As filed with the Securities and Exchange Commission on December 17, 2003
Registration No. 33-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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TRIMEDYNE, INC.
(Exact name of registrant as specified in its charter)
Nevada 36-3094439
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(State or Other Jurisdiction (IRS Employer
Incorporation or Organization) Identification No.)
15091 Bake Parkway
Irvine, California 92618
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(Address of Principal Executive Offices) (Zip Code)
Shares Underlying the 2003 Non-Qualified Stock Option Plan
MARVIN P. LOEB, CHAIRMAN
TRIMEDYNE, INC.
15091 Bake Parkway
Irvine, California 92618
(Name and Address of Agent for Service)
(949) 951-3800
(Telephone Number, Including Area Code, of Agent of Service)
Copies to:
RICHARD F. HOROWITZ, ESQ.
Heller, Horowitz & Feit, P.C.
292 Madison Avenue
New York, New York 10017
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
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Common Stock 3,342,071 $1.03 $3,442,333 $316.69
(1) Estimated solely for the purpose for calculating the registration fee on
the basis of the closing price quoted on the OTCBB on December 11, 2003.
PROSPECTUS
TRIMEDYNE, INC.
SHARES OF COMMON STOCK, $0.01 PAR VALUE
This Prospectus covers the proposed offer and sale by certain security
holders (the "Selling Shareholders") of Trimedyne, Inc. ("we", "our" or "us")
from time to time at their discretion, at prevailing market prices, of up to
3,342,071 shares of our Common Stock, $0.01 par value (the "Shares").
Of these, 2,000,000 Shares are reserved for granting of stock options
("Options") pursuant to our 2003 Non-Qualified Stock Option Plan (the "2003
Option Plan"), under which Options to purchase 1,108,500 Shares have been
granted, and 1,342,071 Shares have been or are committed to be issued to certain
of our officers, employees and consultants in lieu of compensation for services.
Our Shares are traded on the NASDAQ Over-the-Counter Bulletin Board
("OTC:BB") under the symbol "TMED". On December 11, 2003, the closing price of
our Common Stock, as reported by the OTC:BB, was $1.03 per Share.
The net proceeds from the Shares sold by the Selling Shareholders will
inure entirely to their benefit and not to us. We will, however, receive funds
from the exercise of Options, to the extent, if any, the Options are exercised.
The Shares may be offered from time to time by the Selling Shareholders through
ordinary brokerage transactions, in negotiated transactions, or otherwise, at
market prices prevailing at the time of sale or at negotiated prices. See "Plan
of Distribution."
Although there are no current arrangements therefore, commissions equal to
or in excess of normal brokerage commissions may be paid to brokerage firms by
the Selling Shareholders in connection with such sales. Each Selling Shareholder
will bear all expenses with respect to his/her/its sale of Shares, except the
costs associated with registering the Shares under the Act and under any
applicable State blue sky or securities laws, and preparing and printing this
Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We will furnish to each person to whom this Prospectus is delivered, upon
written request, a copy of any or all of the documents referred to by reference,
other than exhibits to such documents unless such exhibits are specifically
incorporated herein by reference. Requests should be addressed to: Sudele Seron,
Secretary, Trimedyne, Inc., 15091 Bake Parkway, Irvine, California 92618
(Telephone: (949) 951-3800). email: sseron@trimedyne.com.
THE DATE OF THIS PROSPECTUS IS DECEMBER 15, 2003
THIS OFFERING INVOLVES SIGNIFICANT RISKS CONCERNING OUR COMPANY AND ITS
BUSINESS. SEE "RISK FACTORS", WHICH BEGINS ON PAGE 3 OF THIS PROSPECTUS, FOR
CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OR AN OFFER TO
BUY ANY OF THE SECURITIES TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL.
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission"), 450 Fifth Street, NW, Washington, D.C. 20549, a Registration
Statement on Form S-8 under the Securities Act of 1933 with respect to the
securities offered hereby (herein, together with all amendments and exhibits,
referred to as the "Registration Statement"). This Prospectus filed as part of
the Registration Statement does not contain all the information set forth in, or
annexed as exhibits to, the Registration Statement. For further information
pertaining to the securities offered hereby our business and financial
condition, reference is made to the information requirements of the Securities
Exchange Act of 1934, as amended. The Registration Statement and exhibits
thereto, as well as reports, proxy and information statements, and other filed
information, may be inspected at the Headquarters Office of the Securities and
Exchange Commission located at 450 Fifth Street, NW, Room 1024, Washington, D.C.
20549 and at certain of the Commission's regional offices at the following
addresses: 7 World Trade Center, New York, New York; and 500 West Madison
Street, Chicago, Illinois; copies of such material may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, NW, Room 1024,
Washington D.C. at prescribed rates. 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.
TABLE OF CONTENTS
HEADING PAGE NO.
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PROSPECTUS 1
THE OFFERING 3
RISK FACTORS 3
THE COMPANY 6
BUSINESS 6
USE OF PROCEEDS 7
SELLING SHAREHOLDERS 7
PLAN OF DISTRIBUTION 9
LITIGATION 9
DESCRIPTION OF SECURITIES 9
INCORPORATION OF DOCUMENTS BY REFERENCE 9
COMMISSION'S POLICY ON INDEMNIFICATION 10
LEGAL OPINION 10
2
THE OFFERING
This prospectus covers the proposed offer and sale by certain of our
security holders, from time to time at prevailing market prices, at their
discretion, of up to 3,342,071 Shares of our Common Stock, $0.01 par value. Our
Shares are traded on the NASDAQ Over-the-Counter Bulletin Board under the symbol
"TMED". The closing price of our Shares on December 11, 2003 was $1.03 per
share.
RISK FACTORS
There is no assurance that our future activities will be successful.
Moreover, there is no assurance that our business will be unaffected by newer
technological developments, that we will be able to develop or obtain licenses
to new products that may be required for us to successfully compete in our
market areas, that we will continue to satisfy regulatory requirements and
obtain regulatory approvals to market new products, or that we will be able to
adapt to changes in the economics of the medical technology business in general
and the laser and laser delivery systems business in particular.
An investment in our Shares 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 Shares could decline
and you may lose all or part of your investment.
1. LIMITED CASH RESOURCES
On June 30, 2003, we had cash of $1,300,000, receivables of $532,000 (after
allowances for bad debts), inventories of $1,500,000 and other current assets of
$242,000. On that date, we had accounts payable of $751,000, accrued expenses of
$543,000, accrued compensation of $250,000 and other current liabilities of
$139,000. All of the above amounts are unaudited figures. While our cash
resources are limited, we expect to continue to operate on a profitable basis
and increase our cash resources, although such cannot be assured.
2. WE HAVE INCURRED SUBSTANTIAL LOSSES IN THE PAST
We had a profit of $828,000, or $0.06 per share, unaudited, in the nine
months ended June 30, 2003. However, we had a net loss of $1,215,000 or $0.08
per share in the fiscal year ended September 30, 2002, and a net loss of
$7,484,000 or $0.59 per share in the fiscal year ended September 30, 2001. We
had an accumulated deficit of $44,313,000 at June 30, 2003. While we expect to
continue to operate at a profit, we could incur losses in the future if we fail
to generate revenues sufficient to offset the costs associated with
manufacturing and marketing our current products, our overhead, and the
development of new products. There can be no assurance that we will be able to
operate profitably in the future.
3. WE MAY NEED SUBSTANTIAL ADDITIONAL FINANCING IN THE FUTURE
Although our working capital (current assets over our current liabilities)
was $1,891,000 at June 30, 2003, on an unaudited basis, if you exclude our
inventories, our liquid working capital on that date was $391,000. We believe
our existing working capital may be sufficient to meet our operating needs, and
the operating needs of our 100% owned laser rental subsidiary for the next six
to twelve months. However, if we fail to continue to operate profitability, or
if we undertake the development, testing and marketing of new products in the
future, we may need to raise substantial additional capital. Also, we have
$200,000 of Senior Convertible Notes outstanding which are due, with interest at
12% per annum, in 2007. The Notes and accrued interest are convertible at prices
of $0.40 and $0.50 per Share. If the Notes and accrued interest are not
converted, we may have to raise additional capital to pay the Note holders the
principal and interest due on the Notes. 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 or shares of Preferred Stock will
dilute the equity interests of our holders of shares. There is no assurance such
financing, if and when needed, will be available to us on acceptable terms.
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4. THERE IS NO ASSURANCE ANY OR ALL OF THE NOTES AND ACCRUED INTEREST WILL BE
CONVERTED OR ANY OR ALL OF THE OPTIONS WILL BE EXERCISED
There is no assurance any or all of the Notes and accrued interest will be
converted or any or all of the Options will be exercised prior to the expiration
of their conversion or exercise rights, as such is largely dependent on the
market price of our Shares in the future significantly exceeding the conversion
prices of the Notes, which range from $0.40 to $0.50 per share, or the exercise
prices of the Options, which range from $0.14 to $3.84 per share.
5. 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.
6. WE MAY ACQUIRE OTHER ENTITIES
Although we have no present plans to do so, we may engage in acquisitions
of other companies and businesses in the future and may use our cash reserves or
shares of our Preferred Stock or Common Stock to pay for these acquisitions. If
we use shares of our Preferred or Common Stock for acquisitions, this will
result in a dilution of the percentage of the equity owned by holders of our
Shares. 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.
