-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qff14lIrvxGVu8G8xGnxBVQjPtcEc4xC3s6ucoapCjmMUj/whfU/7nnJCNh23jj2 d1vyqGp8d4RzKk78EHS5HQ== 0000950135-98-005576.txt : 19981030 0000950135-98-005576.hdr.sgml : 19981030 ACCESSION NUMBER: 0000950135-98-005576 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19981029 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRECISION OPTICS CORPORATION INC CENTRAL INDEX KEY: 0000867840 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 042795294 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-66297 FILM NUMBER: 98732840 BUSINESS ADDRESS: STREET 1: 22 EAST BROADWAY CITY: GARDNER STATE: MA ZIP: 01440-3338 BUSINESS PHONE: 5086301800 FORMER COMPANY: FORMER CONFORMED NAME: PRECISION OPTICS CORP INC DATE OF NAME CHANGE: 19600201 S-3 1 PRECISION OPTICS CORP, INC. 1 As filed with the Securities and Exchange Commission on October 29, 1998 Registration No. 33- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------------- PRECISION OPTICS CORPORATION, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2795294 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) --------------------------- 22 East Broadway Gardner, Massachusetts 01440 (978) 630-1800 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) JACK P. DREIMILLER COPY TO: SENIOR VICE PRESIDENT, FINANCE EDWARD A. BENJAMIN, ESQUIRE AND CHIEF FINANCIAL OFFICER ROPES & GRAY PRECISION OPTICS CORPORATION One International Place 22 East Broadway Boston, MA 02110-2624 Gardner, Massachusetts 01440 (617) 951-7434 (978) 630-1800 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------------------------- Approximate date of commencement of proposed sale to the public: From time to time after the effectiveness of the Registration Statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] ________ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] _____________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------- Title of Shares Amount to be Proposed Maximum Proposed Maximum Amount of to be Registered Registered Offering Price Per Aggregate Offering Registration Fee Share (1) Price (1) - ------------------------------------------------------------------------------------------------------------------- Common Stock - $.01 Par Value 1,086,900 $1.375 $1,494,488 $416 - -------------------------------------------------------------------------------------------------------------------
(1) Estimated, pursuant to Rule 457(c), solely for purposes of calculating the registration fee based on the average of the high and low sales prices of the Registrant's Common Stock on October 27, 1998 as reported on the Nasdaq SmallCap Market, which date is within five business days of the date of this Registration Statement. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ================================================================================ 2 Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. PROSPECTUS SUBJECT TO COMPLETION OCTOBER 29, 1998 PRECISION OPTICS CORPORATION, INC. 1,086,900 Shares of Common Stock ----------------- All of the shares of Precision Optics Corporation, Inc., a Massachusetts corporation (the "Company"), common stock, par value $.01 per share (the "Common Stock"), offered hereby (the "Shares") are being sold by the holders of the Common Stock named herein under "Selling Stockholders" (the "Selling Stockholders"). The Common Stock is traded on the NASDAQ SmallCap Market under the symbol "POCI." On October 27, 1998, the last reported sale price of the Common Stock was $1.25 per share. THE COMMON STOCK OFFERED HEREBY INVOLVES A DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 3. The Company will not receive any of the proceeds from the sale of the Common Stock. Any or all of such Common Stock covered by this Prospectus may be sold, from time to time, by means of ordinary brokerage transactions or otherwise. See "Plan of Distribution." 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 OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------------- The Selling Stockholders named herein have not advised the Company of any specific plans for the distribution of the Shares covered by this Prospectus. It is anticipated, however, that the Selling Stockholders, or any pledgees, donees, transferees or other successors in interest, directly, through agents to be designated from time to time or through dealers or underwriters also to be designated, may sell the Common Stock from time to time in one or more transactions on the Nasdaq SmallCap Market or otherwise, at prices and at terms then prevailing or at prices related to the then current market price, or in negotiated transactions. To the extent required, the specific Common Stock to be sold, the names of the Selling Stockholders, the respective purchase prices and public offering prices, the names of any such agent, dealer or underwriter and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the Registration Statement of which this Prospectus is a part. See "Plan of Distribution." By agreement, the Company will pay all the expenses of the registration of the Common Stock by the Selling Stockholders other than underwriting discounts and commissions and transfer taxes, if any. The Selling Stockholders and any broker-dealers, agents or underwriters that participate with the Selling Stockholders in the distribution of the Common Stock may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and any commissions received by them and any profit on the resale of the Common Stock purchased by them may be deemed underwriting commissions or discounts under the Securities Act. --------------------------- The date of this Prospectus is __________, 1998 3 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files periodic reports, proxy materials and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its regional offices located at Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661, and at Seven World Trade Center, New York, New York 10048, and copies of such material can be obtained from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. In addition, the Commission maintains a web site (at http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding registrants, including the Company, that file electronically with the Commission. The Company has filed with the Commission a registration statement (the "Registration Statement", which term shall include all amendments, exhibits and schedules thereto) on Form S-3 under the Securities Act with respect to the securities offered hereby. This Prospectus does not contain all information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission, and to which reference is hereby made. Statements made in this Prospectus as to the contents of any document referred to herein are not necessarily complete. With respect to each such document filed as an exhibit to the Registration Statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference. The Registration Statement may be inspected at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its regional offices located at Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661, and at Seven World Trade Center, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Registration Statement was filed electronically with the Commission and is available on the Commission's web site (at http://www.sec.gov). INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission are incorporated by reference in this Prospectus and made a part hereof: (i) Annual Report on Form 10-KSB for the fiscal year ended June 30, 1998, including portions of the Company's Proxy Statement dated October 14, 1998, relating to the Company's 1998 Annual Meeting of Stockholders, incorporated therein. (ii) The Description of the Company's Common Stock contained in its registration statement on Form S-1, File No. 33-43929, including any amendment or report filed for the purpose of updating such description. All documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act (i) after the date of filing of the Registration Statement and prior to the effectiveness of the Registration Statement and (ii) after the date of this Prospectus and prior to the 2 4 termination of the offering shall be deemed incorporated herein by reference from the date of filing of such documents. