As filed with the Securities and Exchange Commission on October 9, 2001
Registration No. 333-53608
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED
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TRIMEDYNE, INC.
(Exact name of registrant as specified in its charter)
Nevada 36-3094439
(State or Other Jurisdiction (IRS Employer
Incorporation or Organization) Identification No.)
15091 Bake Pkwy.
P.O. Box 57001
Irvine, California 92618
(Address of Principal Executive Offices) (Zip Code)
------------------------------------------
MARVIN P. LOEB, CHAIRMAN
AND CHIEF EXECUTIVE OFFICER
TRIMEDYNE, INC.
15091 Bake Pkwy.
Irvine, California 92618
(Name and Address of Agent for Service)
(949) 559-5300
(Telephone Number, Including Area Code, of Agent of Service)
Copies to:
RICHARD F. HOROWITZ, ESQ. CHATSWORTH SECURITIES LLC
Heller, Horowitz & Feit, P.C. 95 East Putnam Avenue
292 Madison Avenue Greenwich, CT 06830
New York, New York 10017
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of the registration statement.
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, check the following box. |_X_|
If the registrant elects to deliver its annual report to security
holders, or a complete and legal facsimile thereof pursuant to Item 11(a)(1) of
this Form, check the following box. [ X ]
Calculation of Registration Fee
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share (1) Price (1) Fee (2)
Series A Convertible
Preferred Stock 495,000
Common Stock 4,950,000
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Total Registration Fee $________ $___________ $___________
(1) Based upon the closing price on _______________, 2001.
(2) Estimated solely for the purpose of calculating the registration fee,
based upon the closing price of the Common Stock on
___________________, 2001.
(3) Includes 40,000 shares of Preferred Stock and the underlying 400,000
shares of Common Stock subject to exercise of the five year Warrants
to purchase 40,000 shares of Preferred Stock sold to the Underwriter
and 55,000 shares of Preferred Stock and the underlying 550,000 shares
of Common Stock subject to exercise of three year Warrants to purchase
55,000 shares of Preferred Stock sold to others.
The Registrant hereby amends the registration statement on such date or
dates as may be necessary to delay the 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
DATED October 8, 2001
(Subject to Completion)
-----------------------------------
TRIMEDYNE, INC.
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400,000 SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK
This Prospectus covers the proposed offer and sale by Trimedyne, Inc.
("we", "us", "our" or the "Company") of up to 400,000 shares of its Series A
Convertible Preferred Stock, $10.00 par value (the "Preferred Stock"), to the
public on a "best efforts" basis from time to time over a period of six (6)
months from the date of this Prospectus (unless we and the Underwriter agree to
extend the offering), at prices related to the then market price of our Common
Stock. This Prospectus also covers the possible sale of 40,000 shares of our
Preferred Stock to the public if the Underwriter exercises the Warrants we sold
to the Underwriter, as described below, and 55,000 shares of Preferred Stock to
the public if certain consultants to the Company exercise the Warrants we sold
to them. We will receive all of the net proceeds from the sale of the above
securities.
Each share of Preferred Stock is convertible into ten (10) shares of
our Common Stock, $.01 per value (the "Common Stock"), at the option of the
holder at any time after December 31, 2001. The Preferred Stock shall be
entitled to ten (10) votes per share and to dividends and distributions, if any
are declared, in an amount equal to the dividend or distribution paid, if any,
on ten (10) shares of Common Stock. The Preferred Stock shall have prior rights
to the assets in the event of our liquidation or dissolution to the extent of
$10 per share of Preferred Stock, and the Preferred Stock may be called
(redeemed) at our option at any time after December 31, 2001, at a price equal
to $11 per share of Preferred Stock.
We have agreed to pay the Underwriter a commission of 7% and a
non-refundable expense allowance of one percent 1% of the sales of the Preferred
Stock to the public, of which $5,000 has already been paid. We have also sold to
the Underwriter at nominal cost 40,000 Warrants ("Warrants"), each exercisable
over a period of four (4) years commencing one year after the Effective Date of
this Prospectus to purchase shares of Preferred Stock in an amount equal to ten
percent (10%) of the number of shares of Preferred Stock sold to the public in
this offering. To the extent exercisable, each Warrant will be exercisable to
purchase one share of our Preferred Stock at an exercise price equal to one
hundred twenty percent (120%) of the average monthly sales prices of the
Preferred Stock to the public during the offering. We and the Underwriter have
also agreed to indemnify each other in certain circumstances. We estimate the
other costs of this offering to us will be approximately $75,000. (See "PLAN OF
DISTRIBUTION.")
We have applied for listing of our Preferred Stock on the NASDAQ
National Market System under the symbol "TMDP." Our Common Stock is traded on
the NASDAQ National Market System under the Symbol "TMED". The closing price of
our Common Stock on ____________________ 2001 was $_______ per share.
The Securities offered hereby involve a high degree of risk. Please
read the "Risk Factors" beginning on Page 5.
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.
CHATSWORTH SECURITIES LLC
95 East Putnam Avenue
Greenwich, CT 06830
THE DATE OF THIS PROSPECTUS IS _______________________
1
We will furnish to each person to whom this Prospectus is delivered,
upon written request, a copy of any of the documents referred to in this
prospectus. Requests should be addressed to: Mr. Jeffrey Rudner, Trimedyne,
Inc., 15091 Bake Pkwy., Irvine, California 92618. Mr. Rudner's telephone number
is (949)559-5300, Extension 285.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. ANY INFORMATION OR REPRESENTATION NOT HEREIN CONTAINED, IF GIVEN OR
MADE, MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN RESPECT OF THE SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. DELIVERY OF
THIS PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN OUR BUSINESS SINCE THE DATE OF THIS PROSPECTUS.
THE DATE OF THIS PROSPECTUS IS ______________________, 2001
AVAILABLE INFORMATION
We have filed with the headquarters office of the Securities and
Exchange Commission located at 450 Fifth Street, N.W., Washington, D.C. 20549, a
Registration Statement on Form S-2 under the Securities Act of 1933 with respect
to these securities. This Prospectus filed as part of such Registration
Statement does not contain all the information set forth in, or annexed as
exhibits to, the Registration Statement. For further information about these
securities and the Company, reference is made to the Registration Statement and
the exhibits thereto. The Registration Statement and exhibits may be inspected
at the Headquarters Office of the Securities and Exchange Commission located at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at certain of the
Commission's regional offices at the following addresses: 7 World Trade Center,
13th Floor, New York, New York 10048; and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained from the Public
Reference Section of the SEC, at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. at prescribed rates. The Commission also maintains a Web Site that contains
reports, proxy and information statements and other information regarding
registrants such as the Company, that file electronically with the Commission.
This material can be found at http://www.sec.gov.
TABLE OF CONTENTS
Page No.
Prospectus Summary.............................................................3
The Company....................................................................4
Risk Factors...................................................................5
Use of Proceeds................................................................8
Plan of Distribution...........................................................8
Business of the Company........................................................8
Description of Securities.....................................................10
Registration of Additional Shares.............................................10
Incorporation of Certain Documents by Reference...............................11
Commission's Policy on Indemnification for Securities Act Liabilities.........11
Legal Opinions................................................................11
2
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by more detailed
information and the financial statements appearing elsewhere in this Prospectus
and in the Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 2000.
The Company Trimedyne, Inc. (the "Company", "we", "our" or "us") is
engaged in the development, manufacturing and marketing of
Holmium "cold" pulsed Lasers, Nd:YAG "thermal" continuous
wave Lasers and proprietary, disposable and reusable
fiber-optic laser delivery devices for use in orthopedics,
urology, ear, nose and throat ("ENT") surgery, gynecology,
gastrointestinal surgery, general surgery and other medical
applications. Our 100% owned subsidiary Mobile Surgical
Technologies, Inc. ("MST"), is engaged in the renting of
lasers, along with the services of a trained operator, on a
"fee per case" basis to hospitals, surgery centers and
physicians in the Southwestern United States.
The Offering We are offering up to 400,000 shares of our Preferred Stock
to the public.