7. WE HAVE OBLIGATIONS TO ISSUE SHARES THAT WILL DILUTE OUR HOLDERS
In addition to 760,000 Shares which may be issued if all $200,000 of the
Notes with accrued interest to maturity are converted, the Registration
Statement of which this Prospectus is a part covers 800,514 Shares we have
agreed to issue to our Chairman and 6,957 Shares we have agreed to issue to our
President in lieu of $265,059 and $2,250 of cash compensation they have agreed
to waive, respectively, through September 30, 2003, and 146,000 Shares we have
agreed to issue to certain of our officers, employees and a consultant (25,000
to our President) in lieu of compensation for services.
8. OUR STOCK PRICE IS VOLATILE
The market prices for securities of medical device companies, including our
Shares, have been volatile. It is likely that the price of our Shares will
fluctuate in the future. Many factors can impact the market price of our Shares,
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
Shares could also be adversely affected by future conversions of the Notes or
exercises of outstanding Options.
9. 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 Shares,
as a non-dividend paying stock may not appeal to certain investors.
4
10. WE MAY ISSUE PREFERRED STOCK THAT COULD AFFECT THE RIGHTS OF HOLDERS OF OUR
SHARES
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
we may issue, without requiring shareholder approval. Although we presently have
no intention to do so, the issuance of any of our authorized but unissued
Preferred Stock in the future could have an adverse effect on the rights of the
holders of our Shares.
11. 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. There is no assurance we will be able to continue
to meet all regulatory requirements of the FDA and other governmental
authorities necessary to market our present products or obtain and maintain
approvals to test and market new products. Failing to meet necessary government
requirements will have a negative impact on our ability to continue as a going
concern.
12. WE CARRY LIMITED LIABILITY INSURANCE
We carry an aggregate of $5,000,000 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, patients or other
parties. If court awards exceeding the amount of such insurance were made, our
assets could be depleted.
13. WE ARE DEPENDENT UPON MAINTAINING PATENTS AND LICENSES
There is no assurance our patents will be upheld if challenged in court or
that we will be able to obtain additional valid patents. We cannot assure that
our patents can be successfully enforced against infringers. 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 our patents by others or, to obtain licenses to any necessary
patents could have a material adverse impact on our financial condition, results
of operations and our ability to successfully remain in business. (See
"Litigation" for information on a patent infringement lawsuit filed against us
by a competitor, a counter-suit we filed against this competitor, and current
product liability lawsuits).
14. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this Prospectus are forward-looking statements
that involve risks and uncertainties. These forward-looking statements include
statements about our plans, objectives, expectations, intentions and assumptions
and other statements contained in this Prospectus that are not statements of
historical fact. You can identify these statements by words such as "may,"
"will," "should," "estimates," "plans," "expects," "believes," "intends" and
similar expressions. We cannot guarantee future results, levels of activity,
performance or achievements. Our actual results and the timing of certain events
may differ significantly from those discussed in the forward-looking statements.
Factors that might cause such a discrepancy include those discussed in "Risk
factors" and elsewhere in this prospectus. You are cautioned to not rely on any
forward-looking statements.
5
THE COMPANY
We are engaged in the development, manufacturing and marketing of Holmium
"cold" pulsed lasers. We manufacture a variety of proprietary, disposable and
reusable fiber-optic, laser energy delivery devices, which have been cleared for
sale by the U.S. Food and Drug Administration ("FDA") for use with our Holmium
lasers and those made by others in orthopedics, urology, ear, nose and throat
("ENT") surgery, gynecology, gastrointestinal surgery, general surgery and other
medical applications. We are also developing several new, proprietary laser
energy delivery devices for use with such lasers.
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 and Oklahoma. We plan to extend MST's rental
activities to other states in the future. We have a Revenue Sharing Agreement
with another "fee per case" laser rental company, under which we provide one
laser to them and share in the revenues from its rental. While we expect
revenues from "fee per case" rentals of lasers to grow, such revenues
represented only 13% of our revenues in the nine months ended June 30, 2003 and
11% of our revenues in the preceding fiscal year ended September 30, 2002.
We were incorporated in Nevada on May 1, 1980. Our address is 15091 Bake
Parkway, Irvine, CA 92618. Our telephone number is (949) 951-3800, our facsimile
number is (949) 855-8206 and our website is www.trimedyne.com.
BUSINESS
The principal use of our Holmium lasers in urology is to fragment stones in
the kidney, ureter and bladder. Our Holmium lasers and optical fibers are able
to fragment stones of any size, composition, hardness or color. Our Holmium
lasers are also cleared for sale by the FDA for the treatment of benign
prostatic hyperplasia or "BPH" (sometimes referred to as an "enlarged
prostate"). We recently received clearance from the FDA to market a new
side-firing laser device. We plan to conduct a small study on the use of this
new device in the treatment of BPH, which affects about 50% of men over age 55,
to support an application to the FDA to market it for the treatment of this
condition.
The principal uses of our Holmium lasers in orthopedics are to treat
herniated (bulging) and ruptured lumbar discs, two of the three major causes of
lower back pain, and to treat damage in joints. An estimated 65 million people
suffer from back pain in the United States, and about 1 million surgeries to
treat back pain and 1.2 million arthroscopy procedures to treat damage in joints
are performed each year in the United States.
Our Holmium lasers and proprietary Side-Firing Laser Needles are used
in minimally invasive, percutaneous (x-ray guided) and endoscopic laser
discectomy procedures to treat herniated spinal discs, and in endoscopic laser
foraminoplasty ("ELF") procedures to treat both herniated and ruptured lumbar
discs, all on an outpatient basis.
Our laser discectomy and ELF procedures are typically performed in about 30
minutes, with only local anesthesia, on an outpatient basis. The back and leg
pain often disappears on the operating table or in recovery, and the patient
usually walks out with only a Band Aid on the needle puncture (stitches are
usually not required). Most patients can return to light activities in a few
days and to work in two or so weeks. Published studies show success rates (good
or excellent results, based on pain scores) from our laser disc procedures after
two years of 87% to 91%. Our minimally invasive, laser discectomy and ELF
procedures cost Medicare, insurance companies and health maintenance
organizations (HMOs) less than one-half the cost of the traditional surgical
procedures, which require general anesthesia and entail a 2 day or longer
hospital stay, significant post-operative pain and a recovery period of 2-3
months or longer. Published studies show the success rates of conventional disc
surgery to be significantly lower than those of our laser procedures.
The third major cause of lower back pain is a degenerated lumbar disc, due
to injury, disease or dehydration (loss of water content) of the disc due to old
age. Approximately 400,000 conventional "fusion" surgical procedures to treat
degenerated discs are performed each year in the United States. In these
procedures, metal rods and screws are attached to the vertebra to immobilize the
spine. Fusion surgery generally requires general anesthesia, a hospital stay of
3-5 days, significant post-operative pain and a recovery period of 3-4 months or
longer.
6
Our Holmium laser and Side-Firing Laser Needles are presently being used by
an orthopedic surgeon with a specially designed spinal implant he developed for
use in a new, experimental, endoscopic Spinal Stabilization procedure to treat
degenerated lumbar discs on an outpatient basis. The implant is designed to
maintain the mobility of the spine. The surgeon has assigned the patent rights
to the implant to us for a royalty on future sales, if any. While the surgeon
has had successful results in a small group of patients, a multi-center clinical
trial with successful results will be required to obtain FDA approval to market
the implant. The expected cost of this outpatient Spinal Stabilization
procedure, if and when the implant is approved for sale by the FDA, which cannot
be assured, is expected to be about one-third the cost of a conventional fusion
surgery.
There is no assurance that we will be able to successfully market our
current laser products in the future, that we can successfully market the
recently FDA cleared side-firing laser device, that we can obtain FDA approval
to market the spinal implant or, if it is FDA approved, that we can successfully
market it to treat degenerated discs, or that we will derive any profits from
any of the above.
USE OF PROCEEDS
The net proceeds from the Shares sold by the Selling Shareholders will
inure entirely to their benefit. We will not receive any proceeds from the sale
of the Shares, other than the exercise prices of the Options, if and to the
extent the Options are exercised.
SELLING SHAREHOLDERS
An aggregate of up to 3,342,071 Shares may be offered pursuant to this
Prospectus by certain security holders, including the persons whose names appear
below (the "Selling Shareholders"), some of whom may be deemed to be affiliates,
as defined in Rule 405 promulgated under the Securities Act of 1933, as amended.
The table below sets forth with respect to such Selling Shareholders, (i) the
nature of any position, office or other material relationship he has had with us
within the past three years, (ii) the total amount of Shares beneficially owned
by each Selling Shareholder prior to the offering, (iii) the amount of shares
which may be offered for sale for the account of such Selling Shareholder in his
discretion from time to time pursuant to this Prospectus, and (iv) the amount
and percentage of the outstanding Shares which would be beneficially owned by
such Selling Shareholder after sale of all of the Shares offered by the Selling
Shareholders pursuant to this Prospectus, if they are all offered and sold, and
assuming that other Shares held by such Selling Shareholders are not sold.