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document that also is incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide, upon written or oral request, without charge, to each person, including any beneficial owner, to whom a copy of this Prospectus has been delivered, a copy of any or all of the documents which have been or may be incorporated in this Prospectus by reference, other than certain exhibits to such documents. Requests for such copies should be directed to: Jack P. Dreimiller, Precision Optics Corporation, Inc., 22 East Broadway, Gardner, Massachusetts 01440, (978) 630-1800. RISK FACTORS IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING THE COMPANY AND ITS BUSINESS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS IN THIS PROSPECTUS AND IN FORWARD-LOOKING STATEMENTS MADE FROM TIME TO TIME BY THE COMPANY ON THE BASIS OF MANAGEMENT'S THEN-CURRENT EXPECTATIONS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED OR REFERRED TO BELOW. Prospective purchasers of the Shares offered hereby should consider carefully the risks associated with investing in the Shares, including the principal risk factors set forth below: MARKET VOLATILITY The Common Stock of the Company has had a public market since November 1990. The stock market has from time to time experienced significant price and volume fluctuations, particularly in the high technology and medical products sectors, which may be unrelated to particular companies' operating performance. Factors such as the Company's or its competitors' product failures or announcements of technological innovations or new products may have a significant impact on the market price of the Company's Common Stock. In addition, to date, the Company's Common Stock has had limited float and trading activity. WDM AND OTHER NEW PRODUCTS The Company plans to devote the majority of its research and development resources to the development and marketing of new products, particularly in the area of Wavelength Division Multiplexer (WDM) optical thin films. The Company is in the process of developing WDM thin film prototypes capable of reliably meeting a strict set of operating specifications supplied to the Company by potential customers. No assurance can be given that these efforts will be successful or that the Company will succeed in developing and marketing WDM thin films or other new products. Moreover, certain domestic and foreign companies have commenced marketing products embodying alternative WDM technologies which will compete with the Company's WDM products. There can be no assurance that the Company's WDM products, if and when successfully developed, will be perceived in the marketplace as more cost-effective, efficient and reliable than these alternative 3 5 products. Based upon the Company's expectations as to market acceptance of its WDM products, the Company expects to continue to increase its research and development expenditures as the Company continues its product development and marketing efforts and expands its operations in the WDM area. Future operating results may be materially adversely affected if development efforts with respect to its new products are unsuccessful or if sales of these products are below expectations. RELIANCE UPON KEY PERSONNEL AND SCIENTIFIC TALENT The Company depends to large extent on a small number of key scientific, technical, managerial, and marketing personnel, loss of any of whose services could have a material adverse effect on the Company's operations. The Company's business depends to a large extent on the Company's ability to employ persons with a high degree of scientific and technical talent. Competition for the services of such persons is intense and there can be no assurance that the Company will be able to attract or to retain individuals possessing the qualifications the Company requires. The Company believes its success is highly dependent upon the services and reputation of both its Chief Executive Officer, Mr. Richard E. Forkey and its Vice President, Operations, Mr. Kumar M. Khajurivala. Loss of either Mr. Forkey's or Mr. Khajurivala's services and scientific contributions would materially adversely affect the company's business. RECENT HISTORY OF LOSSES The Company has incurred net operating losses in each of the last six quarterly periods ending June 30, 1998. These net operating losses totaled approximately $2,725,000 during this eighteen-month period, and the Company has an accumulated deficit of approximately $2,132,000 at June 30, 1998. The Company attributes these losses largely to its transition away from night vision products and services sold primarily under contracts or subcontracts with the United States Government, and its concentration of research and product development resources on new products, principally in the area of optical thin films technology for the telecommunications and semi conductor industries. New products embodying this technology are still in development and have not yet generated appreciable revenues for the Company. There can be no assurance that development of such products will be successfully completed and, if so, that significant revenues will result from the Company's initiatives in the optical thin films area. Consequently, there can be no assurance that the Company will achieve profitability as a result of such initiatives. FLUCTUATION IN QUARTERLY RESULTS The Company's quarterly operating results may vary significantly depending upon factors such as the timing of the completion of significant orders, the timing of research and development expenditures and costs of initial product production in connection with new products, the timing of new product introductions by the Company and its competitors and market acceptance of new products or enhanced versions of the Company's existing products. In addition, the Company's operating results may fluctuate as a result of increased competition or delays in the introduction or acceptance of new products in the market. There can be no assurance that the Company will be able to grow or sustain revenues or achieve or maintain profitability on a quarterly or annual basis or that levels of revenue and/or profitability may not vary over any such period. COMPETITION The industries in which the Company competes are highly competitive. Many of the Company's existing competitors, as well as a number of potential competitors, are larger and have significantly greater financial resources and manufacturing capabilities, more established and larger marketing and sales organizations and larger technical staffs than the Company. Other companies, 4 6 some with greater experience in the telecommunications, optics, semiconductor or medical products industries and greater financial resources than the Company, are seeking to produce products and services that compete with those of the Company. To the extent that other domestic or foreign companies offer more sophisticated, cost-effective, efficient or reliable products and services than the Company, the Company's business could be materially adversely affected. SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK Revenues from the Company's three largest customers were approximately 22%, 14% and 10%, respectively, of total revenues for the fiscal year ended June 30, 1998, and revenues from the Company's two largest customers were approximately 38% and 23%, respectively, of total revenues for the fiscal year ended June 30, 1997. No other customers accounted for more than 10% of the Company's revenues during those periods. FOOD AND DRUG ADMINISTRATION ACTIONS The United States Food and Drug Administration (the "FDA") has determined that the Company may market its currently existing medical products that are currently being sold in the United States. Prior FDA approval may be required before the Company can market additional medical products that the Company may develop. The Company may also seek to sell some of its current or future medical products in a manner that requires the Company to obtain FDA permission to market such products, as well as the regulatory approval or license of other federal, state, or local agencies or analogous agencies in other countries. There can be no assurance that the Company will be able to maintain the FDA's permission to market its current products or obtain the necessary regulatory permission, approvals or licenses for the marketing of any of its other products. Furthermore, potential adverse FDA regulation affecting the Company which might arise from future legislation or administrative action cannot be predicted. In addition, FDA regulations may be established that could prevent or delay regulatory clearances or approval of the Company's products. The inability of the Company to secure any necessary licenses or regulatory approvals or permission from the FDA could have a material adverse effect on its business. RISKS INHERENT IN PRODUCT DEVELOPMENT AND PRODUCTION UNDER FIXED PRICE CONTRACTS A significant portion of the Company's business has been and may continue to be devoted to research, development and production of optical systems for customers under fixed price contracts. The expenses incurred in meeting the Company's obligations under such contracts cannot be predicted with certainty, and there can be no assurance that such contracts will be profitable to the Company. PROTECTION OF PROPRIETARY AND OTHER INFORMATION The Company holds rights to patents on certain products and technology. There can be no assurance that the Company will obtain additional patents with respect to current or future applications of its technology. The extent of patent protection provided by patents obtained by the Company cannot be predicted. There can be no assurance that the claims set forth in these patents will not be challenged. Patents may not afford the Company protection from competitors' independent duplication. Accordingly, prospective investors should not rely upon any patent to afford the Company any significant competitive advantage in marketing its products. The Company presently knows of no infringements of its patents. Although the Company plans to protect any patent it may have from infringement and to obtain patents whenever possible, it may not be able to assert any infringement claims or obtain additional patents because seeking such protection and obtaining such patents is both time consuming and expensive. Furthermore, although the Company has obtained confidentiality agreements from its employees and seeks such agreements from consultants and others who have access 5 7 to the design of its products and proprietary information, no assurance can be given that the Company will be successful in protecting its proprietary rights with respect to such products and information. INFRINGEMENTS ON OTHERS' PATENTS A significant portion of the company's business is devoted to the development, manufacture, and sale of advanced optical systems. The technologies used or to be used in these systems may infringe upon patents or proprietary technology held or owned by other persons. Should others claim a proprietary right to all or part of any technology used by