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As filed with the Securities and Exchange Commission on May 1, 2000
File No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NHANCEMENT TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 84-1360852
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(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
6663 Owens Drive, Pleasanton, California 94588
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(Address of Principal Executive Offices)(Zip Code)
Equity Incentive Plan
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(Full title of the plan)
Corporation Service Company
1013 Center Road
Wilmington, Delaware 19805
(800) 927-9800
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(Name and address of agent for service)
(925) 251-3200
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(Telephone number, including area code, of agent for service)
Copies to:
Leonard H. Bloom, P.A.
Broad and Cassel
201 South Biscayne Boulevard
Miami Center, Suite 3000
Miami, Florida 33131
(305) 373-9400
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
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Common Stock, $.01 par
value 2,064,875 $15.09 $31,158,963.75 $8,226.00
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(1) Pursuant to Rule 416, promulgated under the Securities Act of
1933, this Registration Statement covers an indeterminate number of
securities to be offered as a result of any adjustment from stock splits,
stock dividends, exercise price adjustments or similar events. Also includes
additional shares issuable under the anti-dilution provisions of the stock
options granted under the plan that is covered by this Registration Statement.
(2) Estimated solely for the purpose of calculating the amount of
the registration fee pursuant to Rule 457(h), promulgated under the
Securities Act of 1933, as amended, on the basis of the average of the high
and low sales prices per share of common stock of NHancement Technologies,
Inc. as reported on the Nasdaq SmallCap Market on April 24, 2000.
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PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Pursuant to Rule 428(b)(1) under the Securities Act of 1933, as
amended, the documents containing the information specified in Part I of this
Registration Statement on Form S-8 will be sent or given to participants in the
following employee benefit plan of NHancement Technologies, Inc. (the "Company,"
or "We"):
- Equity Incentive Plan.
This document and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Form S-8 (Part II hereof), taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Upon the written or oral request by a participant in the employee
benefit plan listed in Item 1 of this Part I, the Company will provide any of
the documents incorporated by reference in Item 3 of Part II of this
Registration Statement (which documents are incorporated by reference into this
Section 10(a) prospectus), any documents required to be delivered to
participants pursuant to Rule 428(b) and other additional information about such
plan. All of such documents and information will be available without charge.
Any and all such requests should be directed to the Company at 6663 Owens Drive,
Pleasanton, California 94588, (925) 251-3200, attention: Corporate Secretary.
EXPLANATORY NOTE
This Registration Statement has been prepared in accordance with the
requirements of Form S-8 and Form S-3 pursuant to the Securities Act of 1933, as
amended. The Form S-8 portion of this Registration Statement will be used for
offers of shares of common stock, par value $0.01 per share, of the Company,
pursuant to the employee benefit plan listed in Item 1 of Part I to this
Registration Statement. In accordance with the Note to Part I of Form S-8, the
information specified by Part I for Form S-8 has been omitted from this
Registration Statement. The Reoffer Prospectus filed as a part of this
Registration Statement has been prepared in accordance with the requirements of
Part I of Form S-3 and will be used for reofferings or resales of shares of
common stock of the Company which are deemed to be control securities, which
have been acquired or will be acquired by control persons, or resales of
restricted securities, pursuant to the employee benefit plan.
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REOFFER PROSPECTUS
NHANCEMENT TECHNOLOGIES, INC.
503,500 SHARES OF COMMON STOCK
UNDER THE EQUITY INCENTIVE PLAN
OF NHANCEMENT TECHNOLOGIES, INC.
The shares we are registering are either currently held by or will be
issued to certain of our stockholders upon the exercise of stock options granted
under our Equity Incentive Plan. We will pay the expenses of registering the
shares.
Our common stock is quoted on the Nasdaq SmallCap Market under the
symbol "NHAN." The last reported sale price of the common stock on the Nasdaq
SmallCap Market on April 28, 2000 was $17.125 per share.
YOU SHOULD CAREFULLY CONSIDER THE "RISKS OF INVESTING IN OUR SHARES" SECTION
BEGINNING ON PAGE 7 OF THIS REOFFER PROSPECTUS.
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These shares have not been approved by the Securities and Exchange
Commission or any state securities commission nor have these organizations
determined whether this Prospectus is complete or accurate. Any
representation to the contrary is a criminal offense.
