As filed with the Securities and Exchange Commission on December 21, 1999
Registration No. 333-92183
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PREMIER LASER SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0472684
(State or other jurisdiction or (I.R.S. Employer Identification No.)
incorporation or organization)
3 MORGAN
IRVINE, CALIFORNIA 92618
(949) 859-0656
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
ROBERT V. MAHONEY WITH COPIES TO:
CHIEF FINANCIAL OFFICER THOMAS G. BROCKINGTON, ESQ.
PREMIER LASER SYSTEMS, INC. ALISON M. BARBAROSH, ESQ.
3 MORGAN RUTAN & TUCKER, LLP
IRVINE, CALIFORNIA 92618 611 ANTON BOULEVARD, 14TH FLOOR
(949) 859-0656 COSTA MESA, CALIFORNIA 92626
(Name, address, including zip code, and (714) 641-5100
telephone number, including area code, of agent
for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO 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, 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
====================================================================================================================================
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PRICE PER SHARE (2) PRICE (2) REGISTRATION FEE
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Class A common stock, no par 838,667 shares(3) $1.53125 $1,284,208.80 $339.03(4)
value
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(1) In the event of a stock split, stock dividend or similar transaction
involving Premier's common stock, in order to prevent dilution, the number
of shares registered shall automatically be increased to cover the
additional shares in accordance with Rule 416(a) under the Securities Act
of 1933, as amended.
(2) The aggregate offering price of shares of Premier's common stock is
estimated solely for purposes of calculating the registration fee payable
pursuant hereto, as determined in accordance with Rule 457(c) as of
December 16, 1999.
(3) Represents shares of common stock issuable following conversion of
presently outstanding convertible debentures held by the registered
security holders.
(4) A registration fee in the amount of $405.67 has previously been paid.
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.
PROSPECTUS
PREMIER LASER SYSTEMS, INC.
3 MORGAN
IRVINE, CALIFORNIA 92618
(949) 859-0656
838,667 shares of (no par value) common stock
The securityholders listed in this Prospectus under the section
"Registered Securityholders" may offer and sell a total of 838,667 shares of our
company's common stock, no par value, which shares are issuable upon conversion
of convertible debentures (the "Debentures") previously issued to such
securityholders. This Prospectus has been prepared for the purposes of
registering the shares under the Securities Act of 1933, as amended (the
"Securities Act"), and to allow the Registered Securityholders to make future
sales to the public without restriction. To our knowledge, the Registered
Securityholders have made no arrangement with any brokerage firm for the sale of
the shares.
The Registered Securityholders may sell their shares of common stock
described in this Prospectus for their own benefit in public or private
transactions, on or off the Nasdaq National Market, at prevailing market prices,
or at privately negotiated prices. The Registered Securityholders may sell the
shares directly to purchasers or through brokers or dealers. Brokers or dealers
may receive compensation in the form of discounts, concessions or commissions
from the Registered Securityholders. The compensation to a particular
underwriter, broker-dealer or agent may be in excess of customary commissions.
The Registered Securityholders will pay all commissions, transfer taxes and
other expenses associated with their sales of the shares. We will pay the
expenses of the preparation of this Prospectus. We have also agreed to indemnify
certain Registered Securityholders against certain liabilities, including,
without limitation, liabilities arising under the Securities Act. We will not
receive any of the proceeds from the Registered Securityholders' sales of the
shares. In addition to sales under this Prospectus, the Registered
Securityholders may also engage in other sales of shares under Rule 144 or other
exempt resale transactions. There can be no assurance that any or all of the
Registered Securityholders will sell any or all of the shares offered pursuant
this Prospectus. More information is provided in the section titled "Plan of
Distribution."
Our common stock is listed on the Nasdaq National Market under the
symbol "PLSIA." On December 16, 1999, the last reported sale price of our common
stock on the Nasdaq National Market was $1.4375 per share.
__________
SEE "RISK FACTORS" BEGINNING ON PAGE 2, FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY INVESTORS.
__________
This Prospectus is dated December __, 1999
The information in this Prospectus is not complete and may be changed.
The securities may not be sold 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.
__________
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.
RISK FACTORS
Before you invest in our common stock, you should be aware that there
are various risks, including those described below. You should carefully
consider these risk factors, together with all the other information included in
this prospectus, before you decide whether to purchase shares of our common
stock.
THERE ARE RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS MADE BY US AND ACTUAL
RESULTS MAY DIFFER.
Some of the information in this prospectus contains forward-looking
statements that involve substantial risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. You should
read statements that contain these words carefully because they:
o discuss our future expectations
o contain projections of our future results of operations or of
our financial condition
o state other "forward-looking" information
We believe it is important to communicate our expectations to our
investors. However, there may be events in the future that we are not able to
accurately predict or over which we have no control. The risk factors listed in
this section, as well as any cautionary language in this prospectus, provide
examples of risks, uncertainties and events that may cause our actual results to
differ materially from the expectations we describe in our forward-looking
statements. Before you invest in our common stock, you should be aware that the
occurrence of the events described in these risk factors and elsewhere in this
prospectus could have a material adverse effect on our business, results of
operations and financial condition.
RISKS RELATED TO OUR BUSINESS
IF WE ARE UNABLE TO SECURE ADDITIONAL FINANCING IN THE NEAR FUTURE, WE WILL HAVE
SEVERE DIFFICULTIES FINANCING OUR BUSINESS.
In the future, we will require substantial additional funds for
operating expenses, research and development programs, preclinical and clinical
testing, development of our sales and distribution force, operating expenses,
regulatory processes and manufacturing and marketing programs. Our capital
requirements may vary, and will depend on both internal and external factors.
Internal factors affecting our capital requirements include:
o our ability to generate profits and cash flow from operations
o the progress of research and development programs
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o results of preclinical and clinical testing
o the cost of filing, prosecuting, defending and enforcing any
patent claims and other intellectual property rights
o developments and changes in our existing research
o licensing and other relationships
o the terms of any new collaborative, licensing and other
arrangements that we may establish
o the amount of legal, accounting and administrative costs
incurred in connection with pending litigation
External factors affecting our capital requirements include:
o competing technological and market developments
o the time and cost involved in obtaining regulatory approvals
We are currently experiencing cash flow difficulties. Our currently
available short-term assets are not anticipated to be sufficient to meet our
operating expenses and capital expenditures past January, 2000. We are currently
in the process of seeking additional financing. We do not know if additional
financing will be available when needed, or if it is available, if it will be
available on acceptable terms. Having insufficient funds would likely materially
and adversely affect our business. For instance, we may be prevented from
purchasing needed inventory and from implementing our business strategy. We may
also be required to delay, scale back or eliminate research and product
development programs or to license to third parties rights to commercialize
products or technologies that we would otherwise seek to develop internally.
WE HAVE INCURRED NET LOSSES IN THE PAST AND EXPECT TO INCUR FUTURE LOSSES WHICH
MAY NEGATIVELY IMPACT OUR ABILITY TO SUSTAIN OUR OPERATIONS.
