<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended June 30, 2000.
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ___________________to_____________________
Commission file number 0-26208
________________
Kera Vision, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 77-0328942
(State of Incorporation) (I.R.S. Employer
Identification No.
48630 Milmont Drive
Fremont, CA 94538
(Address of principal executive offices)
(510) 353-3000
(Registrant's telephone number)
________________
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No[_]
As of August 2, 2000 there were 18,898,024 shares of Common Stock
outstanding.
<PAGE>
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION (unaudited)
Item 1. Condensed Consolidated Balance Sheets as of June 30, 2000 and
December 31, 1999................................................................... 3
Condensed Consolidated Statements of Operations for the three-month and six-month
periods ended June 30, 2000 and 1999................................................ 4
Condensed Consolidated Statements of Cash Flows for the six-month periods
ended June 30, 2000 and 1999........................................................ 5
Notes to Condensed Consolidated Financial Statements................................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk.......................... 10
PART II. OTHER INFORMATION
Item 2. Changes in Securities............................................................... 11
Item 4. Submission of Matters to a Vote of Security Holders................................. 11
Item 6. Exhibits and Reports on Form 8-K.................................................... 11
SIGNATURES......................................................................................... 13
</TABLE>
2
<PAGE>
KERAVISION, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999*
--------- ---------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents.................................................... $ 25,018 $ 43,251
Available-for-sale investments............................................... 5,288 6,519
Accounts receivable, net..................................................... 496 567
Inventory........................................................................ 2,567 2,403
Prepaid expenses and other current assets.................................... 506 1,161
--------- ---------
Total current assets............................................................... 33,875 53,901
Property and equipment, net...................................................... 2,730 2,604
Other assets............................................................... 961 634
--------- ---------
Total assets....................................................................... $ 37,566 $ 57,139
========= =========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable................................................................. $ 2,838 $ 2,282
Accrued payroll and related expenses............................................. 970 1,172
Accrued clinical trial costs..................................................... 1,895 1,674
Other accrued liabilities........................................................ 418 792
Current portion of capital lease obligations..................................... 685 685
Short-term debt.................................................................. 4,653 4,527
--------- ---------
Total current liabilities.......................................................... 11,459 11,132
Capital lease obligations.......................................................... 658 1,030
Redeemable convertible series B preferred stock.................................... 17,718 16,964
Stockholders' equity:
Common stock..................................................................... 19 19
Additional paid-in capital....................................................... 148,253 147,548
Accumulated other comprehensive income........................................... 122 206
Accumulated deficit.............................................................. (139,842) (118,939)
Notes receivable from stockholders............................................... (821) (821)
--------- ---------
Total stockholders' equity......................................................... 7,731 28,013
--------- ---------
Total liabilities and stockholders' equity......................................... $ 37,566 $ 57,139
========= =========
</TABLE>
See accompanying notes.
* Derived from audited financial statements.
3
<PAGE>
KERAVISION, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-----------------------------------------------
2000 1999 2000 1999
-----------------------------------------------
<S> <C> <C> <C> <C>
Net sales......................................................... $ 707 $ 3,909 $ 1,707 $ 4,381
Costs and expenses:
Cost of sales and manufacturing expenses...................... 1,359 3,027 3,336 4,615
Research and development...................................... 2,175 2,111 4,610 4,201
Selling, general and administrative........................... 7,784 4,192 14,531 8,171
-----------------------------------------------
Total costs and expenses.......................................... 11,318 9,330 22,477 16,987
-----------------------------------------------
Operating loss.................................................... (10,611) (5,421) (20,770) (12,606)
Interest income and other, net.................................... 574 14 1,170 (5)
Interest expense.................................................. (273) (258) (549) (310)
-----------------------------------------------
Net loss.......................................................... (10,310) (5,665) (20,149) (12,921)
Preferred stock dividend requirements:
Redeemable convertible series B................................. (381) (365) (755) (776)
-----------------------------------------------
Net loss applicable to common stockholders........................ $(10,691) $(6,030) $(20,904) $(13,697)
===============================================
Basic and diluted net loss per share applicable to common
stockholders..................................................... $(0.57) $(0.45) $(1.11) $(1.05)
===============================================
Shares used in calculation of net loss per share.................. 18,868 13,382 18,842 13,088
</TABLE>
See accompanying notes.