The date of this Reoffer Prospectus is May 1, 2000.
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TABLE OF CONTENTS
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ABOUT NHANCEMENT TECHNOLOGIES, INC...............................................................................5
RISKS OF INVESTING IN OUR SHARES.................................................................................7
PROCEEDS FROM SALE OF THE SHARES................................................................................13
SELLING STOCKHOLDERS ...........................................................................................14
HOW THE SHARES MAY BE DISTRIBUTED...............................................................................15
LEGAL OPINION...................................................................................................16
EXPERTS ........................................................................................................16
WHERE YOU CAN FIND MORE INFORMATION.............................................................................17
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE...............................................................17
INDEMNIFICATION OF DIRECTORS AND OFFICERS.......................................................................18
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ABOUT NHANCEMENT TECHNOLOGIES, INC.
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS REOFFER
PROSPECTUS. THIS SUMMARY IS NOT COMPLETE AND MAY NOT CONTAIN ALL OF THE
INFORMATION THAT YOU SHOULD CONSIDER BEFORE PURCHASING OUR COMMON STOCK. CERTAIN
STATEMENTS MADE IN THIS REOFFER PROSPECTUS CONSTITUTE "FORWARD-LOOKING
STATEMENTS" UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, AS
DESCRIBED IN THE SECTION "RISKS RELATED TO FORWARD-LOOKING STATEMENTS."
BUSINESS
We are a software applications and services company that specializes
in unified communications, collaborative commerce and multimedia solutions to
help companies improve internal and external communications functions. This
includes facilitation of an enterprise's electronic business transactions and
customer service interactions. Our company telephony products and services
work in both Internet-enabled environments and over standard telephone lines.
Our products orchestrate client use of telephone, e-mail, faxing, paging and
Internet based communications to keep in touch with customers and with one
another. As millennial enterprises must cope with a multiplicity of
communications channels and a mobile workforce, we have developed an
end-to-end solutions suite to enable companies to do business on the road as
effectively as in the office. By simplifying business communications and
improving access to distributed corporate information (data) resources, our
products help clients build solid customer relationships and maximize revenue
opportunities.
Our primary objective is to become a leading provider of communications
and data software products, systems and services for enterprise customers. Our
management believes that increased competition, shorter time to market trends
and the reduced importance of geographical borders make it imperative that
corporations achieve and maintain state-of-the-art communication and information
systems that provide a unified view of an enterprise's business functions on a
worldwide basis. Through three of our four main operating subsidiaries,
NHancement Technologies North America, Inc., a California corporation, Infotel
Technologies (Pte) Ltd., a Singapore corporation, and NHancement Technologies
Software Group, Inc., a recently formed California corporation, we provide
corporations and other businesses with communication systems, data products and
technological innovations designed to enhance efficiency.
In addition, through our other main operating subsidiary, NHancement
Enterprise Software Solutions, Inc., dba Triad Marketing, we design, develop,
market and service profile selling software products and services to
corporate enterprises. This software is designed to ascertain one-to-one
customer-selling opportunities based on marketing characteristics that are
unique to the individual customer. We also have Canadian Nhancement
Technologies. Inc., a subsidiary incorporated under the laws of the Yukon
Territory in Canada and headquartered in Montreal, Quebec, that was formed
for the purpose of facilitating communication product sales in Canada.
We were incorporated in October 1996 to pursue a business combination
opportunity with NHancement Technologies North America, Inc. (then named Voice
Plus). NHancement Technologies North America, Inc. was then engaged in the
business of integrating voice processing systems with telecommunications
equipment. NHancement Technologies North America, Inc. was acquired by us on
February 3, 1997 along with a development stage company whose operations were
later merged with those of NHancement Technologies North America, Inc. On
February 4, 1997, we completed an initial public offering of shares of our
common stock.
We acquired Infotel Technologies (Pte) Ltd. on June 22, 1998. Infotel
Technologies (Pte) Ltd., headquartered in Singapore, is an integrator of
infrastructure communications equipment products, providing radar system
integration, turnkey project management services and test instrumentation, as
well as a portfolio of communications equipment in Asia.
