As filed with the Securities and Exchange Commission on May 28, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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UNIVERSAL DISPLAY CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2372688
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Three Bala Plaza, East
Suite 104
Bala Cynwyd, PA 19004
(610) 617-4010
(Address, including zip code, and telephone
number, including area code,
of registrant's principal executive offices)
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STEVEN V. ABRAMSON
President and Chief Operating Officer
Universal Display Corporation
Three Bala Plaza, East, Suite 104
Bala Cynwyd, PA 19004
(610) 617-4010
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Stephen M. Goodman, Esquire
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(215) 963-5000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.|_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, 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. |_|
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class of Amount to be Proposed maximum
securities to be registered registered aggregate price per share(1)
--------------------------- ---------- ----------------------------
<S> <C> <C>
Common Stock, $.01 par value........ 1,816,772 $5.06
- ------------------------------------ -------------------- -------------------------------
</TABLE>
Proposed maximum Amount of
aggregate offering price registration fee
------------------------ ----------------
$9,192,866.32 $2,786
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(1) Calculated pursuant to Rule 457(c) of the Securities Act of 1933 based upon
the average of the high and low prices of a share of the Company's Common
Stock, as reported by the Nasdaq SmallCap Market on May 22, 1997.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
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.
SUBJECT TO COMPLETION, DATED MAY 28, 1997
PROSPECTUS
1,816,772 Shares
UNIVERSAL DISPLAY CORPORATION
Common Stock
------------
This prospectus covers 1,816,772 shares (the "Shares") of the Common
Stock, $.01 par value per share (the "Common Stock") of Universal Display
Corporation, a Pennsylvania corporation ("UDC" or the "Company"). The Shares are
being registered by the Company for the account of certain selling shareholders
identified herein (the "Selling Shareholders" and each a "Selling Shareholder").
The Shares are issuable upon the exercise of options and warrants (collectively,
the "Options and Warrants") by the Selling Shareholders. The Options and
Warrants were issued in connection with the issuance (i) by the Company in June
1995 and July 1995 of 1,114,000 Units, each consisting of one share of Common
Stock (which has not been registered pursuant to the registration statement of
which this prospectus forms a part) and one warrant to purchase one share of
Common Stock (such warrants, collectively, the "June 1995 Warrants"), (ii) by
the Company in April 1996 of warrants to purchase 578,000 of the Shares and in
August 1996 to purchase 20,000 of the Shares (collectively, the "April 1996
Warrants"), (iii) by the Company on June 22, 1995 of options to purchase 84,234
of the Shares (the "Merger Options") in connection with the merger of a
subsidiary of the Company then named "Enzymatics, Inc." ("Enzymatics") with and
into Universal Display Corporation, a New Jersey corporation subsequently
renamed "UDC, Inc." ("UDC-NJ") (the "Enzymatics Merger"), and (iv) by
Enzymatics, Inc. between January 1992 and June 1995 of options to purchase
20,538 of the Shares (after the effect of a 10.9672 reverse stock split effected
in connection with the Enzymatics Merger) (the "Enzymatics Options") pursuant to
the Enzymatics, Inc. 1992 Stock Option Plan (the "Enzymatics Plan"), which was
subsequently terminated as part of the Enzymatics Merger.
The Selling Shareholders may sell Shares acquired upon exercise of the
Options and Warrants from time to time in the public market or through
negotiated transactions. See "Plan of Distribution." The terms and conditions of
the offer and sale of the Shares by the Company to the Holders upon exercise of
the Options and Warrants , including the purchase price per share, are governed
by the provisions of the Options and Warrants. See "The Options and Warrants"
and "Exercise of the Options and Warrants." The Company will receive all
proceeds from the sale of the Shares to the Holders upon exercise of the Options
and Warrants of $6,776,852.54 before deducting expenses of approximately $27,780
payable by the Company in connection with the offering, but will receive no
proceeds from the sale of the Shares by the Selling Shareholders. See "Use of
Proceeds."
The Company's Common Stock is quoted on the Nasdaq SmallCap Market
("Nasdaq") under the symbol "PANL" and on the Philadelphia Stock Exchange under
the symbol "PNL." On May 22, 1997, the closing price of the Common Stock on
Nasdaq was $5.00 per share.
-----------------------
An investment in the Common Stock offered hereby involves a high degree of
risk. See "Risk Factors" on pages 4 through 10 herein.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
<PAGE>
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May , 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, as well as the following
regional offices of the Commission: Seven World Trade Center, 13th Floor, New
York, New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the
Commission by mail at prescribed rates. Requests should be directed to the
Commission's Public Reference Branch, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material also may be accessed electronically by
means of the Commission's home page on the Internet (http://www.sec.gov). In
addition, such reports, proxy statements and other information concerning the
Company can be inspected at the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the Company
(File No. 0-4643) with the Commission are incorporated herein by reference.
(a) Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996 filed with the Commission on March 28, 1997.
(b) Quarterly Report on Form 10-QSB for the quarter ended March
31, 1997 filed with the Commission on May 15, 1997.
(c) The Company's Proxy Statement related to its 1997 Annual
Meeting of Stockholders filed under the Exchange Act on April
21, 1997.
(d) The description of the Company's Common Stock which is
contained in its Registration Statement on Form 8-A filed
under the Exchange Act on April 4, 1996, including any
amendment or reports filed for the purpose of updating such
description.
(e) The description of the Company's Common Stock which is
contained in its Registration Statement on Form 8-A filed
under the Exchange Act on August 6, 1996, including any
amendment or reports filed for the purpose of updating such
description.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities remaining unsold,
shall be deemed incorporated by reference herein and to be a part hereof from
the date of the filing of such reports and 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 or incorporated by reference herein modifies or supersedes such
statement. Any 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 without charge to each person to whom this
Prospectus is delivered a copy of any or all of such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written or oral requests for copies should be
directed to Sidney D. Rosenblatt, Executive Vice President, Chief Financial
Officer and
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Secretary, Universal Display Corporation, Three Bala Plaza East, Suite 104, Bala
Cynwyd, Pennsylvania 19004, (610) 617-4010.
Unless the context otherwise requires, "UDC" or the "Company" refers to
Universal Display Corporation and its wholly-owned subsidiaries.
