of our common stock to decline. Further,
we participate in a highly dynamic industry, which often results in significant
volatility in the market price of our common stock irrespective of company
performance. Fluctuations in the price of our common stock may be exacerbated
by conditions in the medical device and technology industry segments or
conditions in the financial markets generally.
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Plan of Distribution
We are registering all 6,397,632 shares of common stock on behalf of
selling stockholders who purchased all of these shares from us pursuant to a
Common Stock Purchase Agreement dated as of September 18, 2000. We will receive
no proceeds from this offering. The selling stockholders named in the table
below or pledgees, donees, transferees or other successors-in-interest selling
shares received from a named selling stockholder as a gift, partnership
distribution or other non-sale-related transfer after the date of this
prospectus may sell the shares from time to time. The selling stockholders will
act independently of Symphonix 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 at prices related to the then current market price or in negotiated
transactions. The selling stockholders may effect such transactions by selling
the shares to or through broker-dealers. The shares may be sold by one or more
of, or a combination of, the following:
. a block trade 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;
. purchases by a broker-dealer as principal and resale by such broker-
dealer for its account pursuant to this prospectus;
. an exchange distribution in accordance with the rules of such
exchange;
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
. in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the selling stockholders may arrange for other broker-
dealers to participate in the resales.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholders. Broker-dealers
or agents may also receive compensation from the purchasers of the shares for
whom they act as agents or to whom they sell as principals, or both.
Compensation as to a particular broker-dealer might be in excess of customary
commissions and will be in amounts to be negotiated in connection with the sale.
Broker-dealers or agents and any other participating broker-dealers or the
selling stockholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act in connection with sales of the shares.
Accordingly, any such commission, discount or concession received by them and
any profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because selling
stockholders may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, the selling stockholders will be subject to the
prospectus delivery requirements of the Securities Act. In addition, any
securities covered by this prospectus which qualify for sale pursuant to Rule
144 promulgated under the Securities Act may be sold under Rule 144 rather than
pursuant to this prospectus. The selling stockholders have advised Symphonix
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their securities.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of shares by 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
some states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
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<PAGE>
Under applicable rules and regulations of 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 prior to the commencement of such distribution. In addition, each
selling stockholder 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 of our common stock by the selling stockholders. We will make copies of
this prospectus available to the selling stockholders and have informed them of
the need for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
We will file a supplement to this prospectus, if required, pursuant to Rule
424(b) promulgated under the Securities Act upon being notified by a 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 or dealer.
Such supplement will disclose:
. the name of each such selling stockholder and of the participating
broker-dealer(s);
. the number of shares involved;
. the price at which such shares were sold;
. the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
. that such 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.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against some liabilities,
including liabilities arising under the Securities Act.
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<PAGE>
Selling Stockholders
The following table sets forth the number of shares beneficially owned by
each of the selling stockholders. None of the selling stockholders, with the
exception of J.P. Morgan Capital, L.P., APAX Excelsior VI, L.P., Patricof
Private Investment Club III, L.P. and Cassin Family Trust, has held any position
or office or had a material relationship with Symphonix within the past three
years other than as a result of the ownership of the shares or other securities
of Symphonix or as a result of their employment with Symphonix as of the date of
the issuance of the shares to the selling stockholders. Martin Friedman, one of
our directors, is a Vice President of J.P. Morgan Capital, L.P. Adele Oliva, one
of our directors, is a partner of APAX Excelsior VI Partners, L.P., which is the
general partner of APAX Excelsior VI, L.P. and Patricof Private Investment Club
III, L.P. B.J. Cassin, one of our directors, has voting and dispositive power
over those shares beneficially owned by Cassin Family Trust. The selling
stockholders named in the table have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them,
subject to community property laws where applicable. No estimate can be given as
to the number of shares that will be held by the selling stockholders after
completion of this offering because the selling stockholders may offer all or
some of the shares and because there currently are no agreements, arrangements
or understandings with respect to the sale of any of the shares. The shares
offered by this prospectus may be offered from time to time by the selling
stockholders named below:
<TABLE>
<CAPTION>
Number of Shares Percent of Number of Shares
Beneficially Outstanding Registered for Sale
Name of Selling Stockholder Owned Shares Hereby (1)
------------------------------------------------ -------------------- -------------- --------------------
<S> <C> <C> <C>
J.P. Morgan Capital, L.P. 2,460,630 (2) 12.4% 2,460,630
APAX Excelsior VI, L.P. 2,460,630 (3) 12.4% 2,460,630 (3)
Special Situations Private Equity Fund, L.P. 984,251 (4) 5.0% 984,251 (4)
Cassin Family Trust 688,579 (5) 3.5% 246,061 (6)
Richard M. Lucas Foundation 246,060 (7) 1.2% 246,060 (7)
------------- --------------
Total 6,840,150 6,397,632
========= =========
______________________________
</TABLE>
(1) This registration statement also shall cover any additional shares of
common stock which become issuable in connection with the shares registered
for sale hereby by reason of any stock divided, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration which results in an increase in the number of outstanding
shares of our common stock.