Names and Shares Owned Shares Shares Owned After Offering
Relationship(1) Before Offering Offered Amount Percent
Aguirre, Jose 14,100 5,000 9,100 *
Baker, Donald (Director) 90,000(2) 40,000 50,000 *
Black, Todd 6,500 2,000 4,500 *
Beeny, Scott 5,000 5,000
Cao, Helen 6,800 2,000 4,800 *
Cabral, Richard 2,000 2,000
Casper, David, M.D. (Consultant) 10,000 10,000
Chavit, Joseph 14,500 5,000 9,500 *
Chiu, John C., M.D. (Consultant) 15,000 15,000
Chor, Daly 6,800 2,000 4,800 *
Chuch, Bunnack 11,000 4,000 7,000 *
Corning, Ingrid 13,500 5,000 8,500 *
Dao, Thu Ha 4,300 2,000 2,300 *
De Antonio, Sandra 9,400 2,000 7,400 *
Donner Corp. International (Consultant) 25,000 25,000
Eap, Haysan 41,900 12,500 29,400 *
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Names and Shares Owned Shares Shares Owned After Offering
Relationship Before Offering Offered Amount Percent
Farmer, Jeremy 2,000 2,000
Fine, Russell (Consultant) 15,000 15,000
Fink, Mary 3,000 3,000
Gong, Naomi (Consultant) 5,000 5,000
Guerrero, Mauricio 3,000 3,000
Horowitz, Richard (Director) 90,000(3) 40,000 50,000 *
Jakubowski, Stanislaw 17,200 3,000 14,200 *
Kenney, Brian (Vice President) 135,000(4) 125,000 10,000 *
Knight, Martin, M.D. (Consultant) 10,000 10,000
Krahn, Henry, M.D. (Consultant) 10,000 10,000
Ladendorf, Eric 2,000 2,000
Le, Hung 8,900 2,000 6,900 *
Le, Ngoc A.T. 4,300 2,000 2,300 *
Lindsay, Russell 13,000 8,000 5,000 *
Loeb, Marvin P. (Chairman & CEO) 2,672,114(5) 1,339,114 1,333,000 9.9%
Lojewska, Bozena 12,500 4,000 8,500 *
Ly, Huong 4,500 2,000 2,500 *
Massry, Guy, M.D. (Consultant) 10,000 10,000
Meyers & Associates (Consultant) 200,000(6) 200,000
Morales, Irma 4,500 2,000 2,500 *
Nguyen, Derick 14,700 5,000 9,700 *
Nguyen, Justin 9,500 3,000 6,500 *
Olivere, Gina 5,000 2,000 3,000 *
Pergl, James 75,000 15,000 60,000 *
Ramirez, Jorge, M.D. (Consultant) 10,000 10,000
Richley, Richard, M.D. (Consultant) 35,000 35,000
Rudner, Jeffrey (Treasurer) 107,000(7) 107,000
Seron, Sudele (Secretary) 43,000(8) 15,000 28,000 *
Shade, Dennis 32,000 8,000 24,000 *
Silva, Rubicelia 6,800 2,000 4,800 *
Simmons, Marcus 9,500 4,000 5,500 *
Smith, Craig 85,000 85,000
Spence, Rebecca 3,000 3,000
Strader, Randy 18,500 7,000 11,500 *
Trin Le, Thao 4,300 2,000 2,300 *
Wright, Keith 2,000 2,000
Yeik, Glenn D. (President & Director) 250,257(9) 209,957 40,300 *
Yeung, Anthony, M.D. (Consultant) 10,000 10,000
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* Less than 1%.
(1) Unless otherwise noted, an employee of the Company. If no other address is
shown, their address is 15091 Bake Parkway, Irvine, CA 92618.
(2) Consists of 50,000 Shares and Options to purchase 40,000 Shares. Address is
544 Earlston Road, Kenilworth, IL 60043.
(3) Consists of 50,000 Shares and Options to purchase 40,000 Shares. Address is
Heller, Horowitz & Feit, P.C., 292 Madison Avenue, New York, NY 10017.
(4) Consists of 35,000 Shares and Options to purchase 100,000 Shares.
8
(5) Consists of 961,600 Shares owned by Mr. Loeb and his wife, adult children,
grandchildren and trusts for their benefit, of which Mr. Loeb is not a
trustee, 800,514 Shares issuable to Mr. Loeb and his family members, at
fair market value (based on the closing price of the Shares on the last
business day of each month) in lieu of $265,059 of cash compensation from
May 2001 through September 2003, 760,000 Shares issuable to Mr. Loeb and
his family members in the event of conversion of $200,000 of Notes and
accrued interest to 2007, and Options to purchase 150,000 Shares.
(6) Consists entirely of Options. Address is 45 Broadway, 2nd Floor, New York,
NY 10006.
(7) Consists of 10,000 Shares and Options to purchase 97,000 Shares.
(8) Consists of 5,000 Shares and Options to purchase 38,000 Shares.
(9) Consists of 65,300 Shares, 6,957 Shares issuable in lieu of cash
compensation through September 30, 2003, and Options to purchase 178,000
Shares.
PLAN OF DISTRIBUTION
The sale of Shares by the Selling Shareholders may be affected by them from
time to time on the OTCBB or in such other public forum where our Shares are
publicly traded or listed for quotation. These sales may be made in negotiated
transactions through the timing of options on the Shares, or through a
combination of such methods of sale, at fixed prices, which may be charged at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
affect such transactions by selling the Shares to or through broker-dealers, and
such broker-dealers may receive commissions from the Selling Shareholders and/or
the purchasers of the Shares for which such broker-dealer may act as an agent or
to whom they sell as principal, or both. The compensation as to a particular
broker-dealer may be in excess of customary compensation.
The Selling Shareholders and any broker-dealers who act in connection with
the sale of the Shares hereunder may be deemed to be underwriters within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
them and any profit on any sale of the Shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
LITIGATION
On January 18, 2002, a competitor filed a lawsuit against us in the Federal
District Court alleging infringement of two of its U.S. Patents. We filed a
counter-suit alleging infringement of two of our U.S. Patents, along with claims
of trade libel, unfair competition and other anti-trust violations. We executed
an agreement to settle this litigation on terms which we believe are favorable
to us, and both lawsuits were dismissed on November 17, 2003. We are also named
as a defendant in three product liability lawsuits, along with physicians,
hospitals or surgery centers and others, which are being defended in conjunction
with our product liability insurance carrier.
DESCRIPTION OF SECURITIES
The Shares being offered hereby by the Selling Shareholders are fully
described in our Registration Statement on Form 8-A filed on July 16, 1982,
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (See "Incorporation of Certain Documents by Reference").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Commission are incorporated
herein by reference:
(a) Our Annual Report on Form 10-K for the fiscal year ended September 30,
2002, filed pursuant to Section 13 of the Securities Exchange Act of 1934
(the "Act").
(b) Our Quarterly Reports on Form 10-Q(SB) for the quarters ended December 31,
2002, March 31, 2003 and June 30, 2003, filed pursuant to Section 13 of the
Act.
9
(c) The description of the Shares contained in our Registration Statement on
Form 8-A filed July 16, 1982, pursuant to Section 12 of the Act.
(d) All documents subsequently filed by us 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 of the Shares offered have been
sold or deregisters all Shares then remaining unsold.
In addition, all documents subsequently filed by us 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 Shares offered have
been sold or which deregisters all Shares then remaining unsold, 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 request, a copy of any or all of the documents referred to by reference,
other than exhibits to such documents unless such exhibits are specifically
incorporated herein by reference. Requests should be addressed to: Sudele Seron,
Secretary, Trimedyne, Inc., 15091 Bake Parkway, Irvine, California 92618
(Telephone: (949) 951-3800), email: sseron@trimedyne.com.
COMMISSION'S POLICY ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Article 12 of our Certificate of Incorporation directs us to provide in our
bylaws for provisions relating to the indemnification of our directors and
officers to the full extent permitted by 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 such person is a
party by reason of being our director or officer, if it is determined that such
person acted in accordance with the applicable standard of conduct set forth in
such statutory provisions.
We may also purchase and maintain insurance for the benefit of any director
or officer, which may cover claims for which we could not indemnify such person.
Insofar as indemnification for liabilities arising under the Act may be
permitted to our directors, officers, and controlling persons, or to
underwriters (or controlling persons thereof) of which an officer, partner, or
controlling person thereof is one of the foregoing 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. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by
any such persons, in the successful defense of any action, suit or proceeding)
is asserted by any such persons in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by us is against public policy as
expressed in the Act, and we will be governed by the final decision of such
issue.
LEGAL OPINION
Legal matters in connection with the Shares being offered hereby have been
passed upon for us by Heller, Horowitz & Feit, and 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 such Firm, is
also a member of our Board of Directors.
10
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2002, and the Company's Quarterly Reports on Form 10-Q(SB)
for the fiscal quarters ended December 31, 2002, March 31, 2003 and June
30, 2003, filed pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed July 16, 1982, pursuant to Section
12 of the Exchange Act.
(c) 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 the Shares offered
have been sold or deregisters all Shares then remaining unsold.
Item 4. Description of Securities.
The Common Stock being offered hereby by the Company under the Trimedyne,
Inc. 2003 Non-Qualified Stock Option Plan (the "2003 Option Plan") is fully
described in the Company's Registration Statement on Form 8-A, filed on July 16,
1982, pursuant to Section 12 of the Exchange Act (See "Incorporation of Certain
Documents by Reference").
Item 5. Interests of Named Experts and Counsel.
Mr. Richard F. Horowitz is a member of the firm of Heller, Horowitz & Feit,
and P.C., which is general securities and corporate counsel to the Company, and
is also a member of the Company's Board of Directors.
Item 6. Indemnification of Directors and Officers.