the Company, such a claim, regardless of its merit, could involve the Company in costly litigation which could have a material adverse effect on the Company's operations. Moreover, such a claim could result in the Company's inability to use or sell such technology, which inability could have a material adverse effect on the Company's business. AVAILABILITY OF CERTAIN SUPPLIES AND SERVICES Certain key supplies, including precision grade optical glass, are available from only a few sources, each of which is outside the United States. Furthermore, outside vendors grind and polish certain of the Company's lenses and other optical components, such as prisms and windows. Based upon its ordering experience to date, the Company believes the materials and services required for the production of its products are currently available in sufficient quantities. The Company's requirements are small relative to the total supply, and the Company is not encountering problems with availability. There can be no assurance, however, that the Company will continue to have timely access to adequate supplies of these materials and services in the future, that supplies of these materials and services will be available on satisfactory terms when the need arises or that key supplies will be available for new products the Company may develop. The inability to procure such materials and services in adequate quantities would have a material adverse effect on the Company's business. From time to time, certain of the Company's products may be produced for the Company by subcontractors. The failure of such subcontractors to make timely delivery could have a material adverse effect on the Company's business. Furthermore, in the event that manufacturers that integrate the Company's products or services into their own products or services are unable to acquire supplies and services from third parties in a timely fashion, the Company's business could be materially adversely affected. ADEQUACY OF CURRENT FACILITIES The Company believes its current facilities are adequate for its current operations. The Company's operations may require additional space, however, in the event of a significant increase in production or the acquisition of substantial new equipment or if the Company itself begins to produce materials or supplies its presently purchases from others or otherwise expands its manufacturing capabilities. Such expansion could require significant expenditures by the Company. PRODUCT LIABILITY CLAIMS AND UNINSURED RISKS To the extent that the Company has been and will be successful in developing, marketing, and selling new products, it is and will be exposed to liability resulting form such products' use. Although the Company has obtained product liability insurance against such claims, and no such claims have been asserted or threatened to date, there can be no assurance that the Company's insurance will be sufficient to cover all possible future liabilities. ENVIRONMENTAL REGULATION The Company's operations are subject to a variety of federal, state and local laws and regulations relating to the discharge of materials into the environment or otherwise relating to the 6 8 protection of the environment. From time to time the Company uses a small amount of hazardous materials in its operations. Although the Company believes that it is in compliance with applicable environmental laws and regulations, any failure to comply with such laws and regulations could have a material adverse effect on its operations. THE COMPANY The Company was organized and commenced operations as a Massachusetts corporation in 1982. The Company completed a private placement of 1,000,000 shares of Common Stock in August 1990, an initial public offering of 1,200,000 shares of Common Stock in November 1990, and a public offering of 1,176,250 shares of Common Stock in February 1992. In conjunction with these offerings, the Company issued warrants for a total of 320,000 shares of Common Stock to the selling agent and underwriters for the offerings. Before these offerings, the Company was privately held. The Company completed a private placement of 500,000 shares of Common Stock in June 1998. In conjunction with the June 1998 offering, the purchasers in such offering were issued warrants for an additional 500,000 shares of Common Stock. The Company designs, develops, manufacturers and sells specialized optical systems and components and optical thin film coatings. The Company's products and services include medical products for use by hospitals and physicians, advanced optical products and thin films and advanced optical system design and development services. The Company's principal executive offices are located at 22 East Broadway, Gardner, Massachusetts 01440 and its telephone number is (978) 630-1800. USE OF PROCEEDS The Company will not receive any of the proceeds of the Common Stock offered hereby by the Selling Stockholders. SELLING STOCKHOLDERS The following table sets forth certain information regarding ownership of the Company's Common Stock by the Selling Stockholders as of September 30, 1998, including the number of Shares offered hereby. The Shares are being registered to permit public secondary trading of the Shares, and the Selling Stockholders may offer all or a portion of the Shares for resale from time to time. See "Plan of Distribution."
Shares of Common Number of Shares Stock Beneficially of Common Stock Number of Shares Owned After Offering Beneficially Owned of Common Stock ---------------------- Selling Stockholder Prior to Offering(1) Offered Hereby Number Percent ------------------- -------------------- ---------------- ------ ------- Special Situations Private Equity Fund, L.P. 750,000(2) 750,000 -0- ** c/o Special Situations Fund III, L.P. 153 East 53rd Street New York, NY 10022
7 9
Shares of Common Number of Shares Stock Beneficially of Common Stock Number of Shares Owned After Offering Beneficially Owned of Common Stock ---------------------- Selling Stockholder Prior to Offering(1) Offered Hereby Number Percent ------------------- -------------------- ---------------- ------ ------- Special Situations Technology Fund, L.P. 250,000(3) 250,000 -0- ** c/o Special Situations of Fund III, L.P. 153 East 53rd Street New York, NY 10022 Nathan Newman 69,095 28,500(4) 40,595 ** c/o Equity Securities Investments, Inc. 5353 Wayzata Boulevard, Suite 600 St. Louis Park, MN 55416 Peter L. Hauser 198,000 14,000(4) 184,000 2.76% c/o Equity Securities Investments, Inc. 5353 Wayzata Boulevard, Suite 600 St. Loius Park, MN 55416 Ralph Murphy 25,400 5,000(4) 20,400 ** 278 Dakota Street Prescott, WI 54021 Leighton C. Natt 16,100 4,500(4) 11,600 ** 3 Point Road Bayport, MN 55003 Holderness Leasing, Inc. 135,650 34,900(4) 100,750 1.50% c/o Helmar Nielson 1530 Queens Boulevard, #301 Charlotte, NC 28207
- ------------------------------ ** The number of shares indicated does not exceed one percent of the number of shares of Common Stock outstanding. (1) Beneficial ownership is determined in accordance with the rules of the Commission. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to warrants held by that person that are currently exercisable or exercisable within 60 days of the date of this Prospectus are deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of each other person. Except as indicated in the footnotes to this table and pursuant to applicable community property laws, each Selling Stockholder named in the table above has sole voting and investment power with respect to the shares set forth opposite such Selling Stockholders' name. Percentage beneficial ownership is based on 6,677,595 shares of Common Stock outstanding as of September 30, 1998. (2) Includes 375,000 shares which may be acquired within 60 days of the date of this Prospectus upon the exercise of outstanding warrants owned by Special Situations Private Equity Fund, L.P. ("SSPEF"). All Shares owned by SSPEF were issued, or are issuable upon the exercise of 8 10 warrants issued, to SSPEF in a private placement on June 30, 1998. The Registration Statement of which this Prospectus is a part was filed pursuant to a Registration Rights Agreement dated as of June 30, 1998 among the Company, SSPEF and Special Situations Technology Fund, L.P. ("SSTF") (the "Registration Rights Agreement"). (3) Includes 125,000 shares which may be acquired within 60 days of the date of this Prospectus upon the exercise of outstanding warrants owned by SSTF. All Shares owned by SSTF were issued, or are issuable upon the exercise of warrants issued, to SSTF in a private placement on June 30, 1998. The Registration Statement of which this Prospectus is a part was filed pursuant to the Registration Rights Agreement. (4) Represents Shares issued, or issuable upon, exercise of the Company's Initial Public Offering Selling Agent Warrants issued on or about July 8, 1992, as amended on December 30, 1994 (the "IPO Warrants") and the Company's Private Placement Selling Agent Warrants issued on or about July 8, 1992, as amended on December 30, 1994 (the "Private Placement Warrants"). Both the IPO Warrants and the Private Placement Warrants entitle the holders thereof to certain "piggyback" registration rights. The Shares indicated are being included in this Registration Statement at the election of the Selling Stockholder pursuant to the exercise of such rights. PLAN OF DISTRIBUTION The Selling Stockholders named herein have not advised the Company of any specific plans for the distribution of the Shares covered by this Prospectus. The Shares offered by the Selling Stockholders may be sold from time to time by the Selling Stockholders, or by pledgees, donees, transferees or other successors in interest of the Selling