We incurred net losses of approximately $76,343,000 from April 1, 1995
through March 31, 1999, and approximately $30,841,000 for the year ended March
31, 1999. As of September 30, 1999, we had an accumulated deficit of
approximately $94,301,996. We expect to continue to incur net losses until
product sales generate sufficient revenues to fund our continuing operations. We
may fail to achieve significant revenues from sales or achieve or sustain
profitability. Our ability to achieve profitability in the future will depend in
part on our ability to continue to successfully develop clinical applications,
obtain regulatory approvals for our products and sell these products on a wide
scale. These risks apply to both our laser products and our ophthalmic
diagnostic products.
THE HIGH COST OF DENTAL LASERS, SAFETY AND EFFICACY CONCERNS OF DENTISTS AND
PATIENTS AND THE SUBSTANTIAL MARKET ACCEPTANCE OF DENTAL DRILLS MAY PREVENT US
FROM ACHIEVING THE BROAD MARKET ACCEPTANCE WHICH IS NECESSARY FOR OUR SUCCESS.
Our products may not be accepted by the medical or dental community or
by patients. We do not know if these products can be successfully commercialized
on a broad basis. The acceptance of dental lasers may be adversely affected by
their high cost, concerns by patients and dentists relating to their safety and
efficacy, and the substantial market acceptance and penetration of alternative
dental tools such as the dental drill. Our future sales and profitability depend
in part on our ability to demonstrate to dentists, ophthalmologists,
optometrists and other physicians the potential cost and performance advantages
of our laser systems, diagnostic products and other products over traditional
methods of treatment and over competitive products. Current economic pressure
may make doctors and dentists reluctant to purchase substantial capital
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equipment or invest in new technology. We currently have a limited sales force
and will need to hire additional sales and marketing personnel to increase the
general acceptance of our products. Of all the factors impacting our
profitability, the failure of our products to achieve broad market acceptance
would have the greatest negative impact on our business, financial condition and
results of operations and our profitability.
WE ARE INVOLVED IN PENDING LITIGATION AND A REGULATORY INVESTIGATION AND MAY BE
ADVERSELY AFFECTED BY AN ADVERSE OUTCOME IN THE LAWSUIT OR BY THE COSTS OF
DEFENDING THIS LAWSUIT.
We have been sued in a number of related securities class action
matters, generally relating to allegations of misrepresentations during the
period from May 7, 1997 to April 15, 1998. We have reached an agreement in
principle to settle this litigation and recorded an expense in the quarter ended
December 31, 1998, relating to this settlement. In the quarter ended March 31,
1999, we recorded an additional expenses of $250,000 to cover continuing legal
fees incurred in connection with this settlement. However, this settlement is
subject to several conditions, and it is possible that it may not be completed,
in which case the litigation would continue. An adverse judgment entered in this
litigation could materially and adversely affect our business and results of
operations. In addition, the Securities and Exchange Commission has commenced an
investigation of our practices and procedures relating to revenue recognition
issues and related matters. The Securities and Exchange Commission has begun
taking depositions of past and present employees as well as our outside
accountants. The costs of our continuing defense of the litigation matters and
responses to the regulatory investigations, including accounting and legal fees
as well as management time and effort, will be substantial, and we expect these
costs to materially and adversely affect our results of operations until these
matters are resolved. We do not know when these matters will be resolved.
In addition, the Securities and Exchange Commission is empowered to
assess substantial penalties against us in connection with its findings in the
pending investigation. The imposition of any of these penalties could materially
and adversely affect our business, financial condition and results of
operations.
IF WE ARE UNABLE TO SUCCESSFULLY INTEGRATE THE OPHTHALMIC IMAGING SYSTEMS
("OIS") BUSINESS WITH OUR OTHER OPERATIONS, WE MAY INCUR SUBSTANTIAL AND
UNANTICIPATED EXPENSES AND OPERATING INEFFICIENCIES.
We acquired a majority of the outstanding common stock of OIS in 1998.
In March 1999, we agreed to manufacture OIS's products on an outsourcing basis.
In addition, we have agreed with OIS to acquire the remaining outstanding stock
of OIS, subject to satisfaction of certain conditions. We are not sure if the
synergies of the two entities will allow us to reduce expenses in such a way as
to make OIS profitable. In addition, members of our management will have to
continue to expend time and effort on new activities relating to the OIS
operations, which will detract from their time available to attend to our other
activities. We cannot assure you that the expenses or dislocations that we may
suffer as a result of the coordination of these businesses will not be material.
BECAUSE SOME OF THE COMPONENTS WE USE ARE NOT WIDELY AVAILABLE, THERE IS A RISK
THAT WE MAY NOT ALWAYS BE ABLE TO OBTAIN THESE COMPONENTS, WHICH COULD PREVENT
US FROM FILLING ORDERS ON TIME AND REDUCE OUR SALES.
We purchase some of the raw materials, components and subassemblies
included in our products from a limited group of qualified suppliers and do not
maintain long-term supply contracts with any of our key suppliers. Some of the
components used by OIS are manufactured by a sole vendor, including Foresight
Imaging for its prism card and Kodak for its 12 bit camera. In addition, our
Arago laser product is manufactured for us by one supplier, LaserMed, Inc.
Further, our components are subject to rapid innovation and obsolescence. The
discontinuance of the manufacturing of these components may require us to
redesign some of the hardware and software used in our products to accommodate a
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replacement component. While we believe that suppliers could be found for all of
our components and products, we cannot assure you that any supplier could be
replaced in a timely manner. Any interruption in the supply of key components
could materially harm our ability to manufacture our products and our business,
financial condition and results of operations.
IN ORDER TO CONTINUE TO SELL OUR PRODUCTS IN FOREIGN MARKETS, WE MUST DEVELOP
AND MAINTAIN FOREIGN SALES DISTRIBUTION CHANNELS AND MANAGE POLITICAL AND
ECONOMIC INSTABILITY IN FOREIGN MARKETS AND DEAL WITH GOVERNMENTAL QUOTAS AND
OTHER REGULATIONS.
A substantial portion of our sales are made in foreign markets. The
primary risks to which we are exposed due to our foreign sales are the
difficulty and expense of maintaining foreign sales distribution channels,
political and economic instability in foreign markets and governmental quotas
and other regulations.
The regulation of medical devices worldwide also continues to develop,
and it is possible that new laws or regulations could be enacted which would
have an adverse effect on our business. In addition, we may experience
additional difficulties in providing prompt and cost effective service of our
medical lasers in foreign countries. We do not carry insurance against these
risks. The occurrence of any one or more of these events may individually or in
the aggregate have a material adverse effect upon our business, financial
condition and results of operations.
IF WE CANNOT ADAPT TO TECHNOLOGICAL ADVANCES, OUR PRODUCTS MAY BECOME
TECHNOLOGICALLY OBSOLETE AND OUR PRODUCT SALES COULD SIGNIFICANTLY DECLINE.
