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As filed with the Securities and Exchange Commission on July 31, 1997
SEC Registration No. 333-28843
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
IMAGEMATRIX CORPORATION
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(Exact name of registrant as specified in its charter)
Colorado 84-1313108
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(State of Incorporation) (I.R.S. Employer I.D. No.)
400 S. Colorado Boulevard, Suite 500, Denver, Colorado 80222, (303) 399-3700
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(Address, including zip code, and telephone number, including area
code of Registrant's Principal Executive Offices)
Gerald E. Henderson
ImageMatrix Corporation
400 S. Colorado Boulevard, Suite 500
Denver, Colorado 80222
(303) 399-3700
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(Name, address, including zip code and telephone number
including area code of agent for service)
Copies to:
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Christopher M. Hazlitt, Esq.
Peter J. Jensen, Esq.
Chrisman, Bynum & Johnson, P.C.
1900 Fifteenth Street
Boulder, CO 80302
(303) 546-1300
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [x]
__________________________
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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PROSPECTUS 7,911,149 SHARES
IMAGEMATRIX CORPORATION
COMMON STOCK
(NO PAR VALUE)
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This Prospectus relates to up to 7,911,149 shares (the "Shares") of the
common stock, no par value (the "Common Stock") of ImageMatrix Corporation
("ImageMatrix" or the "Company"), which may be offered from time to time by the
Selling Shareholders named herein under "Selling Shareholders." The Shares fall
into three categories: (i) those which are now owned by the Selling Shareholders
as a result of purchases from the Company or received in connection with mergers
with the Company, in private transactions which were exempt from registration
under Section 4(2) or Regulation D of the Securities Act of 1933; (ii) those
which may be issued to holders of Series A Convertible Preferred Stock
("Preferred Stock") in the future upon the conversion of the Preferred Stock
into shares of Common Stock; and (iii) those which may be purchased from the
Company in the future upon exercise of certain options and warrants held by the
Selling Shareholders.
The Company will not receive any of the proceeds from the sale of the
Shares. The distribution of the Shares by the Selling Shareholders is not
subject to any underwriting agreement. The Shares offered by the Selling
Shareholders may be sold from time to time at designated prices that may be
changed, at market prices prevailing at the time of sale, at prices relating to
such prevailing market prices or at negotiated prices. In addition, the Selling
Shareholders may sell the Shares through customary brokerage channels, either
through broker-dealers acting as agents or principals. The Selling Shareholders
may effect such transactions by selling Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of underwriting
discounts, concessions, commissions, or fees from the Selling Shareholders
and/or purchasers of the Shares for whom such broker-dealers may act as agent,
or to whom they sell as principal, or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). Any broker-dealers
that participate with the Selling Shareholders in the distribution of Shares may
be deemed to be underwriters and any commissions received by them and any profit
on the resale of Shares positioned by them might be deemed to be underwriting
discounts and commissions within the meaning of the Securities Act of 1933, in
connection with such sales.
As of the close of trading on July 29, 1997, the closing sale price of the
Common Stock as quoted on the Nasdaq SmallCap Stock Market system was $2.03 per
share. Total expenses of the offering are estimated to be $21,000, all of which
will be paid by the Company.
SEE "RISK FACTORS" COMMENCING ON PAGE 3 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE COMMON STOCK.
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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 date of this Prospectus is August __, 1997.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement (together with all amendments,
exhibits, schedules and supplements thereto, the "Registration Statement") on
Form S-3 under the Securities Act for registration of the shares of Common Stock
offered hereby. This Prospectus, which forms a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain parts of which have been omitted as permitted by the rules
and regulations of the Commission. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to the
Registration Statement. Statements contained in this Prospectus regarding the
contents of any contract or any other document to which reference is made are
not necessarily complete, and where such contract or other document is an
exhibit to the Registration Statement, each such statement is qualified in all
respects by the provisions of such exhibit, to which reference is hereby made.
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files periodic
reports, proxy statements and other information with the Commission. Such
periodic reports, proxy statements and other information, and a copy of the
Registration Statement can be copied and inspected at the public reference
facilities of the Commission at 450 Fifth Street, Washington, D.C. 20549, and
at the Commission's regional offices at 7 World Trade Center, Suite 1300,
New York, New York 10048, and Citicorp Center, 500 West Madison, Suite 1400,
Chicago, Illinois 60661. Copies of all or any portion of the Registration
Statement may be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Company
files certain of its materials with the Commission electronically. The
Commission maintains a World Wide Web site (www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically.
The Company intends to furnish its Shareholders with Annual Reports
containing audited financial statements for each fiscal year.
DOCUMENTS INCORPORATED BY REFERENCE
The Company will furnish without charge to each person, including any
beneficial owner to whom this Prospectus is delivered, upon the request of such
person, a copy of any or all of the documents referred to below, other than
exhibits to such documents. All requests for copies of such documents should be
directed to Blair W. McNea, Vice President, ImageMatrix Corporation, 400 S.
Colorado Boulevard, Suite 500, Denver, Colorado 80222, (303) 399-3700.
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1) Annual Report on Form 10-KSB/A for the fiscal year ended December
31, 1996.
2) Proxy Statement for the May 16, 1997 Annual Meeting of
Shareholders.
3) Current Report on Form 8-K dated January 16, 1997.
4) Quarterly Report on Form 10-QSB for the fiscal quarter ended
March 31, 1997.
5) A description of the Common Stock contained in the Company's
Registration Statement No. 333-1990 on Form SB-2, dated June 4,
1996.
All documents filed subsequent to the date of this Prospectus by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 prior to the termination of the offering of
the Shares shall be deemed to be 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 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.
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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 before purchasing the securities offered hereby.