Article 12 of the Registrant's Certificate of Incorporation directs the
Registrant to provide provisions in its bylaws for the indemnification of
directors and officers to the full extent permitted by law. Section 78.751 of
the Nevada Revised Statues, as amended, authorizes the Registrant 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
such person is a party by reason of being a director or officer of the
Registrant, if it is determined that such person acted in accordance with the
applicable standard of conduct set forth in such statutory provisions.
The Registrant may also purchase and maintain insurance for the benefit of
any director or officer, which may cover claims for which the Registrant could
not indemnify such person.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits
4.5 Trimedyne, Inc. 2003 Non-Qualified Stock Option Plan
5.1 Opinion of Counsel
11
23.1 Consent of Counsel (included with Exhibit 5.1)
23.2 Consent of Independent Auditors
Item 9. 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:
(i) Include any Prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the Prospectus any facts or events arising which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement;
(iii)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 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 Shares being registered which remain unsold at the termination of
the offering.
EXHIBIT INDEX
Exhibit Page No.
------- --------
Trimedyne, Inc. 2003 Non-Qualified
Stock Option Plan 14
Opinion and Consent of Counsel 21
Consent of Independent Auditors 22
12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 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 the 15th day of
December, 2003.
TRIMEDYNE, INC.
By /S/ Marvin P. Loeb
--------------------------------
Marvin P. Loeb
Chairman of the Board of Directors
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------------------------- ------------------------ --------------------
/S/ Marvin P. Loeb Chairman, Chief Executive December 15, 2003
--------------------------- Officer and Director
Marvin P. Loeb
/S/ Glenn D. Yeik President, Chief Operating December 15, 2003
--------------------------- Officer and Director
Glenn D. Yeik
/S/ Donald Baker Director December 15, 2003
---------------------------
Donald Baker
/S/ Richard F. Horowitz Director December 15, 2003
---------------------------
Richard F. Horowitz
/S/ Jeffrey S. Rudner Treasurer and Chief December 15, 2003
--------------------------- Accounting Officer
Jeffrey S. Rudner
/S/ Sudele Seron Secretary December 15, 2003
----------------------------
Sudele Seron
13
Exhibit 4.5
TRIMEDYNE, INC.
2003 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE
This Non-Qualified Stock Option Plan (the "Plan") is intended to encourage
stock ownership of Trimedyne, Inc., a Nevada Corporation (the "Corporation") by
officers, directors, employees and consultants of the Corporation and those of
any subsidiary corporations (the "Subsidiaries"), as defined in Section 424(f)
of the Internal Revenue Code of 1986, as amended (the "Code"), so that they may
acquire or increase their proprietary interest in the success of the Corporation
and Subsidiaries, and to encourage them to remain in the employ of, or maintain
their relationship with, the Corporation and/or the Subsidiaries. It is further
intended that stock options ("Options") issued pursuant to this Plan shall
constitute non-qualified stock options, the tax consequences of which are
governed by Section 83 of the Code ("Non-Qualified Stock Options"), as
designated at the time of grant. The Corporation intends this Plan to enable it
to issue Non-Qualified Stock Options, with exercise prices at the fair market
value on the date of grant, and with other terms similar in most respects to
Incentive Stock Options.
2. ADMINISTRATION
The Plan shall be administered by a committee appointed by the Board of
Directors of the Corporation (the "Committee"). Each member on the Committee
shall be a "disinterested person" within the meaning of Rule 16b-3 as
promulgated under the Securities Exchange Act of 1934, as amended (the "1934
Act"). Such Committee shall consist of not less than two members of the
Corporation's Board of Directors. The Board of Directors may from time to time
remove members from, or add members to, the Committee. Vacancies on the
Committee, howsoever caused, shall be filled by the Board of Directors. The
Committee shall select one of its members as Chairman, and shall hold meetings
at such times and places as it may determine. A majority of the Committee at
which a quorum is present, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be valid acts of the Committee.
The Committee shall from time to time at its discretion determine (i) those
officers, directors, employees and consultants (including key and non-key) who
shall be granted Options; (ii) the number of shares of common stock (the
"Shares") to be optioned to each; and (iii) regardless of the express provisions
of the Plan, the terms of all Options so granted. Other than "formula awards"
granted pursuant to Article 5(k), no director while a member of the Committee
shall be eligible to receive an Option under the Plan.
The interpretation and construction by the Committee of any provisions of
the Plan or of any Option granted under it shall be final unless otherwise
determined by the Board of Directors. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option granted under it.
If at any time no Committee shall be in office, the "disinterested persons"
of the Board of Directors shall perform the functions of the Committee.
3. ELIGIBILITY
The persons who shall be eligible to receive Options under the Plan shall
be such officers and employees (whether or not they are directors) of the
Corporation or its Subsidiaries as the Committee shall select from time to time.
Non-employee directors, consultants and others, who have a relationship with the
Corporation or its Subsidiaries, which the Committee considers beneficial to the
Corporation, may also receive Options under the Plan. An optionee may hold more
than one Option, but only on the terms and subject to the restrictions hereafter
set forth. Members of the Committee, and "disinterested" members of the Board of
Directors if there is no Committee, shall only be eligible to receive grants
under the Plan pursuant to Article 5(k).
14
4. STOCK
The Shares subject to the options to be granted hereunder shall be an
aggregate of 2,000,000 shares of the Corporation's authorized but unissued or
reacquired $.01 par value Common Stock, hereinafter referred to as the "Shares".
The limitations established by each of the preceding sentences shall be subject
to adjustment as provided in Article 5(g) of the Plan.
In the event any outstanding Option under the Plan for any reason expires,
lapses or is otherwise terminated, the Shares allocable to the unexercised
portion of such Option may again become the subject of an Option granted under
the Plan.
5. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by the Committee
and shall be evidenced by agreements in such form as the Committee shall from
time to time approve, which agreements shall comply with and be subject to the
following terms and conditions.
(a) Number of Shares.
Each Option shall state the total number of Shares to which it pertains.
(b) Option Price.
Each Option shall state the option price, which shall be not less than 100%
of the fair market value of the Shares of the Corporation on the date of the
granting of the Option. In the event that the Committee takes no action to fix
the term of an Option granted to such an individual, such Option shall contain a
provision that it shall expire ten (10) years from the date of grant in the case
of directors, officers and employees and five (5) years from the date of grant
in the case of consultants and others. For purposes of this paragraph, the
parent of the Corporation shall be any corporation, which with respect to the
Corporation, is a parent corporation pursuant to Section 424(e) of the Code; and
the Subsidiaries of the Corporation shall be all corporations which, with
respect to the Corporation, are subsidiary corporations pursuant to Section
424(f) of the Code. During such time as the Shares are not listed upon an
established stock exchange or traded in over-the-market, the fair market value
per share shall be the closing price of the Shares on the day the Option is
granted, as reported by the National Association of Securities Dealers, Inc. If
no sale of the Corporation's Shares shall have been made on the date of grant,
the fair market value shall be the closing price of the Shares on the next
preceding day on which there was a sale of such Shares. If there is no
established market for the Shares, the fair market value shall be determined by
the most recent prior private sale price of the Shares. Subject to the
foregoing, the Committee in fixing the exercise price of Options shall have full
authority and discretion so long as they shall act in good faith.
(c) Medium and Time of Payment.
The exercise price shall be payable in United States dollars upon the
exercise of the Option and may be paid in cash, check or in Shares of the
Corporation, based upon the fair market value of those Shares as determined
under Article 5(b) of the Plan.
(d) Term and Exercise of Options.
No Option under the Plan shall be exercisable either in whole or in part
prior to twelve months from the date it is granted. Subject to the right of
cumulation provided for in this subdivision, each Option, other than Formula
Options, shall be exercisable as to not more than one-fifth of the total number
of Shares granted thereby to officers and employees and as to not more than
one-third of the Shares granted thereby to directors, consultants and others,
during each twelve-month period during which the optionee remains continuously
an officer, director, employee or consultant of the Corporation, commencing
twelve months from the date of the granting of the Option. Notwithstanding the
limitations of the first two sentences of this subparagraph, the Committee, in
its discretion, may waive such vesting requirements, and each Option shall also
be otherwise
15
exercisable pursuant to the terms of each Option Agreement as determined by the
Committee. To the extent that the Option is not exercised in any period, the
number of shares as to which the option is exercisable shall accumulate and be
exercisable, in whole or in part, in any subsequent period, but not later than
the expiration of the term of the Option. No Option shall be exercisable after
the expiration of the term of the Option or three months after termination of
employment, except as provided for herein in the event of the death or permanent
and total disability (as defined below) of the optionee. Upon exercise, the
Option must be exercised for a minimum number of one hundred (100) shares,
unless the number of shares for which the Option is exercisable at such time
shall be less than one hundred (100) shares in which case the minimum number of
shares exercisable shall be the total amount for which the Option is
exercisable.
(e) Termination of Employment Except Death.
In the event that an optionee shall cease to be employed by the Corporation
or Subsidiaries for any reason other than his death and shall be no longer in
the employ of any of them, subject to the condition that no Option shall be
exercisable after the expiration of its term, such optionee shall have the right
to exercise the Option at any time within three months (twelve months in the
case of the "permanent and total disability" of the optionee as defined in
Section 22(e)(3) of the Code) after such termination of employment to the extent
his right to exercise such Option had accrued pursuant to Article 5(d) of the
Plan and had not previously been exercised at the date of such termination.
Subject to Treasury Regulation 1.421-7, whether authorized leave of absence for
military or governmental services shall constitute termination of employment,
for the purpose of the Plan, shall be determined by the Committee, which
determination, unless overruled by the Board of Directors, shall be final and
conclusive. (As used in this Plan, the terms "employ" and "employment" shall be
deemed to refer to employment of the optionee by the Corporation and any of its
Subsidiaries.)