On August 31, 1999, we acquired the software assets of Eastern Systems
Technology, Inc., including the "InfoFast" software search engine which accesses
information contained in multiple corporate databases, in exchange for shares of
our common stock. In connection with the acquisition, Ram V. Mani, the majority
owner of Eastern Systems Technology, Inc., joined
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us as our Chief Technology Officer and as General Manager of the our newly
formed software subsidiary, NHancement Technologies Software Group, Inc. This
subsidiary was formed to internally develop the software products that are
critical to our objective of becoming a software products and services company.
It is headquartered at our principal corporate offices, with research and
development facilities in Chennai, India.
On January 21, 2000, we acquired Trimark Incorporated, a California
corporation, engaged in producing business analysis software tools that have
been utilized in the financial services industry to support customer analysis,
one-to-one marketing, and product profitability. Trimark Incorporated merged
into our wholly owned subsidiary NHancement Acquisition Corp., a newly formed
California corporation and the surviving corporation. Subsequently, NHancement
Acquisition Corp was renamed NHancement Enterprise Software Solutions, Inc., dba
Triad Marketing. We acquired all the outstanding shares of Trimark Incorporated
in exchange for 750,000 shares of our common stock and warrants to purchase
250,000 shares of our common stock.
On February 4, 2000, we acquired certain software products from SVG
Software Services Inc. in exchange for 250,000 shares of our common stock.
Also, on February 4, 2000, we acquired all the shares of its affiliate,
Enhancement Technologies (India) Pte. Ltd. for $50,000.
Our principal corporate office is located at 6663 Owens Drive,
Pleasanton, California 94588, and our telephone number is 925-251-3200.
THE OFFERING
The selling stockholders may offer and sell up to 503,500 shares of our
common stock under this Reoffer Prospectus. We will not receive any of the
proceeds from the sale of these shares of common stock, but we will receive
funds in connection with the exercise of stock options relating to such shares
of common stock, which funds will be used by us for working capital. See
"Proceeds from the Sale of Shares" and "Selling Stockholders."
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RISKS OF INVESTING IN OUR SHARES
PURCHASING THE SHARES OFFERED BY THIS REOFFER PROSPECTUS INVOLVES A
HIGH DEGREE OF RISK. BEFORE PURCHASING OUR COMMON STOCK, YOU SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISK FACTORS AND AS WELL AS THE OTHER INFORMATION
CONTAINED ELSEWHERE IN THIS REOFFER PROSPECTUS.
WE HAVE A HISTORY OF NET LOSSES AND WE CANNOT BE CERTAIN OF FUTURE
PROFITABILITY.
Although we recorded net income of approximately $243,000 on net
revenues of $8.7 million for our first quarter ended December 31, 1999, we have
incurred a loss of $716,800 on $23.3 million in revenues for the fiscal year
ended September 30, 1999. Further, we sustained significant losses for the
fiscal year ended December 31, 1997, as well as for the nine-month quarter ended
September 30, 1998.
While we have recently returned to profitability, our financial
condition and results of operations will be adversely affected if we fail to
continue to produce positive operating results. This could also:
- Adversely affect the future value of our common stock
- Adversely affect our ability to obtain debt or equity financing on
acceptable terms
- Prevent us from engaging in acquisition activity
OUR EQUITY AND DEBT FUNDING SOURCES MAY BE INADEQUATE TO FINANCE FUTURE
ACQUISITIONS.
The acquisition of complementary businesses and products is an element
of our business strategy. Our ability to engage in acquisition activity depends
on our ability to obtain debt or equity financing, neither of which may be
available or, if available, may not be on terms acceptable to us. Our inability
to obtain such financing would have a material adverse effect on our acquisition
strategy.
Both debt and equity financing involve certain risks. Debt financing
may require us to pay significant amounts of interest and principal payments,
reducing the resources available to us to expand our existing businesses. Equity
financing may be dilutive to our stockholders' interest in our assets and
earnings. For example, of a total of 12,500 shares of our Series A convertible
preferred stock sold in April 1998, those shares plus accrued dividends were
converted into 1,231,180 shares of our common stock at an average price per
share of approximately $1.05. Prior to the issuance of such shares of our
preferred stock in April 1998, a total of approximately 4,437,000 shares of our
common stock had been outstanding. As of December 31, 1999, 17,200 shares of our
preferred stock plus accrued dividends had been converted into about 1.7 million
shares of our common stock at an average price of $1.04 resulting in a dilutive
effect on our existing stockholders. As December 31, 1999, 300 shares of our
preferred stock remained outstanding. In addition, common stock issued as
consideration in an acquisition transaction may be dilutive under certain
circumstances to our existing stockholders.