THE COMPANY
UDC is engaged in the research, development and commercialization of
Organic Light Emitting Diode ("OLED") technology for use in flat panel displays
and other applications. The research is being performed by Princeton University
and the University of Southern California pursuant to a certain Sponsored
Research Agreement dated August 1, 1994 between The Trustees of Princeton
University and American Biomimetics Corporation ("ABC"), an affiliate of the
Company (the "1994 Sponsored Research Agreement"), funded by the Company. The
Company currently has the exclusive right to commercialize the technology being
developed pursuant to a related license agreement (the "1994 License
Agreement"). The Company's present commercialization strategy is to enter into
licensing arrangements and other strategic alliances for the volume
manufacturing of products utilizing this technology, the Company does not
presently intend to become a volume manufacturer. The Company anticipates that
its OLED technology, if successfully developed, may have a variety of
applications, including full color, large area, high resolution, high
information content displays, such as laptop and notebook computer screens,
computer monitors and televisions. Potential applications also include
multi-color, and monochrome small area, low information content displays, such
as consumer electronic equipment, vehicular dashboard displays, cellular phones
and other telecommunication displays, computer games, and personal digital
assistants, as well as transparent applications such as head up displays for
automobile windshields.
The Company was incorporated under the laws of the Commonwealth of
Pennsylvania in April 1985 under the name Enzymatics, Inc. Another corporation,
UDC-NJ, then named "Universal Display Corporation," was incorporated under the
laws of the State of New Jersey in June 1994. On June 22, 1995, a wholly-owned
subsidiary of Enzymatics merged with and into UDC-NJ. UDC-NJ, the surviving
corporation in the Merger, became a wholly-owned subsidiary of Enzymatics and
changed its name to "UDC, Inc." Simultaneously with the consummation of the
Merger, Enzymatics changed its name to "Universal Display Corporation." The
Company's corporate offices are located at Three Bala Plaza East, Suite 104,
Bala Cynwyd, Pennsylvania 19004.
THE OPTIONS AND WARRANTS
The Options and Warrants consist of (i) June 1995 Warrants to purchase
1,114,000 shares of Common Stock exercisable at a price of $3.50 per share, (ii)
April 1996 Warrants to purchase 578,000 shares of Common Stock exercisable at a
price of $4.125 per share, (iii) April 1996 Warrants to purchase 20,000 shares
of Common Stock exercisable at a price of $6.00 per share, (iv) Merger Options
to purchase 84,234 shares of Common Stock at a price of $0.29 per share and (v)
Enzymatics Options to purchase an aggregate of 20,538 shares of Common Stock at
prices ranging from $11.73-$29.61 per share.
The June 1995 Warrants are currently exercisable at an exercise price
of $3.50 per share of Common Stock. They were issued in connection with the
private placement in June 1995 and July 1995 of Units consisting of one share of
Common Stock and one warrant to purchase one share of Common Stock. The shares
of Common Stock issued in connection with these private placements have not been
registered under the Securities Act of 1933 and are not being registered under
the registration statement of which this prospectus forms a part. The June 1995
Warrants expire on July 17, 1997.
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The April 1996 Warrants are currently exercisable, and were issued to
certain individuals in exchange for the provision of such individuals of a
variety of services to the Company. Of the April 1996 Warrants, 578,000 are
exercisable at an exercise price of $4.125 per share of Common Stock, and 20,000
are exercisable at $6.00 per share of Common Stock. The April 1996 Warrants
expire on April 25, 2006.
The Merger Options are currently exercisable at an exercise price of
$0.29 per share of Common Stock. They were issued in connection with the
Enzymatics Merger to the shareholders of Nachman, Hayes and Associates, Inc.
("Nachman Hayes") in connection with a certain Management Agreement dated July
26, 1994 between Enzymatics, Inc. and Nachman Hayes (the "Management
Agreement"). Pursuant to the Management Agreement, compensation was to be paid
to Nachman Hayes upon the completion of a transaction, such as a merger, which
enhanced shareholder value, such compensation to be based on the value to the
shareholders of Enzymatics. The Merger Options expire on June 22, 2005.
The Enzymatics Options are currently exercisable at exercise prices
ranging from $11.73-$29.61 per share of Common Stock. They were issued by
Enzymatics between January 1992 and June 1995 pursuant to the Enzymatics Plan
prior to the Enzymatics Merger. The Enzymatics Plan was terminated following the
Enzymatics Merger and the Enzymatics Options assumed by the Company after
adjustment to give effect to a 10.9672 reverse stock split effected in
connection with the Enzymatics Merger. The Enzymatics Options expire on December
31, 1998.
RISK FACTORS
The securities offered hereby are speculative and involve a high degree
of risk. An investment in the securities offered hereby should be considered a
venture capital investment and the securities should not be purchased by
investors who cannot afford the loss of their entire investment. Each
prospective investor should carefully consider the following risk factors before
making an investment decision.
Development Stage Company; No Revenues; Continuing and Future Losses.
Since inception, the Company has been engaged, and for the foreseeable future
expects to continue to be engaged in research, development and commercialization
activities related to the OLED technology. To date, the Company has not
generated any revenues and does not expect to generate any meaningful revenues
for the foreseeable future and, until such time, if ever, as it successfully
demonstrates that the OLED technology is feasible or commercially viable for one
or more flat panel display applications. The Company has incurred significant
losses since its inception, resulting in an accumulated deficit of $4.9 million
at December 31, 1996. Losses are expected to continue for the foreseeable future
and until such time, if ever, as the Company is able to achieve sufficient
levels of revenue from the commercial exploitation of the OLED technology to
support its operations. Historically, only a limited number of early stage
development companies successfully complete the research and development of
commercially viable technologies. There can be no assurance that the OLED
technology will be commercially viable, that markets for flat panel displays
utilizing the OLED technology will not be limited or that the Company will
generate meaningful revenues from the commercial exploitation of the OLED
technology or ever achieve profitable operations. To the extent that Princeton
University's research efforts do not result in the development of commercially
viable applications for the OLED technology, the Company will not have any
meaningful operations.
Significant Capital Requirements; Need for Significant Additional
Financing. The Company's capital requirements have been and will continue to be
significant. The Company has been dependent upon private placements and a public
offering of its equity securities to fund such requirements, which have raised
approximately $8.7 million in gross proceeds. While the Company believes it has
sufficient capital to fund its operations at least through December 1997,
completion of the research, development and commercialization of the OLED
technology for potential applications will require significant additional effort
and resources. There is no assurance that the options and warrants to which the
common stock being registered hereunder is subject will be exercised at a time
beneficial to the Company or at all, or that the Company will obtain sufficient
proceeds hereunder to meets its future obligations. There can be no assurance
that additional financing will be available to the Company when needed, on
commercially reasonable terms
5
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or at all. The inability to obtain additional financing would have a material
adverse effect on the Company, including possibly requiring the Company to
curtail its operations. In addition, any additional equity financing may involve
substantial dilution to the interests of the Company's then existing
shareholders. See "Use of Proceeds".