(f) Death of Optionee and Transfer of Option.
During the lifetime of the optionee, the Option shall be exercisable only
by him and shall not be assignable or transferable by him, and no other person
shall acquire any rights therein. Options granted hereunder shall not be
transferable except by will or by the laws of descent and distribution. In the
event of the death of an optionee, no Option shall be exercised unless such
optionee had been an employee of the Corporation or any Subsidiary for a period
of six (6) months following the date of grant thereof. If the optionee shall die
while in the employ of the Corporation or a Subsidiary or within a period of
three months after the termination of his employment with the Corporation or any
Subsidiary and shall not have fully exercised the Option, such Option may be
exercised, subject to the condition that no Option shall be exercisable after
the expiration of its term, to the extent that the optionee's right to exercise
such Option had accrued pursuant to Article 5(d) of the Plan at the time of his
death and had not previously been exercised, at any time within one year after
the optionee's death, by the executors or administrators of the optionee or by
any person or persons who shall have acquired the option directly from the
optionee by bequest or inheritance.
(g) Changes in Capitalization.
Subject to any required action by the stockholders, the number of Shares
covered by each outstanding Option, and the exercise price per share thereof set
forth in each such Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Corporation by
reason of any Common Stock dividend or common stock split or reverse stock
split, recapitalization (including, without limitation, the payment of an
extraordinary cash dividend), the issuance of stock rights, merger,
consolidation, combination, exchange of shares, spin-off, distribution of assets
to stockholders, or other similar corporate change. In its discretion, the
Committee may also adjust the number of Shares covered by each outstanding
Option in the event of the sale or other disposition or distribution by the
corporation of all or a portion of its assets.
Subject to any required actions by the stockholders, if the Corporation
shall be the surviving corporation in any merger or consolidation, each
outstanding Option shall pertain to and apply to the securities to which a
holder of the number of shares of common stock subject to the Option would have
been entitled. A dissolution or liquidation of the Corporation or a merger or
consolidation in which the Corporation is not the surviving corporation, shall
cause each outstanding Option to terminate, provided that each optionee shall,
in such event, have the right immediately prior to such dissolution or
16
liquidation, or merger or consolidation in which the Corporation is not the
surviving corporation, to exercise his Option in whole or in part without regard
to the installment provisions of Article 5(d) of the Plan, provided the optionee
has been continuously employed by the Corporation for at least two (2) years.
In the event of a change in the Common Stock of the Corporation as
currently constituted, which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to Common Stock or
other securities of the Corporation, such adjustments shall by made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.
Except as hereinbefore expressly provided in this Article 5(g), the
optionee shall have no rights by reason of any subdivision or consolidation of
the shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class or by
reason of any dissolution, liquidation, merger or consolidation or spin-off of
assets or stock of any class, or securities convertible into shares of stock of
any class, and no adjustment by reason thereof shall be made with respect to,
the number or price of the Shares subject to the Option.
The grant of an Option pursuant to the Plan shall not affect in any way the
right or power of the Corporation to make adjustments, reclassification,
reorganizations or changes of its capital of business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
(h) Rights as Stockholder or Employee.
An optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any Shares covered by his Option until the date of
the issuance of a stock certificate to him for such Shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distribution or other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Article 5(g) hereof. The Plan is not a contract of employment, and the terms of
employment of any optionee or the relationship of any non-employee consultant
with the Corporation shall not be affected in any way be the Plan shall not be
construed as conferring any legal rights upon any optionee for a continuation of
employment, nor shall it interfere with the right of the Corporation or any
Subsidiary to discharge any optionee and to treat him without regard to the
effect which such treatment might have upon him as an optionee.
(i) Modification, Extension and Renewal of Options.
Subject to the terms and conditions and within the limitations of the Plan,
including but limited to Article 5(d), the Committee may modify, extend or renew
outstanding Options granted under the Plan or accept the surrender of
outstanding Options (to the extent not theretofore exercised) and authorize the
granting to the new Options in substitution therefore (to the extent not
theretofore exercised). The Committee shall not, however, modify any outstanding
Options so as to specify a lower price. Notwithstanding the foregoing, however,
no modification of an Option shall, without the consent of the optionee, alter
or impair any rights or obligations under any Option theretofore granted under
the Plan.
(j) Investment Purpose and Qualification of Shares.
Each Option under the Plan shall be granted on the condition that the
purchases of Shares thereunder shall be for investment purposes, and not with a
view to resale or distribution except that, in the event the Shares subject to
such option are registered under the Securities Act of 1933, as amended, or in
the event a resale of such Shares without such registration would otherwise be
permissible, such condition shall be inoperative if in the opinion of counsel
for the Corporation such condition is not required under the Securities Act of
1933 or any other applicable law, regulation, or rule of any governmental
agency.
17
The Corporation shall seek such authority as may lawfully be required to
offer and sell the Shares covered by an Option in each jurisdiction in which an
optionee resides. However, nothing herein shall require the Corporation to
register under the Securities Act of 1933 either the Plan, Options granted
thereunder or any securities issued or issuable pursuant to any option granted
under the Plan. If such authority is not obtained for any reason, the
Corporation shall not be obligated (and shall be relieved of any liability for
failure) to issue and sell any securities, which may be exercisable pursuant to
any Option granted hereunder until and unless such authority is obtained.
(k) Formula Awards to Committee Members.
Each director appointed to the Committee shall be granted "Formula Options"
to purchase 30,000 Shares on the day such Committee member is so appointed and
thereafter further grants of Formula Options to purchase 30,000 Shares on the
third anniversary of the grant of such Committee member's most recent prior
grant under this Article 5(k); provided, however, that the grant to newly
appointed Committee members shall be reduced on an option-for-option basis by
the amount of any Options accepted by such appointee from the Company within the
prior 24 month period. The Formula Options granted to such Committee member
shall have an exercise price per share equal to the fair market value of the
Shares on the date of grant. Each Formula Option granted under this Article 5(k)
shall become exercisable in three equal installments on each of the first three
anniversaries of the date of grant. Each portion of each Formula Option granted
under this Article 5(k) shall be exercisable for ten years after the date of
grant. Upon termination of a director's membership on the Board, other than due
to such director's death or "permanent and total disability," any Formula
Options which are then exercisable may be exercised by such director at any time
prior to the expiration of such Option's term or within three (3) months (twelve
months in the case of death or "permanent and total disability") following such
cessation of membership, whichever period is shorter. The exercise price for
each Formula Option granted pursuant to this Article 5(k) is payable in the
forms prescribed in Article 5(c). The terms and provisions of the Plan,
including specifically but without limitation the first sentence of Article
5(g), shall also apply to the grant and exercise of Formula Options, to the
extent such other provisions do not contradict the express provisions of this
Article 5(k) and further provided that no provision of this Plan shall be
construed as applying to this Article 5(k) if the application of such provision
would have the effect of a recipient of Formula Options to not be a
"disinterested person."
(l) Other Provisions.
The Option Agreements authorized under the Plan shall from time to time and
from Option to Option contain such other provisions, including, without
limitation, restrictions upon the exercise of the Option, as the Committee shall
deem advisable in each case.
6. CORPORATION LOANS
The Corporation may make nonrecourse, collateralized loans to employees for
the purpose of exercising Options, with such loans to be made to officers or
employees of the Corporation or the Subsidiaries who are then and who remain in
good standing, said loans bearing interest at a rate to be determined by the
Committee, but in no event at a rate of interest less than the Federal interest
rate applicable under Section 7872 of the Code. Such loans shall be in such
amounts as may from time to time be required to enable said employees to
exercise Options granted under the Plan, to the extent that such loans are
permitted by law and to the extent that such Options are then exercisable, and
shall be secured by the shares being purchased. Such loans shall, however,
terminate and be due and payable (including interest) thirty days after the last
day of the employment of any employee or, if earlier, upon the disposition by
the employee of the shares purchased with the proceeds of such loans.
7. RELOAD OPTIONS
Without in any way limiting the authority of the Committee to make grants
hereunder, and in order to induce officers and other key employees to retain
ownership of Shares of the Corporation, the Committee shall have the authority
(but not an obligation) to include within any Option Agreement a provision
entitling the optionee to a further Option (a "Reload Option") in the event the
optionee exercises the Option evidenced by the option agreement, in whole or in
part, by surrendering other shares of stock of the Company in accordance with
this Plan and terms and conditions of the Option Agreement. Any such Reload
18
Option shall be for number of shares of stock equal to the number of surrendered
shares of stock, shall become exercisable in the event the purchased shares of
stock are held for a minimum period of time established by the Committee, and
shall be subject to such other terms and conditions as the Committee may
determine. Reload Options shall only be available to Committee members
exercising Formula Options received pursuant to Article 5(k), if the Corporation
shall receive an opinion of counsel that the grant of Reload Options to such
Committee member will not cause such Committee member to lose his status as a
"disinterested director" within the meaning of Rule 16b-3 promulgated under the
1934 Act, in which event the Reload Options shall be held for six months before
they may be exercised.
8. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding; provided that within 60 days after institution of
any such action, suit or proceeding a Committee member shall in writing offer
the Corporation the opportunity, at its own expense, to handle and defend the
same. The foregoing right of indemnification shall be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Corporation's Articles of Incorporation or By-Laws, by
contract, as a matter of law, or otherwise.