Conversion Terms Each share of Preferred Stock is convertible at any time
after December 31, 2001, into ten (10) shares of our Common
Stock. (See "DESCRIPTION OF SECURITIES.")
Offering Price The offering price of the Preferred Stock will be based on
the market price of our Common Stock at the time of sale.
Number Of shares of
Common Stock
Outstanding On
September 30, 2001 13,589,369 shares
Number Of shares of
Common Stock To Be
Outstanding
Following This
Offering* 17,815,510 shares*
Use of Proceeds The cash proceeds we receive from this offering, after
underwriting discounts, commissions and expenses of the
offering, will be used for operations and for general
corporate purposes.
Proposed Nasdaq
Symbol TMDP
-------------------
* Assuming all the Preferred Stock being offered is sold and converted into
Common Stock.
3
THE COMPANY
Trimedyne, Inc. (the "Company", "we", "our" or "us") is engaged in the
development, manufacturing and marketing of Holmium "cold" pulsed lasers, Nd:YAG
"thermal" continuous wave lasers and proprietary, disposable and reusable
fiber-optic laser delivery devices which have been cleared for sale by the U.S.
Food and Drug Administration ("FDA") for use in orthopedics, urology, ear, nose
and throat ("ENT") surgery, gynecology, gastrointestinal surgery, general
surgery and other medical applications.
Our 100% owned subsidiary, Mobile Surgical Technologies, Inc. ("MST"),
is engaged in the rental of lasers, along with the services of a trained
operator, on a "fee per case" basis to hospitals, surgery centers, group
practices and individual physicians in Texas, Oklahoma and Louisiana. We
recently entered into a letter of intent to acquire Surgical Alliance, Inc.,
which is engaged in a similar "fee per case" laser rental business in Alabama,
Georgia and Tennessee. We have also entered into Revenue Sharing Agreements with
other "fee per case" laser rental companies, under which we provide our lasers
to them and share in the rental revenues.
In addition to the use of our Holmium lasers in orthopedics for
discectomy and arthroscopy, and in urology for fragmenting urinary and biliary
stones, in November 2000, we received clearance from the FDA to market our
Holmium laser and fiber-optic devices in minimally invasive, endoscopic laser
foraminoplasty ("ELF") procedures, which orthopedic surgeons can employ to treat
herniated and ruptured lumbar (lower back) spinal discs on an outpatient basis.
Our Holmium laser and fiber-optic devices are presently the only laser products
cleared for sale by the FDA for use in such foraminoplasty procedures.
Approximately 540,000 surgical laminectomy or discectomy procedures are
performed each in the United States to treat herniated or ruptured discs at a
cost of about $30,000 each or $16.2 billion annually. Our outpatient laser
discectomy and ELF procedures to treat herniated or ruptured discs procedure
cost less than one-half the cost of the surgical procedure, which requires
general anesthesia and entails a lengthy hospital stay, significant
post-operative pain and a recovery period of several months.
Our Holmium laser and fiber-optic devices are also presently being used
in a new, experimental, endoscopic Minimally Invasive Spinal Stabilization
procedure to treat degenerated lumbar discs on an outpatient basis. Traditional
surgical procedures to treat degenerated discs require general anesthesia, a
lengthy hospital stay, significant post-operative pain, an extensive recovery
period and a cost estimated at two to three times the expected cost of the
outpatient spinal stabilization procedure, if and when the procedure is approved
for sale by the FDA. Approximately 400,000 surgical fusion procedures are
performed each year in the United States to treat degenerated discs and diseased
spinal joints at a cost of about $60,000 each or $24 billion.
We have also designed and obtained U.S. patents or filed patent
applications covering several new fiber-optic devices for use in other minimally
invasive surgical applications. These include disposable devices to treat, on a
minimally invasive, outpatient basis, such widespread conditions as menorrhagia
(excessive uterine bleeding in women), benign prostatic hyperplasia (enlarged
prostates in men), gastro-esophogeal reflux disease (severe heartburn), female
stress urinary incontinence, ear infections in children, and other conditions.
Our factory and corporate office is located at 15091 Bake Pkwy, Irvine
California, 92618, at which its telephone number is (949)559-5300.
We have applied for the listing of our Preferred Stock on the NASDAQ
National Market System under the symbol "TMDP." Our Common Stock is traded on
Nasdaq National Market System under the symbol "TMED". The closing price of our
Common Stock on ________________, 2001 was $_______ per share.
4
RISK FACTORS
An investment in the Preferred Stock offered by this Prospectus
involves a high degree of risk. You should carefully consider the risks and
uncertainties described below, which may not be the only ones we face. If any of
the following risks actually occur, our business, financial condition or results
of operations could be materially adversely affected. In this event, the trading
price of our common stock could decline and you may lose all or part of your
investment.
We have incurred substantial losses and anticipate continuing losses
We had a loss of $1,033,000 from operations and a net loss of
$1,731,000 in the quarter ended June 30, 2001, and a net loss of $4,700,000 in
the fiscal year ended September 30, 2000. Though we had net income of $2,750,000
in fiscal 1999, our income in 1999 was derived from our having received $6.5
million in settlement of our lawsuit against C.R. Bard, Inc. ("Bard") in
December 1998. Excluding the settlement from Bard, we would have had a net loss
of $3,750,000 in fiscal 1999. We sustained a net loss of $2,538,000 in fiscal
1998. At September 30, 2000 we had an accumulated deficit of $36,441,000. We
anticipate continuing to incur losses until we generate sufficient revenues to
offset the costs associated with manufacturing and marketing our current
products, overhead, and the development of new products. There can be no
assurance that we will ever operate profitably. You should be aware of the
risks, problems, delays, expenses, and difficulties encountered by companies
developing new medical technologies, especially in view of the significant
competition that we have and will continue to encounter.
We need the proceeds of this offering
On June 30, 2001, we had only $146,000 of cash and marketable
securities and working capital of $4,016,000. However, on that date, we had
accounts payable and accrued expenses of $2,780,000. If we are unable to collect
a significant portion of our $1.2 million of accounts receivable (after
allowances for bad debts) at June 30, 2001, sell much of our approximately $2
million of goods in inventory or raise at least $2 million in this offering to
reduce our accounts payable and fund our ongoing operations, we may be unable to
continue to operate as a going concern.
We may need substantial additional financing
The development, testing, approval, and marketing of medical devices
require a substantial amount of funds. We believe our existing working capital
and the proceeds of this offering, if all of the Preferred Stock we are offering
is sold, will be sufficient to meet our operating needs and the operating needs
of our 100% owned laser rental subsidiary at least for the next twelve months.
However, we may need to obtain additional financing to support our
operations, continue the development of our new products and expand MST's "fee
per case" rental service. Sources of such financing may include the sale of
additional equity securities or the sale or licensing of patent rights. The
issuance of additional shares of Preferred Stock or Common Stock would dilute
your holdings. Any inability to obtain additional financing, if needed, will
have a material adverse effect on us, such as requiring us to reduce or curtail
our operations.
5
There is no assurance that any or all of the shares will be sold
The Underwriter is offering our Preferred Stock to the public on a
"best efforts" basis, and is not committed to purchase any of the shares. If
substantially less than all of the shares of our Preferred Stock are sold, the
proceeds may be insufficient to cover our capital needs (See "Plan of
Distribution").
We may not be able to adjust to rapid technological changes
We are engaged in an intensely competitive industry. In recent years,
the medical laser industry has been characterized by rapid technological change.
There is no assurance that our present products may not face technological
obsolescence, or that we will be able to develop, acquire licenses for, or
obtain regulatory approvals to market new products and keep pace with
technological advances by our competitors.
We may acquire other entities
We recently entered into a letter of intent to acquire Surgical
Alliance, Inc., which rents lasers, along with a trained operator, on a "fee per
case" basis to hospitals, surgery centers, group practices and individual
physicians in Alabama, Georgia and Tennessee. We may engage in acquisitions of
other companies and businesses and may use our cash reserves or our Preferred
Stock or Common Stock to pay for these companies. If we use our Preferred or
Common Stock for acquisitions, this may result in a dilution of the percentage
of the equity you own. In addition, acquisitions may involve speculative and
risky undertakings. Under Nevada law, acquisitions do not require shareholder
approval, except when accomplished by merger or consolidation.