Early Research Stage; Uncertainty of Feasibility of the OLED Technology
and Product Development. The Company's OLED technology is an emerging innovative
technology and the Company is not aware of any full color flat panel displays
utilizing OLED technology currently being marketed, although there are numerous
companies engaged in research and development respecting OLED technology. The
Company is unable, at this time, to determine the feasibility of its OLED
technology or the commercial viability of any potential applications. The
Company, however, is aware of that substantial advances in Princeton
University's research and development efforts must be made to satisfy the
Company's requirements as to operating life and improvement of reliability for
all flat panel display applications. Additionally, such research efforts must
demonstrate the ability to display a full range of color and scalability for the
development of full color, large area applications. Research and development
efforts remain subject to all of the risks associated with the development of
new products based on emerging and innovative technologies, including
unanticipated technical or other problems and the possible insufficiency of the
funds allocated to complete such development, which could result in delay of
research and development or substantial change or abandonment of research and
development activities. In addition, with technology as complex as the OLED
technology, technical problems and difficulties may arise resulting in delays
and causing the Company to incur additional expenses which would have a material
adverse effect on the Company. There can be no assurance that the Company's and
Princeton University's efforts will result in the feasibility of the OLED
technology, particularly for use in full color, large area, high resolution,
high information content flat panel display applications. The inability to
successfully complete research and development of the OLED technology, or delays
in the completion of the research and development of the OLED technology for use
in potential applications, particularly after the occurrence of significant
expenditures, would have a material adverse effect on the Company.
New Technology; Uncertainty of Certain Commercial Applications for the
OLED Technology. Although flat panel displays have been available for a
significant period of time, a variety of advancements in flat panel displays
have been made over the last several years. The Company is attempting to develop
a new technology for flat panel display applications, initially for use in small
area, low information content displays, and ultimately full color, high
resolution, high information content displays. The potential size, timing and
viability of market opportunities targeted by the Company are uncertain. The
Company's success will be dependent upon successfully completing the research
and development of the OLED technology and introducing flat panel displays
utilizing such technology and providing competitive advantages to existing flat
panel display technologies on the basis of image and color quality, brightness,
contrast, scalability, viewing angle, portability, cost and power requirements.
Market acceptance of the OLED technology for full color, high information
content displays will also depend upon such technology providing benefits
comparable to cathode ray tube ("CRT") technology (the current standard for
display quality). Many potential licensees of the OLED technology manufacture
flat panel displays utilizing competing technologies and may, however, be
reluctant to redesign their products or manufacturing processes to incorporate
the OLED technology. There can be no assurance that the OLED technology will be
viable for any commercial applications and, if viable, that potential licensees
will utilize the OLED technology. Additionally, even if the completion of the
research and development of the OLED technology results in commercially viable
applications for the technology, it is likely that the Company will not recover
its research and development costs in the foreseeable future and there can be no
assurance that the Company will ever recover such costs.
Dependence on Princeton University, the 1994 Sponsored Research
Agreement and the Principal Investigators. Research and development of the OLED
technology is being conducted at the Advanced Technology Center, Princeton
University and USC (on a subcontract basis with Princeton University) pursuant
to the 1994 Sponsored Research Agreement, which was assigned by ABC to the
Company in June 1995. The research and development is being conducted
principally by Professors Stephen R. Forrest and Mark E. Thompson (the
"Principal Investigators"). Research and development of commercially viable
applications for OLED technology is dependent on the success of the research
efforts of the Principal Investigators conducted pursuant to such agreements,
although the Company has begun to hire its own development personnel. There can
be no assurance that Princeton University will make additional
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advances in the research and development of the OLED technology or obtain any
meaningful intellectual property rights relating to, or commercially viable
applications for, the OLED technology. While the Company funds the OLED
technology research, the scope of and technical aspects of the research and the
resources and efforts directed to such research is subject to the control of
Princeton University and the Principal Investigators. The 1994 Sponsored
Research Agreement provides that if either Professor Forrest or Professor
Thompson is unavailable to continue to serve as a Principal Investigator, either
because such person is no longer associated with Princeton University or USC or
otherwise, and a successor acceptable to both the Company and Princeton
University is not available, Princeton University has the right to terminate the
1994 Sponsored Research Agreement. Further, the 1994 Sponsored Research
agreement expires in July 1997. Although the Company believes that its
relationship with Princeton University and the Principal Investigators is
satisfactory, there can be no assurance that the Principal Investigators will
continue to be available to conduct the research, that the Company will be able
to engage Princeton University to conduct further research and development of
the OLED technology upon expiration of the 1994 Sponsored Research agreement, or
that the 1994 Sponsored Research Agreement will be extended. Moreover, under the
1994 License Agreement, the Company is required to make a first commercial sale
or use within two years following a demonstration of efficacy of a product based
on the OLED technology and Princeton University may terminate the 1994 License
Agreement if the Company does not make a commercial sale or use within the
required time period. Loss to the Company of the Principal Investigators'
services or termination of the 1994 Sponsored Research Agreement would have a
material adverse effect on the Company, and the Company would not have any
meaningful operations.
No Marketing or Manufacturing Capabilities or Experience; Dependence
Upon Strategic Relationships. The Company has limited marketing capabilities and
resources, no manufacturing capabilities and does not presently intend to
manufacture products. Therefore, the Company's prospects will be significantly
affected by its ability to sublicense the OLED technology and successfully
develop strategic alliances with third parties for incorporation of the OLED
technology into flat panel displays manufactured by others. The Company's
prospects will be dependent upon the commercial success of such third-party
products and the marketing efforts of such third parties. Informing potential
licensees and other strategic partners of the benefits of the OLED technology
and establishing satisfactory strategic alliances will require significant
financial and other resources. In addition, strategic alliances may require
financial or other commitments by the Company. There can be no assurance that
the Company will be able, for financial or other reasons, to enter into
strategic alliances on commercially acceptable terms, or at all. Failure to do
so would have a material adverse effect on the Company.
