<PAGE>
As filed with the Securities and Exchange Commission on August 11, 1999
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
--------------------
ENDOCARDIAL SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1724963
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
1350 Energy Lane, Suite 110
St. Paul, Minnesota 55108
(651) 644-7890
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Copy to:
James W. Bullock Kenneth L. Cutler, Esq.
President, Chief Executive Officer Dorsey & Whitney LLP
1350 Energy Lane, Suite 110 220 South Sixth Street
St. Paul, Minnesota 55108 Minneapolis, Minnesota 55402-1498
(651) 644-7890 (612) 340-2600
Fax: (651) 644-7897 Fax: (612) 340-8738
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Proposed
Amount Maximum Offering Proposed
Title of Each Class of to be Price per Share Maximum Aggregate Amount of
Securities to be Registered Registered(1) (2) Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,111,111 Shares $10.5625 $11,736,110 $3,262.64
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This amount represents shares to be offered by the selling stockholders
from time to time after the effective date of this Registration Statement
at prevailing market prices at time of sale.
(2) Estimated solely for the purpose of calculating the registration fee based
upon the average of the high and low sales prices for the Common Stock
on August 9, 1999 as reported on the Nasdaq National Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST 11, 1999
PROSPECTUS
ENDOCARDIAL SOLUTIONS, INC.
1350 ENERGY LANE, SUITE 110
ST. PAUL, MINNESOTA 55108
1,111,111 SHARES
ENDOCARDIAL SOLUTIONS, INC.
COMMON STOCK
Shares of common stock of Endocardial Solutions, Inc. are being offered
by this Prospectus. The shares will be sold from time to time by the selling
stockholders named in this Prospectus. We will not receive any of the proceeds
from the sale of the shares.
Our common stock is traded on the Nasdaq National Market under the
symbol "ECSI." On August 9, 1999, the last sale price of our common stock as
reported on the Nasdaq National Market was $10.625 per share.
------------------------
INVESTMENT IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
SECTION TITLED "RISK FACTORS" BEGINNING ON PAGE 3 TO READ ABOUT CERTAIN FACTORS
YOU SHOULD CONSIDER BEFORE BUYING SHARES OF COMMON STOCK.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS DECLARED
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
THE DATE OF THIS PROSPECTUS IS _______________, 1999.
<PAGE>
ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission (the "SEC"). The Prospectus relates to
1,111,111 shares (the "Shares") of our common stock which the selling
stockholders named in this Prospectus (the "Selling Stockholders") may sell from
time to time. We will not receive any of the proceeds from these sales. We have
agreed to pay the expenses incurred in registering the Shares, including legal
and accounting fees.
The Shares have not been registered under the securities laws of any
state or other jurisdiction as of the date of this Prospectus. Brokers or
dealers should confirm the existence of an exemption from registration or
effectuate such registration in connection with any offer and sale of the
Shares.
This Prospectus describes certain risk factors that you should consider
before purchasing the Shares. See "Risk Factors" beginning on page 3. You should
read this Prospectus together with the additional information described under
the heading "Where You Can Find More Information."
--------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About this Prospectus................................................. 2
Risk Factors.......................................................... 3
Where You Can Find More Information................................... 10
About Endocardial Solutions, Inc. .................................... 11
Selling Stockholders.................................................. 13
Plan of Distribution.................................................. 13
Legal Matters......................................................... 14
Experts............................................................... 14
</TABLE>
-2-
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, TOGETHER WITH THE OTHER
INFORMATION IN THIS PROSPECTUS, BEFORE BUYING ANY SHARES. YOU SHOULD ALSO BE
AWARE THAT CERTAIN STATEMENTS CONTAINED IN THIS PROSPECTUS THAT ARE NOT RELATED
TO HISTORICAL RESULTS ARE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING
STATEMENTS, SUCH AS STATEMENTS OF OUR STRATEGIES, PLANS, OBJECTIVES,
EXPECTATIONS AND INTENTIONS, INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS.
OUR SUCCESS DEPENDS ON DEVELOPING AND COMMERCIALIZING THE ENSITE SYSTEM
The EnSite System is currently our only potential product, and our
success depends entirely on the successful development, commercialization and
market acceptance of the EnSite System. Modifications to the EnSite System may
require additional clinical trials and, ultimately, United States and
international regulatory approvals before they can be fully marketed in the
United States and abroad. Problems in the following areas could materially
impact the commercialization of the EnSite System:
- research and development,
- clinical testing,
- regulatory submissions and approval,
- product manufacturing and commercial scale-up,
- marketing, or
- product distribution.
We have recently begun to generate revenue from the EnSite System. We cannot
assure you that we will ever derive substantial revenues from the sale of the
EnSite System.
CLINICAL TESTING OF OUR PRODUCTS CONTINUES TO BE REQUIRED
We have conducted clinical trials on patients for ventricular
tachycardia ("VT") and supraventricular tachycardia ("SVT") in the United States
and in Europe, and we have at times experienced complications in our clinical
trials. During the third and fourth quarters of 1998, we submitted to the United
States Food and Drug Administration (the "FDA") two premarket notification
applications under Section 510(k) of the Food, Drug and Cosmetic Act (the "FDC
Act") containing the results of our left ventricular and right atrium
multi-center clinical trials. We believe, however, we will be required to
conduct more extensive clinical testing in the United States in order to support
a premarket approval ("PMA") application to the FDA for marketing approval for
use of the EnSite System in the left ventricle of the heart. Patients selected
for clinical trials must meet stringent guidelines to undergo testing, and we
cannot assure you that patients can be enrolled in clinical trials on a timely
basis. Further, we cannot assure you that any of our products will prove to be
safe and effective in clinical trials under United States or international
regulatory guidelines. The clinical trials may identify significant technical or
other obstacles to be overcome prior to obtaining approvals. If the EnSite
System does not prove to be safe and effective in clinical trials, our business,
financial condition and results of operations would be materially and adversely
affected.