Stockholders. Such sales may be made in one or more transactions on the Nasdaq SmallCap Market or otherwise, at prices and at terms then prevailing or at prices related to the then current market price, or in negotiated transactions. The Shares may be sold by one or more of the following: (a) a "block" trade in which the broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; and (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers. In effecting sales, brokers or dealers engaged by the Selling Stockholders may arrange for other brokers or dealers to participate. Brokers or dealers will receive commissions or discounts from Selling Stockholders (and, if they act as agent for the purchaser, from such purchaser), which commissions may, in certain situations, be negotiated and in excess of customary compensation in amounts to be negotiated immediately prior to the sale. Such brokers or dealers, and any other participating brokers or dealers, and certain of the Selling Stockholders may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In addition, any Shares covered by this Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus. Upon the Company being notified by a Selling Stockholder that any material arrangement has been entered into with a broker-dealer for the sale of Shares through a block trade, special offering, exchange distribution or secondary distribution, or a purchase by a broker-dealer as principal, a supplemental Prospectus will be filed, pursuant to Rule 424(b) under the Securities Act, setting forth (i) the name of each Selling Stockholder and of the participating broker-dealers(s), (ii) the number of Shares involved, (iii) the price at which such Shares were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, and (v) other facts material to the transaction. 9 11 The Company has agreed to pay the cost of the registration of the Shares and the preparation of this Prospectus and the Registration Statement under which it is filed. The expenses so payable by the Company are estimated to be approximately $22,531. The Company and the Selling Stockholders have agreed to indemnify each other against certain liabilities, including liabilities arising under the Securities Act. The Company has agreed in the Registration Rights Agreement to use its best efforts to keep the Registration Statement of which this Prospectus is a part continuously effective until the earlier of (i) two years from the date on which warrants now held by SSPEF and SSTF have been exercised in full or (ii) such time as all of the Shares now held by SSPEF and SSTF have been sold. LEGAL MATTERS The validity of the shares of Common Stock being offered hereby will be passed upon for the Company by Ropes & Gray, Boston, Massachusetts. EXPERTS The financial statements incorporated in this Prospectus by reference to the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1998 have been audited by Arthur Andersen LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. [Remainder of this page intentionally left blank.] 10 12 ================================================================================ NO DEALER, SALES PERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS SET FORTH UNDER "SELLING STOCKHOLDERS" OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ------------ TABLE OF CONTENTS Page ---- Available Information ................................................. 2 Incorporation of Certain Documents by Reference ....................... 2 Risk Factors .......................................................... 3 The Company ........................................................... 7 Use of Proceeds ....................................................... 7 Selling Stockholders .................................................. 7 Plan of Distribution .................................................. 9 Legal Matters ......................................................... 10 Experts ............................................................... 10 ================================================================================ ================================================================================ 1,086,900 Shares of Common Stock PRECISION OPTICS CORPORATION, INC. _____________, 1998 ================================================================================ 13 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following is an itemization of the expenses incurred or expected to be incurred by the Company in connection with the offering described in this Registration Statement. No portion of such expenses are expected to be borne by Selling Stockholders. (Items marked with an asterisk (*) represent estimated expenses): Registration Fee.......................................... $ 416 Printing Cost*............................................ $ 1,115 Legal Fees*............................................... $18,000 Accounting Fees*.......................................... $ 2,000 Miscellaneous*............................................ $ 1,000 TOTAL*............................................... $22,531 ======= ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS The Company is organized under the laws of The Commonwealth of Massachusetts. The Massachusetts Business Corporation Law provides that indemnification of directors, officers, employees and other agents of a corporation, and persons who serve at its request as directors, officers, employees or other agents of another organization, or who serve at its request in any capacity with respect to any employee benefit plan, may be provided by the corporation to whatever extent specified in or authorized by its articles of organization, a by-law adopted by the stockholders or a vote adopted by the holders of a majority of the shares of stock entitled to vote on the election of directors, except that no indemnification may be provided for any person with respect to any matter as to which the person shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interest of the corporation. Under Massachusetts law, a corporation can purchase and maintain insurance on behalf of any person against liability incurred as a director, officer, employee, agent or person serving at the request of the corporation as a director, officer, employee or other agent of another organization or with respect to any employee benefit plan, in his capacity as such, whether or not the corporation would have the power to itself indemnify him against such liability. The Company's articles of organization provide that its directors shall not be liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that exculpation from liabilities is not permitted under the Massachusetts Business Corporation Law as in effect at the time such liability is determined. The by-laws of the Company provide generally that the Company shall, to the extent legally permissible, indemnify its directors and officers against all liabilities and expenses incurred by them in connection with the defense or disposition of any action, suit or other proceeding in which he may be involved, or by which he may be threatened, by reason of his being or having been a director or officer, except with respect to any matter as to which he shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interest of the Company. In addition, the Company holds a directors and officers liability policy. II-1 14 ITEM 16. EXHIBITS The following exhibits are filed herewith: Exhibit No. Title - ------- ----- 2.1 Stock Subscription Agreement dated as of June 30, 1998 by and among the Company, Special Situations Private Equity Fund, L.P. and Special Situations Technology Fund, L.P. (1) 4.1 Articles of Organization of the Company (2) 4.2 By-laws of the Company (3) 4.3 Specimen Common Stock Certificate (2) 4.4 Registration Rights Agreement dated as of June 30, 1998 by and among the Company, Special Situations Private Equity Fund, L.P. and Special Situations Technology Fund, L.P. (1) 4.5 Common Stock Purchase Warrant dated June 30, 1998 issued to Special Situations Private Equity Fund, L.P. (1) 4.6 Common Stock Purchase Warrant dated June 30, 1998 issued to Special Situations Technology Fund, L.P. (2) 4.7 Sample Initial Public Offering Selling Agent Warrant dated December 30, 1994 4.8 Sample Private Placement Selling Agent Warrant dated December 30, 1994 5.1 Opinion of Ropes & Gray 23.1 Consent of Arthur Andersen LLP 23.2 Consent of Ropes & Gray (included in the opinion filed as Exhibit 5.1) 24.1 Power of Attorney (to be included as part of signature page filed herewith) 27.1 Financial Data Schedule (1) Incorporated herein by reference to the Company's 1998 Annual Report on Form 10-KSB. (2) Incorporated herein by reference to the Company's Registration Statement on Form S-18 (No. 33-36710-B). (3) Incorporated herein by reference to the Company's 1991 Annual Report on Form 10-KSB. II-2 15 ITEM 17. UNDERTAKINGS (a) The Company hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; (i) to include any prospectus required by section 10(a)(3) of the Securities Act; (ii) to reflect in the Prospectus included within this Registration Statement any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; and (4) that, insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. [Remainder of this page intentionally left blank] II-3 16 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Gardner, Massachusetts, on the 23rd day of October, 1998. PRECISION OPTICS CORPORATION, INC. By: /s/ Richard E. Forkey ---------------------------------- Richard E. Forkey Chairman, Chief Executive Officer and President POWER OF ATTORNEY AND SIGNATURES We, the undersigned officers and directors of Precision Optics Corporation, Inc., hereby severally constitute and appoint Richard