4
<PAGE>
KERAVISION, INC.
Condensed Consolidated Statements of Cash Flows
Increase(Decrease) in cash and cash equivalents
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
2000 1999
------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(20,149) $(12,921)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 488 306
Loss from disposal of fixed assets 72 --
Amortization of debt discount 126 85
Payment on stockholders' notes -- 36
Amortization of deferred compensation -- 30
Changes in operating assets and liabilities:
Accounts receivable 71 (779)
Inventory (164) (713)
Prepaid expenses and other current assets 655 229
Other assets (327) 8
Accounts payable 556 1,043
Other accrued liabilities (355) 779
-------- --------
Net cash used in operating activities (19,027) (11,897)
-------- --------
Cash flows from investing activities:
Purchases of available-for-sale investments (5,100) (297)
Sales of available-for-sale investments 2,325 6,410
Maturities of available-for-sale investments 3,922 --
Capital expenditures (686) (809)
-------- --------
Net cash provided by investing activities 461 5,304
-------- --------
Cash flows from financing activities:
Principal payments under capital lease obligations (372) (259)
Proceeds from sales-leaseback of capital equipment -- 132
Proceeds from issuance of short-term debt and warrants -- 5,000
Proceeds from issuance of equity securities 705 8,435
-------- --------
Net cash provided by financing activities 333 13,308
-------- --------
Net increase(decrease) in cash and cash equivalents (18,233) 6,715
Cash and cash equivalents at the beginning of the period 43,251 1,449
-------- --------
Cash and cash equivalents at the end of the period $ 25,018 $ 8,164
======== ========
Supplemental disclosure of non-cash investing and financing
activities:
Accrued dividends related to preferred stock $ 626 $ 708
======== ========
Accretion related to preferred stock $ 129 $ 68
======== ========
</TABLE>
See accompanying notes.
5
<PAGE>
KERAVISION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed financial statements of KeraVision,
Inc. (the "Company" or "KeraVision"), have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions for Form 10-Q and Article 10 of Regulation S-X. The
balance sheet as of June 30, 2000, the statements of operations for the three
and six-month periods ended June 30, 2000 and 1999 and cash flows for the six-
month periods ended June 30, 2000 and 1999 are unaudited but include all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for a fair presentation of the financial position at such
date and the operating results and cash flows for those periods. Although the
Company believes that the disclosures in these financial statements are adequate
to make the information presented not misleading, certain information normally
included in financial statements and related footnotes prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange Commission.
The accompanying financial statements should be read in conjunction with the
Company's annual financial statements and notes thereto included in the
Company's Annual Report on Form 10-K. The accompanying condensed consolidated
balance sheet at December 31, 1999 is derived from audited financial statements
at that date.
Results for three and six-months ended June 30, 2000 and 1999 are not
necessarily indicative of results for any other interim period or for any year.
2. Net Loss Per Common Share
Net loss per common share is computed based on the weighted average number
of common shares outstanding and excludes common stock equivalents as their
effect would be antidilutive. For the periods ended June 30, 2000 and 1999
dividends and accretion related to the redeemable preferred stock are added to
the net loss to arrive at net loss applicable to common stockholders. Options
and warrants to purchase 1,877,050 and 55,492 shares of common stock were
outstanding at June 30, 2000 but were not included in the computation of diluted
net loss per share as the Company incurred a net loss in the periods presented
and the effect of the securities would have been anti-dilutive.
3. Inventory
Inventories are stated at the lower of cost or market. Cost is determined
by the first-in, first-out method. The Company's inventory was composed of the
following (in thousands):
<TABLE>
June 30, December 31,
2000 1999
--------------------------
<S> <C> <C>
Raw materials......................... $ 591 $1,168
Finished goods........................ 1,976 1,235
------ ------
Total................................ $2,567 $2,403
====== ======
</TABLE>
4. Available-for-sale investments
The Company's available-for-sale investments at June 30, 2000 were composed
of the following (in thousands):
<TABLE>
<CAPTION>
Gross Unrealized Estimated
Cost Gains Fair Value
----------------- ----------------- -----------------
<S> <C> <C> <C>
Money market Instruments............................... $ 2,397 $-- $ 2,397
Certificates of deposit................................ 170 -- 170
Commercial paper....................................... 7,937 18 7,955
Auction rate preferred stock........................... 5,100 -- 5,100
Corporate debt securities.............................. 12,575 -- 12,575
----------------- ----------------- -----------------
Available-for-sale investments......................... 28,179 18 28,197
Included in cash & cash equivalents.................... 22,909 -- 22,909
----------------- ----------------- -----------------
Included in available for sale investments............ $ 5,270 $18 $ 5,288
================= ================= =================
</TABLE>
6
<PAGE>
All available-for-sale investments mature within one year. Gross realized
gains and losses were not significant during the six-month periods ended June
30, 2000 and 1999.