There are stock options and warrants that may dilute your ownership
We have reserved a total of 2,600,000 shares of Common Stock for
granting of stock options under our Incentive and Non-Qualified option plans to
our officers, directors, employees and consultants. Also, Warrants to purchase
95,000 shares of our Preferred Stock at exercise prices between $5.00 and $25.00
per share are presently outstanding and exercisable. If options to purchase all
of these shares were granted and all of these options and Warrants were
exercised, and if all of the Preferred Stock is converted into Common Stock,
such Common Stock would represent approximately 28% of our presently outstanding
Common Stock. We may also grant options in the future at prices below the then
market price of our Common Stock, although we presently have no intention to do
so.
Our stock price is volatile
The market prices for securities of medical device companies, including
our Common Stock, have been volatile. It is likely that the price of our Common
Stock will fluctuate in the future. Many factors can impact the market price of
our securities, such as announcements of technological innovations or new
commercial products, FDA clearances or approvals, distribution agreements, the
results of pre-clinical testing and clinical trials, the issuance or acquisition
of patents or proprietary rights, changes in sales or earnings, recommendations
by securities analysts, and market conditions in general. The market price of
our securities could also be adversely affected by future exercises of
outstanding warrants and options.
We do not anticipate paying any dividends
We have not paid any dividends in the past and do not anticipate paying
any dividends in the foreseeable future. This may depress the price of our
securities, as a non-dividend paying stock may not appeal to certain investors.
6
We may issue other Preferred Stock that could effect the rights of holders of
our Preferred Stock
We are authorized to issue 1,000,000 shares of Preferred Stock. Our
Board of Directors has broad powers to fix the rights and terms of any Preferred
Stock without requiring shareholder approval. The issuance of any of our
authorized but unissued Preferred Stock could have an adverse effect on the
rights of the holders of the Preferred Stock sold in this offering and our
Common Stock.
We are subject to extensive government regulation
Our business is subject to extensive regulation by the FDA and
comparable regulatory authorities of foreign countries. Compliance with
regulatory requirements and obtaining approvals to test or market new medical
devices is expensive and time consuming. We cannot be assured that we will be
able to meet all regulatory requirements of the FDA and other governmental
authorities or obtain and maintain approvals to test and market our present or
new products. Failing to meet necessary government requirements will have a
negative impact on our ability to sell our products.
We carry limited liability insurance
We carry an aggregate of $6,000,000 of general liability insurance.
There is no assurance that we can maintain such insurance in force at an
acceptable cost or that the amount of such insurance will be sufficient to
protect our assets in the event of claims by users of our products or other
parties. If court awards exceeding the amount of such insurance were made, our
assets could be depleted.
We are dependent upon maintaining valid patents and licenses
There is no assurance our patents will be upheld if challenged in
courts or that we will be able to obtain additional valid patents. We also
cannot assure that our products do not infringe patents owned by others,
licenses to which may not be available to us. Our inability to maintain our
patents, avoid infringement of patents by others or, in such event, to obtain
licenses thereto could have an adverse impact on our financial condition,
results of operations or our ability to successfully remain in business.
7
USE OF PROCEEDS
The cash proceeds that we will receive from this offering, after
underwriting discounts and commissions and expenses of the offering, will be
applied to our general operating account and used for reducing our accounts
payable operations, increasing our marketing and sales efforts, expanding MST's
"fee per case" rental service, and ongoing new product development.
PLAN OF DISTRIBUTION
The Underwriter is not committed to purchase any of the shares of
Preferred Stock we are offering. As a result, there is no assurance that any or
all of the shares will be sold. The 400,000 shares of Preferred Stock will be
offered on a "best efforts" basis by Chatsworth Capital, Inc. (the
"Underwriter") from time to time over a period of six (6) months from the date
of this Prospectus (unless we and the Underwriter mutually agree to extend the
offering), at such times and in such amounts as we and the Underwriter may
mutually determine, at prices related to the market price of our Common Stock at
the time of sale, with a seven percent (7%) commission to the Underwriter.
However, no commission will be paid to the Underwriter on sales of our Preferred
Stock to officers, directors or employees of the Company and their affiliates.
We have sold the Underwriter, for a nominal consideration, 40,000
Warrants exercisable to purchase shares of our Preferred Stock in an amount
equal to ten percent (10%) of the number of shares of Preferred Stock sold to
the public, except for sales to our officers, directors or employees or their
affiliates or to certain other parties we refer to the Underwriter. To the
extent exercisable, each Warrant will be exercisable over a period of four (4)
years, commencing one (1) year from the date of this Prospectus, to purchase one
(1) share of our Preferred Stock at a price equal to 120% of the average monthly
sales prices of our Preferred Stock during this offering. In addition, we have
agreed to pay the Underwriter a non-refundable expense allowance of one percent
(1%) of the sales of our Preferred Stock to the public, of which $5,000 has been
paid.
BUSINESS OF THE COMPANY
General
Our business is briefly described above under "THE COMPANY."
This Prospectus is accompanied by our Annual report on Form 10-KSB for
the fiscal year ended September 30, 2000, which document fully sets forth our
business and financial and other information concerning us as of that date, and
Forms 10-QSB for the quarters ended December 31, 2000, March 31, 2001 and June
30, 2001.
Subsequent Events
We experienced the following material changes to our operations
subsequent to the end of our fiscal year, which are described in more detail in
our Annual Report on Form 10-KSB for the fiscal year ended September 30, 2000:
(a) On November 27, 2000, we announced clearance from the FDA to market
our Holmium laser and associated fiber-optic delivery devices for use in
minimally invasive, endoscopic laser foraminoplasty ("ELF") procedures, which
orthopedic surgeons may use to treat lower back and leg pain due to a herniated
or ruptured lumbar spinal disc on an outpatient basis. Surgery to
8
treat herniated or ruptured discs entails general anesthesia, a substantial
hospital stay, significant post-operative pain, a lengthy recovery period and
substantially greater cost.
(b) On November 28, 2000, we announced we are commencing to market a
new line of reusable laser arthroscopy devices which reduce the hospital's cost
per case to an amount significantly lower than most competitive devices.
(c) On November 30, 2000, we announced the acquisition of Mobile
Surgical Technologies, Inc. ("MST"), a Dallas, Texas-based "fee per case"
service provider of lasers and trained operators to hospitals and outpatient
surgery centers in Texas, Oklahoma and Louisiana, in exchange for 500,000 shares
of our Common Stock.
(d) On December 4, 2000, we announced the election of William J.
Schubert, founder and President of MST, as our Vice Chairman and Chief Executive
Officer.
(e) On May 15, 2001, we announced that we entered into a Letter of
Intent to merge with Emergent Group Inc.
(f) On June 26, 2001, we announced that the Letter of Intent to merge
with Emergent had been terminated due to our inability to reach satisfactory
terms.
(g) On July 18, 2001, we announced that Mr. Schubert and our President
and Chief Financial Officer, Shane H. Traveller, resigned their positions with
the Company. Our Founder and Chairman, Marvin P. Loeb, resumed the duties of
President and Chief Executive Officer.
(h) On July 30, 2001, we announced that we had entered into a letter of
intent to acquire Surgical Alliance, Inc., a Birmingham, Alabama-based "fee per
case" service provider of lasers and trained operators to hospitals and
outpatient surgery centers in Alabama, Georgia and Tennessee.
9
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 30,000,000 shares of Common
Stock, par value $.01, and 1,000,000 shares of Preferred Stock.
Preferred Stock
Each share of our Series A Convertible Preferred Stock ($10 par value)
is convertible into ten (10) shares of our Common Stock, $.01 per value (the
"Common Stock") at the option of the holder at any time after December 31, 2001.