ACCUMULATED LOSSES; HISTORY OF OPERATING LOSSES. In order to execute its
business strategy and develop new software products, the Company will require
significant funds. Increased spending and decreased sales levels from the
Company's business plan resulted in a net loss of $3,663,000 for the year ended
December 31, 1996 and is expected to result in a net loss of approximately
$1,500,000 for the six months ended June 30, 1997. Operating losses are expected
to continue as the Company will incur significant expenses in connection with
research and development, development of its direct and indirect selling and
marketing channels, and the hiring of additional personnel. There can be no
assurance that the Company will be profitable in the future or that funds
provided by operations and presently available capital will be sufficient to
fund the Company's ongoing operations. If the Company has insufficient funds,
there can be no assurance that additional financing can be obtained on
acceptable terms, if at all. The absence of such financing would have a material
adverse effect on the Company's business, including a possible reduction,
reorganization or cessation of operations.
VARIABILITY OF QUARTERLY OPERATIONS. Results of operations have fluctuated
significantly in the past and may continue to fluctuate significantly from
quarter to quarter as a result of a number of factors, including but not limited
to: (i) the volume and timing of system sales; (ii) customer purchasing
patterns, long sales cycles, order cancellations and rescheduling of system
installations; (iii) the mix of direct and indirect sales; (iv) the actions of
competitors; (v) introduction of new versions of operating systems which would
require new programming expenses by the Company; and (vi) the timing of the
introduction of new software systems. In addition, the Company believes that
sales generated by the opening of additional branch offices, the potential for
arranging distribution partners and the potential of acquiring other claims
processing system providers or document imaging systems integration companies,
all of which are difficult to predict, have the possibility of significantly
increasing or decreasing the Company's revenues. Accordingly, the Company's
future operating results are likely to be subject to significant variability
from quarter to quarter and could be adversely affected in any particular
quarter. Due to the foregoing factors, it is possible that the Company's
operating results may from time to time be below the expectations of public
market analysts and investors. In such event, the price of the Company's
securities could be adversely affected.
AUTHORIZATION AND ISSUANCE OF PREFERRED STOCK. The Company's Articles of
Incorporation authorize the issuance of up to 5,000,000 shares of Preferred
Stock. Pursuant to such authorization, the Company has issued 3,300,000 shares
of Series A Convertible Preferred Stock ("Series A Preferred"). The Series A
Preferred is non-voting, carries a 7% dividend payable in cash or Common Stock
at the election of the Company, has a liquidation preference of $1.00 per share,
and is convertible into Common Stock at any time at the lesser of $2.25 per
share or 75% of the average closing price for the previous eight trading days
prior to conversion. As a result of the conversion feature, the Company will
recognize a dividend charge of approximately $833,000 effective on April
14,1997, the date of issuance of the Preferred Stock. The Articles of
Incorporation authorize the issuance of a further 1,700,000 shares of Preferred
Stock with such rights and preferences as may be determined from time to time by
the Board of Directors ("Undesignated Preferred Stock"). Accordingly, under the
Articles of Incorporation the Board of Directors may, without shareholder
approval, issue the Undesignated Preferred Stock with dividend, liquidation,
conversion, voting, redemption or other rights which could adversely affect the
voting power or other rights of the holders of the Common Stock. The issuance of
any shares of the Undesignated Preferred Stock, having rights superior to those
of the Common Stock, may result in a decrease of the value or market price of
the Common Stock and could be used by the Board of Directors as a device to
prevent a change in control of the Company. Holders of the Undesignated
Preferred Stock may have the right to receive dividends, certain preferences in
liquidation and conversion rights. The Company has no plans to issue shares of
the Undesignated Preferred Stock.
PRODUCT ACCEPTANCE AND MARKET DEVELOPMENT; FUTURE ESTABLISHMENT OF
DISTRIBUTION PARTNERS. The market for imaging-based claims processing,
particularly for HMOs, is still relatively new and may not develop as
anticipated by the Company. The Company's success is dependent upon market
acceptance of its products and services in preference to current competing
products and services and those that may be developed by others. There can be no
assurance that the Company's products and services will achieve a sufficient
level of market acceptance to result in profitable operations. The Company's
success is also dependent upon the success of its marketing and distribution
strategy which involves, to a significant degree, reliance upon attracting
additional qualified sales personnel, the establishment of additional branch
office locations either internally, or through acquisition, as well as adding
marketing partners to sell the Company's systems.
RELIANCE ON INTERNALLY DEVELOPED SOFTWARE AND CONSEQUENTIAL RISK OF DELAY.
The Company's strategy of selling integrated imaging systems which use aspects
of its internally created software creates a reliance on software which has
been used in limited installations and for a limited amount of time. The
Company's software could have functional problems or inadequacies which have not
yet been recognized. To the extent such flaws would require redevelopment, the
Company's ongoing customer relationships as well as its ability to sell and
market its system could be adversely affected.
RISKS RELATING TO COMPETITION; DYNAMIC MARKET. The market for imaging-
based information systems is intensely competitive. Many of the Company's
competitors have significantly greater financial, technical, research and
development and marketing resources than the Company. The imaging products and
services the Company sells compete with other technologies as well as with
similar products and services offered by other companies. Additionally, other
information management companies may enter the market in which the Company
competes. Competitive
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pressures and other factors, such as new product introductions by the Company's
competitors, or the entry into new geographic markets, may result in significant
price erosion that could have a material adverse effect on the Company's
business. The Company's products are dependent upon a number of advanced
technologies, including those relating to computer hardware and software,
scanning devices, storage devices, robotic systems and other peripheral
components, all of which are subject to rapid technological change. To be
competitive, the Company must respond effectively to technological changes by
continuing to enhance its existing products to incorporate emerging or evolving
technologies and standards. There can be no assurance that the Company will be
able to respond effectively to technological changes or new product
announcements or introductions by others. Furthermore, there can be no assurance
that the Company will be able to access the needed new technology at an
acceptable price.
REVENUE CONCENTRATION FROM SMALL GROUP OF CUSTOMERS. Sales of the
Company's imaging systems have been concentrated in a small number of customers.