At December 31, 1999, the Company's investments were composed of the
following (in thousands):
<TABLE>
<CAPTION>
Gross Unrealized Estimated
Cost Gains Fair Value
----------------- ----------------- -----------------
<S> <C> <C> <C>
Money market Instruments............................... $ 4,128 $ -- $ 4,128
Certificates of deposit................................ 170 -- 170
Commercial paper....................................... 17,568 $101 17,669
Short-term notes....................................... 5,042 -- 5,042
Auction rate preferred stock........................... 2,325 -- 2,325
Corporate debt securities.............................. 20,181 -- 20,181
----------------- ----------------- -----------------
Available-for-sale investments......................... 49,414 101 49,515
Included in cash & cash equivalents.................... 42,996 -- 42,996
----------------- ----------------- -----------------
Included in available for sale investments............ $ 6,418 $101 $ 6,519
================= ================= =================
</TABLE>
5. Comprehensive Income (Loss)
The components of comprehensive income (loss) are as follows
(in thousands):
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------------
2000 1999
---------------------------
<S> <C> <C>
Net loss.............................................................................. $(20,149) $(12,921)
Change in unrealized gain on available-for-sale investment............................ (83) --
Foreign currency translation adjustment............................................... (1) --
---------------------------
Total comprehensive loss......................................................... $(20,233) $(12,921)
===========================
</TABLE>
Accumulated other comprehensive income presented in the accompanying
consolidated condensed balance sheets consists of the accumulated net unrealized
gain on available-for-sale investments and the cumulative foreign currency
translation adjustment.
6. Recent Accounting Interpretations
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin 101, (SAB 101), "Revenue Recognition in Financial
Statements". SAB 101 summarizes the SEC's views in applying generally accepted
accounting principles to selected revenue recognition issues. We are required
to apply the guidance in SAB 101 to our financial statements no later than the
fourth quarter of 2000. The Company does not expect the adoption of SAB 101
to have a material effect on its financial position or results of operations.
In March 2000, the Financial Accounting Standard Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation - an interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44
clarifies the application of APB Opinion No. 25 and among other issues clarifies
the 6 following: the definition of an employee for purposes of applying APB
Opinion No. 25; the criteria for determining whether a plan qualifies as a
noncompensatory plan; the accounting consequences of various modifications to
the terms of previously fixed stock options or awards; and the accounting for an
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 1, 2000, but certain conclusions in FIN 44 cover specific events
that occurred after either December 15, 1998 or January 12, 2000. The Company
does not expect the application of FIN 44 to have a material impact on the
Company's financial position or results of operations.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
Overview
Since our founding in November 1986, KeraVision has been engaged in the
research and development of technologies for surgical correction of vision
disorders. Although we have been selling our product since 1996, we expect to
continue to incur substantial losses until sufficient revenues can be generated
to offset expenses. Given the uncertainties in developing a market for a new
product, we may not be able to achieve or sustain significant revenue or revenue
growth in the foreseeable future. Furthermore, we expect our overall expenses
could increase as our sales and marketing activities grow.
On April 9, 1999, KeraVision obtained FDA approval to distribute and sell
Intacs in the United States for the treatment of mild myopia in the range of -
1.0 to -3.0 diopters in patients who are 21 years of age or older, who have a
stable refraction and who have up to +1.0 diopter of astigmatism. We are
currently conducting a Phase III clinical trial to expand our approved range of
indication for myopia to include -0.75 to -1.0 diopter and -3.1 to -4.5
diopters. In May 1998, we began limited commercial sales in Canada following
regulatory approval to sell Intacs to treat myopia in the range of -1.0 to -5.0
diopters. In late 1996, we were granted the right to affix the CE mark on Intacs
for myopia which allows KeraVision to sell products to treat myopia in the range
of -1.0 to -5.0 diopters in European Union countries. KeraVision has also
signed distributor agreements in a number of other countries including Korea,
Singapore, Hong Kong, South Africa, and the Middle East to begin limited
training and market development in other countries.