The Preferred Stock shall have prior rights to our assets in the event of our
liquidation or dissolution to the extent of $10 per share of Preferred Stock,
and the Preferred Stock may be called (redeemed) at our option at any time after
December 31, 2001, at a price of $11 per share of Preferred Stock. The Preferred
Stock is not entitled to any pre-emptive rights or anti-dilution protection and
there is no sinking fund to retire any of the Preferred Stock. Each share of
Preferred Stock shall be entitled to ten (10) votes per share, but there is no
provision for cumulative voting of the Preferred Stock. Holders of the Preferred
Stock shall be entitled to ten (10) times the dividends declared, if any, on the
Common Stock.
Common Stock
The shares of our Common Stock presently outstanding, and any shares of
our Common Stock issues upon conversion of the Preferred Stock sold in this
offering, will be fully paid and non-assessable. Each holder of Common Stock is
entitled to one vote for each share owned of record on all matters voted upon by
stockholders, and a majority vote is required for all actions to be taken by
stockholders. In the event we liquidate, dissolve or wind-up our operations, the
holders of the Common Stock are entitled to share equally and ratably in our
assets, if any, remaining after the payment of all our debts and liabilities and
the liquidation preference of the Preferred Stock and any other shares of
Preferred Stock that may then be outstanding. The Common Stock has no preemptive
rights, no cumulative voting rights, and no redemption, sinking fund, or
conversion provisions. Since the holders of Common Stock do not have cumulative
voting rights, holders of more than 50% of the outstanding shares can elect all
of our Directors, and the holders of the remaining shares by themselves cannot
elect any Directors.
Holders of Common Stock are entitled to receive dividends, if and when
declared by the Board of Directors, out of funds legally available for such
purpose, subject to the dividend and liquidation rights of any Preferred Stock
that may then be outstanding.
Our Articles of Incorporation provide for a staggered Board of
Directors, pursuant to which the Board is divided into three classes (as nearly
equal in number as possible) with the term of one class expiring each year. The
Articles also provide that the staggered Board provisions cannot be amended,
altered or repealed except by the vote of not less than two-thirds of our issued
and outstanding Common Stock and Preferred Stock which may then be entitled to
vote.
Registration of Additional Shares
Included in the Registration Statement of which this Prospectus is a
part are the 40,000 shares of Preferred Stock subject to exercise of the 40,000
Warrants to purchase 40,000 shares of Preferred Stock we have sold to the
Underwriter and the underlying 400,000 shares of Common Stock. Also included in
the Registration Statement are 55,000 shares of Preferred Stock subject to
exercise of the 55,000 Warrants to purchase 55,000 shares of Preferred Stock we
have sold to certain of our consultants and the underlying 550,000 shares of
Common Stock.
Transfer Agent
The transfer agent and registrar for our Preferred Stock and Common
Stock is American Stock Transfer & Trust Co., 40 Wall Street, New York, New
York.
10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Commission are
incorporated herein by reference:
(a) Annual Report on Form 10-KSB for the fiscal year ended September
30, 2000, filed pursuant to Section 13 of the Exchange Act.
(b) The description of the common stock contained in the our
Registration Statement on Form 8-A filed July 16, 1982 pursuant to Section 12 of
the Exchange Act.
(c) Form 10-QSB for the quarters ended December 31, 2001, March 31,
2001 and June 30, 2001.
All documents subsequently filed by the registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment hereto, which indicates that all securities offered
have been sold or deregisters all securities then remaining unsold, which shall
be deemed to be a part hereof from the date of the filing of each such report or
document.
We will furnish to each person to whom this Prospectus is delivered,
upon written or oral request, a copy of any or all of the documents referred to
by reference. Requests should be addressed to: Jeffrey Rudner, Comptroller,
Trimedyne, Inc., 19501 Bake Pkwy., Irvine, California 92618. Mr. Rudner's
telephone number is (949) 559-5300, Extension 285.
The public may read and copy any materials we file with the Securities
and Exchange Commission at the SEC's Public Reference Room located at 450 Fifth
Street, NW, Room 1024, Washington, D.C. 20549. The public may obtain information
on the operation of the Public Reference Room by calling 1-(800)-SEC-0330. The
Commission maintains a World Wide Web site on the Internet at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding us and other registrants that file electronically with the Commission.
COMMISSION'S POLICY ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Article 12 of our Certificate of Incorporation contains provisions
relating to the indemnification of our directors and officers to the fullest
extent permitted by Nevada law. Section 78.751 of the Nevada Revised Statutes,
as amended, authorizes us to indemnify any director or officer under certain
prescribed circumstances and, subject to certain limitations, against certain
costs and expenses, including attorneys' fees actually and reasonably incurred
in connection with any action, suit, or proceeding, whether civil, criminal,
administrative or investigative, to which the director is a party by reason of
being our director or a director of our subsidiary, if it is determined that the
director acted in accordance with the applicable standard of conduct set forth
in those statutory provisions.
We may also purchase and maintain insurance for the benefit of any
director or officer that may cover claims for which we could not otherwise
indemnify such person.
Insofar as indemnification for liabilities arising under the Act may be
permitted to our directors, officers, and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
11
LEGAL OPINIONS
Legal matters in connection with the securities being offered hereby
have been passed upon for us by Heller, Horowitz & Feit, P.C. 292 Madison
Avenue, New York, New York 10017. Heller, Horowitz & Feit, P.C. is our general
securities and corporate counsel and represented us in our initial public
offering and in numerous matters since then. Mr. Richard F. Horowitz, a member
of that firm, is also a member of our Board of Directors.
12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following statement sets forth the estimated expenses in connection
with the offering described in the Registration Statement.
Securities and Exchange Commission Fee................... $626.39
Accountants' Fees and Expenses........................... 5,000
Legal Fees and Expenses.................................. 10,000
Blue Sky Fees and Expenses............................... 2,000
Printing and Mailing Costs............................... 20,000
Miscellaneous............................................37,373.61
---------
TOTAL $ 75,000
Item 15. Indemnification of Directors and Officers.
------------------------------------------
Section 78.751 of the Nevada Revised Statutes, as amended, authorizes
us to indemnify any of our directors or officers under certain prescribed
circumstances and, subject to certain limitations, against certain costs and
expenses, including attorneys' fees actually and reasonably incurred in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which the director is a party by reason of
being one of our directors or officers, if it is determined that the director
acted in accordance with the applicable standard of conduct set forth in those
statutory provisions. Article 12 of our Certificate of Incorporation contains
provisions relating to the indemnification of our directors and officers to the
fullest extent permitted by Nevada law.
We may also purchase and maintain insurance for the benefit of any
director or officer that may cover claims for which we could not indemnify such
person.
Item 16. Exhibits
---------
The following exhibits are filed with this Registration Statement:
1 Form of "Best Efforts" Underwriting Agreement
5 Opinion of Counsel
23(a) Consent of Independent Auditors
Item 17. Undertakings.
------------
The undersigned Registrant hereby undertakes;
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
II-1
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.
(4) The undersigned registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities 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 being offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing a Registration Statement on Form S-2 and has duly
caused this Amendment to the Registration Statement dated January 12, 2001, to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Irvine, State of California, on the 8th day of October, 2001.
TRIMEDYNE, INC.
By:/s/
Marvin P. Loeb
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
____________________________ _____________________ ____________________
/s/ Chairman, Chief October 8, 2001
Marvin P. Loeb Executive Officer
and Director
/s/ Comptroller October 8, 2001
Jeffrey S. Rudner
/s/ Director October 8, 2001
Donald Baker
/s/ Secretary and Director October 8, 2001
Richard F. Horowitz
II-3
Exhibit 1
400,000 Shares
TRIMEDYNE, INC.