The markets in which our medical products compete are subject to rapid
technological change as well as the potential development of alternative
surgical techniques or new pharmaceutical products. These changes could render
our products uncompetitive or obsolete. We will be required to invest in
research and development to attempt to maintain and enhance our existing
products and develop new products. We do not know if our research and
development efforts will result in the introduction of new products or product
improvements.
IF WE ARE UNABLE TO PROTECT OUR PATENTS AND PROPRIETARY TECHNOLOGY WE MAY NOT BE
ABLE TO COMPETE EFFECTIVELY.
Our success will depend in part on our ability to obtain patent
protection for products and processes, to preserve our trade secrets and to
operate without infringing the proprietary rights of third parties. While we
hold a number of U.S. and foreign patents and have other patent applications
pending in the United States and foreign countries, we cannot assure you that
any additional patents will be issued, that the scope of any patent protection
will exclude competitors or that any of our patents will be held valid if
subsequently challenged. Further, other companies may independently develop
similar products, duplicate our products or design products that circumvent our
patents. We are aware of certain patents which, along with other patents that
may exist or be granted in the future, could restrict our right to market some
of our technologies without a license, including, among others, patents relating
to our lens emulsification product and ophthalmic probes for the Er:YAG laser.
We also rely upon unpatented trade secrets, and we cannot assure you
that others will not independently develop or otherwise acquire substantially
equivalent trade secrets. In addition, at each balance sheet date, we are
required to review the value of our intangible assets based on various factors,
such as changes in technology. Any adjustment downward in the value of our
intangible assets may result in a write-off of the intangible asset and a
substantial charge to earnings, which would adversely affect our operating
results in the future.
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IN OUR BUSINESS, WE COULD BECOME INVOLVED IN PATENT AND INTELLECTUAL PROPERTY
LITIGATION, IN WHICH AN ADVERSE DETERMINATION COULD SUBJECT US TO SIGNIFICANT
LIABILITIES AND RESTRICT OUR MANUFACTURING RIGHTS.
In the past, we have received allegations that some of our laser and
diagnostic products infringe on other patents. There has been significant patent
litigation in the medical device industry. Adverse determinations in litigation
or other patent proceedings to which we may become a party could subject us to
significant legal judgments or other liabilities to third parties and could
require us to seek licenses from third parties that may or may not be
economically viable. We cannot assure you that any licenses required under these
or any other patents or proprietary rights would be available on terms
acceptable to us. If we do not obtain these licenses, we could encounter delays
in product introductions while we attempt to design around these patents, or we
could find that the development, manufacture or sale of products requiring such
licenses could be enjoined.
OUR BUSINESS IS SUBJECT TO GOVERNMENTAL REGULATION WHICH IMPOSES SIGNIFICANT
COSTS ON US AND IF NOT COMPLIED WITH COULD LEAD TO THE ASSESSMENT OF PENALTIES.
Our products are regulated as medical devices by the United States Food
& Drug Administration. As such, these devices require either Section 510(k)
premarket clearance or approval of a premarket approval application by the FDA
prior to commercialization. Satisfaction of regulatory requirements is expensive
and may take several years to complete. We cannot assure you that further
clinical trials of our medical products or of any future products will be
successfully completed or, if they are completed, that any requisite FDA or
foreign governmental approvals will be obtained.
FDA or other governmental approvals of products we may develop in the
future may require substantial filing fees which could limit the number of
applications we seek and may entail limitations on the indicated uses for which
our products may be marketed. In addition, approved or cleared products may be
subject to additional testing and surveillance programs required by the FDA and
other regulatory agencies, and product approvals and clearances could be
withdrawn for failure to comply with regulatory standards or by the occurrence
of unforeseen problems following initial marketing. Also, we have made
modifications to some of our existing products which we do not believe require
the submission of a new 510(k) notification to the FDA. However, we cannot
assure you that the FDA would agree with our determination. If the FDA did not
agree with our determination, they could require us to cease marketing one or
more of the modified devices until the devices have been cleared.
We are also required to adhere to a wide variety of other regulations
governing the operation of our business. Noncompliance with state, local,
federal or foreign requirements can result in serious penalties that could harm
our business.
THE INTENSE COMPETITION WE FACE COULD RESULT IN REDUCED SALES AND DOWNWARD
PRESSURE ON THE PRICES OF OUR PRODUCTS.
We are, and will continue to be, subject to intense competition in our
targeted markets, principally from businesses providing other traditional
surgical and nonsurgical treatments, including existing and developing
technologies, and competitive products. Many of our competitors have
substantially greater financial, marketing and manufacturing resources and
experience than us. In addition, we expect that other companies will enter the
laser market, particularly as medical lasers gain increasing market acceptance.
Significant competitive factors which will affect future sales in the
marketplace include regulatory approvals, performance, pricing and general
market acceptance.
The ophthalmic diagnostic market is also highly competitive. There are
many companies engaged in this market, some with significantly greater resources
than ours. Our competitors may be able to develop technologies, procedures or
products that are more effective or economical than ours, or that would render
our products obsolete or noncompetitive.
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To continue to remain competitive, we must develop new software and
hardware meeting the needs of ophthalmologists and optometrists. Our future
revenues will depend, in part, on our ability to develop and commercialize these
new products as well as on the success of development and commercialization
efforts of our competitors.
A SUCCESSFUL PRODUCT LIABILITY CLAIM ASSERTED AGAINST US DUE TO A DEFECT IN ONE
OF OUR PRODUCTS IN EXCESS OF OUR INSURANCE COVERAGE WOULD HARM OUR BUSINESS.
The sale of our medical products involves the inherent risk of product
liability claims against us. We currently maintain product liability insurance
coverage in the amount of $5 million per occurrence and $5 million in the
aggregate, but this insurance is expensive, subject to various coverage
exclusions and may not be obtainable in the future on terms acceptable to us. We
do not know whether claims against us arising with respect to our products will
be successfully defended or that our insurance will be sufficient to cover
liabilities arising from these claims. A successful claim against us in excess
of our insurance coverage could materially harm our business.
THERE IS UNCERTAINTY RELATING TO THIRD PARTY REIMBURSEMENT WHICH IS CRITICAL TO
MARKET ACCEPTANCE OF OUR PRODUCTS.
Our laser systems and other products are generally purchased by
physicians, dentists and surgical centers which then bill various third party
payors, such as government programs and private insurance plans, for the
procedures conducted using these products. Third-party payors carefully review
and are increasingly challenging the prices charged for medical products and
services, and scrutinizing whether to cover new products and evaluating the
level of reimbursement for covered products. While we believe that the
procedures using our products have generally been reimbursed, payors may deny
coverage and reimbursement for our products if they determine that the device
was not reasonable and necessary for the purpose for which it was used, was
investigational or not cost-effective. As a result, we cannot assure you that
reimbursement from third party payors for these procedures will be available or
if available, that reimbursement will not be limited. If third party
reimbursement of these procedures is not available, it will be more difficult
for us to sell our products on a profitable basis. Moreover, we are unable to
predict what 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 may have on us.