E. Forkey and Jack P. Dreimiller and each of them singly, as true and lawful attorneys, with full power to them and each of them singly, to sign for us in our names in the capacities indicated below, all additional amendments to this registration statement, and generally to do all things in our names and on our behalf in such capacities to enable Precision Optics Corporation, Inc. to comply with the provisions of the Securities Act of 1993, as amended, and all applicable requirements of the Securities and Exchange Commission. Pursuant to the requirements of the Securities Act of 1933, this registration statement on Form S-3 has been signed by the following persons in the capacities and on the dates indicated. Signature Capacity Date - --------- -------- ---- /s/ Richard E. Forkey Chairman of the October 23, 1998 - ------------------------ Board of Directors, Richard E. Forkey Chief Executive Officer and President (principal executive officer) /s/ Jack P. Dreimiller Senior Vice President, October 23, 1998 - ------------------------ Finance, Chief Financial Jack P. Dreimiller Officer and Clerk (principal financial and accounting officer) /s/ Edward A. Benjamin Director October 23, 1998 - ------------------------ Edward A. Benjamin 17 /s/ H. Angus Macleod Director October 23, 1998 - ------------------------ H. Angus Macleod /s/ Austin W. Marxe Director October 23, 1998 - ------------------------ Austin W. Marxe /s/ Joel R. Pitlor Director October 23, 1998 - ------------------------ Joel R. Pitlor /s/ Robert R. Shannon Director October 23, 1998 - ------------------------ Robert R. Shannon EX-4.7 2 SAMPLE IPO SELLING AGENT WARRANT 1 EXHIBIT 4.7 PRECISION OPTICS CORPORATION, INC. INITIAL PUBLIC OFFERING SELLING AGENT COMMON STOCK PURCHASE WARRANT NO. __ Precision Optics Corporation, Inc., a Massachusetts corporation (the "Company"), hereby agrees that, for value received, __________ , or his or her assigns, is entitled, subject to the terms set forth below, to purchase from the Company at any time or from time to time after February 21, 1992, and before 5:00 p.m., Boston, Massachusetts time, on October 23, 1998, ____ shares of $.01 par value Common Stock of the Company (the "Common Stock"), at a price per share of $1.375. 1. EXERCISE OF WARRANT. The purchase rights exercised by this Warrant shall be exercised by the holder surrendering this Warrant to the Company at its principal office, accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, of the purchase price payable in respect of the Common Stock being purchased, along with the exercise form attached hereto duly executed by such holder. If less than all of the Common Stock is purchased, the Company will, upon such exercise, execute and deliver to the holder hereof a new Warrant (dated the date thereof) evidencing the number of shares of the Common Stock not so purchased. As soon as practicable after the exercise of this Warrant and payment of the purchase price, the Company will cause to be issued in the name of and delivered to the holder hereof, or as such holder may direct, a certificate or certificates representing the shares purchased. The Company may require that such certificate or certificates contain on the face thereof legends substantially as follows: The transfer of the shares represented by this certificate is restricted pursuant to the terms of a Common Stock Purchase Warrant dated August 21, 1990 issued by Precision Optics Corporation, Inc., a copy of which is available for inspection at the offices of Precision Optics Corporation, Inc. Transfer may not be made except in accordance with the terms of such Common Stock Purchase Warrant. In addition, no sale, offer to sell, pledge or transfer of the shares represented by this certificate shall be made unless a Registration Statement under the federal Securities Act of 1933, as amended, with respect to such shares is then in effect or an exemption from the registration requirements of such Securities Act is then applicable to such shares. 2. NEGOTIABILITY. This Warrant is issued upon the following terms, to which each taker or owner hereof consents and agrees: (a) Except where directed by a court of competent jurisdiction pursuant to the dissolution or liquidation of a corporate holder hereof, and until after November 20, 1991, title to 2 this Warrant may not be sold, assigned, hypothecated or transferred other than to a person who is both (i) an officer and a shareholder, (ii) an officer and an employee or (iii) an officer and a registered representative of Van Clemens & Co. Incorporated, a Minnesota corporation ("Van Clemens"), or to a successor (or an officer and a shareholder, an officer and an employee or an officer and a registered representative of the successor) in interest to the business of Van Clemens, by endorsement (by the holder hereof executing the form of assignment attached hereto) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery. (b) Subject to the next paragraph, any person authorized to be a holder as specified in subparagraph (a) above, in possession of this Warrant properly endorsed, is authorized to represent himself or herself as absolute owner hereof and is granted power to transfer absolute title hereto by endorsement and delivery hereof to a holder in due course. Each prior taker or owner waives and renounces all of his or her equities or rights in this Warrant in favor of every such holder in due course, and every such holder in the due course shall acquire absolute title hereto and to all rights represented hereby. (c) Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder of this Warrant as absolute owner hereof for all purposes without being affected by any notice to the contrary. 3. ADJUSTMENT OF PURCHASE PRICE; REORGANIZATION. In case the Company shall at any time hereafter subdivide or combine its outstanding shares of Common Stock or declare a dividend payable in Common Stock the exercise price in effect immediately before the subdivision, combination or record date for such dividend payable in Common Stock shall forthwith be proportionately increased, in the case of combination, or proportionately decreased, in the case of subdivision or declaration of a dividend payable in Common Stock, and each share of Common Stock purchasable upon exercise of the Warrant shall be changed to the number determined by dividing the then current exercise price by the exercise price as adjusted after such subdivision, combination or dividend payable in Common Stock. No fractional shares of Common Stock are to be issued upon the exercise of the Warrant, but the Company shall pay a cash adjustment in respect of any fraction of a share which would otherwise be issuable in an amount equal to the same fraction of the market price per share of Common Stock on the day of exercise as determined in good faith by the Company. In case of any capital reorganization or any reclassification of the shares of Common Stock of the Company, or in the case of any consolidation with or merger of the Company into or with another corporation or the sale of all or substantially all of its assets to another corporation effected in such a manner that the holders of Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for Common Stock, then, as part of such reorganization, reclassification, consolidation, merger or sale, as the case may be, lawful provision shall be made so that the holder of the Warrant shall have the right thereafter to receive, upon the exercise hereof, the kind and amount of shares of stock or other securities or -2- 3 property which the holder would have been entitled to receive if, immediately before such reorganization, reclassification, consolidation or merger, the holder had held the number of shares of Common Stock which were then purchasable upon the exercise of the Warrant had the Warrant been exercisable. In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interest thereafter of the holder of the Warrant, to the end that the provisions set forth herein (including provisions with respect to adjustments of the exercise price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the exercise of the Warrant. When any adjustment is required to be made in the exercise price, initial or adjusted, the Company shall forthwith determine the new exercise price; and (a) Prepare and retain on file a statement describing in reasonable detail the method used in arriving at the new exercise price; and (b) Cause a copy of such statement to be mailed to the holder of the Warrant as of a date within ten (10) days after the date when the circumstances giving rise to the adjustment occurred. 4. INVESTMENT INTENT. Neither the Warrant nor the shares of Common Stock of the Company issuable upon exercise of the Warrant have been registered under the Securities Act of 1933, as amended (the "Securities Act"). The Warrant is issued to the holder on the condition that the Warrant and any Common Stock purchased upon exercise or the Warrant (excepting Common Stock for which a Notification under Regulation A or a Registration Statement has been filed and declared effective) are or will be purchased for investment purposes and not with an intent to distribute the same. Before making any disposition of the Warrant or of any Common Stock purchased upon exercise of the Warrant, the holder will give written notice to the Company describing briefly the manner of any such proposed disposition. The holder will not make any such disposition until (i) the Company has notified him or her that, in the opinion of its counsel, registration under the Securities Act is not required with respect to such disposition, or (ii) a Notification under Regulation A or a Registration Statement covering the proposed distribution has been filed by the Company and has become effective. Upon receipt of written notice from the holder hereof with respect to such proposed distribution, the Company will use its best efforts, in consultation with the holder's counsel, to ascertain as soon as possible whether or not registration is required, and will advise the holder promptly with respect thereto. 