Series A Convertible Preferred Stock
UNDERWRITING AGREEMENT
__________, 2001
Chatsworth Securities LLC
95 East Putnam Avenue
Greenwich, CT 06830
Attn: Joel Matcovsky
Dear Sirs:
The undersigned, Trimedyne, Inc. a Nevada corporation (the
"Company"), hereby confirms its agreement with you (the "Underwriter"), as
follows:
1. The Offering.
------------
(a) The Underwriter agrees to sell up to 400,000 shares of the
Company's Series A Convertible Preferred Stock, $10.00 par value per share
("Preferred Stock") to the public as agent for the Company on a "best
efforts" only basis during the offering period commencing as of the
effective date ("Effective Date") of the Company's Registration Statement
on Form S-2, filed with the Securities and Exchange Commission (the
"Commission") on January 12, 2001 and amended on October ___, 2001
(Commission File No. 333-46054) (the "Registration Statement"), and
terminating on the first to occur of (i) the sale of the 400,000 shares of
Preferred Stock or (ii) six (6) months from the Effective Date, unless such
period is extended by mutual agreement between us (the "Offering Period"),
plus an additional three business days to permit funds collected during the
Offering Period to clear (the "Offering").
(b) The public offering price of the Preferred Stock shall be mutually
determined by us from time to time, based upon the then market price of the
Preferred Stock on the NASDAQ market. You may from time to time after the
aforesaid mutual determination of the public offering price increase, but
not decrease the public offering price, without the consent of the Company,
by reason of changes in general market conditions or otherwise.
- 1 -
(c) The number of shares of Preferred Stock which you shall offer to
the public from time to time during the Offering Period shall be mutually
determined by us from time to time after the Effective Date.
(d) The Company shall pay you as Underwriter a sales commission of
seven percent (7%) and a non-accountable expense allowance of one percent
(1%) of all sales of Preferred Stock sold by you during the Offering
Period, of which $5,000 will be paid concurrent with the execution hereof,
except on sales of Preferred Stock to officers, directors or employees of
the Company and their affiliates.
(e) The Company hereby agrees to sell to you, and you hereby agree to
purchase 40,000 five year warrants ("Warrants") at a price of $0.01 per
Warrant, for a total purchase price of $400. The Warrants shall be
exercisable in an amount equal to ten percent (10%) of the number of shares
of Preferred Stock sold by you hereunder to the public during the Offering
Period, except for shares of Preferred Stock sold to officers, directors or
employees of the Company and their affiliates and certain other parties
referred to you by the Company. The Warrants will each be exercisable for a
period of four (4) years commencing one (1) year following the Effective
Date to purchase one (1) share of Preferred Stock at a price equal to one
hundred twenty percent (120%) of the average monthly public offering prices
of the Preferred Stock sold by you during the Offering Period.
2. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to, and agrees with the
Underwriter that:
(i) The Company will deliver to you any amendment(s) to the
Registration Statement filed with the Commission (collectively
referred to herein as the "Registration Statement"). The prospectus,
in the form filed with the Commission pursuant to Rule 424(b) of the
General Rules and Regulations (the "Regulations") of the Commission
under the Securities Act of 1933, as amended (the "Act") is herein
referred to as the "Prospectus."
(ii) When the Registration Statement becomes effective, and at
all times subsequent thereto and including the Closing Date (as
defined in Section 1(d) and during such longer period as the
Prospectus may be required to be delivered in connection with sales by
the Underwriter or a dealer, and during such longer period until any
post-effective amendment thereto shall become effective, the
Registration Statement (and any post-effective amendment thereto) and
the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement to the
Registration Statement or the Prospectus) will contain all statements
which are required to be stated therein in accordance with the Act and
the Regulations, will comply with the Act and the Regulations, and
will not contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and no event will have
occurred which should have been set forth in an amendment or
- 2 -
supplement to the Registration Statement or the Prospectus which has
not been set forth in such an amendment or supplement; except that no
representation or warranty is made in this Section 2(a)(ii) with
respect to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company with
respect to the Underwriter by or on behalf of the Underwriter
expressly for inclusion in any Preliminary Prospectus, the
Registration Statement, or the Prospectus, or any amendment or
supplement thereto.
(iii) Neither the Commission nor the "blue sky" or securities
authority of any jurisdiction have issued an order ("Stop Order")
suspending the effectiveness of the Registration Statement, preventing
or suspending the use of any Preliminary Prospectus, the Prospectus,
the Registration Statement refusing to permit the effectiveness of the
Registration Statement, or suspending the registration or
qualification of the Preferred Stock, nor has any of such authorities
instituted or threatened to institute any proceedings with respect to
a Stop Order.
(iv) The only subsidiaries (as defined in the Regulations) of the
Company are Mobile Surgical Technologies, Inc. and Cardiodyne, Inc.,
(the "Subsidiaries"). The Company and the Subsidiaries are
corporations duly organized, validly existing, and in good standing
under the laws of their respective jurisdictions of incorporation. The
Company and the Subsidiaries are each duly qualified to do business
and are in good standing in every jurisdiction in which their
ownership, leasing, licensing, or use of property and assets or the
conduct of their business makes such qualification necessary.
(v) The authorized capital stock of the Company consists of
1,000,000 shares of Preferred Stock, none of which have been issued or
are outstanding, and 30,000,000 shares of Common Stock, of which
12,815,510 shares were outstanding on September 30, 2001. Each
outstanding share of Common Stock and to the knowledge of the Company
each outstanding share of capital stock of the Subsidiaries is validly
authorized, validly issued, fully paid, and nonassessable, has not
been issued and is not owned or held in violation of any preemptive
rights of stockholders, and to the knowledge of the Company in the
case of the Subsidiary are owned of record and beneficially by the
Company or the other shareholders as scheduled in the Prospectus free
and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, and voting trusts, except as
otherwise disclosed in the Prospectus. There are currently no
outstanding options, warrants, or other rights calling for the
issuance of, any shares of capital stock of the Company or to the
knowledge of the Company of the Subsidiary or any security or other
instrument which by their terms are convertible into, exercisable for,
or exchangeable for capital stock of the Company, except as may be
described in the Prospectus.
(vi) The consolidated financial statements of the Company as of
and for the period ended September, 2000 included in the Registration
Statement and the Prospectus fairly present with respect to the
Company and the Subsidiaries the consolidated financial position, the
consolidated results of operations, and the other information
purported to be shown therein at the respective dates and for the
respective periods to which they apply. Such financial statements have
- 3 -
been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, are
correct and complete, and are in accordance with the books and records
of the Company and the Subsidiaries. The accountants whose report on
the audited financial statements is filed with the Commission as a
part of the Registration Statement are, and during the periods covered
by their report(s) included in the Registration Statement and the
Prospectus were independent certified public accountants with respect
to the Company and the Subsidiaries within the meaning of the Act and
the Regulations. Except for the consolidated financial statements of
the Company, no other financial statements are required by Form S-2 or
otherwise to be included in the Registration Statement or the
Prospectus.
(vii) There is no litigation, arbitration or other governmental
proceeding (formal or informal), or investigation pending, threatened
in writing, with respect to the Company, the Subsidiaries, or any of
their respective operations, businesses, properties, or assets, except
as described in the Prospectus. Neither the Company nor the
Subsidiaries are in violation of, or in default with respect to, any
law, rule, regulation, order, judgment, or decree except as described
in the Prospectus, nor are the Company or the Subsidiaries required to
take any action in order to avoid any such violation or default.
(viii) Neither the Company nor the Subsidiaries have received any
notice that the Company, the Subsidiaries or any other party is in
violation or breach of, or in default with respect to, complying with
any material provision of any contract, agreement, instrument, lease,
license, arrangement, or understanding which is material to the
Company and the Subsidiaries taken as a whole, and each such contract,
agreement, instrument, lease, license, arrangement, and understanding
is in full force and is the legal, valid, and binding obligation of
the parties thereto and is enforceable as to them in accordance with
its terms. Neither the Company nor the Subsidiaries are in violation
or breach of, or in default with respect to, any material term of its
certificate of incorporation (or other charter document) or by-laws.