OUR PRODUCTS ARE SUBJECT TO REGULATORY APPROVAL
The manufacture and sale of medical devices, including the EnSite
System, are subject to extensive regulation in the United States, principally by
the FDA and corresponding state agencies, and in other countries. In the United
States, our products are subject to the FDA's premarket approval requirements,
which have not yet been satisfied for left ventricular use. Securing FDA
approvals requires us to submit extensive clinical data and supporting
information to the FDA. During the third and fourth quarters of 1998, we
submitted to the FDA two premarket notification applications under Section
510(k) of the FDC Act containing the results of our left
-3-
<PAGE>
ventricular and right atrium multi-center clinical trials. The FDA has
cleared the EnSite System for use in the right atrium of the heart. In March
1999, we determined that our FDA application for left ventricular use of the
EnSite System will be submitted as a PMA application. However, we may not be
able to file a PMA application with the FDA to market the EnSite System for
diagnosing VT in the United States until we complete more extensive clinical
trials. The process of obtaining FDA and other required regulatory approvals
is lengthy, expensive and uncertain.
Sales of medical devices outside of the United States are subject to
international regulatory requirements that vary from country to country, and
approval for sale internationally may take more or less time than that required
for FDA approval. We have obtained CE certification for the EnSite catheter and
for the EnSite 3000 clinical workstation, allowing us to sell our products in
member countries of the European Union. We may encounter significant costs and
requests for additional information in continuing our efforts to obtain
regulatory approvals in other countries, which could substantially delay or
preclude us from marketing our products internationally.
Marketing approvals, if granted, may require us to limit the indicated
use of our product. FDA enforcement policy strictly prohibits the marketing of
approved medical devices for unapproved uses. Product approvals could be
withdrawn for failure to comply with regulatory standards or the occurrence of
unforeseen problems following the initial marketing. We will be required to
follow FDA regulations regarding Good Manufacturing Practices and similar
regulations in other countries, which include testing, control, and
documentation requirements. Ongoing compliance with Good Manufacturing Practices
and other applicable regulatory requirements will be monitored through periodic
inspections by federal and state agencies, including the FDA, and by comparable
agencies in other countries. If we fail to comply with applicable regulatory
requirements, we could be subjected to warning letters, fines, injunctions,
civil penalties, recall or seizure of products, total or partial suspension of
production, refusal of the government to grant premarket approval, withdrawal of
approvals and criminal prosecution.
We cannot assure you that we will be able to obtain the necessary
regulatory approvals on a timely basis or at all. Delays in receipt of or
failure to receive the approvals, the loss of previously obtained approvals, or
failure to comply with existing or future regulatory requirements would have a
material and adverse effect on our business, financial condition and results of
operations.
TREATMENTS USING THE ENSITE SYSTEM MAY NOT BE AVAILABLE TO PATIENTS
We have developed the EnSite System to diagnose tachycardia and assist
electrophysiologists in selecting among treatment options. Current treatments
for VT include drugs, implantable defibrillators, surgery and, potentially,
catheter ablation. We believe that the EnSite System will enable increased use
of catheter ablation for treating complex VT. Because ablation treatment for VT
is relatively new and untested, the long term effects of ablation on patients
are unknown. As a result, the long term success of ablation therapy in treating
VT will not be known for several years. Catheter ablation devices require PMA
approval by the FDA, and we cannot assure you that a catheter ablation market
will develop. Moreover, we cannot assure you that the EnSite System will prove
useful in diagnosing VT for treatment by catheter ablation products. We are not
in the process of developing a catheter for ablation treatment and are entirely
dependent upon other medical device companies to develop those devices. If a
market for treating VT by catheter ablation does not develop, our business,
financial condition and results of operations could be materially and adversely
affected.
OUR PRODUCTS MAY BE UNABLE TO DIAGNOSE ATRIAL FIBRILLATION
In addition to assisting the diagnosis of VT, we intend to apply the
EnSite System to the diagnosis of SVT, including atrial fibrillation. However,
we have conducted only limited clinical studies of our technology on patients
suffering from atrial fibrillation. We may be unable to successfully extend our
technology to the mapping of atrial fibrillation or obtain regulatory approval
to test and market any products developed using the technology to map
-4-
<PAGE>
atrial fibrillation. We have made, and expect to continue to make, research
and development expenditures to extend our technology to the diagnosis of
atrial fibrillation. We cannot assure you that we will realize any benefit
from these expenditures.
Atrial fibrillation is a complex disease and the subject of continuing
research. The therapies presently available for atrial fibrillation are in the
developmental stage with no proven effectiveness. Even if we are successful in
extending our technology to provide products that are capable of diagnosing
atrial fibrillation, we cannot assure you that treatments for atrial
fibrillation will exist that will require the diagnostic capabilities of any of
our products. As a result, a commercial market may never develop for any product
we develop for the diagnosis of atrial fibrillation. We have no present
intention to develop any medical devices on our own for the treatment of atrial
fibrillation.
OUR PRODUCTS MAY NOT SUCCEED IN THE MARKET
The commercial success of the EnSite System depends upon the number of
diagnostic procedures performed by electrophysiologists using the system. Our
system may not gain any significant degree of market acceptance among
electrophysiologists, patients, health care insurers and managed care providers.