5. INCLUSION IN REGISTRATION STATEMENT. If after November 20, 1991, and prior to October 23, 1998, the Company shall propose to file a Registration Statement (other than on Forms S-8, S-4, or S-15 or other similarly inappropriate forms) under the Securities Act covering a public offering of the Company's Common Stock, it will notify the holder hereof at least twenty (20) days prior to such filing and will, after October 23, 1991, include in the Registration Statement (to the extent permitted by applicable regulation), at the sole expense of the Company, the Common Stock purchased by the holder or purchasable by the holder upon the exercise of the -3- 4 Warrant to the extent requested by the holder hereof. The holder shall be responsible for payment of the fees of such holder's counsel and the payment of commissions relating to the shares of Common Stock purchased by the holder and sold pursuant to such Registration Statement. Notwithstanding the foregoing, the Company need not include the Common Stock so purchased or purchasable in any such Registration Statement if the underwriter with respect to such proposed public offering determines, and has a reasonable basis for determining, that such inclusion would be inadvisable or detrimental to the success of that offering. If the Registration Statement filed pursuant to such twenty (20) day notice has not become effective within six months following the date such notice is given to the holder hereof, the Company must again notify such holder in the manner provided above. The obligations of the Company to include the shares purchased or purchasable under this Warrant in a Registration Statement pursuant to this paragraph shall terminate if on the last day on which this Warrant may be exercised the Company would not have been obligated to provide the holder hereof with twenty (20) days notice as provided in this Section 5. 6. REGISTRATION -- GENERAL PROVISIONS. In connection with any offering involving an underwriting of securities being issued by the Company, the Company shall not be required to include any of the securities of the holder hereof in such underwriting unless he or she accepts the reasonable terms of the underwriting as agreed upon between the Company and the underwriters selected by it. In the case of any registration initiated by the Company, the Company shall have the right to designate the managing underwriter in any underwritten offering. The Company will furnish the holder hereof with a reasonable number of copies of any prospectus included in such filings and will amend or supplement the same as required during the period of required use thereof, provided, that the expenses of any amendment or supplement made or filed more than nine (9) months after the effective date of the Registration Statement filed at the request of any holder shall be paid by any such holder. The Company need not maintain the effectiveness of any Registration Statement filed by the Company more than nine (9) months following the effective date thereof. In the case of filing of any Registration Statement, and to the extent permissible under the Securities Act of 1933 and controlling precedent thereunder, the holder hereof shall enter into cross indemnification agreements with the Company and, if requested and applicable, the Underwriter(s) named in such Registration Statement, in customary scope covering the accuracy and completeness of the information furnished by each. The holder of the Warrant agrees to cooperate with the Company in the preparation and filing of any such Registration Statement or in its efforts to establish that the proposed sale is exempt under the Securities Act as to any proposed distribution. 7. NOTICES. The Company shall mail to the registered holder of the Warrant, at his or her last post office address appearing on the books of the Company, not less than fifteen (15) days prior to the date on which (a) a record will be taken for the purpose of determining the holders of Common Stock entitled to dividends (other than cash dividends) or subscription -4- 5 rights, or (b) a record will be taken (or in lieu thereof, the transfer books will be closed) for the purpose of determining the holders of Common Stock entitled to notice of and to vote at a meeting of stockholders at which any capital reorganization, reclassification of shares of Common Stock, consolidation, merger, dissolution, liquidation, winding up or sale of substantially all of the Company's assets shall be considered and acted upon. Notwithstanding such notice requirements, until exercise and payment therefor, any holder hereof shall not be deemed a shareholder of the Company with respect to shares of Common Stock underlying the Warrant. 8. RESERVATION OF COMMON STOCK. A number of shares of Common Stock sufficient to provide for the exercise of the Warrant upon the basis herein set forth shall at all times be reserved for the exercise thereof. 9. MISCELLANEOUS. Whenever reference is made herein to the issue or sale of shares of Common Stock, the term "Common Stock" shall include any stock of any class of the Company other than preferred stock with a fixed limit on dividends and a fixed amount payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company. The Company will not, by amendment of its Articles of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act or deed, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by the Company, but will, at all times in good faith, assist, insofar as it is able, in the carrying out of all provisions hereof and in the taking of all other action which may be necessary in order to protect the rights of the holder hereof against dilution. The representations, warranties and agreements herein contained shall survive the exercise of this Warrant. References to the "holder of" include the immediate holder of shares purchased on the exercise of this Warrant and the holder of any new warrants issued pursuant to Section 1 upon the purchase of less than all of the Common Stock purchasable under this Warrant, and the word "holder" shall include the plural thereof. All shares of Common Stock or other securities issued upon the exercise of this Warrant shall be validly issued, fully paid and nonassessable, and the Company will pay all taxes in respect of the issue thereof. * * * * * * * * * -5- 6 IN WITNESS WHEREOF, this Warrant has been duly executed by Precision Optics Corporation, Inc., this 30th day of December, 1994. PRECISION OPTICS CORPORATION, INC. By: ______________________________ President -6- 7 EXERCISE FORM (TO BE SIGNED ONLY UPON EXERCISE OF WARRANT) To Precision Optics Corporation, Inc.: The undersigned, the holder of the within warrant, hereby irrevocably elects to exercise the purchase right represented by such warrant for, and to purchase thereunder *________________ shares of the Common Stock of Precision Optics Corporation, Inc., and herewith makes payment of $______ therefor, and requests that the certificates for such shares be issued in the name of ______________, and be delivered to _______________________, whose address is _____________________________________________ . Dated:_______________ ____________________________________________ (Signature must conform in all respects to the name of holder as specified on the face of the warrant) ____________________________________________ (Address) ____________________________________________ (City - State - Zip) *Insert here all or such portion of the number of shares called for on the face of the within warrant in 100 or more share increments with respect to which the holder desires to exercise the purchase right represented thereby, without adjustment for any other or additional stock, other securities, property or cash which may be deliverable on such exercise. -7- 8 ASSIGNMENT FORM (TO BE SIGNED ONLY UPON TRANSFER OF THE WARRANT) For value received, the undersigned hereby sells, assigns and transfers unto _______________________ the right represented by the within warrant to purchase _________________ of the shares of Common Stock of Precision Optics Corporation, Inc. to which the within warrant relates and appoints _____________________ attorney to transfer said right on the books of Precision Optics Corporation, Inc., with full power of substitution in the premises. Dated:_______________ ____________________________________________ (Signature must conform in all respects to the name of holder as specified on the face of the warrant) ____________________________________________ (Address) ____________________________________________ (City - State - Zip) In the presence of: _______________________ -8- EX-4.8 3 SAMPLE PRIVATE PLACEMENT SELLING AGENT WARRANT 1 EXHIBIT 4.8 PRECISION OPTICS CORPORATION, INC. PRIVATE PLACEMENT SELLING AGENT COMMON STOCK PURCHASE WARRANT NO. ___ Precision Optics Corporation, Inc., a Massachusetts corporation (the "Company"), hereby agrees that, for value received, __________, or his or her assigns, is entitled, subject to the terms set forth below, to purchase from the Company at any time or from time to time after February 21, 1992, and before 5:00 p.m., Boston, Massachusetts time, on August 21, 1998, _____ shares of $.01 par value Common Stock of the Company (the "Common Stock"), at a price per share of $1.375. 