THE COVERAGE AND SPENDING LIMITATIONS CONTAINED IN HEALTH CARE REFORM PROPOSALS
WOULD, IF ADOPTED, REDUCE DEMAND FOR OUR PRODUCTS.
Several states and the United States government are investigating a
variety of alternatives to reform the health care delivery system and further
reduce and control health care spending. These reform efforts include proposals
to limit spending on health care items and services, limit coverage for new
technology and limit or control the price health care providers and drug and
device manufacturers may charge for their services and products. If adopted and
implemented, such reforms could have a material adverse effect on our business,
financial condition and results of operations.
IF WE EXPERIENCE PROBLEMS WITH YEAR 2000 COMPLIANCE OUR OPERATIONS MAY BE
DISRUPTED.
Many existing computer programs use only two digits to identify the
year in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. As a result, any
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the Year 2000. This could result in system
failure or miscalculations, causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices or
engage in similar normal business activities.
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We are heavily dependent upon the proper functioning of our own
computer and data-dependent systems. This includes, but it not limited to, our
support/administrative and operational/production systems. Any failure or
malfunctioning on the part of these or other systems could harm our business in
ways that we currently do not know and cannot discern, quantify or otherwise
anticipate. In addition, if our key vendors experience Year 2000 compliance
issues, then our business could be harmed. Due to the interrelated nature of
international commerce, if there is a failure in Year 2000 compliance by us or
one of our direct or indirect business partners, we could suffer major
disruptions in our ability to call on customers, obtain orders from customers,
obtain parts from suppliers, manufacture products for sale, ship products to our
customers, or receive payment for our sales.
We are currently in the final phase of identifying and evaluating the
potential impacts of the Year 2000 on our systems. We design, manufacture and
sell medical products which contain computer chips and we utilize software
developed by other companies. We rely on external business partners. As such,
there can be no assurance that our business will not be negatively affected by
Year 2000 problems experienced by these business partners.
RISKS RELATED TO THIS OFFERING
CHANGES IN REVENUE AND OPERATING RESULTS MAY CAUSE THE MARKET PRICE OF OUR STOCK
TO FLUCTUATE, WHICH MAY ADVERSELY AFFECT OUR ABILITY TO RAISE ADDITIONAL
CAPITAL.
Due to the relatively high sales price of our products and low sales
unit volume, minor timing differences in receipt of customer orders have
produced and could continue to produce significant fluctuations in quarterly
results. In addition, if anticipated sales and shipments in any quarter do not
occur when expected, expenditures and inventory levels could be
disproportionately high, and our operating results for that quarter, and
potentially for future quarters, would be adversely affected. Quarterly results
may also fluctuate based on a variety of other factors. The important factors
which may cause our quarterly results to fluctuate are seasonality and
production delays. During the past four fiscal quarters, our net loss has
fluctuated from a low of $2.1 million to a high of $12.9 million. Such
fluctuations may cause our stock price to decline and adversely affect our
ability to raise additional capital.
THE VOLATILITY OF OUR STOCK PRICE MAKES THESE SECURITIES RISKY FOR THOSE SEEKING
A STABLE INVESTMENT.
The market price of our common stock is very volatile, and our common
stock therefore may not be a suitable investment for those who seek stable
investment prices over the short or long term. Our common stock was first
publicly traded in December 1994 and has had last reported closing sale prices
ranging from a low of $1.38 per share in August 1999 to a high of $14.00 per
share in May 1997. The market price of our common stock could continue to
fluctuate substantially due to a variety of risk factors, including those
described elsewhere in this prospectus. The market price for our common stock
may also be affected by our ability to meet analysts' expectations. Any failure
to meet these expectations, even slightly, could have an adverse effect on the
market price of our common stock. In addition, the market prices of securities
issued by many companies may change for reasons unrelated to the operating
performance of these companies. In the past, following periods of volatility in
the market price of a company's securities, securities class action litigation
has often been instituted against the company. If similar litigation were
instituted against us, it could result in substantial costs and a diversion of
our management's attention and resources, which could have an adverse effect on
our business, results of operations and financial condition.
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A SIGNIFICANT NUMBER OF SHARES ARE ELIGIBLE FOR SALE, AND IF SOLD, THESE SHARES
MAY CREATE EXCESS SUPPLY IN THE MARKET CAUSING OUR STOCK PRICE TO DECLINE.
Sales of a substantial number of our shares of common stock in the
public market could adversely affect the market price for our common stock. At
this time, approximately 7.6 million shares of our common stock are issuable
upon the full exercise of our outstanding Class B Warrants, and over 7.4 million
shares of our common stock are issuable upon exercise of other outstanding
warrants and options and conversion of outstanding debentures. The existence of
these outstanding warrants and options could adversely affect our ability to
obtain future financing. We have also reserved 2,250,000 shares of our common
stock for issuance in connection with the proposed settlement of outstanding
litigation. The consummation of this settlement will require satisfaction of a
number of conditions, and we cannot assure you that the settlement will be
completed.
The price which we may receive for our common stock issued upon
exercise of outstanding options and warrants will likely be less than the market
price of our common stock at the time these options and warrants are exercised.
Moreover, the holders of the options and warrants might be expected to exercise
them at a time when we would, in all likelihood, be able to obtain needed
capital by a new offering of our securities on terms more favorable than those
provided for by the options and warrants.
OUR PREFERRED STOCK MAY DELAY OR PREVENT A TAKEOVER OF OUR COMPANY POSSIBLY
PREVENTING YOU FROM OBTAINING HIGHER SHARE PRICES.
Our articles of incorporation authorize the issuance of 8,850,000
shares of "blank check" preferred stock, which will have terms as may be
determined from time to time by the board of directors. Accordingly, the board
of directors is empowered, without shareholder approval, to issue preferred
stock with terms which could adversely affect the rights of the holders of the
common stock. The preferred stock could also be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of Premier. This could have the effect of preventing others from seeking
to acquire your shares in transactions at premium prices.
In March 1998, we adopted a Shareholder Rights Plan, which entitles
certain of our shareholders to purchase our Series A Junior Participating
Preferred Stock. These rights are not exercisable until the acquisition by a
person or affiliated group of 15% or more of the outstanding shares of our
common stock, or the commencement or announcement of a tender offer or exchange
offer which would result in the acquisition of 15% or more of our outstanding
shares. Upon request, we will provide you with a copy of the Shareholder Rights
Plan. The Shareholder Rights Plan may have the effect of discouraging, delaying
or preventing a change of control of Premier.
SHORT SELLING OF OUR COMMON STOCK COULD ADVERSELY AFFECT OUR STOCK PRICE.
If a significant number of shares of common stock which are issued upon
conversion of the debentures and payment of interest thereon are then sold in
the market, the price of our common stock could be depressed due to the presence
of these additional shares in the market. This downward pressure could encourage
short sales of common stock by the selling shareholders or others. By increasing
the number of shares offered for sale, material amounts of short selling could
place further downward pressure on the market price of the common stock.