Electrophysiologists will not recommend diagnostic procedures until clinical
data demonstrate the safety and efficacy of those procedures. Even if we
demonstrate the safety and efficacy of the EnSite System, electrophysiologists
and other physicians may elect not to recommend the procedures for any number of
other reasons, including the availability of alternative procedures and
treatment options, or inadequate levels of reimbursement. Broad use of the
EnSite System will require time-consuming training of electrophysiologists,
which could adversely also affect market acceptance. If our products are not
accepted by the market, our business, financial condition and results of
operations would be materially and adversely affected.
WE FACE SIGNIFICANT INDUSTRY COMPETITION
The cardiac medical device market is highly competitive, and the EnSite
System is a new technology that must compete with more established devices.
Certain of our competitors are developing new approaches and new products for
diagnosing VT and SVT, including contact mapping systems using multi-electrode
basket contact catheters and single-point mapping technologies. Certain of our
competitors have integrated product lines that include products for both
diagnosis and ablation treatment, which may afford them opportunities for
product bundling and other marketing advantages. Many of our competitors have an
established presence in the field of electrophysiology and established
relationships with electrophysiology labs. Many of our competitors have
substantially greater financial and other resources than we do, including larger
research and development staffs and more experience and capabilities in
conducting research and development activities, testing products in clinical
trials, obtaining regulatory approvals, and manufacturing, marketing and
distributing products. Some of our competitors may achieve patent protection,
regulatory approval or product commercialization more quickly than us, which may
decrease our ability to compete.
OUR PRODUCTS MAY BECOME OBSOLETE IF WE ARE UNABLE TO ANTICIPATE AND ADAPT TO
RAPIDLY CHANGING TECHNOLOGY
The medical device industry is subject to rapid technological
innovation and, consequently, the life cycle of any particular product is short.
Alternative diagnostic systems or other discoveries and developments with
respect to mapping tachycardia may render our products obsolete. Furthermore,
the greater financial and other resources of many of our competitors may permit
them to respond more rapidly than us to technological advances. If we fail to
demonstrate the safety, benefit, efficacy and cost effectiveness of our products
as compared to those of our competitors, or if we fail to develop new
technologies and products before our competitors, our business, financial
condition and results of operations would be materially and adversely affected.
WE DEPEND ON OUR PATENTS AND PROPRIETARY TECHNOLOGY, WHICH WE MAY NOT BE ABLE
TO PROTECT
-5-
<PAGE>
Our success will depend in part on our ability to obtain patent
protection for our products and processes, to preserve our trade secrets and to
operate without infringing the intellectual property rights of others. The
patent positions of medical device companies are uncertain and involve complex
and evolving legal and factual questions. We cannot assure you that any of our
pending or future patent applications will result in issued patents, that any
current or future patents will not be challenged, invalidated or circumvented,
that the scope of any of our patents will exclude competitors or that the patent
rights granted to us will provide us any competitive advantage. We may discover
that our technology infringes patents or other rights owned by others, and we
cannot be certain that we were the first to make the inventions covered by each
of our issued patents and our pending patent applications, or that we were the
first to file patent applications for such inventions. In addition, we cannot
assure you that our competitors will not seek to apply for and obtain patents
that will prevent, limit or interfere with our ability to make, use or sell our
products either in the United States or in international markets. Further, the
laws of certain foreign countries may not protect our intellectual property
rights to the same extent as do the laws of the United States.
In addition to patents, we rely on trade secrets and proprietary
knowledge that we seek to protect, in part, through confidentiality agreements
with employees, consultants and others. We cannot assure you that our
proprietary information or confidentiality agreements will not be breached, that
we will have adequate remedies for any breach, or that our trade secrets will
not otherwise become known to or independently developed by competitors.
WE MAY FACE INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS WHICH WOULD BE COSTLY
TO RESOLVE
There has been substantial litigation regarding patent and other
intellectual property rights in the medical device industry and our competitors
may resort to intellectual property litigation as a means of competition.
Intellectual property litigation is complex and expensive and the outcome is
difficult to predict. We cannot assure you that we will not become subject to
patent infringement claims or litigation, or interference proceedings declared
by the United States Patent and Trademark Office to determine the priority of
inventions. Litigation or regulatory proceedings may also be necessary to
enforce our patent or other intellectual property rights. We may not always have
the financial resources to assert patent infringement suits or to defend
ourselves from claims. An adverse result in any litigation could subject us to
liabilities to, or require us to seek licenses from or pay royalties to, others
that may be substantial. Furthermore, we cannot assure you that the necessary
licenses would be available to us on satisfactory terms, if at all.
WE HAVE LIMITED MANUFACTURING EXPERIENCE
We have limited experience in manufacturing the EnSite catheter and the
patient interface unit of the EnSite System. We currently manufacture our
products in limited quantities for laboratory and clinical testing and only have
begun to manufacture our products for commercial sale. We have limited
experience manufacturing our products in the volumes that will be necessary for
us to achieve significant commercial sales, and we cannot assure you that
reliable, high-volume manufacturing capacity can be established or maintained at
commercially reasonable costs. If we receive regulatory approval for our
products, we will need to expend significant capital resources and develop the
necessary expertise to establish large-scale manufacturing capabilities. We may
encounter the following difficulties in scaling up production of our products:
- problems involving production yields,
- quality control and assurance,
- component supply shortages,
- shortages of qualified personnel,
- compliance with FDA and foreign regulations, or
- the need for further FDA or foreign regulatory approval of new
manufacturing processes.