The research, manufacture, sale and distribution of medical devices such as
Intacs are subject to numerous regulations imposed by governmental authorities,
principally the FDA and comparable state and foreign agencies. The regulatory
process is lengthy, expensive and uncertain. Prior to commercial sale in the
United States, most medical devices, including Intacs, must be cleared or
approved by the FDA. Securing FDA approvals and clearances requires the
submission to the FDA of extensive clinical data and supporting information.
Current FDA enforcement policy strictly prohibits the marketing of medical
devices for uses other than those for which the product has been approved or
cleared. Product approvals and clearances can be withdrawn for failure to comply
with regulatory standards or for the occurrence of unforeseen problems following
initial marketing. Foreign governments or agencies also have review processes
for medical devices which present many of the same risks. The right to affix the
CE mark can be withdrawn, resulting in an inability to sell products in European
Union countries.
We cannot be sure that we will achieve significant revenues from sales of
Intacs or any other potential products or become profitable. Although KeraVision
has received approval to sell Intacs in the United States, the European Union
and Canada, we cannot be sure that our Intacs technology will prove to be safe
or effective over the long term in correcting vision, that our Intacs technology
will perform in the manner we anticipate or that Intacs or any other product
developed by us will be commercially successful.
Results of Operations
Three Months Ended June 30, 2000 and 1999
Net sales decreased 82 percent or $3.2 million to $707,000 for the second
quarter ended June 30, 2000 as compared to the $3.9 million in revenues for the
same quarter a year ago. As a result of the reduction in new surgeon training,
training-related surgeon kit sales were down from the second quarter of 1999.
The change in revenue reflects a transition towards building on-going sales from
Intacs procedures, the focus in the first half of 2000, and away from initial
sales of surgeon startup kits, which was the focus in 1999 following FDA
approval in April 1999. Each kit includes two sets of proprietary instruments to
perform the Intacs placement procedure and a supply of 18 Intacs corneal ring
segments. The predominant portion of the revenues received from the sale of the
kits was attributable to the proprietary instruments. Significant growth of our
net sales will be dependent upon our ability to sell Intacs in increasing
volumes. For the three months ended June 30, 2000, net sales benefited from a
favorable change in estimate related to sales return reserves.
Cost of sales and manufacturing expenses totaled $1.4 million in the three-
month period ended June 30, 2000 as compared to $3.0 million in the comparable
prior year period. The decrease in cost of sales and manufacturing expenses
primarily reflected lower variable costs as a result of lower net sales.
8
<PAGE>
Research and development expenses, which include clinical and regulatory
expenses, for the three-month period ended June 30, 2000 were $2.2 million, an
increase of $64,000 from the three-month period ended June 30, 1999. The slight
increase is primarily due to expenses associated with the Phase III clinical
trial on expanded treatment ranges.
Selling, general and administrative expenses of $7.8 million were incurred
in the three-month period ended June 30, 2000, an increase of $3.6 million from
the $4.2 million incurred in the comparable prior year period. The increase is
primarily due to increased staffing and marketing efforts related to market
development in the U.S. which included the development of a new website and
advertising. The Company expects sales and marketing expenses could continue to
increase as further investments in marketing our product in the United States
are incurred.
Interest income and other, net was $574,000 for the three-month period
ended June 30, 2000, as compared to $14,000 in the comparable prior year period.
Interest income increased due to the short-term investment of proceeds from the
secondary public offering completed on August 17, 1999. Interest expense
remained relatively consistent with the comparable prior year period, increasing
$15,000 to $273,000 for the three-month period ended June 30, 2000.
Six months ended June 30, 2000 and 1999
Net sales for the six-month period ended June 30, 2000 totaled $1.7
million, a decrease of $2.7 million from $4.4 million for the six-month period
ended June 30, 1999. As part of the reduction in new surgeon training, training-
related surgeon kit sales were down from the from the six-month period ended
June 30, 1999, which resulted in a reduction in revenues period-over-period of
$2.7 million.