(ix) Except as set forth in the Prospectus, all patents, patent
applications, trademarks, trademark applications, trade names, service
marks, copyrights, franchises, and other intangible properties and
assets (all of the foregoing herein referred to as "Intangibles") that
the Company or the Subsidiaries owns or has pending, or under which it
is licensed, are in good standing and to the knowledge of the Company
uncontested. Neither the Company nor the Subsidiaries are aware that
they have infringed, are infringing, or have received notice of
infringement with respect to asserted Intangibles of others. To the
knowledge of the Company or the Subsidiaries there is no infringement
by others of Intangibles of the Company or of the Subsidiaries.
(x) The Company has all requisite power and authority to execute,
deliver, and perform this underwriting agreement (the "Agreement").
All necessary corporate proceedings of the Company have been duly
taken to authorize the execution, delivery, and performance of this
Agreement by the Company. This Agreement has been duly authorized,
executed, and delivered by the Company, is the legal, valid, and
- 4 -
binding obligation of the Company, and is enforceable as to the
Company in accordance with its terms. No consent, authorization,
approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or other
governmental authority or any court or other tribunal is required by
the Company for the execution, delivery, or performance of this
Agreement by the Company (except filings under the Act which have been
or will be made before the Closing Date and such consents consisting
only of consents under "blue sky" or securities laws which have been
obtained at or prior to the date of this Agreement). Except where the
failure would not have a material adverse effect on the Company taken
as a whole: (a) no consent of any party to any contract, agreement,
instrument, lease, license, arrangement to which the Company is a
party, or to which any of its properties or assets are subject, is
required for the execution, delivery, or performance of this Agreement
and (b) the execution, delivery, and performance of this Agreement
will not violate, result in a breach of, conflict with any material
provision of or (with or without the giving of notice or the passage
of time or both), entitle any party to terminate or call a default
under any contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a breach of any
term of the certificate of incorporation (or other charter document)
or by-laws of the Company or violate, result in a breach of, or
conflict with any law, rule, regulation, order, judgment, or decree
binding on the Company or to which any of their respective operations,
businesses, properties, or assets are subject.
(xi) The Preferred Stock to be offered hereunder and the Common
Stock underlying the Preferred Stock and those of the Warrants are
validly authorized and, when issued and delivered in accordance with
this Agreement, will be validly issued, fully paid, and nonassessable
and will not be issued in violation of any preemptive rights of
stockholders. The Preferred Stock and the Common Stock conform to all
statements relating thereto contained in the Registration Statement or
the Prospectus.
(xii) Neither the Company nor any of its officers, directors, or
affiliates (as defined in the Regulations), has taken or will take,
directly or indirectly, any action designed to stabilize or manipulate
the price of any security of the Company, or which has caused or
resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of the
Preferred Stock hereunder.
(xiii) The Company has obtained from each of its directors,
officers and 5% stockholders a written agreement that for a period
terminating ninety (90) days after the termination of the Offering
Period, without your prior written consent, offer, pledge, sell,
contract to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any shares of Common Stock or any
security or other instrument which by its terms is convertible into,
exercisable for, or exchangeable for shares of Common Stock, except
(a) as set forth in the Prospectus, (b) in a private transaction or
(c) in a transaction with a non U.S. national or resident, outside the
U.S. or its territories.
- 5 -
(xiv) On the Effective Date the Company shall have complied with
the requirements of the NASD with respect to the Offering.
3. Covenants of the Company.
------------------------
The Company covenants that it will:
(i) Use its best efforts to cause the Registration Statement to
become effective as promptly as possible and notify you immediately,
and confirm such notice in writing, (A) when the Registration
Statement and any post-effective amendment thereto become effective,
(B) of the receipt of any comments from the Commission or the "blue
sky" or securities authority of any jurisdiction regarding the
Registration Statement, any post-effective amendment thereto, the
Prospectus, or any amendment or supplement thereto, and (C) of the
receipt of any notification with respect to a Stop Order or the
initiation or threatening of any proceeding with respect to a Stop
Order. The Company will use its best efforts to prevent the issuance
of any Stop Order and, if any Stop Order is issued, to obtain the
lifting thereof as promptly as possible.
(ii) During the time when a prospectus relating to the Preferred
Stock and the underlying Common Stock is required to be delivered
hereunder or under the Act or the Regulations, the Company shall
comply so far as it is able with all requirements imposed upon it by
the Act, as now existing and as hereafter amended, and by the
Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Preferred Stock
in accordance with the provisions hereof and the Prospectus. If, at
any time when a prospectus relating to the Preferred Stock is required
to be delivered hereunder or under the Act or the Regulations, any
event shall have occurred as a result of which, in the reasonable
opinion of counsel for the Company, the Registration Statement or the
Prospectus as then amended or supplemented contains any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or if, in the opinion of such counsel, it is
necessary at any time to amend or supplement the Registration
Statement or the Prospectus to comply with the Act or the Regulations,
the Company will immediately notify the Underwriter and promptly
prepare and file with the Commission an appropriate amendment or
supplement (in form and substance satisfactory to the Representative)
which will correct such statement or omission or which will effect
such compliance and will use its best efforts to have any such
amendment declared effective as soon as possible.
(iii) Deliver without charge to the Underwriter, as soon as the
Registration Statement, or any amendment thereto, becomes effective or
a supplement is filed, two copies of the executed Registration
Statement, including exhibits, and any amendment thereto, as the case
may be, and two copies of any supplement thereto, and such number of
copies of the Prospectus, the Registration Statement, and amendments
and supplements thereto, if any, without exhibits, as the Underwriter
may request for the purposes contemplated by the Act.
- 6 -
(iv) Endeavor in good faith, in cooperation with the Underwriter,
at or prior to the time the Registration Statement becomes effective,
to qualify the Preferred Stock for offering and sale under the "blue
sky" or securities laws of such jurisdictions as you may designate
subject to the Company's prior approval; provided, however, that no
such qualification shall be required in any jurisdiction where, as a
result thereof, the Company would be subject to service of general
process or to taxation as a foreign corporation doing business in such
jurisdiction to which it is not then subject. In each jurisdiction
where such qualification shall be effected, the Company will, unless
you agree in writing that such action is not at the time necessary or
advisable, file and make such statements or reports at such times as
are or may be required by the laws of such jurisdiction.
(v) File no amendment or supplement to the Registration Statement
or Prospectus at any time, whether before or after the effective date
of the Registration Statement, unless such filing shall comply with
the Act and the Regulations and unless the Underwriter shall
previously have been advised of such filing and furnished with a copy
thereof.
(vi) Comply with all registration, filing, and reporting
requirements of the Exchange Act, which may from time to time be
applicable to the Company.
(vii) Comply with all provisions of all undertakings contained in
the Registration Statement.
(viii) File timely and accurate reports on Form SR with the
commission in accordance with Rule 463 of the Regulations or any
successor provision.
(ix) If the principal stockholders, officers, or directors of the
Company are required by the "blue sky" or securities authority of any
jurisdiction requested by the Underwriter pursuant to Section 3(a)(iv)
to escrow or agree to restrict the sale of any security of the Company
owned by them for the Company to qualify or register the Preferred
Stock for sale under the "blue sky" or securities laws of any such
jurisdiction, cause each such person to escrow or restrict the sale of
such security on the terms and conditions and in the form specified by
the securities administrator of such jurisdiction.
4. Payment of Expenses.
-------------------
The Company agrees to pay all expenses in connection with (a) the
preparation, printing and filing of the Registration Statement and the
Prospectus, including the cost of all copies of the Prospectus and any
amendments or supplements thereto supplied to the Underwriter in quantities
as hereinabove stated, (b) the issuance, sale, transfer, and delivery of
the Preferred Stock, including any transfer or other taxes payable thereon,
(c) subject to the Company's prior approval, the qualification of the
Preferred Stock and underlying Common Stock under state or foreign "blue
sky" or securities laws, including the costs of printing the preliminary
and final "Blue Sky Survey, " (d) the filing fees payable to the
Commission, the National Association of Securities Dealers, Inc. (the
"NASD"), and the jurisdictions in which such qualification is sought, and
(e) the disbursements in connection therewith relating to all filings with
the NASD.