1. EXERCISE OF WARRANT. The purchase rights exercised by this Warrant shall be exercised by the holder surrendering this Warrant to the Company at its principal office, accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, of the purchase price payable in respect of the Common Stock being purchased, along with the exercise form attached hereto duly executed by such holder. If less than all of the Common Stock is purchased, the Company will, upon such exercise, execute and deliver to the holder hereof a new Warrant (dated the date thereof) evidencing the number of shares of the Common Stock not so purchased. As soon as practicable after the exercise of this Warrant and payment of the purchase price, the Company will cause to be issued in the name of and delivered to the holder hereof, or as such holder may direct, a certificate or certificates representing the shares purchased. The Company may require that such certificate or certificates contain on the face thereof legends substantially as follows: The transfer of the shares represented by this certificate is restricted pursuant to the terms of a Common Stock Purchase Warrant dated August 21, 1990 issued by Precision Optics Corporation, Inc., a copy of which is available for inspection at the offices of Precision Optics Corporation, Inc. Transfer may not be made except in accordance with the terms of such Common Stock Purchase Warrant. In addition, no sale, offer to sell, pledge or transfer of the shares represented by this certificate shall be made unless a Registration Statement under the federal Securities Act of 1933, as amended, with respect to such shares is then in effect or an exemption from the registration requirements of such Securities Act is then applicable to such shares. 2. NEGOTIABILITY. This Warrant is issued upon the following terms, to which each taker or owner hereof consents and agrees: (a) Except where directed by a court of competent jurisdiction pursuant to the dissolution or liquidation of a corporate holder hereof, and until after August 21, 1991, title to -1- 2 this Warrant may not be sold, assigned, hypothecated or transferred other than to a person who is both (i) an officer and a shareholder, (ii) an officer and an employee or (iii) an officer and a registered representative of Van Clemens & Co. Incorporated, a Minnesota corporation ("Van Clemens"), or to a successor (or an officer and a shareholder, an officer and an employee or an officer and a registered representative of the successor) in interest to the business of Van Clemens, by endorsement (by the holder hereof executing the form of assignment attached hereto) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery. (b) Subject to the next paragraph, any person authorized to be a holder as specified in subparagraph (a) above, in possession of this Warrant properly endorsed, is authorized to represent himself or herself as absolute owner hereof and is granted power to transfer absolute title hereto by endorsement and delivery hereof to a holder in due course. Each prior taker or owner waives and renounces all of his or her equities or rights in this Warrant in favor of every such holder in due course, and every such holder in the due course shall acquire absolute title hereto and to all rights represented hereby. (c) Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder of this Warrant as absolute owner hereof for all purposes without being affected by any notice to the contrary. 3. ADJUSTMENT OF PURCHASE PRICE; REORGANIZATION. In case the Company shall at any time hereafter subdivide or combine its outstanding shares of Common Stock or declare a dividend payable in Common Stock the exercise price in effect immediately before the subdivision, combination or record date for such dividend payable in Common Stock shall forthwith be proportionately increased, in the case of combination, or proportionately decreased, in the case of subdivision or declaration of a dividend payable in Common Stock, and each share of Common Stock purchasable upon exercise of the Warrant shall be changed to the number determined by dividing the then current exercise price by the exercise price as adjusted after such subdivision, combination or dividend payable in Common Stock. No fractional shares of Common Stock are to be issued upon the exercise of the Warrant, but the Company shall pay a cash adjustment in respect of any fraction of a share which would otherwise be issuable in an amount equal to the same fraction of the market price per share of Common Stock on the day of exercise as determined in good faith by the Company. In case of any capital reorganization or any reclassification of the shares of Common Stock of the Company, or in the case of any consolidation with or merger of the Company into or with another corporation or the sale of all or substantially all of its assets to another corporation effected in such a manner that the holders of Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for Common Stock, then, as part of such reorganization, reclassification, consolidation, merger or sale, as the case may be, lawful provision shall be made so that the holder of the Warrant shall have the right thereafter to receive, upon the exercise hereof, the kind and amount of shares of stock or other securities or -2- 3 property which the holder would have been entitled to receive if, immediately before such reorganization, reclassification, consolidation or merger, the holder had held the number of shares of Common Stock which were then purchasable upon the exercise of the Warrant had the Warrant been exercisable. In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interest thereafter of the holder of the Warrant, to the end that the provisions set forth herein (including provisions with respect to adjustments of the exercise price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the exercise of the Warrant. When any adjustment is required to be made in the exercise price, initial or adjusted, the Company shall forthwith determine the new exercise price; and (a) Prepare and retain on file a statement describing in reasonable detail the method used in arriving at the new exercise price; and (b) Cause a copy of such statement to be mailed to the holder of the Warrant as of a date within ten (10) days after the date when the circumstances giving rise to the adjustment occurred. 4. INVESTMENT INTENT. Neither the Warrant nor the shares of Common Stock of the Company issuable upon exercise of the Warrant have been registered under the Securities Act of 1933, as amended (the "Securities Act"). The Warrant is issued to the holder on the condition that the Warrant and any Common Stock purchased upon exercise or the Warrant (excepting Common Stock for which a Notification under Regulation A or a Registration Statement has been filed and declared effective) are or will be purchased for investment purposes and not with an intent to distribute the same. Before making any disposition of the Warrant or of any Common Stock purchased upon exercise of the Warrant, the holder will give written notice to the Company describing briefly the manner of any such proposed disposition. The holder will not make any such disposition until (i) the Company has notified him or her that, in the opinion of its counsel, registration under the Securities Act is not required with respect to such disposition, or (ii) a Notification under Regulation A or a Registration Statement covering the proposed distribution has been filed by the Company and has become effective. Upon receipt of written notice from the holder hereof with respect to such proposed distribution, the Company will use its best efforts, in consultation with the holder's counsel, to ascertain as soon as possible whether or not registration is required, and will advise the holder promptly with respect thereto. 5. INCLUSION IN REGISTRATION STATEMENT. If after February 21, 1992, and prior to August 21, 1998, the Company shall propose to file a Registration Statement (other than on Forms S-8, S-4, or S-15 or other similarly inappropriate forms) under the Securities Act covering a public offering of the Company's Common Stock, it will notify the holder hereof at least twenty (20) days prior to such filing and will, after February 21, 1992, include in the Registration Statement (to the extent permitted by applicable regulation), at the sole expense of the Company, the Common Stock purchased by the holder or purchasable by the holder upon the exercise of the -3- 4 Warrant to the extent requested by the holder hereof. The holder shall be responsible for payment of the fees of such holder's counsel and the payment of commissions relating to the shares of Common Stock purchased by the holder and sold pursuant to such Registration Statement. Notwithstanding the foregoing, the Company need not include the Common Stock so purchased or purchasable in any such Registration Statement if the underwriter with respect to such proposed public offering determines, and has a reasonable basis for determining, that such inclusion would be inadvisable or detrimental to the success of that offering. If the Registration Statement filed pursuant to such twenty (20) day notice has not become effective within six months following the date such notice is given to the holder hereof, the Company must again notify such holder in the manner provided above. The obligations of the Company to include the shares purchased or purchasable under this Warrant in a Registration Statement pursuant to this paragraph shall terminate if on the last day on which this Warrant may be exercised the Company would not have been obligated to provide the holder hereof with twenty (20) days notice as provided in this Section 5. 