19
9. AMENDMENT OF THE PLAN
The Board of Directors of the Corporation may, insofar as permitted by law,
from time to time, with respect to any Shares at the time not subject to
Options, suspend or discontinue the Plan or revise or amend it in any respect
whatsoever, except to remove the administration of the Plan from the Committee,
or render any member of the Committee eligible to receive an Option under the
Plan, other than Formula Options, while serving thereon. Neither the Board of
Directors nor the Committee may amend, suspend, modify, or terminate the Plan so
as to alter or impair any grantee's right under any Option theretofore granted
under the Plan. The above notwithstanding, the provisions of Article 5(k) shall
not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, or the
rules thereunder. Further, any and/or all provisions of this Plan may be revised
and/or deleted, if the Board of Directors, acting upon the advice of Counsel,
determines that the securities laws and/or tax laws then in effect no longer
require the inclusion of such provisions.
10. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of Common Stock
pursuant to options will be used for general corporate purposes.
11. NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the optionee to
exercise such Option.
* * * *
20
Exhibit 5.1
HELLER, HOROWITZ & FEIT, P.C.,
292 Madison Avenue
New York, NY 10017
(212) 685-7600
December 15, 2003
Trimedyne, Inc.
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-8, coving the registration
under the Securities Act of 1933, as amended, of up to 3,342,071 shares of
Common Stock, $0.01 par value, of the Company ("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 the business which it conducts 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 Common Stock has been duly and validly authorized and, upon the
issuance thereof, will be duly and validly issued as fully paid and
non-assessable shares of Common Stock.
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,
/S/Richard F. Horowitz
----------------------
Richard F. Horowitz
21
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-8 of our report dated
January 14, 2003, appearing on page F-2 of the Trimedyne, Inc. Annual Report on
Form 10-K for the year ended September 30, 2002.
/s/ MCKENNON, WILSON & MORGAN, LLP.
----------------------------------
MCKENNON, WILSON & MORGAN, LLP.
Irvine, California
December 15, 2003
RE-OFFER PROSPECTUS
TRIMEDYNE, INC.
SHARES OF COMMON STOCK, $0.01 PAR VALUE
This Re-Offer Prospectus covers the proposed re-offer and sale by certain
security holders (the "Selling Shareholders") of Trimedyne, Inc. ("we", "our" or
"us") from time to time at their discretion, at prevailing market prices, of up
to 3,342,071 shares of our Common Stock, $0.01 par value (the "Shares").
Of these, 2,000,000 Shares are reserved for granting of stock options
("Options") pursuant to our 2003 Non-Qualified Stock Option Plan (the "2003
Option Plan"), under which Options to purchase 1,108,500 Shares have been
granted, and 1,342,071 Shares have been or are committed to be issued to certain
of our officers, employees and consultants in lieu of compensation for services.
Our Shares are traded on the NASDAQ Over-the-Counter Bulletin Board
("OTC:BB") under the symbol "TMED". On December 11, 2003, the closing price of
our Common Stock, as reported by the OTC:BB, was $1.03 per Share.
The net proceeds from the Shares sold by the Selling Shareholders will
inure entirely to their benefit and not to us. We will, however, receive funds
from the exercise of Options, to the extent, if any, the Options are exercised.
The Shares may be offered from time to time by the Selling Shareholders through
ordinary brokerage transactions, in negotiated transactions, or otherwise, at
market prices prevailing at the time of sale or at negotiated prices. See "Plan
of Distribution."
Although there are no current arrangements therefore, commissions equal to
or in excess of normal brokerage commissions may be paid to brokerage firms by
the Selling Shareholders in connection with such sales. Each Selling Shareholder
will bear all expenses with respect to his/her/its sale of Shares, except the
costs associated with registering the Shares under the Act and under any
applicable State blue sky or securities laws, and preparing and printing this
Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We will furnish to each person to whom this Re-Offer Prospectus is
delivered, upon written request, a copy of any or all of the documents referred
to by reference, other than exhibits to such documents unless such exhibits are
specifically incorporated herein by reference. Requests should be addressed to:
Sudele Seron, Secretary, Trimedyne, Inc., 15091 Bake Parkway, Irvine, California
92618 (Telephone: (949) 951-3800). email: sseron@trimedyne.com.
THE DATE OF THIS PROSPECTUS IS DECEMBER 15, 2003
1
THIS OFFERING INVOLVES SIGNIFICANT RISKS CONCERNING OUR COMPANY AND ITS
BUSINESS. SEE "RISK FACTORS", WHICH BEGINS ON PAGE 3 OF THIS PROSPECTUS, FOR
CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY US. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OR
AN OFFER TO BUY ANY OF THE SECURITIES TO ANY PERSON IN ANY JURISDICTION WHERE
SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission"), 450 Fifth Street, NW, Washington, D.C. 20549, a Registration
Statement on Form S-8 under the Securities Act of 1933 with respect to the
securities offered hereby (herein, together with all amendments and exhibits,
referred to as the "Registration Statement"). This Re-offer Prospectus filed as
part of the Registration Statement does not contain all the information set
forth in, or annexed as exhibits to, the Registration Statement. For further
information pertaining to the securities offered hereby our business and
financial condition, reference is made to the information requirements of the
Securities Exchange Act of 1934, as amended. The Registration Statement and
exhibits thereto, as well as reports, proxy and information statements, and
other filed information, may be inspected at the Headquarters Office of the
Securities and Exchange Commission located at 450 Fifth Street, NW, Room 1024,
Washington, D.C. 20549 and at certain of the Commission's regional offices at
the following addresses: 7 World Trade Center, New York, New York; and 500 West
Madison Street, Chicago, Illinois; copies of such material may be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, NW, Room
1024, Washington D.C. at prescribed rates. 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.
TABLE OF CONTENTS
HEADING PAGE NO.
------- --------
PROSPECTUS 1
THE OFFERING 3
RISK FACTORS 3
THE COMPANY 6
BUSINESS 6
USE OF PROCEEDS 7
SELLING SHAREHOLDERS 7
PLAN OF DISTRIBUTION 9
LITIGATION 9
DESCRIPTION OF SECURITIES 9
INCORPORATION OF DOCUMENTS BY REFERENCE 9
COMMISSION'S POLICY ON INDEMNIFICATION 10
LEGAL OPINION 10
2
THE OFFERING
This re-offer prospectus covers the proposed re-offer and sale by certain
of our security holders, from time to time at prevailing market prices, at their
discretion, of up to 3,342,071 Shares of our Common Stock, $0.01 par value. Our
Shares are traded on the NASDAQ Over-the-Counter Bulletin Board under the symbol
"TMED". The closing price of our Shares on December 11, 2003 was $1.03 per
share.
RISK FACTORS
There is no assurance that our future activities will be successful.
Moreover, there is no assurance that our business will be unaffected by newer
technological developments, that we will be able to develop or obtain licenses
to new products that may be required for us to successfully compete in our
market areas, that we will continue to satisfy regulatory requirements and
obtain regulatory approvals to market new products, or that we will be able to
adapt to changes in the economics of the medical technology business in general
and the laser and laser delivery systems business in particular.
An investment in our Shares 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 Shares could decline
and you may lose all or part of your investment.
1. LIMITED CASH RESOURCES
On June 30, 2003, we had cash of $1,300,000, receivables of $532,000 (after
allowances for bad debts), inventories of $1,500,000 and other current assets of
$242,000. On that date, we had accounts payable of $751,000, accrued expenses of
$543,000, accrued compensation of $250,000 and other current liabilities of
$139,000. All of the above amounts are unaudited figures. While our cash
resources are limited, we expect to continue to operate on a profitable basis
and increase our cash resources, although such cannot be assured.
2. WE HAVE INCURRED SUBSTANTIAL LOSSES IN THE PAST
We had a profit of $828,000, or $0.06 per share, unaudited, in the nine
months ended June 30, 2003. However, we had a net loss of $1,215,000 or $0.08
per share in the fiscal year ended September 30, 2002, and a net loss of
$7,484,000 or $0.59 per share in the fiscal year ended September 30, 2001. We
had an accumulated deficit of $44,313,000 at June 30, 2003. While we expect to
continue to operate at a profit, we could incur losses in the future if we fail
to generate revenues sufficient to offset the costs associated with
manufacturing and marketing our current products, our overhead, and the
development of new products. There can be no assurance that we will be able to
operate profitably in the future.
3. WE MAY NEED SUBSTANTIAL ADDITIONAL FINANCING IN THE FUTURE
Although our working capital (current assets over our current liabilities)
was $1,891,000 at June 30, 2003, on an unaudited basis, if you exclude our
inventories, our liquid working capital on that date was $391,000. We believe
our existing working capital may be sufficient to meet our operating needs, and
the operating needs of our 100% owned laser rental subsidiary for the next six
to twelve months. However, if we fail to continue to operate profitability, or
if we undertake the development, testing and marketing of new products in the
future, we may need to raise substantial additional capital. Also, we have
$200,000 of Senior Convertible Notes outstanding which are due, with interest at
12% per annum, in 2007. The Notes and accrued interest are convertible at prices
of $0.40 and $0.50 per Share. If the Notes and accrued interest are not
converted, we may have to raise additional capital to pay the Note holders the
principal and interest due on the Notes. 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 or shares of Preferred Stock will
dilute the equity interests of our holders of shares. There is no assurance such
financing, if and when needed, will be available to us on acceptable terms.