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WE RELY UPON OUR DISTRIBUTOR AND SUPPLIER RELATIONSHIPS AND WE ARE DEPENDENT
UPON SIGNIFICANT CUSTOMERS.
Our North American subsidiary operations are based upon the integration
of hardware, software, and communications and data processing equipment
manufactured by others into systems designed to meet the needs of our customers.
Although we have distributor agreements with a number of equipment
manufacturers, a major portion of our revenues are based upon products
manufactured by three companies. In this regard, we rely to a significant extent
on products manufactured (and services provided) by Centigram Communications
Corporation, products manufactured by Baypoint Innovations, a division of
Mitel, Inc., that purchased the customer premises equipment business of
Centigram Communications Corporation, and on products manufactured by
Interactive Intelligence, Inc., principally its enterprise information center
product, a next-generation communications server that merges voice and data
functions into a single computer-based system. Revenues from the sale of
enterprise information center products accounted for approximately 10% of our
North American subsidiaries revenues for the last two quarters ended September
30, 1999 and approximately 4% of our North American subsidiaries revenues for
the quarter ended December 31, 1999. Enterprise information center revenues are
expected to increase rapidly in future quarters.
Legacy voicemail systems made up 54% of our total revenues for the
quarter ended December 31, 1999. Management believes that future revenues
from legacy voicemail systems will steadily decline over the next two years,
due to the introduction of new unified messaging systems, which integrate
several diverse messaging technologies, such as voicemail, email and
facsimile. Our ability to transition our revenue to the new unified messaging
platforms will be critical, not only for our future growth but also to
maintain our current revenue levels. Any disruption in our relationships with
Centigram Communications Corporation, Baypoint Innovations, a division of
Mitel, Inc. or Interactive Intelligence, Inc. would have a significant
adverse effect on our business for an indeterminate period of time until new
supplier relationships could be established. Further, any material change in
our other distributor relationships could adversely affect our financial
condition.
Infotel Technologies (Pte) Ltd., our Singapore subsidiary, offers a
wide range of infrastructure communications equipment products. Infotel
Technologies (Pte) Ltd. also has an established business providing test
measuring instrumentation and testing environments, and is the regional
distributor and test and repair center for Rohde & Schwarz test instruments.
Infotel Technologies (Pte) Ltd.'s profitability depends in part on a steady
stream of revenues relating to the services performed for Rohde & Schwarz
test instruments. Since Infotel Technologies (Pte) Ltd.'s revenues comprised
approximately 41% of our total revenues for the fiscal year ended September
30, 1999, and approximately 43% of our total revenues for the quarter ended
December 31, 1999, any material change in Infotel Technologies (Pte) Ltd.'s
relationship with its manufacturers, including Rohde & Schwarz, and any
interruption in the delivery of products to Infotel Technologies (Pte) Ltd.
by its key suppliers, would materially adversely affect our results of
operations and financial condition.
The revenues from our three largest customers accounted for
approximately 32.7%, 11.9% and 10.9% respectively of total revenues during the
first quarter ended December 31, 1999. No other customer accounted for over 5%
of total revenues during this period. This concentration of revenues results in
additional risk to us and our operations, and any disruption
8
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of orders from our largest customers would have an adverse effect on our results
of operations and financial condition.
OUR MARKET IS HIGHLY COMPETITIVE, AND IF WE DO NOT COMPETE EFFECTIVELY, WE MAY
SUFFER PRICE REDUCTIONS, REDUCED GROSS MARGINS AND LOSS OF MARKET SHARE.
The voice processing and customer premises equipment and related
software markets are highly competitive and competition in this industry is
expected to further intensify with the introduction of new product enhancements
and new competitors. We compete with a number of larger integrated companies
that provide competitive voice-processing products and services as subsets of
larger product offerings. Our existing and potential competitors include many
large domestic and international companies that have better name and product
recognition in the market for our products and services and related software, a
larger installed base of customers, and substantially greater financial,
marketing and technical resources than ourselves.
Our Singapore subsidiary, Infotel Technologies (Pte) Ltd., competes
against several large companies in Singapore that are better capitalized.