Uncertainty of Intellectual Property Rights. The Company's rights to
the OLED technology are governed by the 1994 Sponsored Research Agreement and
the 1994 License Agreement. Pursuant to such agreements, all patents and other
intellectual property rights relating to the OLED technology are the property of
Princeton University. Princeton University has filed more than 20 patent
applications related to the OLED technology. No patents have yet been issued.
The Company has a worldwide exclusive license to manufacture and market products
based on such pending patent application and the right to obtain a similar
license to inventions conceived or discovered under the 1994 Sponsored Research
Agreement, the right to sublicense to such agents. Additionally, the Company
anticipates that Princeton University will file additional patent applications
in the United States and internationally to protect future inventions conceived
or discovered under the 1994 Sponsored Research Agreement and that the Company
will license technology based on such patent applications. There can be no
assurance that patents applied for will be obtained or that any such patents
will afford the Company and Princeton University commercially significant
protection of the OLED technology. In addition, the patent laws of other
countries may differ from those of the United States as to the patentability of
the OLED technology and the degree of protection may obtain patent or similar
rights with respect therefor. Patents have been issued to third parties for
aspects of OLED technology and additional patent applications are being filed,
there can be no assurance that the OLED technology and the exercise of the
Company's rights do not and will not infringe on the patents or other
intellectual property of others. In the event of infringement, the Company and
Princeton University could, under certain circumstances, be required to obtain a
license or modify its methods or other aspects of the OLED technology. The 1994
License Agreement provides that Princeton University has the right, but not the
obligation, to enforce its intellectual property rights against infringement,
except that the Company may prosecute an infringement action only if within six
months after having received notice of infringement Princeton University has not
commenced an action or otherwise successfully terminated the infringement. There
can be no
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assurance that the Company or Princeton University will be able to do so in a
timely manner, upon acceptable terms and conditions, or at all. Failure to do
any of the foregoing could have a material adverse effect on the Company. There
can also be no assurance that the Company will have the financial or other
resources necessary to enforce or defend a patent infringement action or that
Princeton University will elect to enforce an action in a timely manner.
Moreover, if products incorporating the OLED technology licensed by the Company
are found to infringe upon the patent or other intellectual property rights of
others, the Company could, under certain circumstances, become liable for
damages, which could have a material adverse effect on the Company.
The Company and Princeton University may also seek to rely on
proprietary know-how and trade secrets and employ various methods to protect
concepts, ideas and documentation of their technology. However, such methods may
not afford complete protection, and there can be no assurance that others will
not independently develop similar know-how or obtain access to the Company's or
Princeton University's know-how, trade secrets, concepts, ideas and
documentation.
Government Rights to Use the OLED Technology. The United States
government, through the Office of Research and Project Administration ("ARPA"),
has provided funding to Princeton University for research activities related to
certain aspects of the OLED technology. The Company does not have access to the
funding agreement between Princeton University and ARPA and, accordingly, is
unable to determine the scope of ARPA's funds or of the federal governments
rights to OLED technology. As a result, the Company's rights to the OLED
technology will be subject to any rights the federal government may have to use
such technology, royalty-free. The federal government's right to use certain
aspects of the OLED technology could, among other things, restrict the Company's
ability to market the OLED technology to the federal government for military and
other applications which could have a material adverse effect on the Company.
There can be no assurance as to which aspects of the OLED technology the federal
government has any rights and the extent of such rights. Continued funding of
Princeton University's research activities by the federal government, which is
anticipated, may give the federal government rights to certain aspects of the
OLED technology developed in the future.
Competition and Competing Technologies. The flat panel display industry
is characterized by intense competition. The market is currently dominated by
products utilizing liquid crystal display ("LCD") technology and is expected to
be dominated by LCD technology for the foreseeable future. The Company believes
that competition in this market, particularly for full color, large area, high
resolution, high information content displays is based upon image and color
quality, viewing angle, power requirements, cost and manufacturability. The
Company believes LCD technology has certain limitations, such as a limited
viewing angle, limited scalability, low contrast and inferior image and color
quality when compared to CRT displays (the current standard for display
quality). Numerous companies, however, are making substantial investments in,
and conducting research to improve these characteristics of, LCD technology. The
Company also believes, although there can be no assurances that flat panel
displays utilizing the OLED technology, if developed, will provide image and
color quality, brightness, contrast, scalability and viewing angles comparable
to CRT displays, be manufacturable from light weight, low cost materials and
require a relatively low power source. In addition, several other flat panel
display technologies have been, or are being, developed. The Company believes,
however, that each of these developing technologies will have one or more of the
limitations associated with LCD technology, or other limitations, such as lack
of reliability, high power requirements (restricting portability), high
production cost and/or difficulty of manufacture. There can be no assurance,
however, that advances in LCD technology or any of these developing technologies
will not overcome such limitations or become the leading technology for flat
panel displays, either of which could limit the potential market for flat panel
displays utilizing the OLED technology.
Numerous domestic and foreign companies have developed or are
developing CRT, LCD and other display technologies. Substantially all of these
competitors have greater name recognition and financial, technical, marketing,
personnel and research capabilities than the Company. There can be no assurance
that the Company's competitors will not succeed in developing technologies and
applications that are more cost effective, have fewer display limitations than
or have other advantages as compared to the OLED technology. There can be no
assurance that the Company will be able to compete successfully or develop
commercial applications for the OLED technology.
8
<PAGE>
Potential Conflicts of Interest. The Company obtained rights to the
OLED technology through a technology transfer agreement dated June 22, 1995 (the
"Transfer Agreement") between the Company and ABC. Sherwin Seligsohn, Chairman
and Chief Executive Officer of the Company, holds the same positions in ABC.
Pursuant to the Transfer Agreement, ABC, among other things, assigned to the
1994 License Agreement to the Company and granted to the Company an exclusive
worldwide sublicense to patents and other intellectual property rights related
to display technology developed under a Sponsored Research Agreement dated
October 22, 1993 between ABC and Princeton University (the "1993 Sponsored
Research Agreement"). As consideration, the Company (i) paid to ABC $674,000 for
amounts previously paid to Princeton University by ABC under the 1994 Sponsored
Research Agreement and $500,000 to acquire the sublicense under the 1993
Sponsored Research Agreement, (ii) assumed ABC's obligations to make future
payments to Princeton University under the 1994 Sponsored Research Agreement of
approximately $1,610,000 and estimated future expenses related thereto of
$500,000, (iii) issued to ABC 200,000 shares of Series A Nonconvertible
Preferred Stock, par value $.01 per share (the "Series A Preferred Stock") and
(iv) granted to ABC an exclusive worldwide sublicense under the 1994 License
Agreement to manufacture and market products based on technology developed but
unrelated to the OLED technology. Additionally, ABC and International
Multi-Media Corporation ("IMMC"), of which Sherwin Seligsohn is President and
Chairman, paid on behalf of the Company certain professional fees,
administrative expenses and payroll expenses totaling $168,721, of which $63,245
was repaid to ABC during the year ended December 31, 1995.