6. REGISTRATION -- GENERAL PROVISIONS. In connection with any offering involving an underwriting of securities being issued by the Company, the Company shall not be required to include any of the securities of the holder hereof in such underwriting unless he or she accepts the reasonable terms of the underwriting as agreed upon between the Company and the underwriters selected by it. In the case of any registration initiated by the Company, the Company shall have the right to designate the managing underwriter in any underwritten offering. The Company will furnish the holder hereof with a reasonable number of copies of any prospectus included in such filings and will amend or supplement the same as required during the period of required use thereof, provided, that the expenses of any amendment or supplement made or filed more than nine (9) months after the effective date of the Registration Statement filed at the request of any holder shall be paid by any such holder. The Company need not maintain the effectiveness of any Registration Statement filed by the Company more than nine (9) months following the effective date thereof. In the case of filing of any Registration Statement, and to the extent permissible under the Securities Act of 1933 and controlling precedent thereunder, the holder hereof shall enter into cross indemnification agreements with the Company and, if requested and applicable, the Underwriter(s) named in such Registration Statement, in customary scope covering the accuracy and completeness of the information furnished by each. The holder of the Warrant agrees to cooperate with the Company in the preparation and filing of any such Registration Statement or in its efforts to establish that the proposed sale is exempt under the Securities Act as to any proposed distribution. 7. NOTICES. The Company shall mail to the registered holder of the Warrant, at his or her last post office address appearing on the books of the Company, not less than fifteen (15) days prior to the date on which (a) a record will be taken for the purpose of determining the holders of Common Stock entitled to dividends (other than cash dividends) or subscription -4- 5 rights, or (b) a record will be taken (or in lieu thereof, the transfer books will be closed) for the purpose of determining the holders of Common Stock entitled to notice of and to vote at a meeting of stockholders at which any capital reorganization, reclassification of shares of Common Stock, consolidation, merger, dissolution, liquidation, winding up or sale of substantially all of the Company's assets shall be considered and acted upon. Notwithstanding such notice requirements, until exercise and payment therefor, any holder hereof shall not be deemed a shareholder of the Company with respect to shares of Common Stock underlying the Warrant. 8. RESERVATION OF COMMON STOCK. A number of shares of Common Stock sufficient to provide for the exercise of the Warrant upon the basis herein set forth shall at all times be reserved for the exercise thereof. 9. MISCELLANEOUS. Whenever reference is made herein to the issue or sale of shares of Common Stock, the term "Common Stock" shall include any stock of any class of the Company other than preferred stock with a fixed limit on dividends and a fixed amount payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company. The Company will not, by amendment of its Articles of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act or deed, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by the Company, but will, at all times in good faith, assist, insofar as it is able, in the carrying out of all provisions hereof and in the taking of all other action which may be necessary in order to protect the rights of the holder hereof against dilution. The representations, warranties and agreements herein contained shall survive the exercise of this Warrant. References to the "holder of" include the immediate holder of shares purchased on the exercise of this Warrant and the holder of any new warrants issued pursuant to Section 1 upon the purchase of less than all of the Common Stock purchasable under this Warrant, and the word "holder" shall include the plural thereof. All shares of Common Stock or other securities issued upon the exercise of this Warrant shall be validly issued, fully paid and nonassessable, and the Company will pay all taxes in respect of the issue thereof. * * * * * * * * * -5- 6 IN WITNESS WHEREOF, this Warrant has been duly executed by Precision Optics Corporation, Inc., this 30th day of December, 1994. PRECISION OPTICS CORPORATION, INC. By: ____________________________________ President -6- 7 EXERCISE FORM (TO BE SIGNED ONLY UPON EXERCISE OF WARRANT) To Precision Optics Corporation, Inc.: The undersigned, the holder of the within warrant, hereby irrevocably elects to exercise the purchase right represented by such warrant for, and to purchase thereunder *________________ shares of the Common Stock of Precision Optics Corporation, Inc., and herewith makes payment of $______ therefor, and requests that the certificates for such shares be issued in the name of ______________, and be delivered to _______________________, whose address is _____________________________________________ . Dated:_______________ ____________________________________________ (Signature must conform in all respects to the name of holder as specified on the face of the warrant) ____________________________________________ (Address) ____________________________________________ (City - State - Zip) *Insert here all or such portion of the number of shares called for on the face of the within warrant in 100 or more share increments with respect to which the holder desires to exercise the purchase right represented thereby, without adjustment for any other or additional stock, other securities, property or cash which may be deliverable on such exercise. -7- 8 ASSIGNMENT FORM (TO BE SIGNED ONLY UPON TRANSFER OF THE WARRANT) For value received, the undersigned hereby sells, assigns and transfers unto _______________________ the right represented by the within warrant to purchase _________________ of the shares of Common Stock of Precision Optics Corporation, Inc. to which the within warrant relates and appoints _____________________ attorney to transfer said right on the books of Precision Optics Corporation, Inc., with full power of substitution in the premises. Dated:_______________ ____________________________________________ (Signature must conform in all respects to the name of holder as specified on the face of the warrant) ____________________________________________ (Address) ____________________________________________ (City - State - Zip) In the presence of: _____________________________ -8- EX-5.1 4 OPINION OF ROPES & GRAY 1 EXHIBIT 5.1 ROPES & GRAY ONE INTERNATIONAL PLACE ONE FRANKLIN SQUARE BOSTON, MASSACHUSETTS 02110-2624 1301 K STREET, N.W. 30 KENNEDY PLAZA (617) 951-7000 SUITE 800 EAST PROVIDENCE, RI 02903-2328 FAX: (617) 951-7050 WASHINGTON, D.C. 20005-3333 (401) 455-4400 (202) 626-3900 FAX: (401) 455-4401 FAX: (202) 626-3961
October 26, 1998 Precision Optics Corporation, Inc. 22 East Broadway Gardner, MA 01440 Re: Registration Statement on Form S-3 ---------------------------------- Ladies and Gentlemen: This opinion is being furnished to you in connection with a registration statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, for the registration of 1,086,900 shares (the "Shares") of Common Stock, $.01 par value, of Precision Optics Corporation, Inc., a Massachusetts corporation (the "Company"). We have acted as counsel for the Company in connection with the preparation of the Registration Statement, the issuance and sale of certain of the Shares and the issuance of warrants (the "Warrants") exercisable for the balance of the Shares. For purposes of this opinion, we have examined and relied upon such documents, records, certificates and other instruments as we have deemed necessary. We express no opinion as to the applicability of, compliance with or effect of Federal law or the law of any jurisdiction other than The Commonwealth of Massachusetts. Based on the foregoing, we are of the opinion that the Shares that have been issued and sold as of the date of this letter are duly authorized, validly issued, fully paid and nonassessable, and that the Shares that are issuable upon exercise of the Warrants have been duly authorized and, if and when any such Shares are issued and the Company has received the exercise price therefor in accordance with the terms of the applicable Warrant, such Shares will be validly issued, fully paid and nonassessable. 2 ROPES & GRAY Precision Optics Corporation, Inc. -2- October 26, 1998 We hereby consent to your filing this opinion as an exhibit to the Registration Statement and to the use of our name therein and in the related prospectus under the caption "Legal Matters". It is understood that this opinion is to be used only in connection with the offer and sale of the Shares while the Registration Statement is in effect. Very truly yours, /s/ Ropes & Gray Ropes & Gray EX-23.1 5 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated July 23, 1998 included in Precision Optics Corporation, Inc.'s Form 10-KSB for the year ended June 30, 1998 and to all references to our Firm included in this registration statement. Arthur Andersen LLP Boston, Massachusetts October 29, 1998 EX-27.1 6 FINANCIAL DATA SCHEDULE
5 1 12-MOS JUN-30-1998 JUN-30-1998 2,060,146 0 486,070 0 949,993 3,686,079 3,471,589 2,318,380 5,127,478 811,766 208,684 0 0 66,186 4,040,842 5,127,478 4,053,052 4,053,052 3,595,756 3,595,756 2,606,079 0 26,254 (1,947,489) 13,300 (1,960,789) 0 0 0 (1,960,789) (.32) (.32)
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