Although Infotel Technologies (Pte) Ltd. has in the past managed to compete
successfully against these larger companies on the basis of its engineering
and product management expertise, no assurances can be given that this
expertise will allow Infotel Technologies (Pte) Ltd. to compete effectively
with these larger companies in the future. Further, various large
manufacturers headquartered outside of Singapore have established their own
branch offices in Singapore and also compete with Infotel Technologies (Pte)
Ltd.
OUR REVENUES WILL LIKELY DECLINE IF WE DO NOT DEVELOP AND INTEGRATE THE
COMPANIES WE ACQUIRE.
We have in the past pursued, and plan to continue to pursue,
acquisition opportunities. Acquisitions involve a number of special risks,
including among others:
- Adverse short-term effects on our operating results
- The disruption of our ongoing business
- The risk of reduced management attention to normal daily operations
- Our dependence on the retention, hiring and training of key
personnel and the potential risk of loss of such personnel
- Our potential inability to successfully integrate the personnel,
operations, technology and products of acquired companies
- Unanticipated problems or unknown legal liabilities
- Adverse tax or financial consequences
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Two of our prior acquisitions, namely the acquisition of Voice Plus (now
known as NHancement Technologies North America, Inc.) and Advantis Network &
Systems Sdn Bhd, a Malaysian company, in the past yielded operating results
that were significantly lower than expected. In fact, the poor performance of
Advantis Network & Systems Sdn Bhd led to its divestiture less than one year
after the company was acquired by us. Accordingly, no assurances can be given
that the future performance of our subsidiaries will be commensurate with the
consideration paid to acquire these companies. If we fail to establish the
needed controls and to manage growth effectively, our operating results, cash
flows and overall financial condition will be adversely affected.
OUR INTERNATIONAL OPERATIONS INVOLVE RISKS THAT MAY ADVERSELY AFFECT OUR
OPERATING RESULTS.
Infotel Technologies (Pte) Ltd., our Singapore subsidiary, accounted
for approximately 41% of our revenues for the fiscal year ended September 30,
1999 and approximately 43% of our revenues for the quarter ended December 31,
1999. There are risks associated with our international operations, including:
- Our dependence on members of management of Infotel Technologies
(Pte) Ltd. and the risk of loss of customers in the event of the
departure of key personnel
- Unexpected changes in or impositions of legislative or regulatory
requirements
- Potentially adverse taxes and adverse tax consequences
- The burdens of complying with a variety of foreign laws
- Political, social and economic instability
- Changes in diplomatic and trade relationships
Any one or more of these factors could negatively affect the performance of
Infotel Technologies (Pte) Ltd. and result in a material adverse change in our
business, results of operations and financial condition.
OUR STOCK PRICE COULD EXPERIENCE PRICE AND VOLUME FLUCTUATIONS.
The markets for securities such as our common stock historically have
experienced extreme price and volume fluctuations during certain periods. Other
factors that also may adversely affect the market price of our common stock
include the following:
- New product developments
- Technological and other changes in the voice-messaging and
communications industries
- Fluctuations in the financial markets o General economic conditions
- Quarterly variations in our results of operations
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IT WOULD REQUIRE SIGNIFICANT TIME AND EFFORT TO REPLACE OUR KEY PERSONNEL.
Management changes often have a disruptive effect on businesses and
can lead to the loss of key employees because of the uncertainty inherent in
change. In 1999, our President and Chief Executive Officer resigned his
position and, more recently, our Chief Financial Officer and the Secretary
and General Counsel of NHancement Technologies, Inc. left us to pursue other
opportunities. Douglas S. Zorn, our former Chief Financial Officer, was
promoted to President and Chief Executive Officer to fill these vacancies.
While hiring efforts are underway to fill the vacancies created by the
departure of other key employees, there is no assurance that these posts will
be filled in the near future since the job market in the greater San
Francisco Bay Area is intensely competitive. The loss of these or other key
employees could have a material adverse effect on our operations.
Furthermore, the recent changes in management may not be adequate to sustain
our profitability or to meet our future growth targets.
FAILURE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS WILL HARM OUR
ABILITY TO COMPETE.