9
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement we filed with the
Securities and Exchange Commission (the "SEC"). You should rely only on the
information incorporated by reference or provided in this Prospectus. We have
not authorized anyone else to provide you with different information. The
Registered Securityholders will not make an offer of the shares in any state
where the offer is not permitted. You should not assume that the information in
this Prospectus is accurate as of any date other than the date on the front of
the document.
USE OF PROCEEDS
The Registered Securityholders will directly receive the proceeds from
the sale of the shares. We will not receive any proceeds from the sale of the
shares offered by this Prospectus.
DILUTION
The following discussion and table treats our Class A Common Stock,
Class E-1 Common Stock and Class E-2 Common Stock as a single class.
As of September 30, 1999, we had a net tangible book value of
$(2,600,000), or $(0.15) per share of common stock. Net tangible book value per
share represents the amount of total tangible assets less the amount of our
total liabilities, divided by the number of shares of common stock outstanding.
After giving effect to the issuance and conversion of the debentures and
exercise of the warrants, our adjusted pro forma net tangible book value as of
September 30, 1999 would have been $(1,353,000), or $(0.07) per share of common
stock. This amount represents an immediate increase in pro forma net tangible
book value of $0.08 per share to our existing shareholders and an immediate
dilution to the persons converting the debentures and exercising the warrants of
approximately $1.57 per share. Dilution is determined by subtracting pro forma
net tangible book value per share of common stock after this offering from the
price paid by new investors for a share of our common stock. The following table
illustrates this dilution on a per share basis and assume that all of the
warrants will be exercised:
Assumed average price per share(1)...................................................$ 1.50
Net tangible book value per share before exercise ..................$(0.15)
Increase per share attributable to the conversion of the
debentures and exercise of the warrants ..........................$ 0.08
Pro forma net tangible book value per share after conversion and exercise............$(0.07)
-------
Dilution of net tangible book value..................................................$ 1.57
=======
- -----------
(1) The debentures are convertible into common stock based on the closing
sale price of the common stock on the day the debenture is converted.
Accordingly, the conversion price for the debentures will fluctuate on
a daily basis. For purposes of this dilution table, we have assumed a
conversion price of $1.50 per share and, based on such assumed price,
the outstanding debentures would be convertible into approximately
838,667 shares of common stock. The assumed average price per share
equals the total amount that would be received upon conversion of the
debentures and exercise of the warrants, divided by this assumed number
of shares into which the debentures would have been convertible plus
the number of shares issuable upon exercise of the warrants.
10
REGISTERED SECURITYHOLDERS
The following table sets forth certain information as of December 16,
1999, with respect to each Registered Securityholder . The securities registered
under the Registration Statement of which this Prospectus is a part include
securities issuable upon the conversion of convertible debentures. The holders
of such debentures are entitled to determine whether and when to convert such
debentures, except that under certain conditions we may require the Registered
Securityholders to convert the debentures into common stock, in accordance with
their terms.. We will not receive any of the proceeds from the sale of the
shares by the Registered Securityholders. None of the Registered Securityholders
will beneficially own more than 1% of our outstanding shares after the sale of
the securities offered hereby.
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES
NAME OF REGISTERED BENEFICIALLY OWNED BEING OFFERED PURSUANT BENEFICIALLY
SHAREHOLDER PRIOR TO THIS OFFERING(1) TO THIS PROSPECTUS(1) OWNED AFTER OFFERING(2)
------------------ ------------------------- ----------------------- -----------------------
Big Sky Laser 400,000 400,000 0
Technologies, Inc.
Knobbe, Martens, Olson 233,333 233,333 0
& Bear, LLP
Paul, Hastings, Janofsky 64,667 64,667 0
& Walker LLP
Rutan & Tucker, LLP 140,667 140,667 0
-----------------------
(1) Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. All of the securities being registered consist of shares of
Class A Common Stock. The number of shares of common stock issuable
upon conversion of the debentures is calculated by dividing the amount
of the debenture by the closing sale price of the common stock on the
day before the debenture is converted. For purposes of this Prospectus
and the Registration Statement, we have assumed a closing sale price of
$1.50 per share. For each of the Registered Securityholders, the number
of shares of common stock beneficially owned and being offered under
the Prospectus represents the number of shares of our common stock
issuable upon conversion of convertible debentures within 60 days.
(2) Assumes that all of the shares are sold pursuant to this Prospectus.
Other than broker discounts and commissions, if any, we have agreed to
pay the expenses in connection with this Prospectus.
11
PLAN OF DISTRIBUTION
The Registered Securityholders have advised us that they will offer for
sale, from time to time, all or a portion of the shares offered by this
Prospectus in one or more private or negotiated transactions, in open market
transactions on the Nasdaq National Market, in settlement of short sale
transactions, in settlement of option transactions, or otherwise, or a
combination of these methods, at prices and terms then obtainable, at fixed
prices, at prices then prevailing at the time of sale, at prices related to such
prevailing prices, or at negotiated prices or otherwise. The Registered
Securityholders may effect these transactions by selling the shares (i) to or
through underwriters; (ii) through broker-dealers or agents, which may include
underwriters, including: (a) in a block trade in which the broker or dealer so
engaged will attempt to sell the shares of common stock as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) in purchases by a broker or dealer and resale by such broker or
dealer as a principal for its account pursuant to this Prospectus; (c) in
ordinary brokerage transactions and (d) in transactions in which the broker
solicits purchasers; or (iii) directly to one or more purchasers. THE REGISTERED
SECURITYHOLDERS AND ANY UNDERWRITERS, DEALERS, BROKERS OR AGENTS EXECUTING
SELLING ORDERS ON BEHALF OF THE REGISTERED SECURITYHOLDERS MAY BE DEEMED TO BE
"UNDERWRITERS" WITHIN THE MEANING OF THE SECURITIES ACT AND ANY PROFITS ON THE
SALE OF THE SHARES BY THEM AND ANY DISCOUNTS, COMMISSIONS OR CONCESSIONS
RECEIVED BY SUCH UNDERWRITERS, DEALERS, BROKERS OR AGENTS MAY BE DEEMED TO BE
UNDERWRITING DISCOUNTS AND COMMISSIONS UNDER THE SECURITIES ACT. The
compensation to a particular underwriter, broker-dealer or agent may be in
excess of customary commissions. To our knowledge, the Registered
Securityholders have made no arrangement with any brokerage firm for the sale of
the shares.