-6-
<PAGE>
Our manufacturing facilities will be periodically inspected by United
States and foreign regulatory authorities. In order to manufacture products for
sale in the United States, our operations must undergo "Good Manufacturing
Practices" compliance inspections conducted by the FDA. Our facilities and
manufacturing processes have not yet undergone any inspections by the FDA. We
will also be required to comply with ISO 9001 or 9002 and CE Mark standards in
order to sell our products in Europe. We received ISO 9001 certification for our
catheter and quality system in August 1997 and ISO 9001 certification for the
clinical workstation in November 1998. We received a CE Mark for each of the
EnSite catheter and the clinical workstation in the first quarter of 1998. If we
fail to comply with Good Manufacturing Practices or ISO 9001 and CE Mark
standards in future audits, we may be required to modify our manufacturing
policies and procedures. In addition, we may be required to stop all or part of
our operations until we can demonstrate that appropriate steps have been taken
to comply with the regulations.
WE DEPEND ON A FEW SUPPLIERS FOR KEY COMPONENTS OF OUR PRODUCTS
We purchase raw materials and certain key components of our products,
including the computer workstation and certain components for our catheter, from
one or a few suppliers. For certain of these components, there are relatively
few alternative sources of supply. We currently have no agreements that would
assure delivery of raw materials and components from alternate suppliers.
Establishing additional or replacement suppliers for any of the components used
in our products, if required, may not be accomplished quickly and could involve
significant additional costs. If our suppliers are unable to provide an adequate
supply of components in a timely manner, or if we are unable to locate qualified
alternate suppliers for materials and components at a reasonable cost, our
business, financial condition and results of operations could be materially and
adversely affected. In the event we had to replace a single source supplier, a
new supplier would be required to meet Good Manufacturing Practices and other
regulatory standards.
WE HAVE LIMITED COMMERCIAL SALES AND MARKETING EXPERIENCE
We have limited experience marketing the EnSite System. We cannot
assure you that we will be able to maintain a suitable sales force or enter into
or maintain satisfactory marketing arrangements with others. Our sales and
marketing efforts may not be successful.
WE WILL NEED TO CAREFULLY MANAGE OUR EXPANDING OPERATIONS
In order to complete clinical trials, prepare additional products for
clinical trials, and develop future products, we believe that we will be
required to expand our operations, particularly in the areas of research and
development, manufacturing, quality assurance and sales and marketing. As we
expand our operations in these areas, the expansion will likely result in new
and increased responsibilities for management. To accommodate any growth and
compete effectively, we must implement and improve our information systems,
procedures, and controls, and expand, train, motivate and manage our work force.
Our future success will depend significantly on the ability of our current and
future management to operate effectively. We cannot assure you that our
personnel, systems, procedures and controls will be adequate to support our
future operations.
INTERNATIONAL OPERATIONS WILL EXPOSE US TO ADDITIONAL RISKS
We plan to market the EnSite System through distributors in
international markets, once we receive the required foreign regulatory
approvals, and sales in foreign markets are initially expected to be our only
source of revenue. We have entered into a distribution agreement granting
Medtronic exclusive distribution rights for our products in Canada, Europe and
Japan and certain rights for distribution in other regions outside of the United
States. In the first quarter of 1998, we received ISO 9002 certification for our
workstation and a CE Mark for each of the EnSite catheter and the clinical
workstation, allowing us to begin selling our products in member countries of
the European Union. ISO 9001 certification for our workstation was subsequently
received in November 1998. We
-7-
<PAGE>
have no distribution arrangements for other international markets, and
currently retain all distribution rights in the United States. We cannot
assure you that international distributors for our products will devote
adequate resources to selling our products.
Changes in overseas economic conditions, currency exchange rates,
foreign tax laws or tariffs or other trade regulations could materially and
adversely affect on our ability to market our products internationally. Our
business is also expected to subject us and our representatives, agents and
distributors to laws and regulations of the foreign jurisdictions in which we
operate or our products are sold. We may depend on foreign distributors and
agents for compliance and adherence to foreign laws and regulations.
OUR SUCCESS MAY DEPEND ON ACHIEVING ADEQUATE LEVELS OF THIRD-PARTY
REIMBURSEMENT
Sales of our products will depend largely on the availability of
adequate reimbursement for tachycardia diagnostic procedures from third-party
payors, such as government and private insurance plans, health maintenance
organizations and preferred provider organizations. In the United States, our
products, if and when approved for commercial sale, would be purchased primarily
by health care providers such as doctors and hospitals who will then seek to be
reimbursed for the health care services provided to their patients. Third-party
payors are increasingly challenging the pricing of medical products and
procedures they consider unnecessary, inappropriate, not cost-effective,
experimental or used for a non-approved indication. Even if a procedure is
eligible for reimbursement, the level of reimbursement may not be adequate to
enable us to achieve or maintain market acceptance of our products or maintain
price levels which exceed our costs of developing and manufacturing our
products.
It is anticipated that our EnSite catheter will be sold at a premium
compared to existing single point catheters used in current diagnostic or
mapping procedures. In addition, an initial capital outlay will be required for
the EnSite clinical workstation. Assuming no increase in the level of
reimbursement for cardiovascular procedures utilizing our products, we will be
required to justify the relative increased cost of using the EnSite System. This
will require us to demonstrate the enhanced benefits of the EnSite System to
health care providers and payors in terms of such factors as enhanced patient
procedural efficiencies, reduced radiation exposure and improved patient
outcomes. Without adequate support from third-party payors, the market for our
products may be severely limited.