Control by Seligsohn Family. Prior to this offering, Sherwin Seligsohn,
Scott Seligsohn, Vice President of the Company and Sherwin Seligsohn's son, and
Lori S. Rubenstein, Sherwin Seligsohn's daughter, beneficially own, in the
aggregate, approximately 38% of the outstanding shares of Common Stock.
Accordingly, such persons, acting together, will be in a position to effectively
control the Company, elect the Company's directors, cause an increase in the
authorized capital or the dilution, merger or sale of the assets of the Company.
Dependence on Key Personnel. The success of the Company will be largely
dependent on the personal efforts of Sherwin Seligsohn and other key personnel.
Although the Company has entered into a two-year employment agreement, effective
as of November 1, 1995, with Sherwin Seligsohn, the loss of the services of Mr.
Seligsohn or other key personnel could have a material adverse effect on the
Company's business and prospects. Moreover, Mr. Seligsohn is only required to
devote a majority of his business time to the Company's business and affairs.
The Company has obtained "key-man" life insurance on the life of Mr. Seligsohn
in the amount of $2,000,000. The Company's success may also be dependent on its
ability to hire and retain additional qualified management, licensing,
marketing, sales and other personnel. There can be no assurance that the Company
will be able to attract or retain additional qualified personnel.
No Dividends. The Company has not paid any cash dividends on its Common
Stock to date. The Company intends to retain earnings, if any, to finance the
operation and expansion of its business and, therefore, does not expect to pay
cash dividends in the foreseeable future.
Shares Eligible for Future Sale. The Company has 8,937,268 shares of
Common Stock outstanding of which 1,300,000 shares of Common Stock were issued
in a public offering on April 11, 1996 (the "Public Offering"). The remaining
7,637,268 shares of Common Stock outstanding are deemed to be "restricted
securities" as that term is defined under Rule 144 promulgated under the
Securities Act and may only be sold pursuant to an effective registration under
the Securities Act, in compliance with the exemption provisions of Rule 144 or
pursuant to another exemption under the Securities Act. As of April 30, 1997,
some or all of these shares may become eligible for sale under Rule 144,
subject to certain volume limitations prescribed by Rule 144. In addition, the
Company issued 1,495,000 warrants, each to purchase one share of Common Stock
(the "Public Warrants"), in connection with the Public Offering, as well as
260,000 warrants (the "Underwriter's Warrants") to Whale Securities Co., L.P.,
the underwriter of the Public Offering. At the time of the Public Offering, the
Company registered the shares of Common Stock underlying the Public Warrants on
Form SB-2, and simultaneously with the filing of the registration statement of
which this prospectus forms a part, is updating such registration via a
post-effective amendment to the Form SB-2 statement on Form S-3. Further, the
Company grants stock options to employees, directors and consultants to provide
incentives and as partial compensation for services rendered. As of May 1, 1997,
the Company had 1,424,772 additional outstanding options of which 676,439
9
<PAGE>
are currently exercisable. No prediction can be made as to the effect, if any,
that sales of shares of Common Stock or even the availability of such shares for
sale will have on the market prices prevailing from time-to-time. The
possibility that substantial amounts of Common Stock may be sold in the public
market may adversely affect prevailing market prices for the Common Stock and
Warrants and could impair the Company's ability to raise capital through the
sale of its equity securities.
Authorization and Discretionary Issuance of Preferred Stock. The
Company's Articles of Incorporation authorize the issuance of up to 5,000,000
shares of preferred stock with designations, rights and preferences determined
from time-to-time by its Board of Directors. Accordingly, the Company's Board of
Directors is empowered, without shareholder approval, to issue preferred stock
with dividend, liquidation, conversion, voting or other rights which could
adversely affect the voting power or other rights of the holders of the Common
Stock. The issuance of shares of preferred stock could, among other things,
adversely affect the voting power of the holders of Common Stock and, under
certain circumstances, make it more difficult for a third party to gain control
of the Company, discourage bids for the Company's Common Stock at a premium or
otherwise adversely affect the market price of the Common Stock. The Board of
Directors has designated and issued 200,000 shares of Series A Preferred Stock,
all of which are held by ABC. Holders of Series A Preferred Stock are not
entitled to receive dividends, but are entitled, as a class, to elect two
directors to the Company's Board of Directors and to certain liquidation
preferences. Although the Company has no present intention to issue any
additional shares of its authorized preferred stock, there can be no assurance
that the Company will not do so in the future.
Possible Volatility of Market Price of Common Stock. The market prices
of the Company's securities may be highly volatile as has been the case with the
securities of other emerging companies. Factors such as the Company's operating
results, announcements by the Company or its competitors of technological
developments, new product applications or license arrangements, and various
factors affecting the flat panel display industry generally, may have a
significant impact on the market price of the Company's securities. In addition,
in recent years, the stock market has experienced a high level of price and
volume volatility and market prices for the stock of many companies,
particularly a small and emerging growth companies, the Common Stock of which
traded in the over-the-counter market, have experienced wide price fluctuations
which have not necessarily been related to the operating performance of such
companies.
Possible Delisting of Securities from Nasdaq System; Risks Relating to
Low-Priced Stocks. The Company's Common Stock and Warrants are listed on Nasdaq.
In order to continue to be listed on Nasdaq, however, the Company must maintain
$2,000,000 in total assets, a $200,000 market value of the public float and
$1,000,000 in total capital and surplus. In addition, continued inclusion
requires two market-makers and a minimum bid price of $1.00 per share; provided,
however, that if the Company falls below such minimum bid price, it will remain
eligible for continued inclusion in Nasdaq if the market value of the public
float is at least $1,000,000 and the Company has $2,000,000 in capital and
surplus. The failure to meet these maintenance criteria in the future may result
in the delisting of the Common Stock from Nasdaq, and trading, if any, in the
Company's securities would thereafter be conducted in the non-Nasdaq
over-the-counter market. As a result of such delisting, an investor could find
it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, the Company's securities.