Any broker-dealer participating in such transactions as agent may
receive commissions from the Registered Securityholders and, if they act as
agent for the purchaser of such shares, from such purchaser. Broker-dealers may
agree with the Registered Securityholders to sell a specified number of shares
at a stipulated price per share and, to the extent such a broker-dealer is
unable to do so acting as agent for the Registered Securityholder, to purchase
as principal any unsold shares at the price required to fulfill the
broker-dealer commitment to the Registered Securityholder. Broker-dealers who
acquire shares as principal may thereafter resell such shares from time to time
in transactions, which may involve crosses and block transactions and which may
involve sales to and through other broker-dealers, including transactions of the
nature described above, in the over-the-counter market, in negotiated
transactions or otherwise at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such resales may pay to or receive
from the purchasers of such shares commissions computed as described above. To
the extent required under the Securities Act, a supplemental prospectus will be
filed, disclosing (a) the name of any such broker-dealers; (b) the number of
shares involved; (c) the price at which such shares are to be sold; (d) the
commissions paid or discounts or concessions allowed to such broker-dealers,
where applicable; (e) that such broker-dealers did not conduct any investigation
to verify the information set out or incorporated by reference in this
Prospectus, as supplemented; and (f) other facts material to the transaction.
The Registered Securityholders will act independently from Premier in
making decisions concerning the sale of the shares, provided, however, that
Premier and each of the Registered Securityholders have agreed to a maximum
value of shares of common stock that each Registered Securityholder may sell in
any calendar month.
12
Under applicable rules and regulations under the Securities Exchange
Act of 1934, as amended, any person engaged in a distribution of the shares may
not simultaneously engage in market making activities with respect to the shares
for a period beginning when such person becomes a distribution participant and
ending upon such person's completion of participation in the distribution,
including stabilization activities in the common stock to effect covering
transactions, to impose penalty bids or to effect passive marketing making bids.
In addition to and without limiting the foregoing, in connection with
transactions in the shares, the Registered Securityholders and any underwriters,
dealers, brokers or agents executing selling orders on behalf of the Registered
Securityholders may be subject to applicable provisions of the Securities
Exchange Act of 1934,as amended, and the rules and regulations thereunder,
including, without limitation, Rule 10b-5 thereof and, insofar as Premier and
the Registered Securityholders are distribution participants, Regulation M and
Rules 100, 101, 102, 103, 104 and 105 thereof. All of the foregoing may affect
the marketability of the shares.
The Registered Securityholders will pay all commissions, transfer taxes
and other expenses associated with their sales of the shares. The shares offered
hereby are being registered pursuant to our contractual obligations, and we have
agreed to pay the expenses of the preparation of this Prospectus and the filing
of the Registration Statement. We have also agreed to indemnify certain
Registered Securityholders against certain liabilities, including, without
limitation, liabilities arising under the Securities Act. We will not receive
any of the proceeds from the sale of the shares by the Registered
Securityholders.
Total expenses incurred in connection with the preparation of this
Prospectus, consisting primarily of legal, accounting, and filing fees, are
estimated to be approximately $10,840.
In order to comply with the securities laws of certain states, if
applicable, the shares may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless the shares have been registered or qualified for
sale in these states or an exemption from registration or qualification is
available and complied with.
Our common stock is currently traded on the Nasdaq National Market
under the symbol "PLSIA." Concurrently with sales under this Prospectus, the
Registered Securityholders may effect other sales of shares under Rule 144 or
other exempt resale transactions. There can be no assurance that the Registered
Securityholders, or any of them, will sell any or all of the shares offered
hereunder.
DESCRIPTION OF CONVERTIBLE DEBENTURES
The securities being offered by the Registered Securityholders consist
of shares of our Class A Common Stock which are issuable upon the conversion of
convertible debentures. We are not required to pay interest on the principal sum
of the debentures.
The debentures are convertible, at the option of the holder, into
shares of our Class A Common Stock at any time and from time to time from the
date they were issued. In addition, under certain circumstances, we may require
the Registered Securityholders to convert their debentures into shares of common
stock. The number of shares of our common stock issuable upon conversion is
13
determined by dividing the outstanding principal amount of the debenture to be
converted by the closing sale price of the common stock on the date the
conversion is to be effective, which date may not be prior to the date the
notice of conversion is deemed to have been delivered to us under the terms of
the debenture agreement. However, under certain circumstances the conversion
price may not be less than $1.50. Notwithstanding the foregoing, we may not
issue upon conversion a number of shares that exceeds 19.999% of the number of
shares of common stock outstanding immediately prior to the issuance of the
debenture, unless the common stock is then listed for trading on the Nasdaq or
the Nasdaq SmallCap Market and we have obtained shareholder approval for such
issuance.
Since the number of shares of common stock issuable upon conversion of
the debentures is dependent in part upon the market price of the common stock
prior to the conversion, the actual number of shares of common stock that will
then be issued in respect of such conversions and, consequently, offered for
sale pursuant to this Prospectus, cannot be determined at this time. Therefore,
for purposes of this Prospectus, we have assumed a conversion rate of $1.50 per
share and, therefore, based upon an aggregate principal amount of the debentures
of $1,258,000, we are registering an aggregate of 838,667 shares of our common
stock.
Each of the Registered Securityholders has agreed to a maximum value of
shares of common stock that each Registered Securityholder may sell in any
calendar month.
LEGAL MATTERS
The validity of the shares offered pursuant to this Prospectus will be
passed upon for us by Rutan & Tucker, LLP, Costa Mesa, California. As of
December 16, 1999, Rutan & Tucker, LLP held convertible debentures issued by
Premier in the aggregate amount of $211,000. Based upon an assumed closing sale
price of our common stock of $1.50 per share, such debentures would be
convertible into approximately 140,667 shares of our common stock, and Rutan &
Tucker, LLP would be deemed to beneficially own approximately 140,667 shares of
our common stock.
EXPERTS
The consolidated financial statements and related consolidated
financial statement schedule, incorporated in this Prospectus by reference from
our Annual Report on Form 10-K for the year ended March 31, 1999, as amended,
have been audited by Haskell & White LLP, independent auditors, as stated in
their report, which is incorporated in this Prospectus by reference, and have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
RECENT DEVELOPMENTS
Effective November 19, 1999, we appointed Michael J. Quinn as our new
President and Chief Executive Officer.
Effective December 13, 1999, Tom Hazen is no longer an officer or
employee of our company.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company. We file annual, quarterly and special reports,
proxy statements and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SEC's website at
HTTP://WWW.SEC.GOV. You may also read and copy any document we file with the SEC
at its public reference facilities at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the SEC's Midwest Regional Offices at 500 West Madison Street,
Chicago, Illinois 60606 and Northeast Regional Office at 7 World Trade Center,
New York, New York 10048. You can also obtain copies of such material at
prescribed rates from the Public Reference Section of the SEC at its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1- 800-SEC-0330 for further information on the operation of the public
references facilities.
Our common stock is traded on the Nasdaq National Market under the
symbol "PLSIA." You may inspect reports, proxy statements and other information
concerning us at the National Association of Securities Dealers, Inc., at 1735 K
Street, N.W., Washington D.C. 2006.