Moreover, we are unable to predict what additional legislation or
regulation, if any, relating to the health care industry or third-party coverage
and reimbursement may be enacted in the future, or what effect such legislation
or regulation would have on us. Reforms may include mandated basic health care
benefits, limitations on the growth of private health insurance premiums and
Medicare and Medicaid spending, greater reliance on prospective payment systems,
the creation of large insurance purchasing groups and fundamental changes to the
health care delivery system. We anticipate that Congress and state legislatures
will continue to review and assess alternative health care delivery systems and
payment methodologies. We cannot predict whether any reform proposals will be
adopted or what impact they may have on us.
Reimbursement systems in international markets vary significantly by
country and by region within some countries. Many international markets have
government managed health care systems that control reimbursement for new
devices and procedures. In most international markets, there are private
insurance systems as well as government managed systems. We cannot assure you
that reimbursement for our products will be available in international markets
under either government or private reimbursement systems.
OUR PRODUCTS MAY EXPOSE US TO COSTLY LITIGATION
We may be exposed to product liability claims if a patient is adversely
affected by our products. We currently carry product liability insurance
covering our clinical trial operations with an aggregate limit of $5 million. We
cannot assure you that our existing insurance coverage limits are adequate to
cover any liabilities we
-8-
<PAGE>
might incur in connection with the distribution of our products. Although we
expect to obtain product liability insurance coverage in connection with the
commercialization of the EnSite System, insurance may not be available on
commercially reasonable terms, if at all. Insurance, even if obtained, might
not adequately cover any product liability claim.
WE HAVE A HISTORY OF OPERATING LOSSES AND EXPECT FUTURE LOSSES
We have generated limited revenue and have sustained significant
operating losses each year since our inception. We expect our losses to continue
at least through 1999. We may never generate substantial operating revenues or
achieve profitability. Our ability to generate revenues from operations and make
a profit depends upon successful development, regulatory approval, manufacturing
and commercialization of the EnSite System and our successful transition from a
research and development company to a manufacturing and sales company.
WE MAY BE UNABLE TO MEET OUR FUTURE CAPITAL REQUIREMENTS
We may require substantial funds to meet our working capital
requirements for continued research and development, testing, regulatory
approval and full-scale commercial introduction of our EnSite System. In order
to meet our funding needs, we may be required to raise additional funds through
public or private financings, including the sale of equity or debt. Any
additional equity financings may dilute current stockholders, and debt
financing, if available, may involve restrictive covenants. Adequate funds for
our operations, whether from financial markets or from other sources, may not be
available when needed on attractive terms, if at all. Insufficient funds may
require us to delay, scale back or eliminate some or all of our programs
designed to facilitate the commercial introduction of the EnSite System.
OUR SYSTEMS MAY BE SUBJECT TO YEAR 2000 PROBLEMS
We have formed a project team consisting of representatives from our
information technology, finance, manufacturing, product development and quality
department to address internal and external Year 2000 issues. Based on our
assessment to date, we believe we will not experience any material disruption as
a result of Year 2000 problems in our financial, internal manufacturing
processes or the EnSite 3000 System. However, we cannot guarantee that the
systems of other companies on which we rely will be converted in a timely
manner, or that a failure to convert by another company, or a conversion that is
incompatible with our systems, would not have a material and adverse effect on
us. We have not yet developed a contingency plan in the event of various problem
scenarios, but we will assess the need to develop a plan based on the outcome of
our validation phase of our Year 2000 compliance program and the results of
surveying our major suppliers. Assuming no major disruption in service from
utility companies or other critical third-party providers, we believe that we
will be able to manage our total Year 2000 transition without any material
effect on our results of operations or financial condition. We cannot assure
you, however, that unexpected difficulties will not arise and, if so, that we
will be able to timely develop and implement a contingency plan.
-9-
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires us to file information with the SEC
concerning our business and operations. We file annual, quarterly and special
reports, proxy statements and other information with the SEC. You can read and
copy these documents at the public reference facility maintained by the SEC at
Judiciary Plaza, 450 Fifth Street, NW, Room 1024, Washington, DC 20549. You can
also copy and inspect such reports, proxy statements and other information at
the following regional offices of the SEC:
New York Regional Office Chicago Regional Office
Seven World Trade Center Citicorp Center
Suite 1300 500 West Madison Street, Suite 1400
New York, NY 10048 Chicago, Illinois 60661
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public on the
SEC's web site at http://www.sec.gov. You can also inspect our reports, proxy
statements and other information at the offices of the Nasdaq Stock Market.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information that we incorporate by
reference is considered to be part of this Prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
- Annual Report on Form 10-K for the fiscal year ended December 31, 1998;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999; and
- The description of our Common Stock contained in the Registration
Statement on Form 8-A, dated March 12, 1997, as amended.
This Prospectus is part of a registration statement we filed with the
SEC (Registration No. 333-______). You may request a free copy of any of the
above filings by writing or calling:
Leota L. Pearson.
Chief Financial Officer
1350 Energy Lane, Suite 110
St. Paul, MN 55108
(651) 644-7890
You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement to this Prospectus. We have not
authorized anyone else to provide you with different information. The Selling
Stockholders should not make an offer of these Shares in any state where the
offer is not permitted. You should not assume that the information in this
Prospectus or any supplement to this Prospectus is accurate as of any date other
than the date on the cover page of this Prospectus or any supplement.