- 7 -
5. Conditions of the Underwriters' Obligations.
-------------------------------------------
The obligation of the Underwriter to offer and sell the Preferred
Stock as agent for the Company on a best efforts basis, as provided herein,
shall be subject, in its discretion, to the continuing accuracy of the
representations and warranties of the Company contained herein and in each
certificate and document contemplated under this Agreement to be delivered
to the Underwriter, as of the date hereof and as of the Closing Date, to
the performance by the Company of its obligations hereunder, and to the
following conditions:
(a) The Registration Statement shall have become effective not later
than 6:00 P.M., New York City Time, on or before the date of execution of
this Agreement or such other date and time as shall be consented to in
writing by the Underwriter.
(b) At the time this Agreement is executed and at the Closing Date,
you shall have received the favorable opinion of Heller, Horowitz & Feit,
P.C., counsel for the Company, dated the date of delivery, addressed to the
Underwriter, to the effect that:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada.
The Company is duly qualified to do business and are in good standing
in every jurisdiction in which its ownership, leasing, licensing, or
use of property and assets or the conduct of its business makes such
qualification necessary;
(ii) The authorized capital stock of the Company consists of
1,000,000 shares of Preferred Stock, none of which are issued or
outstanding, and 30,000,000 shares of Common Stock, of which
12,815,510 shares were issued and outstanding on September 30, 2001.
Each outstanding share of Common Stock is validly authorized, validly
issued, fully paid, and nonassessable, free and clear of all liens,
security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts, except as set forth in the Prospectus.
Except as disclosed in the Prospectus, to the knowledge of such
counsel, there is no commitment, plan, or arrangement to issue, and no
outstanding option, warrant, or other right calling for the issuance
of, any share of capital stock of the Company or any security or other
instrument which by its terms is convertible into, exercisable for, or
exchangeable for capital stock of the Company, except as may be
properly described in the Prospectus;
(iii) To the knowledge of counsel, the Company is not in
violation or breach of, or in default with respect to, any material
provision of its certificates of incorporation (or other charter
document) or by-laws;
(iv) The Company has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of the Company have been taken to authorize the execution,
delivery, and performance of this Agreement by the Company. This
Agreement has been duly authorized, executed, and delivered by the
Company, is the legal, valid, and binding obligation of the Company,
and (subject to applicable bankruptcy, insolvency, and other laws
affecting the enforceability of creditors' rights generally) is
enforceable as to the Company in accordance with its terms;
- 8 -
(v) The Preferred Stock to be sold by the Company in this
Offering and the Common Stock underlying the Preferred Stock and those
of the Warrants will be validly authorized and, when issued and
delivered in accordance with this Agreement, will be validly issued,
fully paid, and nonassessable and will not be issued in violation of
any preemptive rights of stockholders; and
(vi) The Registration Statement shall have become effective under
the Act. To the knowledge of such counsel, no Stop Order has been
issued and no proceedings for that purpose have been instituted or
threatened in writing.
Such opinions may contain such qualifications, exceptions, and
assumptions and may rely upon such matters or other opinions as may be
agreed upon by the Underwriters and the counsel rendering the opinion.
(c) At the Closing Date, you shall have received a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company,
dated as of the Closing Date, to the effect that as of the date of this
Agreement and as of the Closing Date, the representations and warranties of
the Company contained herein were and are accurate, and that as of the
Closing Date the obligations to be performed by the Company hereunder on or
prior thereto have been fully performed.
(d) All proceedings taken in connection with the issuance, sale,
transfer and delivery of the Common Stock shall be satisfactory in form and
substance to the Underwriter.
(e) The NASD, upon review of the terms of the public offering of the
Common Stock, shall not have objected to the Underwriter's participation in
such offering.
Any certificate or other document signed by any officer of the Company
and delivered to the Underwriter or its counsel shall be deemed a
representation and warranty by the Company hereunder to the Underwriter as
to the statements made therein. If any condition to the Underwriters'
obligations hereunder to be fulfilled prior to or at the Closing Date is
not so fulfilled, the Underwriter may terminate this Agreement or, if the
Underwriter so elects, in writing waive any such conditions which have not
been fulfilled or extend the time for their fulfillment.
6. Indemnification and Contribution.
--------------------------------
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Underwriter and its officers, directors,
partners, employee's, agents, and counsel, and each person, if any, who
controls the Underwriters within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any and all loss, liability,
claim, damage, and expense whatsoever (which shall include, for all
purposes of this Section 6, but not be limited to reasonable attorneys'
fees and any and all reasonable expense incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or
any claim whatsoever and any and all amounts paid in settlement of any
claim or litigation) as and when incurred arising out of, based upon, or in
connection with (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in the Registration Statement or the Prospectus
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(as amended and supplemented from time to time), or any amendment or
supplement thereto or (B) in any application or other document or
communication (in this Section 6 collectively referred to as an
"application") executed by or on behalf of the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Preferred Stock and the underlying
Common Stock under the "blue sky" or securities laws thereof or filed with
the Commission or any securities exchange; or any omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company as stated in Section 6(b) with
respect to you expressly for inclusion in the Prospectus, or any amendment
or supplement thereto, or in any application, as the case may be, or (ii)
any breach of any material representation, warranty, covenant, or agreement
of the Company contained in this Agreement. The foregoing agreement to
indemnify shall be in addition to any liability the Company may otherwise
have, including liabilities arising under this Agreement.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each director of the Company and each officer of the Company who shall have
signed the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to the Underwriter in Section 6(a), but only with respect
to statements or omissions, if any, made in the Registration Statement, or
the Prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, or in any application in reliance upon and
in conformity with written information furnished to the Company as stated
in this Section 6(b) with respect to the Underwriter expressly for
inclusion in any Preliminary Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto, or in any application,
as the case may be; provided, however, that the obligation of the
Underwriter to provide indemnity under the provisions of this Section 6(b)
shall be limited to the amount which represents the product of the number
of shares of Preferred Stock sold by the Underwriter as agent for the
Company hereunder and the public offering price of the Preferred Stock sold
by the Underwriter to the public hereunder. For all purposes of this
Agreement, the amounts of the Underwriter's commission, any concession or
re-allowance and the information set forth under "Underwriting" set forth
in the Prospectus constitute the only information furnished in writing by
or on behalf of the Underwriter expressly for inclusion in the Registration
Statement or the Prospectus (as from time to time amended or supplemented),
or any amendment or supplement thereto, or in any application, as the case
may be.
(c) If any action is brought against the Underwriter or the Company or
any of their officers, directors, partners, employees, agents, counsel, or
controlling persons (an "indemnified party") in respect of which indemnity
may be sought against any other party hereto pursuant to the foregoing
paragraphs, such indemnified party or parties shall promptly notify all the
parties (the "indemnifying parties") against whom indemnification is to be
sought in writing of the institution of such action (but the failure so to
notify shall not relieve the indemnifying parties from any liability they
may have other than pursuant to this Section 6(d)) and the indemnifying
parties shall promptly assume the defense of such action, including the
employment of counsel (satisfactory to such indemnified party or parties)
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and payment of expenses. Such indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
or parties unless the employment of such counsel shall have been authorized
in writing by the indemnifying parties in connection with the defense of
such action or the indemnifying parties shall not have promptly employed
counsel satisfactory to such indemnified party or parties to have charge of
the defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be one or more legal defenses available
to it or them or to other indemnified parties which are different from or
additional to those available to one or more of the indemnifying parties,
in any of which events such fees and expenses shall be borne by the
indemnifying parties and the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified party or
parties. Anything in this paragraph to the contrary notwithstanding, no
indemnifying party shall be liable for any settlement of any such claim or
action effected without its written consent. In addition, the Company and
the Selling Stockholder agree promptly to notify the Underwriter of the
commencement of any litigation or proceedings against the Company or any of
its officers or directors in connection with the sale of the Common Stock,
the Registration Statement, or the Prospectus, or any amendment or
supplement thereto, or any application.