Cost of sales and manufacturing expenses totaled $3.3 million in the 2000
period as compared to $4.6 million in the 1999 period. The decrease in cost of
sales and manufacturing expenses reflected primarily lower variable costs as a
result of lower net sales.
Research and development expenses, which include clinical and regulatory
expenses, for the 2000 period were $4.6 million, which represented an increase
of $0.4 million from the 1999 period. The increase was primarily due to expenses
associated with the Phase III clinical trial on expanded treatment.
Selling, general and administrative expenses were $14.5 million in the 2000
period, which represented an increase of $6.4 million from the 1999 period,
primarily due to increased marketing efforts related to market development in
the U.S.
Interest income and other, net was $1,170,000 for the six-month period
ended June 30, 2000, as compared to $(5,000) in the comparable prior year
period. Interest income increased due to the short-term investment of proceeds
from the secondary public offering completed on August 17, 1999. Interest
expense increased $239,000 to $549,000 for the six-month period ended June 30,
2000. The increase was primarily due to the increase in average short-term debt
balances.
Liquidity and Capital Resources
KeraVision has financed its operations since incorporation primarily
through its public offerings, private sales of preferred stock, interest income,
equipment financing arrangements and the May 1999 acquisition of Transcend
Therapeutics and its net cash balance of $8.5 million. Cash used in operating
activities for the first six months of 2000 increased to $19.0 million from
$11.9 million in the comparable period of the prior year. The use of cash for
operating activities was primarily affected by an increase in net loss
reflecting increased selling, general and administrative, and research and
development expenses. Cash and investments were approximately $30.3 million at
June 30, 2000. Capital expenditures for the first six months of 2000 and 1999
were $686,000 and $809,000, respectively.
9
<PAGE>
The Company believes it has the financial resources to meet business
requirements through at least December 31, 2000. The Company's future cash
requirements, however, may vary materially from those now planned because of
results of research, development and clinical testing, establishment of
relationships with strategic partners, changes in focus and direction of the
Company's research and development programs, changes in the scale, timing, or
cost of the Company's commercial manufacturing facility, competitive and
technological advances, the FDA or other regulatory processes, changes in the
Company's marketing and distribution strategy, and other factors. In addition,
we anticipate that we will need to obtain additional funds in the near future to
continue our business operations. We cannot assure you that we will be able to
obtain additional sources for funding our business operations when necessary,
and we cannot assure you that other sources of funding, if any, will be
available on terms favorable or acceptable to KeraVision. If we fail to obtain
sufficient funds to continue our operations, we may need to delay, scale back or
eliminate some or all of our sales and marketing efforts, research and product
development programs, clinical studies or regulatory activities or license third
parties to commercialize products or technologies that we would otherwise seek
to develop and that such efforts would impact our future results.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
KeraVision is exposed to financial market risks from changes in interest
rates related to our investment portfolio, short-term debt, and capital lease
obligations. To mitigate these risks, we invest in debt instruments that meet
high credit quality standards and we further limit the amount of credit exposure
to any one issue, issuer, or type of instrument. KeraVision also limits the
maturity of debt investments to one year or less. KeraVision does not utilize
derivative financial instruments. As of June 30, 2000, we held $30.3 million of
interest rate sensitive investments in debt securities. The interest rate
exposure of the investments is partially offset by $6.0 million of short-term
debt and capital lease obligations outstanding as of June 30, 2000. A
hypothetical 1% increase in interest rates would result in a decrease in the net
fair value of the interest rate sensitive securities of less than $20,000 as of
June 30, 2000. This estimate is based on sensitivity analyses performed on our
financial positions at June 30, 2000. Actual results may differ materially.
10
<PAGE>
PART II. OTHER INFORMATION
Item 2. Changes in Securities
The Company sold no unregistered securities during the period but did issue
11,352 additional shares of its Series B Convertible Preferred Stock to holders
of Series B Convertible Preferred Stock as a stock dividend for the previous
quarter. These dividend shares were not registered under the Securities Act of
1933, because their issuance did not constitute a sale under the Securities Act
of 1933. The shares issued have the same conversion and other rights as the
originally issued shares of Series B Convertible Preferred Stock. On July 5,
2000, the holder of a majority of the outstanding shares of Series B Convertible
Preferred Stock notified the Company of its election to set the conversion price
of the Series B shares at $5.74 per share pursuant to the provisions of the
Certificate of Designation of Rights, Preferences and Privileges of Series B
Convertible Preferred Stock.