-10-
<PAGE>
ABOUT ENDOCARDIAL SOLUTIONS, INC.
We design, develop, and manufacture a minimally invasive diagnostic
system that diagnoses, within the span of a few heartbeats, arrhythmia, a
potentially fatal abnormal heart rhythm. Arrhythmias are caused by irregular
electrical activity in the heart which disrupts the heart's normal pumping
action. Ventricular tachycardia, a type of arrhythmia, occur in the lower
chambers of the heart and frequently lead to serious complications, including
sudden cardiac death. Supraventricular tachycardia, including atrial
fibrillation and flutter, originate in the upper chambers of the heart and often
result in chest pain, fatigue and dizziness and, while generally not
life-threatening, are a leading cause of stroke in the United States.
Electrophysiologists have generally been unable to adequately diagnose complex
arrhythmia due to the limited capabilities of present technology. We believe
that our proprietary EnSite-TM- catheter and EnSite 3000-TM- clinical
workstation (together, the "EnSite System") is a powerful new diagnostic tool
that will enable electrophysiologists to rapidly and comprehensively map
arrhythmia and improve the selection of patient treatment options.
Our EnSite System is designed to enable electrophysiologists to rapidly
and precisely locate the multiple, unpredictable points of origin of complex
arrhythmia. The EnSite System applies proprietary mathematical algorithms to
compute more than 3,000 points of electrical activity within a heart chamber,
producing a high resolution, real-time, three dimensional color display of the
electrical activity in the heart chamber. The "virtual electrogram" function of
the EnSite System allows electrophysiologists to instantly view the electrical
activity at any of the more than 3,000 points. The EnSite System is also capable
of tracking and displaying the location and movements of auxiliary catheters
introduced into the chamber.
Our strategy is to establish the EnSite System as the leading
diagnostic tool for diagnosing arrhythmia in the more than 1,200
electrophysiology laboratories worldwide. The key elements of our strategy are
as follows:
- DEMONSTRATE SAFETY AND CLINICAL EFFICACY. The EnSite System
represents a new technology for mapping arrhythmia. In order to
gain acceptance of this technology in electrophysiology labs, we
must demonstrate the safety and effectiveness of the EnSite System
through successful clinical trials. We have conducted clinical
trials on VT and SVT patients in the United States and the United
Kingdom using our EnSite System. We have filed the results of our
studies and other product information with the FDA in order to
seek the required approvals for marketing in the United States. In
1998, we received the necessary approval to market our products in
the European Community. In the second quarter of 1999, we received
FDA approval to market our products in the United States for right
atrial use. We will also seek to demonstrate the clinical efficacy
of the EnSite System through the publication of the results of our
studies and clinical trials and articles on our technology in
medical journals.
- DEVELOP TECHNOLOGY FOR VENTRICULAR TACHYCARDIAS. We believe that
the patient population that suffers from complex VT that are
difficult to map using currently available technology presents a
significant market opportunity for our EnSite System. We intend to
focus on the ability of our technology to provide improved speed,
increased accuracy and cost-effectiveness in mapping VT. This
improved mapping power should benefit electrophysiologists in
performing diagnostic procedures and prescribing treatments for an
expanded patient population. In June 1997, we received FDA
approval for the use of our EnSite System in the left ventricle of
the heart in a multi-center clinical study. In December 1998, we
filed a premarket notification application with the FDA under
Section 510(k) of the Food, Drug and Cosmetic Act containing the
results of our left ventricular multi-center clinical trials. In
March 1999, we announced that our FDA application for left
ventricular use of the EnSite System will be submitted as a PMA
application.
- DEVELOP TECHNOLOGY FOR ATRIAL FIBRILLATION. We believe that the
EnSite System can be extended from mapping VT to mapping atrial
tachycardia, including atrial fibrillation, which share similar
complex
-11-
<PAGE>
characteristics, such as multiple sites of origin in
unpredictable locations. In August 1997, we received FDA approval
for the use of our EnSite System in the right atrium in a
multi-center clinical study. In September 1998, we filed a 510(k)
application with the FDA containing the results of our right
atrial multi-center clinical trials. In the second quarter of
1999, we received FDA approval to market our products in the
United States for right atrial use.
- LEVERAGE RELATIONSHIPS WITH LEADING ELECTROPHYSIOLOGISTS. With our
multi-center clinical studies and our U.S. and European product
launch, we have established relationships with several leading
electrophysiologists, which we hope will enhance market acceptance
of the EnSite System.
We were incorporated in Minnesota in 1992 and reincorporated in
Delaware in 1995. Our common stock began trading on the Nasdaq National Market
under the symbol "ECSI" on March 19, 1997. We sold 2,250,000 shares of our
common stock to the public pursuant to a registered public offering, and sold
750,000 shares of our common stock in a concurrent private placement to
Medtronic, Inc. Also at such time, all outstanding shares of our preferred stock
were automatically converted into an aggregate of 4,705,602 shares of common
stock following a 1 for 2 reverse stock split. Prior to such date, there was no
established public trading market for our securities.
In September 1997, we signed a seven-year exclusive distribution
agreement with Medtronic, Inc. to market our diagnostic products for the
electrophysiology markets in Europe and Japan. The distribution agreement was
amended in December 1998 to provide Medtronic with exclusive distribution rights
for our products in Canada. In January 1998, we signed a license agreement with
Medtronic, Inc. that gives us exclusive use of 3D intracardiac location
technology for our EnSite System. The technology, when integrated with the
EnSite System, will improve intracardiac catheter positioning while
significantly reducing the use of harmful radiation.