14
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this Prospectus and information that we file subsequently
with the SEC will automatically update this Prospectus. We incorporate by
reference the documents listed below:
o Annual Report on Form 10-K for the fiscal year ended March 31,
1999, as filed with the SEC on June 29, 1999 pursuant to the
Securities Exchange Act of 1934, as amended, and amended by
Form 10-K/A filed with the SEC on October 12, 1999.
o Quarterly Report on Form 10-Q for the quarter ended September
30, 1999, as filed with the SEC on November 15, 1999.
o Quarterly Report on Form 10-Q for the quarter ended June 30,
1999, as filed with the SEC on August 16, 1999, as amended by
Form 10-Q/A filed with the SEC on October 12, 1999.
o Current Report on Form 8-K, as filed with the SEC on November
30, 1999.
o Current Report on Form 8-K, as filed with the SEC on November
5, 1999.
o Current Report on Form 8-K, as filed with the SEC on June 1,
1999.
o The description of our common stock contained in our
Registration Statement on Form 8-A filed under the Securities
Exchange Act of 1934, as amended, on December 7, 1994, as
amended January 30, 1995, together with any amendment or
report filed to amend or update such description.
o All other reports filed by us pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended,
since the end of our fiscal year ended March 31, 1999.
We also incorporate by this reference any future filings we make with
the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended. Documents filed with the SEC after the date of
this Prospectus are made a part of this Prospectus as of the date such documents
are filed with the SEC.
Any statement in a document incorporated or deemed to be incorporated
by reference in this Prospectus is deemed to be modified or superseded to the
extent that a statement contained in this Prospectus, or in any other document
we subsequently file with the SEC, modifies or supersedes such statement. If any
statement is so modified or superseded, it does not constitute a part of this
Prospectus, except as so modified or superseded.
You may request a copy of the documents incorporated by reference in
this Prospectus, other than exhibits to such documents, at no cost, by writing
to or telephoning us at the following address:
15
Premier Laser Systems, Inc.
Attention: Robert V. Mahoney, Chief Financial Officer
3 Morgan
Irvine, California 92618
(949) 859-0656
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The California General Corporations Law provides that California
corporations may include provisions in their articles of incorporation relieving
directors of monetary liability for breach of their fiduciary duty as directors,
except for the liability of a director resulting from (i) any transaction from
which the director derives an improper personal benefit, (ii) acts or omissions
involving intentional misconduct or a knowing and culpable violation of law,
(iii) acts or omissions that a director believes to be contrary to the best
interests of the registrant or its shareholders or that involves the absence of
good faith on the part of the director, (iv) acts or omissions constituting an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the registrant or its shareholders, (v) acts or omissions showing a
reckless disregard for the director's duty to the registrant or its shareholders
in circumstances in which the director was aware or should have been aware, in
the ordinary course of performing a director's duties, of a risk of serious
injury to the registrant or its shareholders, (vi) any improper transaction
between a director and the registrant in which the director has a material
financial interest, or (vii) the making of an illegal distribution to
shareholders or an illegal loan or guaranty. Our Articles of Incorporation
provide that our directors are not liable to us or our shareholders for monetary
damages for breach of their fiduciary duties to the fullest extent permitted by
California law.
The inclusion of the above provision in the Articles of Incorporation
may have the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter shareholders or management from bringing a
lawsuit against directors for breach of their duty of care, even though such an
action, if successful, might otherwise have benefitted us and our shareholders.
Our Articles of Incorporation and bylaws provide that we will indemnify
our directors and officers to the fullest extent permitted by California law,
including circumstances in which indemnification is otherwise discretionary
under California law. Since the California statute is nonexclusive, it is
possible that certain claims beyond the scope of the statute may be
indemnifiable. Accordingly, we have also entered into an indemnification
agreement (the "Indemnification Agreement") with certain of our directors and
officers that requires us to indemnify such directors and officers to the
fullest extent permitted by law.
Set forth below is a description of the principal provisions of the
Indemnification Agreement:
First, the Indemnification Agreement imposes upon us the burden of
proving that the indemnified party has not met the applicable standard of
conduct required for indemnification. The California statute requires a finding
by the Board of Directors, independent legal counsel, or the shareholders that
the applicable standard of conduct has been met.
Second, the Indemnification Agreement provides that litigation expenses
shall be advanced to an indemnified party at his request, against an undertaking
to repay the amount advanced if it is ultimately determined that he is not
entitled to indemnification for such expenses. The California statute provides
that such expenses may be advanced against such an undertaking, upon
authorization by the Board of Directors.
16
Third, in the event we do not pay a requested indemnification amount,
the Indemnification Agreement allows such indemnified party to contest this
determination by petitioning a court to make an independent determination of
whether such indemnified party is entitled to indemnification under the
Indemnification Agreement. The California statute does not set forth the
procedure for contesting a corporation's determination of a party's right to
indemnification.
Finally, the Indemnification Agreement explicitly provides that actions
by an Indemnified Party at our request as a director, officer or agent of an
employee benefit plan, corporation, partnership, joint venture or other
enterprise owned or controlled by us shall be covered by the indemnification.
The California statute does not specifically address this issue. It does,
however, provide that to the extent that an indemnified party has been
successful on the merits, he shall be entitled to such indemnification.
We are currently engaged in class action litigation in which certain
current and former directors are seeking indemnification, and for which we have
agreed to provide indemnification.
We are also empowered under our bylaws to purchase insurance on behalf
of any person we are required or permitted to indemnify.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons pursuant to
the foregoing provisions, or otherwise, Premier has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
17
No dealer, sales representative or any other person has been authorized to give
any information or to make any representations in connection with the offering
described in this Prospectus other than those contained in this Prospectus, and,
if given or made, such information or representations must not be relied upon as
having been authorized by Premier or any of the Registered Securityholders. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy, nor shall there be any sale of these securities by any person in any
jurisdiction in which such an offer, solicitation or sale would be unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of Premier since the date of this Prospectus or that the information
contained in this Prospectus is correct as of any time subsequent to the date of
this Prospectus.
------------------------
TABLE OF CONTENTS
PAGE
----
Risk Factors..................................................................2
About this Prospectus........................................................10
Use of Proceeds..............................................................10
Dilution.....................................................................10
Registered Securityholders...................................................11
Plan of Distribution.........................................................12
Description of Convertible Debentures........................................13
Legal Matters................................................................14
Experts......................................................................14
Recent Developments..........................................................14
Where You Can Find More Information..........................................14
Incorporation of Certain Documents by
Reference.................................................................15
Indemnification of Directors and Officers....................................16
------------------------
838,667 Shares
PREMIER LASER SYSTEMS, INC.