In addition, if the Common Stock were to become delisted from trading
on Nasdaq and the trading price of the Common Stock were to fall below $5.00 per
share, trading in the Common Stock would also be subject to the requirements of
certain rules promulgated under the Exchange Act, which require additional
disclosure by broker-dealers in connection with any trades involving a stock
defined as a penny stock (generally, any non-Nasdaq equity security that has a
market price of less than $5.00 per share, subject to certain exceptions). Such
rules require the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith, and impose various sales practice requirements on broker-dealers who
sell penny stocks to persons other than established customers and accredited
investors (generally defined as an investor with a net worth in excess of
$1,000,000 or annual income exceeding $200,000, $300,000 together with a
spouse). For these types of transactions, the broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale. The broker-dealer also must
disclose the commissions payable to the
10
<PAGE>
broker-dealer, current bid and offer quotations for the penny stock and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. Such information
must be provided to the customer orally or in writing prior to effecting the
transaction and in writing before or with the customer confirmation. Monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in the Common Stock, which
could severely limit the market liquidity of the Common Stock and the ability of
purchasers in this offering to sell the Common Stock in the secondary market.
Possible Inability to Exercise the Warrants. The Company intends to
qualify the sale of the Common Stock in a limited number of states. Although
certain exemptions in the securities laws of certain states might permit
Warrants to be transferred to purchasers in states and other than those in which
the Warrants were initially qualified, the Company will be prevented from
issuing Common Stock in such other states upon the exercise of the Warrants
unless exemption from qualification is available or unless the issuance of
Common Stock upon exercise of the Warrant is qualified.
USE OF PROCEEDS
The net proceeds (after deducting the estimated expenses of this
offering) to be received by the Company from the exercise of all of the Options
and Warrants are estimated to be approximately $6,749,000. The Company will not
receive any proceeds from the sale of Shares by the Selling Shareholders. The
Company expects to use the net proceeds received upon the exercise of the
Options and Warrants for working capital purposes, including the preparation,
filing and prosecution of patent applications and the enforcement of
intellectual property rights in the United States and internationally, payments
due to Princeton University under the 1994 Sponsored Research Agreement, and any
extensions or renewals thereof, capital expenditures and general corporate
purposes. Proceeds not immediately required for the purposes described above
will be invested principally in short-term investment grade debt obligations,
bank certificates of deposit, United States Government money market instruments
or other short-term interest bearing investments.
SELLING SHAREHOLDERS
The following tables list, as of April 30, 1997, the number of shares
of Common Stock underlying the Options and Warrants being registered in the
registration statement of which this prospectus forms a part on behalf of each
of the Selling Shareholders listed, as well as the total number of shares of
Common Stock (including those underlying the Options and Warrants) held by such
Selling Shareholder, the number of shares of Common Stock to be held by such
Selling Shareholder after the offering (assuming exercise of all Options and
Warrants held by the Selling Shareholder and the resale of all underlying shares
of Common Stock) and the approximate percentage of shares of Common Stock
outstanding held by such Selling Shareholder both before and after the offering.
Percentages of less than one percent have not been indicated.
June 1995 Warrants
<TABLE>
<CAPTION>
Shares of Shares of
Options or Common Stock Common Stock
Selling Shareholder Warrants Before Offering After Offering Percentage
- ------------------- -------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
Wynne S. Amick 12,500 25,000 12,500 *
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares of Shares of
Options or Common Stock Common Stock
Selling Shareholder Warrants Before Offering After Offering Percentage
- ------------------- -------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
Herbert M. Baker and 10,000 20,000 10,000 *
Freda R. Baker, JT ENT
Bruce W. Baldwin 15,000 30,000 15,000 *
Barry Barnholtz 12,500 50,000(1) 12,500 *
Leonard Becker 12,500 35,000(1) 12,500 *
Pramod Biyani 10,000 20,000 10,000 *
Alfred F. Bracher 100,000 200,000 100,000 1.1
Janney Montgomery
Scott, Inc., custodian for
the benefit of Norman
Berman (SEP IRA
#15199378) 12,500 25,000 12,500 *
Steven J. Caputo 7,500 15,000 7,500 *
Roger W. Christoph 12,500 25,000 12,500 *
George F. Claussen, III 12,500 53,000(1) 12,500 *
George F. Claussen, III,
IRA 8,500 17,000 8,500 *
Daniel Cohen 50,000 100,000 50,000 *
William R. Conway, 12,500 25,000 12,500 *
Coopers & Cummings 12,500 25,000 12,500 *
Scott Davis 5,000 10,000 5,000 *
Deborah K. Deeg 12,500 25,000 12,500 *
David T. Dewitt 12,500 25,000 12,500 *
David W. Droesch 5,000 10,000 5,000 *
Dean Elfman 25,000 50,000 25,000 *
Barry R. Elson 12,500 25,000 12,500 *
A. Robert Esposito 12,500 25,000 12,500 *
Anna J. Esposito 5,000 10,000 5,000 *
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Shares of Shares of
Options or Common Stock Common Stock
Selling Shareholder Warrants Before Offering After Offering Percentage
- ------------------- -------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
Delaware Charter
Guarantee as Trustee for
Bruce L. Evans IRA
Dated 03/24/81 25,000 50,000 25,000 *
Mark X. Feck 6,250 12,500 6,250 *
Frederick J. Gerhart 12,500 25,000 12,500 *
Oliver D. Goldman 12,500 25,000 12,500 *
Eugene Jaffe 17,500 35,000 17,500 *
Alan M. Kaplan 5,000 10,000 5,000 *
John E. Karpac and
Lorraine Karpac, JT 40,000 80,000 40,000 *
ENT
David Kraus 5,000 10,000 5,000 *
James E. Lakin 35,000 70,000 35,000 *
Lear Research
Corporation 5,000 10,000 5,000 *
E. Robert Libby 12,500 25,000 12,500 *
Franklin A. Mathias 125,000 250,000 125,000 1.4
Grover C. Maxwell, III 50,000 170,000(1) 50,000 *
Andrew P. McGuire 12,500 65,000(1) 12,500 *
Claire Mindock 10,000 20,000 10,000 *
John A. Minutella and
Diedra M. Minutella 32,500 65,000 32,500 *
Lynette F. Moss 37,500 125,000(1) 37,500 *
T. C. Moss 5,000 10,000 5,000 *
John Papaioannou 5,000 10,000 5,000 *
Arlen L. Peterson 12,500 25,000 12,500 *
John M. Poole 25,000 50,000 25,000 *
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Shares of Shares of
Options or Common Stock Common Stock
Selling Shareholder Warrants Before Offering After Offering Percentage
- ------------------- -------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
Delaware Charter
Guarantee Trust as
Trustee for the benefit of
Delptron Keough for the
benefit of Patrick J.