3
4. THERE IS NO SSURANCE ANY OR ALL OF THE NOTES AND ACCRUED INTEREST WILL BE
CONVERTED OR ANY OR ALL OF THE OPTIONS WILL BE EXERCISED
There is no assurance any or all of the Notes and accrued interest will be
converted or any or all of the Options will be exercised prior to the expiration
of their conversion or exercise rights, as such is largely dependent on the
market price of our Shares in the future significantly exceeding the conversion
prices of the Notes, which range from $0.40 to $0.50 per share, or the exercise
prices of the Options, which range from $0.14 to $3.84 per share.
5. 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.
6. WE MAY ACQUIRE OTHER ENTITIES
Although we have no present plans to do so, we may engage in acquisitions
of other companies and businesses in the future and may use our cash reserves or
shares of our Preferred Stock or Common Stock to pay for these acquisitions. If
we use shares of our Preferred or Common Stock for acquisitions, this will
result in a dilution of the percentage of the equity owned by holders of our
Shares. 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.
7. WE HAVE OBLIGATIONS TO ISSUE SHARES THAT WILL DILUTE OUR HOLDERS
In addition to 760,000 Shares which may be issued if all $200,000 of the
Notes with accrued interest to maturity are converted, the Registration
Statement of which this Prospectus is a part covers 800,514 Shares we have
agreed to issue to our Chairman and 6,957 Shares we have agreed to issue to our
President in lieu of $265,059 and $2,250 of cash compensation they have agreed
to waive, respectively, through September 30, 2003, and 146,000 Shares we have
agreed to issue to certain of our officers, employees and a consultant (25,000
to our President) in lieu of compensation for services.
8. OUR STOCK PRICE IS VOLATILE
The market prices for securities of medical device companies, including our
Shares, have been volatile. It is likely that the price of our Shares will
fluctuate in the future. Many factors can impact the market price of our Shares,
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
Shares could also be adversely affected by future conversions of the Notes or
exercises of outstanding Options.
9. 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 Shares,
as a non-dividend paying stock may not appeal to certain investors.
4
10. WE MAY ISSUE PREFERRED STOCK THAT COULD AFFECT THE RIGHTS OF HOLDERS OF OUR
SHARES
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
we may issue, without requiring shareholder approval. Although we presently have
no intention to do so, the issuance of any of our authorized but unissued
Preferred Stock in the future could have an adverse effect on the rights of the
holders of our Shares.
11. 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. There is no assurance we will be able to continue
to meet all regulatory requirements of the FDA and other governmental
authorities necessary to market our present products or obtain and maintain
approvals to test and market new products. Failing to meet necessary government
requirements will have a negative impact on our ability to continue as a going
concern.
12. WE CARRY LIMITED LIABILITY INSURANCE
We carry an aggregate of $5,000,000 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, patients or other
parties. If court awards exceeding the amount of such insurance were made, our
assets could be depleted.
13. WE ARE DEPENDENT UPON MAINTAINING PATENTS AND LICENSES
There is no assurance our patents will be upheld if challenged in court or
that we will be able to obtain additional valid patents. We cannot assure that
our patents can be successfully enforced against infringers. 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 our patents by others or, to obtain licenses to any necessary
patents could have a material adverse impact on our financial condition, results
of operations and our ability to successfully remain in business. (See
"Litigation" for information on a patent infringement lawsuit filed against us
by a competitor, a counter-suit we filed against this competitor, and current
product liability lawsuits).
14. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this Prospectus are forward-looking statements
that involve risks and uncertainties. These forward-looking statements include
statements about our plans, objectives, expectations, intentions and assumptions
and other statements contained in this Prospectus that are not statements of
historical fact. You can identify these statements by words such as "may,"
"will," "should," "estimates," "plans," "expects," "believes," "intends" and
similar expressions. We cannot guarantee future results, levels of activity,
performance or achievements. Our actual results and the timing of certain events
may differ significantly from those discussed in the forward-looking statements.
Factors that might cause such a discrepancy include those discussed in "Risk
factors" and elsewhere in this prospectus. You are cautioned to not rely on any
forward-looking statements.
5
THE COMPANY
We are engaged in the development, manufacturing and marketing of Holmium
"cold" pulsed lasers. We manufacture a variety of proprietary, disposable and
reusable fiber-optic, laser energy delivery devices, which have been cleared for
sale by the U.S. Food and Drug Administration ("FDA") for use with our Holmium
lasers and those made by others in orthopedics, urology, ear, nose and throat
("ENT") surgery, gynecology, gastrointestinal surgery, general surgery and other
medical applications. We are also developing several new, proprietary laser
energy delivery devices for use with such lasers.
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 and Oklahoma. We plan to extend MST's rental
activities to other states in the future. We have a Revenue Sharing Agreement
with another "fee per case" laser rental company, under which we provide one
laser to them and share in the revenues from its rental. While we expect
revenues from "fee per case" rentals of lasers to grow, such revenues
represented only 13% of our revenues in the nine months ended June 30, 2003 and
11% of our revenues in the preceding fiscal year ended September 30, 2002.
We were incorporated in Nevada on May 1, 1980. Our address is 15091 Bake
Parkway, Irvine, CA 92618. Our telephone number is (949) 951-3800, our facsimile
number is (949) 855-8206 and our website is www.trimedyne.com.
BUSINESS
The principal use of our Holmium lasers in urology is to fragment stones in
the kidney, ureter and bladder. Our Holmium lasers and optical fibers are able
to fragment stones of any size, composition, hardness or color. Our Holmium
lasers are also cleared for sale by the FDA for the treatment of benign
prostatic hyperplasia or "BPH" (sometimes referred to as an "enlarged
prostate"). We recently received clearance from the FDA to market a new
side-firing laser device. We plan to conduct a small study on the use of this
new device in the treatment of BPH, which affects about 50% of men over age 55,
to support an application to the FDA to market it for the treatment of this
condition.
The principal uses of our Holmium lasers in orthopedics are to treat
herniated (bulging) and ruptured lumbar discs, two of the three major causes of
lower back pain, and to treat damage in joints. An estimated 65 million people
suffer from back pain in the United States, and about 1 million surgeries to
treat back pain and 1.2 million arthroscopy procedures to treat damage in joints
are performed each year in the United States.
Our Holmium lasers and proprietary Side-Firing Laser Needles are used in
minimally invasive, percutaneous (x-ray guided) and endoscopic laser discectomy
procedures to treat herniated spinal discs, and in endoscopic laser
foraminoplasty ("ELF") procedures to treat both herniated and ruptured lumbar
discs, all on an outpatient basis.
Our laser discectomy and ELF procedures are typically performed in about 30
minutes, with only local anesthesia, on an outpatient basis. The back and leg
pain often disappears on the operating table or in recovery, and the patient
usually walks out with only a Band Aid on the needle puncture (stitches are
usually not required). Most patients can return to light activities in a few
days and to work in two or so weeks. Published studies show success rates (good
or excellent results, based on pain scores) from our laser disc procedures after
two years of 87% to 91%. Our minimally invasive, laser discectomy and ELF
procedures cost Medicare, insurance companies and health maintenance
organizations (HMOs) less than one-half the cost of the traditional surgical
procedures, which require general anesthesia and entail a 2 day or longer
hospital stay, significant post-operative pain and a recovery period of 2-3
months or longer. Published studies show the success rates of conventional disc
surgery to be significantly lower than those of our laser procedures.
The third major cause of lower back pain is a degenerated lumbar disc, due
to injury, disease or dehydration (loss of water content) of the disc due to old
age. Approximately 400,000 conventional "fusion" surgical procedures to treat
degenerated discs are performed each year in the United States. In these
procedures, metal rods and screws are attached to the vertebra to immobilize the
spine. Fusion surgery generally requires general anesthesia, a hospital stay of
3-5 days, significant post-operative pain and a recovery period of 3-4 months or
longer.
Our Holmium laser and Side-Firing Laser Needles are presently being used by
an orthopedic surgeon with a specially designed spinal implant he developed for
6
use in a new, experimental, endoscopic Spinal Stabilization procedure to treat
degenerated lumbar discs on an outpatient basis. The implant is designed to
maintain the mobility of the spine. The surgeon has assigned the patent rights
to the implant to us for a royalty on future sales, if any. While the surgeon
has had successful results in a small group of patients, a multi-center clinical
trial with successful results will be required to obtain FDA approval to market
the implant. The expected cost of this outpatient Spinal Stabilization
procedure, if and when the implant is approved for sale by the FDA, which cannot
be assured, is expected to be about one-third the cost of a conventional fusion
surgery.
There is no assurance that we will be able to successfully market our
current laser products in the future, that we can successfully market the
recently FDA cleared side-firing laser device, that we can obtain FDA approval
to market the spinal implant or, if it is FDA approved, that we can successfully
market it to treat degenerated discs, or that we will derive any profits from
any of the above.
USE OF PROCEEDS
The net proceeds from the Shares sold by the Selling Shareholders will
inure entirely to their benefit. We will not receive any proceeds from the sale
of the Shares, other than the exercise prices of the Options, if and to the
extent the Options are exercised.