In the year ended December 31, 1996, two customers accounted for 34% of the
Company's revenues and in the year ended December 31, 1995, two customers
accounted for 69% of the Company's total revenues. The inability to replace any
such customers with significant new customers would have a material adverse
effect on the Company's business. The Company believes the expected increase in
the number of sales offices and the release of its proprietary systems may
decrease customer concentration levels in the future. However, the Company
expects that the proportion of revenues from large customers will continue to be
a significant factor with respect to future operations.
DEPENDENCE ON SOFTWARE VENDOR RELATIONSHIPS. The Company's products and
services integrate the software application platforms of various third party
software vendors including, but not limited to, FileNet, Inc. ("FileNet"),
Oracle Systems, Inc. ("Oracle"), Microsoft, Inc. ("Microsoft") and KOFAX, Inc.
("Kofax"). There can be no assurance that these vendors will continue to
conduct business with the Company over the long term, that these vendors will
not themselves attempt to compete with the Company in its markets, or that these
firms will continue to work cooperatively with the Company in the development of
the Company's products. In the case of FileNet, the Company's vendor
authorization is an important requirement to the Company's business operations
and future plans. FileNet regularly provides referrals of potential clients and
establishes credibility with potential clients. Dealer agreements typically
provide that a dealer may be terminated with cause upon as little as 30 days'
notice. The Company's current dealer agreements are generally for durations of
one year. Vendors have regularly renewed the Company's dealer agreements;
however, no assurance can be given that such renewals will continue or that the
referrals generated from such relationships, whether the relationships continue
or not, will continue to occur. The loss of vendor authorization from FileNet
could have a material adverse effect on the Company's business. The Company
believes that there are competitive alternatives should its relationship with
any particular software vendor deteriorate, but there can be no assurance that
such alternatives would be available, or could be implemented without adverse
effect on the Company.
ABILITY TO MANAGE GROWTH IN REVENUE, ASSETS, LIABILITIES AND INCOME. As a
result of internal development and expansion into additional applications and
markets, the Company has at times grown rapidly. There is no assurance that the
Company will continue to experience growth. However, growth and expansion, if
experienced, could continue to place a significant strain on the Company's
services and support operations, cash flow, sales and administrative personnel
and other resources. The Company's ability to manage such growth effectively
will require the Company to continue improving its operational, management and
financial capabilities and systems. As a result, the Company is subject to
certain growth-related risks, including the risk that it will be unable to hire
and retain qualified personnel or other resources necessary to sustain growth.
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adverse effect on the Company. Generally, the Company's contracts with its
clients limit the ability of such clients to seek payment from the Company for
consequential damages. Even unsuccessful claims could result in the Company's
expenditure of funds in litigation and management time and resources. There can
be no assurance that the Company will not be subject to claims related to its
products and services, that such claims will not result in liability in excess
of its insurance coverage, that the Company's insurance will cover such claims,
or that appropriate insurance will continue to be available to the Company in
the future at commercially reasonable rates.
DEPENDENCE ON KEY PERSONNEL. Gerald E. Henderson, Blair W. McNea, Dennis
C. Hefter and certain other executive officers and employees have been
primarily responsible for the development and expansion of the Company's
business, and the loss of the services of one or more of these individuals could
have a material adverse effect on the Company. The Company's future success will
be dependent in part upon its continued ability to recruit, motivate and retain
qualified personnel. There can be no assurance that the Company will be
successful in this regard. Except for a non-disclosure provision in Mr.
Henderson's employment agreement and a non-competition provision in the
Company's employment agreement with Dennis Hefter, Executive Vice President of
the Company, the Company does not have non-competition agreements with any key
personnel. The Company maintains for its benefit a $1,000,000 key man life
insurance policy on the life of Mr. Henderson, a $500,000 key man life insurance
policy on the life of Mr. McNea and has applied for a key man life insurance
policy of $1,000,000 on Mr. Hefter. Mr. Henderson is registering all of his
beneficial holdings in the Company for resale in the registration statement of
which this Prospectus is a part.
DEPENDENCE ON PROPRIETARY RIGHTS, COPYRIGHTS, AND POTENTIAL PATENTS. To
develop and maintain its competitive position, the Company relies primarily upon
the technical expertise and creative skills of its personnel, independent
consultants and contractors. To protect its proprietary products, concepts and
systems, the Company relies on copyrights held by third parties and by the
Company, confidentiality and invention assignment agreements, and may in the
future file applications for patents and further copyrights for software it
develops. There can be no assurance that copyrights, patents (if applied for)
or confidentiality or invention assignment agreements will not be breached or
that the Company will have adequate remedies for any such breaches. Although
the Company is not aware of any infringement by it of intellectual property
rights held by third parties, there can be no assurance that the Company is not
infringing on the intellectual property rights of others. The Company has
acquired non-exclusive licenses to certain software owned by third parties which
is used in certain of the Company's products. Litigation against the Company,
whether or not successful, regarding copyrights, or infringement by the Company
of the patent rights or copyrights of others could have a material adverse
effect on the Company's business. There can be no assurance that patents or
copyright registrations which may be applied for, issued to or licensed by the
Company will not be challenged or circumvented by competitors or found to be
overly broad so as to fail to adequately protect the Company's technology or to
provide it with any competitive advantage.
LONG SALES AND DELIVERY CYCLE. Because the Company's imaging systems
typically range in sales price from $150,000 to $3,000,000, the decision by a
client to purchase a system typically involves a major commitment of capital and
an extended review and approval process. Accordingly, the sales cycle for the
Company's system is typically 6 to 12 months from initial contact to receipt of
order. During these periods, the Company may expend substantial efforts and
funds preparing a contract proposal and negotiating the contract. The length of
time between receipt of order and system acceptance typically ranges from three
to six months depending on the size of the system, the products ordered and
delivery terms. Any significant or ongoing failure to achieve signed contracts
and subsequent customer acceptance after expending time, effort and funds, or in
excess of expected completion time, could have a material adverse effect on the
Company's business.