Renshaw 12,500 25,000 12,500 *
Mark A. Ritchie 12,500 25,000 12,500 *
Vernon E. Sanders 15,000 30,000 15,000 *
Ronald Scoleri 15,500 31,000 15,500 *
Edward A. Skae, Jr. 12,500 25,000 12,500 *
Mark J. Sklar 12,500 25,000 12,500 *
Samuel J. Talucci 6,250 12,500 6,250 *
Oliver H. Van Horn Co., 15,000 54,000(1) 15,000 *
Inc.
C. Frederick Von Dusen 12,500 25,000 12,500 *
Peter A. Vosgerichian 12,500 25,000 12,500 *
Robert A. Ward, Jr. 15,000 30,000 15,000 *
Raymond H. Welsh 25,000 50,000 25,000 *
Forrest S. Williams 12,500 25,000 12,500 *
Myles Wilson 5,000 10,000 5,000 *
A. Charles Winkelman, 22,500 45,000 22,500 *
M.D.
Alfred G. Yates, Jr. and 12,500 25,000 12,500 *
Barbara L. Yates
H. Dewey Yesner 12,500 25,000 12,500 *
(1) Includes shares which may be acquired upon exercise of the April 1996 Warrants.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
April 1996 Warrants
Shares of Shares of
Options or Common Stock Common Stock
Selling Shareholder Warrants Before Offering After Offering Percentage
- ------------------- -------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
William Burns 20,000(1) 20,000 -0- *
Barry Barnholz 25,000 50,000(2) 12,500 *
Leonard Becker 10,000 35,000(2) 12,500 *
Norman Berman 100,000 100,000 -0- *
Marilyn Burlage 6,000 6,000 -0- *
George F. Claussen, III 28,000 53,000(2) 12,500 *
William Evans 50,000 50,000 -0- *
Dennis J. Giannangeli 10,000 10,000 -0- *
Albert Halegoua 100,000 100,000 -0- *
Grover C. Maxwell, III 70,000 170,000(2) 50,000 *
Andrew P. McGuire 40,000 65,000(2) 12,500 *
Lynette F. Moss 50,000 125,000(2) 37,500 *
Camille Naffah 5,000 5,000 -0- *
Zachary Salmon 60,000 60,000 -0- *
Oliver H. Van Horn Co., Inc. 24,000 54,000(2) -0- *
</TABLE>
(1) Exercise price of $6.00. All other April 1996 Warrants have an exercise
price of $4.125.
(2) Includes shares which may be acquired upon exercise of the June 1995
Warrants.
Mr. Naffah has been a director of the Company since October 1996. Since
1990 he has been President of Camille Naffah Enterprises, an unaffiliated
holding company for leisure enterprises including hotels, lounges and
restaurants.
15
<PAGE>
<TABLE>
<CAPTION>
Merger Options
Shares of Shares of
Options or Common Stock Common Stock
Selling Shareholder Warrants Before Offering After Offering Percentage
- ------------------- -------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
Thomas D. Hayes, III 42,117 113,851(1) 71,734(1) *
Harvey Nachman 42,117 42,117 -0- *
</TABLE>
(1) Includes 71,734 shares of Common Stock owned by Nachman Hayes, of which Mr.
Hayes is a principal.
Messrs. Nachman and Hayes are shareholders of Nachman Hayes and
received the Merger Options as payment of Nachman Hayes' consulting services in
connection with the wind down of Enzymatics. The Merger Options were issued to
satisfy a liability which was reflected on the balance sheet of Enzymatics on
the date of the Enzymatics Merger.
Enzymatics Options
<TABLE>
<CAPTION>
Shares of Shares of
Options or Common Stock Common Stock
Selling Shareholder Warrants Before Offering After Offering Percentage
- ------------------- -------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
S. Wayne Kay 12,357 12,357 -0- *
Donald E. Kuhla 6,818 6,818 -0- *
John L. Palmer 1,363 1,363 -0- *
</TABLE>
PLAN OF DISTRIBUTION
The distribution of the Shares by the Selling Shareholders may be
effected from time to time in one or more transactions (which may involve block
transactions) in the over-the-counter market or on Nasdaq (or any exchange on
which the Common Stock may then be listed) in negotiated transactions, through
the writing of options (whether or not such options are listed on an options
exchange or otherwise) or a combination of such methods of sale, 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 effect such
transactions by selling Shares to or thorough brokers or dealers, and such
brokers or dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Shareholders or
purchasers of the Shares for whom they may act as agent. The Selling
Shareholders may also sell such Shares pursuant to Rule 144 promulgated under
the Securities Act of 1933, as amended (the "Securities Act"), or may pledge
Shares as collateral for margin accounts and such Shares could be resold
pursuant to the terms of such accounts. The Selling Shareholders and any brokers
or dealers that act in connection with the sale of Shares might be deemed
"underwriters" within the meaning of Section 2(11) of the Securities Act and any
commission received by them and any profit on the resale of the Shares as
principal might be deemed to be underwriting discounts and commissions under the
Securities Act. The Selling Shareholders may agree to indemnify any agent,
broker or dealer that participates in transactions involving sales of the Shares
against certain liabilities, including liabilities arising under the Securities
Act.
16
<PAGE>
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania.
EXPERTS
The financial statements incorporated by reference in this Prospectus
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said reports.
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
======================================================== =====================================================
No dealer, salesman or other person has 1,816,772 Shares
been authorized to give any information or to make
any representations other than those contained in
this Prospectus and, if given or made, such
information or representations must not be relied UNIVERSAL
upon as having been authorized by the Company. DISPLAY
This Prospectus does not constitute an offer to sell CORPORATION
or a solicitation of an offer to buy to any person in
any jurisdiction in which such offer or solicitation
would be unlawful or to any person to whom it is
unlawful. Neither the delivery of this Prospectus Common Stock
nor any offer or sale made hereunder shall, under
any circumstances, create any implication that there
has been no change in the affairs of the Company or
that information contained herein is correct as of _______________
any time subsequent to the date hereof.