(d) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section
6(a), 6(b), or 6(c) (subject to the limitations thereof) but it is found in
a final judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this
Agreement expressly provides for indemnification in such case or (ii) any
indemnified or indemnifying party seeks contribution under the Act, the
Exchange Act, or otherwise, then the Company (including for this purpose
any contribution made by or on behalf of any director of the Company, any
officer of the Company who signed the Registration Statement, any
controlling person of the Company as one entity and the Underwriter, in the
aggregate (including for this purpose any contribution by or on behalf of
an indemnified party) as a second entity, shall contribute to the losses,
liabilities, claims, damages, and expenses whatsoever to which any of them
may be subject, so that the Underwriter is responsible for the proportion
thereof equal to the Underwriter's commission on the sale of shares of the
Preferred Stock hereunder, and the Company is responsible for the remaining
portion based upon the proceeds received or which may have been received as
a result of this Offering; provided, however, that if applicable law does
not permit such allocation, then other relevant equitable considerations
such as the relative fault of the Company and you in the aggregate in
connection with the facts which resulted in such losses, liabilities,
claims, damages, and expenses shall also be considered. The relative fault,
in the case of an untrue statement, alleged untrue statement, omission, or
alleged omission, shall be determined by, whether such statement, alleged
statement, omission, or alleged omission relates to information supplied by
the Company, or by you. The Company and you agree that it would be unjust
and inequitable if the respective obligations of the Company and you for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages, and expenses (even if you
and the other indemnified parties were treated as one entity for such
purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 6(e). No person guilty
of a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who is not
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guilty of such fraudulent misrepresentation. For purposes of this Section
6(e), each person, if any, who controls you within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act and each officer,
director, partner, employee, agent, and your counsel shall have the same
rights to contribution as you, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the
Registration Statement, and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to the
provisions of this Section 6(e). Anything in this Section 6(e) to the
contrary notwithstanding, no party shall be liable for contribution with
respect to the settlement of any claim or action effected without its
written consent. This Section 6(e) is intended to supersede any right to
contribution under the Act, the Exchange Act, or otherwise.
7. Representations and Agreements to Survive Delivery.
--------------------------------------------------
All representations, warranties, covenants, and agreements contained
in this Agreement shall be deemed to be representations, warranties,
covenants, and agreements at the Closing Date, and such representations,
warranties. covenants, and agreements of the Underwriter and the Company,
including the indemnity and contribution agreements contained in Section 6,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriter or any indemnified
person, or by or on behalf of the Company, or any person or entity which is
entitled to be indemnified under Section 6(b), and shall survive
termination of this Agreement or the delivery of the Common Stock to the
purchasers thereof.
8. Effective Date of This Agreement and Termination Thereof.
--------------------------------------------------------
(a) This Agreement shall become effective at 10:00 A.M., New York City
Time, on the first full business day following the day on which the
Registration Statement becomes effective. The Underwriter or the Company
may prevent this Agreement from becoming effective without liability of any
party to any other party, except as noted below in this Section 8, by
giving the notice indicated in Section 8(d) before the time this Agreement
becomes effective.
(b) The Underwriter shall have the right to terminate this Agreement
at any time prior to the Closing Date by giving notice to the Company if
any domestic or international event, act, or occurrence has materially in
disrupted, or in the opinion of the Underwriter will in the immediate
future materially disrupt, the securities markets; or if there shall have
been a general suspension of, or a general limitation on prices for,
trading in securities on NASDAQ; or if there shall have been an outbreak of
major hostilities or other national or international calamity; or if a
banking moratorium has been declared by a state or federal authority; or if
a moratorium in foreign exchange trading by major international banks or
persons has been declared; or if there shall have been a material
interruption in the mail service or other means of communication within the
United States; or if the Company shall have sustained a material or
substantial loss by fire, flood, accident, hurricane, earthquake, theft,
sabotage, or other calamity or malicious act which, whether or not such
loss shall have been insured, will, in the opinion of the Underwriter, make
it inadvisable to proceed with the offering; or if there shall have been
such change in the market for the Company's securities or securities in
general or in political, financial, or economic conditions as in the
judgment of the Underwriter makes it inadvisable to proceed with the public
offering on the terms contemplated by the Prospectus.
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(c) If the Underwriter elects to prevent this Agreement from
becoming effective, as provided in this Section 8, or to terminate this
Agreement, the Underwriter shall notify the Company promptly by
telephone, telex, or telegram, confirmed by letter. If, as so provided,
the Company elects to prevent this Agreement from becoming effective or
to terminate this Agreement, the Company shall notify the Underwriter
promptly by telephone, telex, or telegram, confirmed by letter.
9. Notices.
-------
All communications hereunder, except as may be otherwise specifically
provided herein, shall be in writing and, if sent to you shall be mailed,
certified mail, return receipt requested, delivered personally or by
messenger, or via facsimile with fax confirmation of receipt or if by
letter, to you at Chatsworth Securities LLC, 95 East Putnam Ave.,
Greenwich, CT 06830, Attention: Joel Matcovsky; or if sent to the Company,
at Trimedyne, Inc., 15091 Bake Pkwy., Irvine, CA 92618, Attention: Marvin
P. Loeb, Chairman, with a copy to Heller, Horowitz & Feit, P.C., 292
Madison Avenue, New York, , New York 10017, Attention: Richard F. Horowitz,
Esq., Facsimile No.: (212) 696-9459. Either party hereto may change its
address by written notice to the other party.
10. Construction.
------------
This Agreement shall be construed in accordance with the laws of the
State of New York, without giving effect to conflict of laws. Time is of
the essence in this Agreement.
11. Acknowledgments.
---------------
The parties hereto acknowledge, understand and accept that Heller,
Horowitz & Feit, P.C. have acted as counsel to the Company in connection
with all legal matters relating to the Offering described in Section 1 of
this Agreement.
If the foregoing correctly sets forth the understanding between us,
please so indicate in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement among us.
Very truly yours,
The "Company"
Trimedyne, Inc.
By:_______________________________
Marvin P. Loeb
Chairman and CEO
Accepted as of the date first above written.
The "Underwriter"
CHATSWORTH SECURITIES LLC
By:__________________________________
Print Name:__________________________________
Title:__________________________________
Date:__________________________________
- 13 -
Exhibit 5
[HELLER, HOROWITZ & FEIT, P.C., LETTERHEAD]
Trimedyne, Inc. October 8, 2001
15091 Bake Parkway
Irvine, CA 92618
Gentlemen:
As counsel for your Company, we have examined your certificate of
incorporation, by-laws, and such other corporate records, documents and
proceedings and such questions of laws we have deemed relevant for the purpose
of this opinion.
We have also, as such counsel, examined the Registration Statement (the
"Registration Statement") of your Company on Form S-2, covering the registration
under the Securities Act of 1933 of up to 400,000 Shares of Preferred Stock,
$10.00 par value, of the Company ("Preferred Stock") and the underlying
4,000,000 shares of Common Stock, $0.01 par value ("Common Stock").
Our review has also included the exhibits and form of prospectus for
the issuance of such securities (the "Prospectus") filed with the Registration
Statement.
On the basis of such examination, we are of the opinion that:
1. The Company is a corporation duly authorized and validly existing
and in good standing under the laws of the State of Nevada, with corporate power
to conduct its business as described in the Registration Statement.
2. The Company has an authorized capitalization of 30,000,000 shares of
Common Stock and 1,000,000 shares of Preferred Stock.
3. The Preferred Stock and the underlying Common Stock have been duly
and validly authorized and, upon the issuance thereof, will be duly and validly
issued as fully paid and non-assessable.
We hereby consent to the use of our name in the Registration Statement
and Prospectus and we also consent to the filing of this opinion as an exhibit
thereto.
Very truly yours,
HELLER, HOROWITZ & FEIT, P.C.
Exhibit 23 (a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement on Form S-2 of our report
dated January 3, 2001 appearing on page F-2 of the Trimedyne, Inc. Annual Report
on Form 10-KSB for the year ended September 30, 2000.
/s/MCKENNON, WILSON & MORGAN, LLP__
----------------------------------------
MCKENNON, WILSON & MORGAN, LLP.
Irvine, California
September 4, 2001