REVENUE RECOGNITION, PERCENTAGE COMPLETION OF PROJECTS. The Company
designs and installs systems which may take up to six months to complete. As a
result of using the percentage of completion method of accounting for its long-
term contracts, the Company's estimates of total project costs will have a
significant influence on the amount of revenue and gross margin to be recognized
on individual contracts. In addition, the Company's estimates of the costs to
complete a project will determine the amount of revenue and gross margin
recognized through the end of each quarter. If actual results differ from the
Company's estimates it could result in the premature recording of revenues and
gross margins or the deferral into future periods of income or loss that should
be currently recognized.
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CREDIT RISK. Although the Company has not experienced any material losses
related to client inability to pay for its services, as the Company's customer
base expands it may be subject to increased credit risk. Because the Company's
revenues are derived from a small number of significant customers, the Company's
receivables are similarly concentrated. The inability of one of these
significant customers to satisfy its obligations to the Company could have
a material adverse effect on the Company. Also, in the event that the system
performance does not meet customer expectations, customers could hold back on
payments for portions of the overall system contract until additional services
have been performed. Such hold backs could cause the Company to: (i) incur
losses on its installations or earn less profit than anticipated; or (ii) fail
to receive payments for certain portions of its work.
UNCERTAINTY IN COVERAGE PROVIDER INDUSTRY; GOVERNMENT HEALTH CARE REFORM
PROPOSALS. The health insurance and HMO industries are subject to changing
political, economic and regulatory influences that may affect the procurement
practices and operation of health maintenance organizations ("HMOs") and health
insurance companies ("Coverage Providers"). If health care reform proposals
that feature a single-payor system or that control methods by which claims are
processed and reimbursed are adopted, the anticipated market for the
ClaimMatrix(TM) system could be materially adversely affected. Health care
reform proposals have contained provisions to increase governmental involvement
in health care, lower reimbursement rates and otherwise change the operating
environment for care providers and Coverage Providers. Coverage Providers may
react to these proposals and the uncertainty surrounding such proposals by
curtailing or deferring investments, including those for the Company's products
and services. Cost containment measures instituted by Coverage Providers as a
result of regulatory reform or otherwise could result in greater selectivity in
the allocation of capital funds. Such selectivity could have a material adverse
effect on the Company's ability to sell its products and services.
PRODUCT LIABILITY. The Company's products are used to provide information
that is critical to its clients' operations and management information systems.
Any failure by the Company's systems to provide accurate and timely information
or loss of client data could result in claims against the Company. The Company
maintains insurance to protect against errors and omissions claims associated
with the use of its systems in an amount up to a $1,000,000 total limit with a
deductible amount of $25,000 per occurrence, but there can be no assurance that
its insurance coverage would adequately cover any claim asserted against the
Company. A successful claim brought against the Company in excess of its
insurance coverage or for any reason not within the scope of coverage of its
policy could have a material
REGULATORY RISK. The Company does not believe that its current systems are
subject to U.S. Food and Drug Administration ("FDA") review and approval. The
core ClaimMatrix(TM) system is intended for internal use by Coverage Providers
to process claims for payment to insured or member parties. However, if the FDA
chooses to regulate software associated with medical treatment management, it
could impose extensive requirements governing pre- and post-market conditions
such as device investigation, approval, labeling and manufacturing. In addition,
such products would be subject to FDA's general controls, including those
relating to good manufacturing practices and adverse experience reporting. To
the extent the Company is forced by competitive pressures, or it desires to
expand the applications of the ClaimMatrix/(R)/ system to include patient
records management, the Company's systems may come under FDA jurisdiction.
TREND TOWARD CAPITATION OF HEALTH CARE COSTS. So-called "capitation-based"
health care plans utilize a flat fee rate service which is negotiated with a
health care provider or group. Through capitation plans the cost risks are
transferred from the Coverage Provider to the health care provider or group. In
the event that Coverage Providers are not subject to claim risks, the positive
productivity impacts of installation of the Company's ClaimMatrix(TM) system for
Coverage Providers may be reduced, which may adversely affect the Company's
sales.
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SECURITIES ELIGIBLE FOR FUTURE SALE. The sale of substantial amounts of
Common Stock in the public market subsequent to the effectiveness of the
registration statement of which this Prospectus forms a part, pursuant to Rule
144 and Regulation S promulgated under the Securities Act of 1933, as amended
(the "Securities Act") or otherwise, or the perception that such sales could
occur, may adversely affect prevailing market prices of the Company's securities
and could impair the future ability of the Company to raise additional capital
through an offering of its equity securities.
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS. This Prospectus contains
certain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities and Exchange Act of
1934 and the Company intends that such forward-looking statements be subject to
the safe harbors for such statements under such sections. The Company's
forward-looking statements include the plans and objectives of management for
future operations, including plans and objectives relating to the
ClaimMatrix(TM) system, systems integration services, and future economic
performance of the Company. The forward-looking statements and associated risks
set forth in this Prospectus include or relate to: (i) the ability of the
Company to attract and retain qualified professionals for system installation
for the ClaimMatrix(TM), CaptureMatrix(TM) and ServiceMatrix(TM) systems, (ii)
the ability of the Company to market its products and services at competitive
prices, (iii) the ability of the Company to develop brand-name recognition for
its systems, (iv) the ability of the Company to develop an effective sales staff
and sales network of distribution partners, (v) market acceptance of the
Company's systems, (vi) success of the Company's market initiatives, (vii)
success of the Company in forecasting demand for its systems, (viii) the ability
of the Company to diversify sales of Company products and services to large and
small customers, (ix) the ability to maintain pricing and thereby maintain
adequate profit margins, (x) ability to achieve adequate intellectual property
protection for the Company's products, and (xi) success of the Company in
increasing proprietary system sales as a percentage of overall revenues to
increase gross profit margins and decrease general, administrative and sales
costs as a percentage of overall gross profit.