PROSPECTUS
---------------
---------------
TABLE OF CONTENTS
Page
May __, 1997
Available Information............................... 2
Incorporation of Certain Documents
by Reference..................................... 2
The Company ........................................ 3
The Options and Warrants............................ 3
Risk Factors........................................ 4
Use of Proceeds.....................................10
Selling Shareholders................................10
Plan of Distribution............................... 15
Legal Matters...................................... 16
Experts............................................ 16
======================================================== =====================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table shows the estimated expenses of the issuance and
distribution of the securities offered hereby (all such expenses will be borne
by the Company):
Securities and Exchange Commission Registration Fee............ $ 2,786
Legal Fees and Expenses ....................................... 7,500
Nasdaq Listing Fees............................................ 17,500
------
Total................................................. $27,786
=======
Item 15. Indemnification of Directors and Officers
Section 1741 of the Pennsylvania Business Corporation Law of 1988
provides the Company the power to indemnify any officer or director acting in
his capacity as a representative of the Company who was, is, or is threatened to
be made a party to any action or proceeding against expenses, judgments,
penalties, fines and amounts paid in settlement in connection with such action
or proceeding whether the action was instituted by a third party or arose by or
in the right of the Company. Generally, the only limitation on the ability of
the Company to indemnify its officers and directors is if the act violates a
criminal statute or if the act or failure to act is finally determined by a
court to have constituted willful misconduct or recklessness.
The Company's Bylaws provide a right to indemnification to the full
extent permitted by law, for expenses (including attorney's fees), damages,
punitive damages, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by any director or officer whether or not the
indemnified liability arises or arose from any threatened, pending or completed
proceeding by or in the right of the Company (a derivative action) by reason of
the fact that such director or officer is or was serving as a director, officer,
employee or agent of the Company or, at the request of the Company, as a
director, officer, partner, fiduciary or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
unless the act or failure to act giving rise to the claim for indemnification is
financially determined by a court to have constituted willful misconduct or
recklessness. The Bylaws provide for the advancement of expenses to an
indemnified party upon receipt of an undertaking by the party to repay those
amounts if it is finally determined that the indemnified party is not entitled
to indemnification.
The Company's Bylaws authorize the Company to take steps to ensure that
all persons entitled to the indemnification are properly indemnified, including,
if the Board of Directors so determines, purchasing and maintaining insurance.
As of the date hereof, no such insurance has been purchased.
II-1
<PAGE>
Item 16. Exhibits
The exhibits filed as part of this registration statement are as
follows:
Exhibit
Number Description
- ------ -----------
5 Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities being registered.
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its opinion
filed as Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
Item 17. Undertakings
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to its Certificate of Incorporation, its Bylaws, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against a public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) of, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "calculation of Registration
Fee" table in the effective registration
II-2
<PAGE>
statement;
(iii) Include any material information with respect to the
plan of distribution;
Provided, however, that paragraph (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is incorporated by reference from periodic reports
filed by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934.
(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 securities being registered which remain unsold at
the end of the offering.
II-3
<PAGE>
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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bala Cynwyd, Commonwealth of Pennsylvania on the 27th
day of May, 1997.
UNIVERSAL DISPLAY CORPORATION
By: /s/ Sherwin I. Seligsohn
-------------------------
Sherwin I. Seligsohn
Chairman, Director and
Chief Executive Officer
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Sherwin I. Seligsohn Chairman, Director and Chief May 27, 1997
- -------------------------------- Executive Officer (Principal
Sherwin I. Seligsohn Executive Officer)
/s/ Steven V. Abramson Director, President and Chief May 27, 1997
- -------------------------------- Operating Officer
Steven V. Abramson
/s/ Elizabeth H. Gemmill Director May 27, 1997
- --------------------------------
Elizabeth H. Gemmill
/s/ Dean L. Ledger Director May 27, 1997
- --------------------------------
Dean L. Ledger
/s/ Camille Naffah Director May 27, 1997
- --------------------------------
Camille Naffah
/s/ Sidney D. Rosenblatt Executive Vice President, Chief May 27, 1997
- -------------------------------- Financial Officer, Secretary and
Sidney D. Rosenblatt Treasurer (Principal Financial and
Accounting Officer)
</TABLE>
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Page
Number Description Number
- ------ ----------- ------
5 Opinion of Morgan, Lewis & Bockius LLP regarding
legality of securities being registered.
23.1 Consent of Morgan, Lewis & Bockius LLP (included in
its opinion filed as Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
EXHIBIT 5
OPINION OF MORGAN, LEWIS & BOCKIUS LLP
May 28, 1996
Universal Display Corporation
Three Bala Plaza East, Suite 104
Bala Cynwyd, PA 19004
RE: Universal Display Corporation -- Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel for Universal Display Corporation, a
Pennsylvania corporation (the "Company"), in connection with the preparation of
the registration statement (the "Registration Statement") filed by the Company
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended (the "Act"), relating to the public offering of up to 1,816,772
shares of the Company's common stock, $.01 par value (the "Common Stock"), to be
sold by the individuals listed as selling shareholders in the Registration
Statement (the "Selling Shareholders") upon the exercise of outstanding options
and warrants held by such Selling Shareholders (the "Options and Warrants"). In
this connection, we have reviewed (a) the Registration Statement; (b) the
Company's Amended and Restated Articles of Incorporation; (c) the Company's
By-laws, as amended; (d) certain records of the Company's corporate proceedings
as reflected in its minute books; (e) the agreements governing the exercise of
the Options and Warrants (the "Option and Warrant Agreements"); and (f) such
other documents and records as we have considered necessary or desirable in
connection with this opinion. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original of all documents submitted to
us as copies thereof. Our opinion set forth below is limited to the Business
Corporation Law of the Commonwealth of Pennsylvania.
Based upon the foregoing, we are of the opinion that the shares of
Common Stock to be sold by the Selling Shareholders as described in the
Registration Statement, when and to the extent issued by the Company upon the
exercise of the Options and Warrants in the manner contemplated by the Option
and Warrant Agreements, will be duly authorized, validly issued, fully paid and
non-assessable.
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act and the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ MORGAN, LEWIS & BOCKIUS LLP
----------------------------
MORGAN, LEWIS & BOCKIUS LLP
EXHIBIT 23.1
To Universal Display Corporation:
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our report dated March 6,
1997 included in Universal Display Corporation's Form 10-KSB for the year ended
December 31, 1996, and to all references to our firm included in this Form S-3
Registration Statement.
/s/ Arthur Andersen LLP
--------------------------
Arthur Andersen LLP
Philadelphia, Pa.
May 28, 1997