SELLING SHAREHOLDERS
An aggregate of up to 3,342,071 Shares may be offered pursuant to this
Re-offer Prospectus by certain security holders, including the persons whose
names appear below (the "Selling Shareholders"), some of whom may be deemed to
be affiliates, as defined in Rule 405 promulgated under the Securities Act of
1933, as amended. The table below sets forth with respect to such Selling
Shareholders, (i) the nature of any position, office or other material
relationship he has had with us within the past three years, (ii) the total
amount of Shares beneficially owned by each Selling Shareholder prior to the
offering, (iii) the amount of shares which may be offered for sale for the
account of such Selling Shareholder in his discretion from time to time pursuant
to this Prospectus, and (iv) the amount and percentage of the outstanding Shares
which would be beneficially owned by such Selling Shareholder after sale of all
of the Shares offered by the Selling Shareholders pursuant to this Prospectus,
if they are all offered and sold, and assuming that other Shares held by such
Selling Shareholders are not sold.
Names and Shares Owned Shares Shares Owned After Offering
Relationship(1) Before Offering Offered Amount Percent
--------------- --------------- ------- ------ -------
Aguirre, Jose 14,100 5,000 9,100 *
Baker, Donald (Director) 90,000(2) 40,000 50,000 *
Black, Todd 6,500 2,000 4,500 *
Beeny, Scott 5,000 5,000
Cao, Helen 6,800 2,000 4,800 *
Cabral, Richard 2,000 2,000
Casper, David, M.D. (Consultant) 10,000 10,000
Chavit, Joseph 14,500 5,000 9,500 *
Chiu, John C., M.D. (Consultant) 15,000 15,000
Chor, Daly 6,800 2,000 4,800 *
Chuch, Bunnack 11,000 4,000 7,000 *
Corning, Ingrid 13,500 5,000 8,500 *
Dao, Thu Ha 4,300 2,000 2,300 *
De Antonio, Sandra 9,400 2,000 7,400 *
Donner Corp. International (Consultant) 25,000 25,000
Eap, Haysan 41,900 12,500 29,400 *
Names and Shares Owned Shares Shares Owned After Offering
Relationship Before Offering Offered Amount Percent
------------ --------------- ------- ------ -------
Farmer, Jeremy 2,000 2,000
Fine, Russell (Consultant) 15,000 15,000
Fink, Mary 3,000 3,000
Gong, Naomi (Consultant) 5,000 5,000
7
Guerrero, Mauricio 3,000 3,000
Horowitz, Richard (Director) 90,000(3) 40,000 50,000 *
Jakubowski, Stanislaw 17,200 3,000 14,200 *
Kenney, Brian (Vice President) 135,000(4) 125,000 10,000 *
Knight, Martin, M.D. (Consultant) 10,000 10,000
Krahn, Henry, M.D. (Consultant) 10,000 10,000
Ladendorf, Eric 2,000 2,000
Le, Hung 8,900 2,000 6,900 *
Le, Ngoc A.T. 4,300 2,000 2,300 *
Lindsay, Russell 13,000 8,000 5,000 *
Loeb, Marvin P. (Chairman & CEO) 2,672,114(5) 1,339,114 1,333,000 9.9%
Lojewska, Bozena 12,500 4,000 8,500 *
Ly, Huong 4,500 2,000 2,500 *
Massry, Guy, M.D. (Consultant) 10,000 10,000
Meyers & Associates (Consultant) 200,000(6) 200,000
Morales, Irma 4,500 2,000 2,500 *
Nguyen, Derick 14,700 5,000 9,700 *
Nguyen, Justin 9,500 3,000 6,500 *
Olivere, Gina 5,000 2,000 3,000 *
Pergl, James 75,000 15,000 60,000 *
Ramirez, Jorge, M.D. (Consultant) 10,000 10,000
Richley, Richard, M.D. (Consultant) 35,000 35,000
Rudner, Jeffrey (Treasurer) 107,000(7) 107,000
Seron, Sudele (Secretary) 43,000(8) 15,000 28,000 *
Shade, Dennis 32,000 8,000 24,000 *
Silva, Rubicelia 6,800 2,000 4,800 *
Simmons, Marcus 9,500 4,000 5,500 *
Smith, Craig 85,000 85,000
Spence, Rebecca 3,000 3,000
Strader, Randy 18,500 7,000 11,500 *
Trin Le, Thao 4,300 2,000 2,300 *
Wright, Keith 2,000 2,000
Yeik, Glenn D. (President & Director) 250,257(9) 209,957 40,300 *
Yeung, Anthony, M.D. (Consultant) 10,000 10,000
--------
* Less than 1%.
(1) Unless otherwise noted, an employee of the Company. If no other
address is shown, their address is 15091 Bake Parkway, Irvine, CA
92618.
(2) Consists of 50,000 Shares and Options to purchase 40,000 Shares.
Address is 544 Earlston Road, Kenilworth, IL 60043.
(3) Consists of 50,000 Shares and Options to purchase 40,000 Shares.
Address is Heller, Horowitz & Feit, P.C., 292 Madison Avenue, New
York, NY 10017.
(4) Consists of 35,000 Shares and Options to purchase 100,000 Shares.
(5) Consists of 961,600 Shares owned by Mr. Loeb and his wife, adult
children, grandchildren and trusts for their benefit, of which Mr.
Loeb is not a trustee, 800,514 Shares issuable to Mr. Loeb and his
family members, at fair market value (based on the closing price of
the Shares on the last business day of each month) in lieu of $265,059
of cash compensation from May 2001 through September 2003, 760,000
Shares issuable to Mr. Loeb and his family members in the event of
conversion of $200,000 of Notes and accrued interest to 2007, and
Options to purchase 150,000 Shares.
(6) Consists entirely of Options. Address is 45 Broadway, 2nd Floor, New
York, NY 10006.
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(7) Consists of 10,000 Shares and Options to purchase 97,000 Shares.
(8) Consists of 5,000 Shares and Options to purchase 38,000 Shares.
(9) Consists of 65,300 Shares, 6,957 Shares issuable in lieu of cash
compensation through September 30, 2003, and Options to purchase
178,000 Shares.
PLAN OF DISTRIBUTION
The sale of Shares by the Selling Shareholders may be affected by them from
time to time on the OTCBB or in such other public forum where our Shares are
publicly traded or listed for quotation. These sales may be made in negotiated
transactions through the timing of options on the Shares, or through a
combination of such methods of sale, at fixed prices, which may be charged at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Shareholders may
affect such transactions by selling the Shares to or through broker-dealers, and
such broker-dealers may receive commissions from the Selling Shareholders and/or
the purchasers of the Shares for which such broker-dealer may act as an agent or
to whom they sell as principal, or both. The compensation as to a particular
broker-dealer may be in excess of customary compensation.
The Selling Shareholders and any broker-dealers who act in connection with
the sale of the Shares hereunder may be deemed to be underwriters within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
them and any profit on any sale of the Shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
LITIGATION
On January 18, 2002, a competitor filed a lawsuit against us in the Federal
District Court alleging infringement of two of its U.S. Patents. We filed a
counter-suit alleging infringement of two of our U.S. Patents, along with claims
of trade libel, unfair competition and other anti-trust violations. We executed
an agreement to settle this litigation on terms which we believe are favorable
to us, and both lawsuits were dismissed on November 17, 2003. We are also named
as a defendant in three product liability lawsuits, along with physicians,
hospitals or surgery centers and others, which are being defended in conjunction
with our product liability insurance carrier.
DESCRIPTION OF SECURITIES
The Shares being offered hereby by the Selling Shareholders are fully
described in our Registration Statement on Form 8-A filed on July 16, 1982,
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (See "Incorporation of Certain Documents by Reference").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Commission are incorporated
herein by reference:
(a) Our Annual Report on Form 10-K for the fiscal year ended September 30,
2002, filed pursuant to Section 13 of the Securities Exchange Act of
1934 (the "Act").
(b) Our Quarterly Reports on Form 10-Q(SB) for the quarters ended December
31, 2002, March 31, 2003 and June 30, 2003, filed pursuant to Section
13 of the Act.
(c) The description of the Shares contained in our Registration Statement
on Form 8-A filed July 16, 1982, pursuant to Section 12 of the Act.
(d) All documents subsequently filed by us 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 of the Shares
offered have been sold or deregisters all Shares then remaining
unsold.
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In addition, all documents subsequently filed by us 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 Shares offered have
been sold or which deregisters all Shares then remaining unsold, 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 Re-offer Prospectus is
delivered, upon written request, a copy of any or all of the documents referred
to by reference, other than exhibits to such documents unless such exhibits are
specifically incorporated herein by reference. Requests should be addressed to:
Sudele Seron, Secretary, Trimedyne, Inc., 15091 Bake Parkway, Irvine, California
92618 (Telephone: (949) 951-3800), email: sseron@trimedyne.com.
COMMISSION'S POLICY ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Article 12 of our Certificate of Incorporation directs us to provide in our
bylaws for provisions relating to the indemnification of our directors and
officers to the full extent permitted by 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 such person is a
party by reason of being our director or officer, if it is determined that such
person acted in accordance with the applicable standard of conduct set forth in
such statutory provisions.
We may also purchase and maintain insurance for the benefit of any director
or officer, which may cover claims for which we could not indemnify such person.
Insofar as indemnification for liabilities arising under the Act may be
permitted to our directors, officers, and controlling persons, or to
underwriters (or controlling persons thereof) of which an officer, partner, or
controlling person thereof is one of the foregoing 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. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by
any such persons, in the successful defense of any action, suit or proceeding)
is asserted by any such persons in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by us is against public policy as
expressed in the Act, and we will be governed by the final decision of such
issue.
LEGAL OPINION
Legal matters in connection with the Shares being offered hereby have been
passed upon for us by Heller, Horowitz & Feit, and 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 such Firm, is
also a member of our Board of Directors.
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