The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties. Such forward-looking
statements are based on assumptions that the Company will continue to design,
market and provide new products and services on a timely basis, that competitive
conditions in the claims processing market will not change adversely or
materially, the market will accept the Company's systems, that the Company will
retain and add qualified sales, research and systems integration personnel and
consultants, that the Company's forecasts will accurately anticipate market
demand, and that there will be no material adverse change in the Company's
operations or business. The foregoing assumptions are based on judgments with
respect to, among other things, future economic, competitive and market
conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the Company's
control. Accordingly, although the Company believes that the assumptions
underlying the forward-looking statements are reasonable, any such assumption
could prove to be inaccurate and therefore there can be no assurance that the
results contemplated in forward-looking statements will be realized. In
addition, as disclosed elsewhere in the "Risk Factors" section of this
Prospectus, there are a number of other risks presented by the Company's
business and operations which could cause the Company's net sales or net income,
or growth in net sales or net income to vary markedly from prior results or the
results contemplated by the forward-looking statements. Growth in absolute
amounts of cost goods sold and selling, general and administrative expenses or
the occurrence of extraordinary events could cause actual results to vary
materially from the results contemplated by the forward-looking statements.
Management decisions, including budgeting, are subjective in many respects and
periodic revisions must be made to reflect actual conditions and business
developments, the impact of which may cause the Company to alter its marketing,
capital investment and other expenditures, which may also adversely affect the
Company's results of operations. In light of significant uncertainties inherent
in the forward-looking information included in this Prospectus, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the Company's objectives or plans will be achieved.
NO DIVIDENDS. The Company has not paid any dividends on its Common Stock
and does not intend to pay dividends in the foreseeable future.
STAGGERED TERMS OF DIRECTORS. The Company's directors are elected to
staggered terms, such that it would require at least two years for a majority of
the Company's current directors to be replaced.
7
<PAGE>
LIMITATIONS ON LIABILITY OF DIRECTORS. The Company's Articles of
Incorporation substantially limit the liability of the Company's Directors to
its shareholders for breach of fiduciary or other duties to the Company, to the
full extent permitted by Colorado law.
THINLY TRADED STOCK AND VOLATILITY OF STOCK PRICE. The Company's Common
Stock is concentrated in the hands of management, is thinly traded and is
subject to significant price volatility. Between the Company's June 1996 initial
public offering and June 30, 1997, the closing prices of the Company's
Common Stock ranged from a high of $6.13 to a low of $1.25.
USE OF PROCEEDS
The Company will not receive any part of the proceeds from the sale of the
Shares. All net proceeds of sale will go to the Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
Common Stock beneficially owned by each Selling Shareholder as of June 30, 1997,
and as adjusted to give effect to the sale of such securities. The Shares are
being registered to permit public secondary trading of such securities, and
the Selling Shareholders may offer such securities for resale from time to
time. See "Plan of Distribution".
The Shares of Common Stock being offered by the Selling Shareholders fall
into three categories: (i) 2,278,568 Shares acquired from the Company in
various private transactions in 1995 and 1996 in reliance on Section 4(2) of the
Securities Act and Regulation D promulgated thereunder as the basis for an
exemption from registration; (ii) up to 3,450,000 Shares that may be issued to
certain holders of Series A Convertible Preferred Stock ("Preferred Stock") upon
conversion of the Preferred Stock into shares of Common Stock; and (iii)
2,182,581 Shares that may be purchased by the Selling Shareholders upon exercise
of options or warrants (collectively, "Warrants") held by such persons to
purchase Common Stock. In connection with such private transactions, the
Company agreed to register all such shares of Common Stock and the shares of
Common Stock issuable upon exercise of the Warrants. The registration statement
of which this Prospectus is a part registers only the resale of shares of Common
Stock that are issuable upon conversion of Preferred Stock or upon exercise of
Warrants, and does not register the Preferred Stock or Warrants themselves.
Except as set forth below, none of such Selling Shareholders has had a material
relationship with the Company within the past three years other than as a result
of ownership of the securities of the Company. The Shares may be offered from
time to time by the Selling Shareholders named below or their nominees, and this
Prospectus may be required to be delivered by persons who may be deemed to be
underwriters in connection with the offer or sale of such securities. See "Plan
of Distribution". In accordance with the rules of the Commission, the columns
"Common Stock Owned After Offering" show the amount of securities owned by
Selling Shareholders after the offering. The numbers in such columns assume all
Shares registered and offered by this Prospectus, shown in the column "Common
Stock Offered" are sold by the Selling Shareholders. However, the Selling
Shareholders are not required to sell any of the Shares offered, and the Selling
Shareholders may sell as many or as few Shares as they choose. See "Plan of
Distribution".
The 2,182,581 Shares registered hereunder for issuance upon exercise of
Warrants are pursuant to Warrants with exercise prices in the following ranges:
$2.25 to $3.00 -- 1,729,025 Shares
$3.01 to $6.00 -- 64,534 Shares
over $6.00 -- 389,022 Shares
As of May 29, 1997 there were 4,922,834 shares of Common Stock and
3,300,000 shares of Preferred Stock outstanding. The Preferred Stock is
convertible by the holders thereof at any time into the number of shares of
Common Stock resulting from dividing the number of shares of Preferred Stock by
the lesser of (i) $2.25, or (ii) 75% of the average market price of the Common
Stock on the eight trading days prior to conversion ("Average Market Price").
The Average Market Price as of May 29, 1997 was $1.70, and therefore, for
purposes of the table below, the 3,300,000 shares of Preferred Stock are treated
as converted into 2,588,235 shares of Common Stock, resulting in 7,511,069 total
shares of Common Stock outstanding as of such date. As a result of the
conversion feature, the Company will recognize a dividend charge of
approximately $833,000 effective on April 14, 1997, the date of issuance of the
Preferred Stock.