In the first quarter of 1998, we received ISO 9002 certification for
our workstation and a CE Mark for each of the EnSite catheter and EnSite 3000
clinical workstation, allowing us to begin selling our products in the European
Community. Distribution by Medtronic in Europe of the EnSite System began in the
second quarter of 1998. ISO 9001 certification for our workstation was
subsequently received in November 1998.
In February 1999, we announced a financing agreement with Medtronic,
Inc. Under the agreement, we will receive $7 million from Medtronic Asset
Management, which is repayable by 2001 or, if earlier, at the close of a
significant round of debt or equity financing. The financing will facilitate our
continued growth in Europe and preparation for our U.S. product launch.
Our offices are located at 1350 Energy Lane, Suite 110, St. Paul,
Minnesota 55108, and our telephone number is (651) 644-7890. The address of the
our web site is www.endocardial.com.
RECENT DEVELOPMENTS
FINANCING. In July 1999, we received net proceeds of $10,000,000 from a
private placement to accredited investors of our common stock at $9.00 per
share. Investors purchased a total of 1,111,111 shares in this private
placement. Proceeds from the financing will be used for general working capital,
including expenses associated with our U.S. product launch and ongoing research
and development. We granted registration rights to the Selling Stockholders
covering the resale of common stock issued to investors in the private
placement. We are registering the Shares on a Form S-3 Registration Statement,
of which this Prospectus forms a part, pursuant to which all of the Shares may
be offered from time to time by the Selling Stockholders.
-12-
<PAGE>
SELLING STOCKHOLDERS
The Selling Stockholders acquired the Shares in connection with a
private placement of our common stock. See "About Endocardial Solutions,
Inc.--Financing" above. The Shares are being registered to permit public
secondary trading of Shares, and the Selling Stockholders may offer the Shares
for resale from time to time. See "Plan of Distribution." The following table
lists the Selling Stockholders and sets forth certain information regarding the
beneficial ownership of common stock of each Selling Stockholder as well as the
number of Shares each Selling Stockholder may sell pursuant to this Prospectus.
<TABLE>
<CAPTION>
Maximum
Number of Number of
Shares Shares to be
Name Beneficially Sold Pursuant
Owned to this
Prospectus(1)
--------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
AST Kemper Small Cap Growth Portfolio 594,886 594,886
The Kaufmann Fund Inc. 444,445 444,445
Scudder 21st Century Growth Fund 67,540 67,540
Scudder Variable Life Investment Fund Small Company Growth 4,420 4,240
---------------
Total 1,111,111
</TABLE>
(1) Assumes the sale of Shares offered by this Prospectus.
PLAN OF DISTRIBUTION
We are registering the Shares on behalf of the Selling Stockholders. As
used in this Prospectus, the term "Selling Stockholders" includes donees and
pledgees selling Shares received from a named Selling Stockholder after the date
of this Prospectus. The Selling Stockholders will offer and sell the Shares to
which this Prospectus relates for their own accounts. We will not receive any
proceeds from the sale of the Shares. We will bear all costs, expenses and fees
in connection with the registration of the Shares. Brokerage commissions and
similar selling expenses, if any, attributable to the sale of the Shares will be
borne by the Selling Stockholders.
The Selling Stockholders may offer and sell the Shares from time to
time in one or more types of transactions (which may include block transactions)
on the Nasdaq National Market, in transactions directly with market makers or in
privately negotiated transactions, through put or call options transactions,
through short sales, or a combination of such methods of sale, at prices
relating to prevailing market prices or at negotiated prices. Sales may be made
to or through brokers or dealers who may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders or the
purchasers of the Shares. As of the date of this Prospectus, we are not aware of
any agreement, arrangement or understanding between any broker or dealer and the
Selling Stockholders regarding the sale of their Shares, nor are we aware of any
underwriter or coordinating broker acting in connection with the proposed sale
of Shares by the Selling Stockholders. There is no assurance that the Selling
Stockholders will sell any or all of the Shares that they offer.
The Selling Stockholders and any brokers or dealers who participate in
the sale of the Shares may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933, as amended (the "Securities Act"), and any
commissions received by them and any profits realized by them on the resale of
Shares may be deemed to be underwriting discounts or commissions under the
Securities Act. Because the Selling Stockholders may be deemed to
be"underwriters" within the meaning of the Securities Act, the Selling
Stockholders will be subject to the prospectus delivery requirements of the
Securities Act. We have informed the Selling Stockholders that the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales in the market.
-13-
<PAGE>
The Selling Stockholders may also resell all or a portion of the Shares
in open market transactions in reliance upon Rule 144 under the Securities Act,
provided it meets the criteria and conforms to the requirements of such Rule.
Upon notification to us by a Selling Stockholder that any material
arrangement has been entered into with a broker or 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, a supplement to this
Prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating brokers or dealers, (ii) the number of Shares involved, (iii)
the price at which such Shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such brokers or dealers, where applicable, (v) that
such brokers or dealers did not conduct any investigation to verify the
information set out or incorporated by reference in this Prospectus and (vi)
other facts material to the transaction. In addition, upon notification to us by
a Selling Stockholder that a donee or pledgee intends to sell more than 500
Shares, a supplement to this Prospectus will be filed.
LEGAL MATTERS
The validity of the Shares offered by this Prospectus has been passed
upon for us by Dorsey & Whitney LLP, Minneapolis, Minnesota.