(2) Martin Friedman, one of our directors, is a Vice President of J.P. Morgan
Capital, L.P.
(3) Share number consists of 2,390,010 shares held by APAX Excelsior VI, L.P.
and 70,620 shares held by Patricof Private Investment Club III, L.P., which
is an affiliate of APAX Excelsior VI, L.P. Adele Oliva, one of our
directors, is a general partner of APAX Excelsior VI Partners, L.P., which
is the general partner of APAX Excelsior VI, L.P. and Patricof Private
Investment Club III, L.P.
(4) Share number consists of 676,673 shares held by Special Situations Private
Equity Fund, L.P. and 307,578 shares held by Special Situations Technology
Fund, L.P., an affiliate of Special Situations Private Equity Fund, L.P.
(5) Share number consists of 387,459 shares held by Cassin Family Trust, and
156,902 shares held by Cassin Family Partners and 61,515 shares held by
Robert S. Cassin Charitable Trust, which are affiliates of Cassin Family
Trust. B.J. Cassin, one of our directors, holds voting and dispositive
power over the shares held by Cassin Family Trust, Cassin Family Partners
and Robert S. Cassin Charitable Trust. Also includes options directly owned
by B.J. Cassin to purchase up to 82,703 shares exercisable within 60 days
after December 7, 2000.
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<PAGE>
(6) Share number consists of 123,031 shares held by Cassin Family Trust, and
61,515 shares held by Cassin Family Partners and 61,515 shares held by
Robert S. Cassin Charitable Trust, which are affiliates of Cassin Family
Trust. B.J. Cassin, one of our directors, holds voting and dispositive
power over the shares held by Cassin Family Trust, Cassin Family Partners
and Robert S. Cassin Charitable Trust.
(7) Shares number consists of 61,515 shares held by Richard M. Lucas
Foundation, and 61,515 shares held by Donald L. Lucas Profit Sharing Trust,
61,515 shares held by David Ferris Ellison Trust and 61,515 shares held by
Margaret Elizabeth Ellison Trust, which are affiliates of Richard M. Lucas
Foundation.
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<PAGE>
Legal Matters
The validity of the securities offered pursuant to this prospectus will be
passed upon for Symphonix by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California.
Experts
The consolidated financial statements incorporated in this
prospectus by reference to the Annual Report on Form 10-K for the year ended
December 31, 1999 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
Where You Can Find More Information
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the SEC's Public Reference Room, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. Our SEC filings are
also available to the public from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13a, 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
until this offering is completed:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1999, filed April 13, 2000, and amended April 28, 2000;
(b) Definitive Proxy Statement on Schedule 14A in connection with
Symphonix's 2000 Annual Meeting of Stockholders, filed May 5, 2000;
(c) Definitive Proxy Statement on Schedule 14A in connection with
Symphonix's Special Meeting of Stockholders held on November 8, 2000 to approve
the terms of an equity financing by investors, filed October 16, 2000;
(d) Quarterly Report on Form 10-Q for the quarter ended March 31, 2000,
filed May 12, 2000;
(e) Quarterly Report on Form 10-Q for the quarter ended June 30, 2000,
filed August 3, 2000;
(f) Quarterly Report on Form 10-Q for the quarter ended September 30,
2000, filed November 14, 2000;
(g) Current Report on Form 8-K filed November 2, 2000;
(h) The description of Symphonix common stock contained in its
registration statement on Form S-1 filed November 17, 1997, including any
amendments or reports filed for the purpose of updating such descriptions.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Chief Financial Officer
Symphonix Devices, Inc.
2331 Zanker Road
San Jose, California 95131-1107
(408) 232-0710
You should rely only on the information incorporated by reference or
provided in this prospectus or in any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making
an offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or in any prospectus
supplement is accurate as of any date other than the date on the front of the
prospectus or any prospectus supplement.
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