Item 4. Submission of Matters to a Vote of Security Holders
1. The 2000 Annual Meeting of Stockholders of the Company was held
pursuant to notice at 9:00 a.m., Pacific Time on May 17, 2000 at the
Embassy Suites, 901 East Calaveras Blvd., Milpitas, California. There
were present at the meeting, in person or represented by the proxy,
the holders of 16,370,744 shares of Common Stock, including the
holders of shares of Series B Preferred stock who vote on an as-
converted basis, or 87% of the total outstanding and voted in the
following manner:
(a) As listed below, all of Company's nominees for directors were elected
at the meeting:
<TABLE>
<CAPTION>
No. of Common No. of Common
Name of Nominee Votes in Favor Votes Withheld
--------------- -------------- --------------
<S> <C> <C>
Lawrence A. Lehmkuhl...................... 15,820,386 550,358
Peter L. Wilson........................... 15,821,656 549,088
</TABLE>
(b) Approval of the Amendment to the 1995 Stock Option Plan was ratified
and approved with 14,795,972 shares voting in favor, 1,471,490 shares
voting against and 103,282 shares abstaining.
(c) Approval of the Amendment of the 1995 Stock Option Plan to provide
grants of restricted stock was ratified and approved with 14,662,314
shares voting in favor, 1,578,337 shares voting against and 130,093
shares abstaining.
(c) Approval of the Amendment of the Company's 1995 Directors' Stock
Option Plan was ratified and approved with 14,700,784 shares voting in
favor, 1,537,446 shares voting against and 132,514 shares abstaining.
(d) Approval of the Amendment of the 1995 Directors' Stock Option Plan was
ratified and approved with 14,494,109 shares voting in favor,
1,759,437 shares voting against and 117,198 shares abstaining.
(f) The appointment of Ernst & Young, LLP as independent auditors of the
Company for the fiscal year ending December 31, 2000 was ratified and
approved with 16,046,790 shares voting in favor, 249,438 shares voting
against and 74,516 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1 Amended and Restated Certificate of Incorporation of the Company (filed as
Exhibit 3.1 to the Company's registration statement on Form S-1 (File No. 33-
92880) and incorporated herein by reference)
3.2 Amended and Restated Bylaws of the Company, as amended (filed as Exhibit
3.2 to the Company's Annual Report on Form 10-K/A for the year ended December
31, 1998 filed with the Commission on May 3, 1999 ("Form 10-K/A") and
incorporated herein by reference)
11
<PAGE>
4.1 Preferred Shares Rights Agreement, dated as of August 18, 1997, between the
Company and Bank Boston, N.A., including the Certificate of Designation of
Rights, Preferences and 13 Privileges of Series A Participating Preferred Stock
attached thereto as Exhibit A (filed as Exhibit 4.1 to the Company's Form 8-A
filed with the Commission on August 25, 1997 and incorporated herein by
reference)
4.2 Investors' Rights Agreement dated as of June 12, 1998, by and among the
Company and the investors listed on Exhibit A thereto (filed as Exhibit 4.2 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1998
filed with the Commission on April 1, 1999 ("Form 10-K") and incorporated herein
by reference)
4.3 Certificate of Designation of Rights, Preferences and Privileges of Series
B Convertible Preferred Stock of the Company (filed as Exhibit 3.3 to the
Company's Form 10-K and incorporated herein by reference)
27.1 Financial Data Schedule (filed via the EDGAR system)
(b) The Company filed the following Current Reports on Form 8-K during the
quarterly period ended June 30, 2000:
Date of Report Items Reported Financial Statements Filed
May 23, 2000 5,7 None
May 5, 2000 5,7 None
April 19, 2000 5,7 Yes
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KeraVision, Inc.
By: /s/ Mark Fischer-Colbrie
---------------------------------------------
Mark Fischer-Colbrie
Vice President, Finance and Administration
and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer)
Date: August 10, 2000
13