Pursuant to an agreement entered into in connection with the original
issuance of the Preferred Stock, the Company is obligated to register 5,000,000
shares of Common Stock. The registered Common Stock is to be issued to holders
of Preferred Stock upon conversion of the Preferred Stock, and to holders of
warrants granted in connection with the sale of the Preferred Stock, upon the
exercise of such warrants. 1,550,000 of the shares registered hereunder are for
shares underlying such warrants, and 3,450,000 are for shares of Common Stock
issuable upon conversion of the Preferred Stock. As of May 29, 1997, the
3,300,000 shares of Preferred Stock are convertible into 2,588,235 shares
8
<PAGE>
of Common Stock. The Company is required to keep a sufficient number of shares
of Common Stock registered to provide for the resale of the shares of Common
Stock issuable from time to time upon conversion of the Preferred Stock.
<TABLE>
<CAPTION>
Name of Common Stock Common Stock Common Stock
Selling Shareholders Owned Prior to Offering/(1)/ Offered/(1)/ Owned After Offering
- ----------------------------------- ---------------------------- ------------- --------------------
Amount Percent/(2)/ Amount/(3)/ Percent/(2)(4)/
------ ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C>
Opus Capital, LLP/(5)/ 358,077 4.6% 358,077 0 --
K. Dieter Heidrich/(5)/ 74,917 -- 74,917 0 --
Transcorp c/f K.D. Heidrich 27,500 -- 27,500 0 --
SEP IRA/(5)/
K.D. Heidrich Family Trust 19,995 -- 19,995 0 --
Daryl F. Yurek/(5)/ 25,917 -- 25,917 0 --
Transcorp c/f D. F. Yurek 27,500 -- 27,500 0 --
SEP IRA/(5)/
D. F. Yurek Family Trust 19,995 -- 19,995 0 --
Gerald E. Henderson/(6)/ 2,078,088 27.7% 2,078,088 0 --
Random Access, Inc. 64,534 -- 64,534 0 --
W.G. Zepelin 4,629 -- 4,629 0 --
Neidiger/Tucker/Bruner, Inc./(7)/ 6,000 -- 6,000 0 --
Eugene L. Neidiger 34,750 -- 34,750 0 --
Anthony B. Petrelli 34,900 -- 34,900 0 --
Charles C. Bruner 34,750 -- 34,750 0 --
Robert L. Parrish 17,800 -- 17,800 0 --
J. Henry Morgan 20,450 -- 20,450 0 --
John J. Turk, Jr. 5,500 -- 5,500 0 --
Regina L. Neidiger 8,700 -- 8,700 0 --
George McCaffrey 5,000 -- 5,000 0 --
Michael McCaffrey 5,000 -- 5,000 0 --
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Name of Common Stock Common Stock Common Stock
Selling Shareholders Owned Prior to Offering/(1)/ Offered/(1)/ Owned After Offering
- ----------------------------------- ---------------------------- ------------- --------------------
Amount Percent/(2)/ Amount/(3)/ Percent/(2)(4)/
------ ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C>
Rolf Stepparud 13,650 -- 13,650 0 --
Joseph Charles & Assoc., Inc./(7)/ 5,278 -- 5,278 0 --
Joseph Visconti 12,219 -- 12,219 0 --
Doug Kaiser 6,982 -- 6,982 0 --
Roy Amico 6,982 -- 6,982 0 --
Frank Salvatore 6,982 -- 6,982 0 --
Guy Amico 1,746 -- 1,746 0 --
Myra Domingo 3,000 -- 3,000 0 --
James Hosch 14,236 -- 14,236 0 --
Richard Rappaport 16,072 -- 16,072 0 --
The Huberfeld Bodner Family 156,863/(8)/ 2.1% 307,440/(9)/ 0 --
Foundation
Jules Nordlicht 196,079/(8)/ 2.6% 384,380/(9)/ 0 --
Kahal Tefilo Lemoshe 47,059/(8)/ -- 92,115/(9)/ 0 --
Stephanie Rubin 19,608/(8)/ -- 38,295/(9)/ 0 --
Robert Cohen 78,432/(8)/ 1.0% 153,525/(9)/ 0 --
Ace Foundation 196,079/(8)/ 2.6% 384,380/(9)/ 0 --
Philip Huberfeld 58,824/(8)/ -- 115,230/(9)/ 0 --
Jeffrey Rubin 78,432/(8)/ 1.0% 153,525/(9)/ 0 --
Ezra Birnbaum 19,608/(8)/ -- 38,295/(9)/ 0 --
Cong. Ahavas Tzdokah V'Chesed 392,157/(8)/ 5.2% 768,415/(9)/ 0 --
Millenco LP 392,157/(8)/ 5.2% 768,415/(9)/ 0 --
Yeshivat Hanegev, Inc. 78,432/(8)/ 1.0% 153,525/(9)/ 0 --
Bais Medrash Govoha of Israel 39,216/(8)/ -- 76,935/(9)/ 0 --
Shekel Hakodesh 7,844/(8)/ -- 15,525/(9)/ 0 --
Mueller Trading Company 1,500,000 16.6% 1,500,000 0 --
All Selling Shareholders as
a Group 6,221,939 64.2% 7,911,149 0 --
</TABLE>
10
<PAGE>
(1) Includes the following Shares which may be purchased by Selling
Shareholders upon exercise of Warrants: Opus Capital, LLP - 358,050; Random
Access, Inc. - 64,534; Neidiger/Tucker/Bruner, Inc. - 6,000; Eugene L.
Neidiger - 34,750; Anthony B. Petrelli - 34,900; Charles C. Bruner - 34,
750; Robert L. Parrish - 17,800; J. Henry Morgan - 20, 450; John J. Turk,
Jr. - 5,500; Regina L. Neidiger - 8,700; George McCaffrey - 5,000; Michael
McCaffrey - 5,000; Rolf Stepparud - 13,650; Joseph Charles & Assoc., Inc. -
5,278; Joseph Visconti - 12,219; Doug Kaiser - 6,982; Roy Amico - 6,982;
Frank Salvatore - 6,982; Guy Amico - 1,746; Myrna Domingo - 3,000; James
Hosch - 14,236; Richard Rappaport - 16,072; Mueller Trading Company -
1,500,000.