COMMON STOCK
-----------------
PROSPECTUS
-----------------
DECEMBER __, 1999
================================================================================
18
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION
The following table sets forth the estimated expenses in connection
with the Offering described in this Registration Statement:
SEC registration fee........................ 340
Printing and engraving expenses............. 500
Legal fees and expenses..................... 5,000
Blue Sky fees and expenses.................. 500
Accounting fees and expenses................ 3,500
Miscellaneous............................... 1,000
-------
Total............................... $10,840
=======
All of the above expenses will be paid by Premier.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The California General Corporations Law provides that California
corporations may include provisions in their articles of incorporation relieving
directors of monetary liability for breach of their fiduciary duty as directors,
except for the liability of a director resulting from (i) any transaction from
which the director derives an improper personal benefit, (ii) acts or omissions
involving intentional misconduct or a knowing and culpable violation of law,
(iii) acts or omissions that a director believes to be contrary to the best
interests of the Registrant or its shareholders or that involves the absence of
good faith on the part of the director, (iv) acts or omissions constituting an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the Registrant or its shareholders, (v) acts or omissions showing a
reckless disregard for the director's duty to the Registrant or its shareholders
in circumstances in which the director was aware or should have been aware, in
the ordinary course of performing a director's duties, of a risk of serious
injury to the Registrant or its shareholders, (vi) any improper transaction
between a director and the Registrant in which the director has a material
financial interest, or (vii) the making of an illegal distribution to
shareholders or an illegal loan or guaranty. The Registrant's Articles of
Incorporation provide that the Registrant's directors are not liable to the
Registrant or its shareholders for monetary damages for breach of their
fiduciary duties to the fullest extent permitted by California law.
The inclusion of the above provision in the Articles of Incorporation
may have the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter shareholders or management from bringing a
lawsuit against directors for breach of their duty of care, even though such an
action, if successful, might otherwise have benefitted the Registrant and its
shareholders.
The Registrant's Articles of Incorporation and bylaws provide that the
Registrant shall indemnify its directors and officers to the fullest extent
permitted by California law, including circumstances in which indemnification is
otherwise discretionary under California law. Since the California statute is
nonexclusive, it is possible that certain claims beyond the scope of the statute
may be indemnifiable. Accordingly, the Registrant has also entered into an
indemnification agreement (the "Indemnification Agreement") with certain of its
directors and officers that requires the Registrant to indemnify such directors
and officers to the fullest extent permitted by law.
II-1
Set forth below is a description of the principal provisions of the
Indemnification Agreement:
First, the Indemnification Agreement imposes upon the Registrant the
burden of proving that the indemnified party has not met the applicable standard
of conduct required for indemnification. The California statute requires a
finding by the Board of Directors, independent legal counsel, or the
shareholders that the applicable standard of conduct has been met.
Second, the Indemnification Agreement provides that litigation expenses
shall be advanced to an indemnified party at his request, against an undertaking
to repay the amount advanced if it is ultimately determined that he is not
entitled to indemnification for such expenses. The California statute provides
that such expenses may be advanced against such an undertaking, upon
authorization by the Board of Directors.
Third, in the event the Registrant does not pay a requested
indemnification amount, the Indemnification Agreement allows such indemnified
party to contest this determination by petitioning a court to make an
independent determination of whether such indemnified party is entitled to
indemnification under the Indemnification Agreement. The California statute does
not set forth the procedure for contesting a corporation's determination of a
party's right to indemnification.
Finally, the Indemnification Agreement explicitly provides that actions
by an Indemnified Party at the request of the Registrant as a director, officer
or agent of an employee benefit plan, corporation, partnership, joint venture or
other enterprise owned or controlled by the Registrant shall be covered by the
indemnification. The California statute does not specifically address this
issue. It does, however, provide that to the extent that an indemnified party
has been successful on the merits, he shall be entitled to such indemnification.
We are currently engaged in class action litigation in which certain
current and former directors are seeking indemnification, and for which we have
agreed to provide indemnification.
The Registrant is also empowered under its bylaws to purchase insurance
on behalf of any person it is required or permitted to indemnify.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant, 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 Securities Act, and is, therefore, unenforceable.
II-2
ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 Form of Convertible Debenture issued to Big Sky Laser
Technologies, Inc.*
4.2 Form of Convertible Debenture issued to each of Rutan
& Tucker, LLP, Paul, Hastings, Janofsky & Walker LLP
and Knobbe, Martens, Olson & Bear, LLP*
5 Opinion of Rutan & Tucker, LLP*
10.1 Settlement Agreement between Big Sky Laser
Technologies, Inc. and Premier Laser Systems, Inc.*
10.2 Form of Exchange Agreement with each of Rutan &
Tucker, LLP, Paul, Hastings, Janofsky & Walker, LLP
and Knobbe, Martens, Olson & Bear LLP*
23.1 Consent of Haskell & White LLP*
23.2 Consent of Rutan & Tucker, LLP (included in Exhibit
5)*
- ------------------------
* Filed herewith
ITEM 17. UNDERTAKINGS
(a) 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;
(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 in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total 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 SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price present 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;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
II-3
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the SEC by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities of 1934, as amended, that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(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, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
of 1934, as amended (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 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 the time shall be deemed to be
the initial BONA FIDE offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities of 1934, as
amended; and, where interim financial information requires to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-4
SIGNATURES
In accordance with 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 Irvine, State of California, on December 20,
1999.
PREMIER LASER SYSTEMS, INC.
By: /S/ Michael J. Quinn
-------------------------------------
Michael J. Quinn, Chief Executive
Officer (Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael J. Quinn and Robert V. Mahoney,
jointly and severally, his attorneys-in-fact and agents, each with the power of
substitution and resubstitution, for him and in his name, place or stead, in any
and all capacities, to sign any amendment to this Registration Statement on Form
S-3, and to file such amendments, together with exhibits and other documents in
connection therewith, with the Securities and Exchange Commission, granting to
each attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully as he might or could do in person, and ratifying and
confirming all that the attorneys-in-fact and agents, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, including a
majority of the Board of Directors, in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ Michael J. Quinn Chief Executive Officer December 20, 1999
- ------------------------------ and President (Principal
Michael J. Quinn Executive Officer)
/S/ Robert B. Mahoney Executive Vice President, December 20, 1999
- ------------------------------ Finance and Chief
Robert B. Mahoney Financial Officer
(Principal Financial and
Accounting Officer)
/S/ Patrick J. Day Director December 20, 1999
- ------------------------------
Patrick J. Day
II-5
/S/ Frederic J. Feldman Director December 20, 1999
- ------------------------------
Frederic J. Feldman
/S/ John Hunkeler, M.D. Director December 17, 1999
- ------------------------------
John Hunkeler, M.D.
/S/ Lewis H. Stanton Director December 20, 1999
- ------------------------------
Lewis H. Stanton
II-6
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
4.1 Form of Convertible Debenture issued to Big Sky Laser
Technologies, Inc.
4.2 Form of Convertible Debenture issued to each of Rutan &
Tucker, LLP, Paul, Hastings, Janofsky & Walker LLP and Knobbe,
Martens, Olson & Bear, LLP
5 Opinion of Rutan & Tucker, LLP
10.1 Settlement Agreement between Big Sky Laser Technologies, Inc.
and Premier Laser Systems, Inc.
10.2 Form of Exchange Agreement with each of Rutan & Tucker, LLP,
Paul, Hastings, Janofsky & Walker, LLP and Knobbe, Martens, Olson
& Bear, LLP*
23.1 Consent of Haskell & White LLP
23.2 Consent of Rutan & Tucker, LLP (included in Exhibit 5)