EXPERTS
The financial statements included in our Annual Report on Form 10-K
for the year ended December 31, 1998 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
-14-
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee...................................... $ 3,263
Accounting Fees and Expenses.............................. 2,000
Legal Fees and Expenses................................... 3,000
Miscellaneous ............................................ 1,737
-------------
Total............................................ $ 10,000
=============
</TABLE>
All fees and expenses other than the SEC registration fee are
estimated. The expenses listed above will be paid by the Company.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the Delaware General Corporation Law authorizes a court
to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred arising under the Securities Act of 1933, as
amended (the "Securities Act"). Article VIII, Section 8.01 of the Company's
Bylaws provides for mandatory indemnification of its directors and officers and
permissible indemnification of employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. The Company's Certificate of
Incorporation provides that, pursuant to Delaware law, its directors shall not
be liable for monetary damages for breach of the directors' fiduciary duty as
directors to the Company and its stockholders. This provision in the Certificate
of Incorporation does not eliminate the directors' fiduciary duty, and in
appropriate circumstances equitable remedies such as an injunctive or other
forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Company for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
ITEM 16. LIST OF EXHIBITS
<TABLE>
<C> <S>
5.1 Opinion of Dorsey & Whitney LLP regarding legality.
23.1 Consent of Independent Auditors.
23.2 Consent of Dorsey & Whitney LLP (included in Exhibit 5 to this Registration Statement).
24.1 Power of Attorney.
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
II-1
<PAGE>
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change to such information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change in the
information set forth in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, 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.
(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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against 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 Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Paul, State of Minnesota, on August 11, 1999.
ENDOCARDIAL SOLUTIONS, INC.
By /s/ James W. Bullock
-------------------------------------
James W. Bullock
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ James W. Bullock President and Chief Executive Officer August 11, 1999
- --------------------------- (Principal Executive Officer)
James W. Bullock
/s/ Leota L. Pearson Chief Financial Officer August 11, 1999
- -------------------------- (Principal Financial and Accounting Officer)
Leota L. Pearson
* Director August 11, 1999
- --------------------------
Graydon E. Beatty
* Director August 11, 1999
- --------------------------
James E. Daverman
* Director August 11, 1999
- --------------------------
Robert G. Hauser, M.D.
* Director August 11, 1999
- --------------------------
Ronald H. Kase
* Director August 11, 1999
- --------------------------
Steven R. LaPorte
*By: /s/ James W. Bullock August 11, 1999
---------------------
James W. Bullock
Attorney-in-fact
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<S> <C>
5.1 Opinion of Dorsey & Whitney LLP regarding legality
23.1 Consent of Independent Auditors
23.2 Consent of Dorsey & Whitney LLP (included in Exhibit 5 to this Registration Statement)
24.1 Power of Attorney
</TABLE>
<PAGE>
EXHIBIT 5.1
[Dorsey & Whitney LLP Letterhead]
Endocardial Solutions, Inc.
1350 Energy Lane, Suite 110
St. Paul, Minnesota 55108
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Endocardial Solutions, Inc., a Delaware
corporation (the "Company"), in connection with a Registration Statement on Form
S-3 (the "Registration Statement") to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to the sale
from time to time of up to 1,111,111 shares of common stock of the Company, par
value $.01 per share ("Common Stock"), by the Selling Stockholders named in the
Registration Statement.
We have examined such documents and have reviewed such questions of law
as we have considered necessary and appropriate for the purposes of our opinions
set forth below. In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Company, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
upon certificates of officers of the Company and of public officials.
Based on the foregoing, we are of the opinion that the shares of Common
Stock to be sold by the Selling Stockholders pursuant to the Registration
Statement have been duly authorized by all requisite corporate action and are
validly issued, fully paid and nonassessable.
Our opinions expressed above are limited to the laws of the State of
Minnesota.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus constituting part of the Registration
Statement.
Dated: August 11, 1999
Very truly yours,
/s/ Dorsey & Whitney LLP
KLC
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-3) and related Prospectus of
Endocardial Solutions, Inc. for the registration of 1,111,111 shares of its
common stock and to the incorporation by reference therein of our report
dated February 12, 1999, with respect to the financial statements of
Endocardial Solutions, Inc. included in its Annual Report (Form 10-K) for the
year ended December 31, 1998, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
August 9, 1999
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints each of James W. Bullock and Leota
L. Pearson, his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities to sign a Registration Statement on
Form S-3 of Endocardial Solutions, Inc. (the "Company") and any and all
amendments thereto, including post-effective amendments, for the sale of shares
of the Company by certain selling stockholders, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with such state securities commissions
and other agencies as necessary; granting unto said attorney-in-fact and agent,
full power and authority to do and perform to all intents and purposes as he or
she might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or the substitutes for such attorney-in-fact and
agent, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ James W. Bullock President and Chief Executive Officer August 4, 1999
- ---------------------------- (Principal Executive Officer)
James W. Bullock
/s/ Leota L. Pearson Chief Financial Officer August 4, 1999
- ---------------------------- (Principal Financial and Accounting Officer)
Leota L. Pearson
/s/ Graydon E. Beatty Director August 4, 1999
- ----------------------------
Graydon E. Beatty
/s/ James E. Daverman Director August 4, 1999
- ----------------------------
James E. Daverman
/s/ Robert G. Hauser Director August 4, 1999
- ----------------------------
Robert G. Hauser, M.D.
/s/ Ronald H. Kase Director August 4, 1999
- ----------------------------
Ronald H. Kase
/s/ Steven R. LaPorte Director August 6, 1999
- ----------------------------
Steven R. LaPorte
</TABLE>