(2) No percent of class is shown for holders of less than 1%. Percentage
computations are based on 7,511,069 shares of Common Stock outstanding as
of May 29, 1997 (includes Common Stock issuable upon conversion of
Preferred Stock - see paragraphs preceding table).
(3) Assumes sale of all Common Stock offered hereby. See "Plan of
Distribution".
(4) Assumes issuance of 2,182,581 shares of Common Stock registered hereby,
issuable upon exercise of shares of Common Stock underlying the Warrants,
and is therefore based on 9,693,650 shares of Common Stock outstanding
(includes Common Stock issuable upon conversion of Preferred Stock - see
paragraphs preceding table). No percent of class is shown for holders of
less than 1%.
(5) Opus Capital, LLP ("Opus") provided financial and strategic consulting
services to the Company. Daryl Yurek and K. Dieter Heidrich are the
managing directors of Opus.
(6) Mr. Henderson is President, Chief Executive Officer and director of the
Company.
(7) Neidiger/Tucker/Bruner, Inc. and Joseph Charles & Assoc, Inc. were
underwriters of the Company's June 1996 initial public offering.
(8) Figure represents shares of Common Stock into which shares of Preferred
Stock owned by holder are convertible. See explanatory paragraphs
preceding table for conversion details.
(9) Figure represents Preferred Stock holder's proportionate share of 3,450,000
shares of Common Stock registered hereunder reserved for shares of Common
Stock issuable upon conversion of Preferred Stock.
PLAN OF DISTRIBUTION
The distribution of the Shares by the Selling Shareholders is not
subject to any underwriting agreement. The Shares offered by the Selling
Shareholders may be sold from time to time at designated prices that may be
changed, at market prices prevailing at the time of sale, at prices relating to
such prevailing market prices or at negotiated prices. The Selling Shareholders
are not required to sell any of the Shares offered, and the Selling Shareholders
may sell as many or as few Shares as they choose. In addition, the Selling
Shareholders may sell the Shares through customary brokerage channels, either
through broker-dealers acting as agents or principals. The Selling Shareholders
may effect such transactions by selling Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of underwriting
discounts, concessions, commissions, or fees from the Selling Shareholders
and/or purchasers of the Shares for whom such broker-dealers may act as agent,
or to whom they sell as principal, or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). Any broker-dealers
that participate with the Selling Shareholders in the distribution of Shares may
be deemed to be underwriters and any commissions received by them and any profit
on the resale of Shares positioned by them might be deemed to be underwriting
discounts and commissions within the meaning of the Securities Act of 1933, in
connection with such sales. The Company has entered into a Selling Agreement
with holders of all of the Shares offered hereby, which contains the Company's
agreement to indemnify the Selling Shareholders for losses or damages, including
losses or damages under the Securities Act, to which the Selling Shareholders
may become subject arising out of or based upon untrue statements of fact
contained in the registration statement of which this Prospectus is a part.
INDEMNIFICATION
The Colorado Business Corporation Act (the "Colorado Act") permits the
Company to indemnify an officer or director who was or is a party or is
threatened to be made a party to any proceeding because of his or her position,
if: (i) the officer or director acted in good faith; (ii) the person reasonably
believed, in the case of conduct in an official capacity with the Company, that
his or her conduct was in the best interests of the Company, or in all other
cases, that his or her conduct was at least not opposed to the Company's best
interests; and, (iii) in the case of a criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful. If the officer or
director is successful on the merits in such a proceeding, the Colorado Act
requires the Company to indemnify the officer or director against all expenses,
including attorneys' fees incurred in connection with any such proceeding. The
Colorado
11
<PAGE>
Act authorizes the Company to advance expenses incurred in defending any such
proceeding under certain circumstances. Article X of the Company's Articles of
Incorporation provide that the Company shall indemnify its officers and
directors to the fullest extent permitted by the Colorado Act.
The Colorado Act permits the Company to limit the personal liability
of its directors for monetary damages for breaches of fiduciary duty as a
director, except for breaches that involve the director's duty of loyalty, acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, acts involving unlawful dividends or stock redemptions
or transactions from which the director derived an improper personal benefit.
Article IX of the Company's Articles of Incorporation, as amended, includes such
a provision which limits the personal monetary liability of its directors.
Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, 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 Act and is, therefore, unenforceable.
EXPERTS
The consolidated financial statements of ImageMatrix Corporation
appearing in ImageMatrix Corporation's Annual Report (Form 10-KSB/A) for the
year ended December 31, 1996 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
LEGAL OPINION
The legality of the Common Stock offered will be passed upon for the
Company by Chrisman, Bynum & Johnson, P.C., 1900 Fifteenth Street, Boulder, CO
80302.
12
<PAGE>
----------------------------------------------
No person has been authorized to give any information or make any
representations other than those contained in this Prospectus in connection with
the sale or offering of any Shares of Common Stock covered by this Prospectus,
and if given or made, such other information or representations must not be
relied upon as having been authorized by ImageMatrix Corporation or the Selling
Shareholders. This Prospectus does not constitute an offer of any securities
other than those to which it relates or an offer to sell, or a solicitation of
an offer to buy, in any jurisdiction to any person to whom it is not lawful to
make such offer or solicitation in such jurisdiction. Under no circumstances
should the delivery of this Prospectus or the sale or offering of any Shares of
Common Stock covered by this Prospectus create any implication that there has
been no change in the business or operations of ImageMatrix Corporation since
the date of this Prospectus.
----------------------------------------------
TABLE OF CONTENTS
Page
----
Available Information..................................... 2
Documents Incorporated by Reference....................... 2
Risk Factors.............................................. 3
Use of Proceeds........................................... 8
Selling Shareholders...................................... 8
Plan of Distribution...................................... 11
Indemnification........................................... 11
Experts................................................... 12
Legal Opinion............................................. 12
7,911,149 Shares
IMAGEMATRIX CORPORATION
Common Stock (No Par Value)
PROSPECTUS
___________________________________________
___________________________________________
__________, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
--------------------------------------------
The expenses in connection with the issuance and distribution of the
securities being registered, other than brokerage discounts, fees or
commissions, are:
Commission Registration Fee $ 3,763
Accounting Fees and Expenses 6,000
Legal Fees and Expenses 10,000
Miscellaneous Expenses 1,237
_______
Total $ 21,000
_______
All expenses, except the registration fee, are estimated. The Company
will pay all expenses in connection with this Offering.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
------------------------------------------
The Colorado Business Corporation Act (the "Colorado Act") permits the
Company to indemnify an officer or director who was or is a party or is
threatened to be made a party to any proceeding because of his or her position,
if: (i) the officer or director acted in good faith; (ii) the person reasonably
believed, in the case of conduct in an official capacity with the Company, that
his or her conduct was in the best interests of the Company, or in all other
cases, that his or her conduct was at least not opposed to the Company's best
interests; and, (iii) in the case of a criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful. If the officer or
director is successful on the merits in such a proceeding, the Colorado Act
requires the Company to indemnify the officer or director against all expenses,
including attorneys' fees incurred in connection with any such proceeding. The
Colorado Act authorizes the Company to advance expenses incurred in defending
any such proceeding under certain circumstances. Article X of the Company's
Articles of Incorporation provide that the Company shall indemnify its officers
and directors to the fullest extent permitted by the Colorado Act.
The Colorado Act permits the Company to limit the personal liability of its
directors for monetary damages for breaches of fiduciary duty as a director,
except for breaches that involve the director's duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, acts involving unlawful dividends or stock redemptions or
transactions from which the director derived an improper personal benefit.
Article IX of the Company's Articles of Incorporation, as amended, includes such
a provision which limits the personal monetary liability of its directors.
II-1
<PAGE>
ITEM 16. EXHIBITS
--------
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------
<S> <C>
1.1* Form of Selling Agreement.
4.1 Form of Certificate for Shares of Common Stock./(1)/
4.2 Form of Warrant Agreement and Redeemable Warrant./(1)/
4.3 Form of Stock Purchase Warrant A./(2)/
4.4 Form of Stock Purchase Warrant B./(2)/
5.1* Opinion of Chrisman, Bynum & Johnson, P.C.
23.1 Consent of Ernst & Young LLP.
23.2* Consent of Chrisman, Bynum & Johnson, P.C. (contained in the opinion
filed as Exhibit 5.1).
24.1* Power of attorney (included in signature page of original filing).
_________
* Previously filed.
(1) Incorporated by reference from the Company's Registration Statement No. 333-
1990 on Form SB-2 dated June 4, 1996.
(2) Incorporated by reference from the Company's Quarterly Report on Form 10-QSB
for the fiscal quarter ended March 31, 1997.
</TABLE>
ITEM 17. UNDERTAKINGS
------------
(1) The undersigned Registrant hereby undertakes:
A. To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective amendment to
this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933.
(ii) To reflect in the prospectus 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 the undertakings set forth in Paragraph (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.
B. 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.
C. 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.
(2) 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-2
<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 Amendment
No. 1 to Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Denver, State of
Colorado, on the 31st day of July, 1997.
IMAGEMATRIX CORPORATION
By: /s/ Gerald E. Henderson
-------------------------------
Gerald E. Henderson, Chief
Executive Officer
<TABLE>
<CAPTION>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Gerald E. Henderson Chief Executive Officer and July 31, 1997
- ----------------------- Director (Principal Executive
Gerald E. Henderson Officer)
* President, Chief Operating Officer July 31, 1997
_____________________ and Director
Dennis Hefter
/s/ Blair W. McNea Chief Financial Officer, Senior July 31, 1997
- ----------------------- Vice President - Business Development,
Blair W. McNea Secretary, Treasurer and Director,
(Principal Financial and Accounting
Officer)
* Director July 31, 1997
- -----------------------
Robert Beekmann
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
* Director July 31, 1997
_____________________
Bryan Finkel
Director _______, 1997
_____________________
David Seigle
* Director July 31, 1997
_____________________
Beverly Sloan
* Director July 31, 1997
_____________________
Jaidev Sugavanam
* By: /s/ Gerald E. Henderson
-----------------------
Gerald E. Henderson,
Attorney-in-Fact
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<S> <C>
1.1* Form of Selling Agreement.
4.1 Form of Certificate for Shares of Common Stock./(1)/
4.2 Form of Warrant Agreement and Redeemable Warrant./(1)/
4.3 Form of Stock Purchase Warrant A. /(2)/
4.4 Form of Stock Purchase Warrant B. /(2)/
5.1* Opinion of Chrisman, Bynum & Johnson, P.C.
23.1 Consent of Ernst & Young LLP.
23.2* Consent of Chrisman, Bynum & Johnson, P.C. (contained in the
opinion filed as Exhibit 5.1).
24.1* Power of attorney (included in signature page of original
filing).
_________
* Previously filed.
(1) Incorporated by reference from the Company's Registration Statement
No. 333-1990 on Form SB-2 dated June 4, 1996.
(2) Incorporated by reference from the Company's Quarterly Report on Form 10-QSB
for the fiscal quarter ended March 31, 1997.
</TABLE>
II-5
<PAGE>
Exhibit 23.1
------------
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3, No. 333-28843) and related
Prospectus of ImageMatrix Corporation for the registration of 7,911,149 shares
of its common stock and to the incorporation by reference therein of our report
dated February 18, 1997, except for Note 8 as to which the date is April 21,
1997, with respect to the consolidated financial statements of ImageMatrix
Corporation included in its Annual Report (Form 10-KSB/A) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Denver, Colorado
July 31, 1997