We do not have any patents or copyrights and while we intend to file
for copyright and patent protection, we currently rely on general common law and
confidentiality and non-disclosure agreements with our key employees to protect
our trade secrets. Our success depends on our ability to adequately protect our
intellectual property rights. Our efforts to protect our intellectual property
may not be sufficient against unauthorized third-party copying or use or the
application of reverse engineering, and existing laws afford only limited
protection. In addition, existing laws may change in a manner that adversely
affects our proprietary rights. Furthermore, policing the unauthorized use of
our product is difficult, and expensive litigation may be necessary in the
future to enforce our intellectual property rights.
OUR PRODUCTS COULD INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS,
RESULTING IN COSTLY LITIGATION AND THE LOSS OF SIGNIFICANT RIGHTS.
We may be subject to legal proceedings and claims for alleged
infringement of proprietary rights of others, particularly as the number of
products and competitors in our industry grow and functionalities of products
overlap. This risk is higher in a new market in which a large number of patent
applications have been filed but are not yet publicly disclosed. We have limited
ability to determine which patents our products may infringe and take measures
to avoid infringement. Any litigation could result in substantial costs and
diversion of management's attention and resources. Further, parties making
infringement claims against us may be able to obtain injunctive or other
equitable relief, which could prevent us from selling our products or require us
to enter into royalty or license agreements which are not advantageous to us.
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IF WE FAIL TO ADEQUATELY RESPOND TO RAPID TECHNOLOGICAL CHANGES, OUR EXISTING
PRODUCTS WILL BECOME OBSOLETE OR UNMARKETABLE.
Advances in technology could render our current products obsolete and
unmarketable. We believe that to succeed we must enhance our software products
and underlying technology, develop new products and technologies on a timely
basis, and satisfy the increasingly sophisticated requirements of our customers.
We may not successfully respond to technological change, evolving industry
standards or customer requirements. If we are unable to adequately respond to
these changes, our revenues could decline. In connection with the introduction
of new products and enhancements, we have experienced development delays and
related cost overruns, which are not unusual in the software industry. To date,
these delays have not had a material impact on our revenues. If new releases or
products are delayed or do not achieve broad market acceptance, we could
experience a delay or loss of revenues and customer dissatisfaction.
IF OUR SOFTWARE CONTAINS DEFECTS, WE COULD LOSE CUSTOMERS AND REVENUES.
Software as complex as ours often contains unknown and undetected
errors or performance problems. Many defects are frequently found during the
period immediately following the introduction of new software or enhancements to
existing software. Although we attempt to resolve all errors that we believe
would be considered serious by our customers, our software may not be
error-free. Undetected errors or performance problems may be discovered in the
future and errors considered minor by us may be considered serious by our
customers. This could result in lost revenues or delays in customer acceptance
and would be detrimental to our reputation, which could harm our business.
RISKS RELATED TO FORWARD-LOOKING STATEMENTS.
Certain statements contained in this Reoffer Prospectus, including,
without limitation, statements containing the words "believes," anticipates,"
"may," "intends," "expects" and words of similar import, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements (or industry results, performance or
achievements) expressed or implied by these forward-looking statements to be
substantially different from those predicted. The factors that could affect our
actual results include the following:
- general economic and business conditions, both nationally and in
the regions in which we operate
- competition
- changes in business strategy or development plans
- delays in the development or testing of our products
- technological, manufacturing, quality control or other problems
that could delay the sale of our products
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- our inability to obtain appropriate licenses from third parties,
protect our trade secrets, operate without infringing upon the
proprietary rights of others, or prevent others from infringing on
our proprietary rights
- our inability to obtain sufficient financing to continue to expand
operations
- changes in demand for products by our customers
Certain of these factors are discussed in more detail elsewhere in this
Reoffer Prospectus, including under the caption "Risks of Investing in Our
Shares."
We do not undertake any obligation to publicly update or revise any
forward-looking statements contained in this Reoffer Prospectus or incorporated
by reference, whether as a result of new information, future events or
otherwise. Because of these risks and uncertainties, the forward-looking events
and circumstances discussed in this Reoffer Prospectus might not transpire.
PROCEEDS FROM SALE OF THE SHARES
All of the shares of common stock in this Reoffer Prospectus are being
offered by the selling stockholders. We will not receive any proceeds from the
sale of the shares of common stock, but we will receive funds in connection with
the exercise of stock options relating to such shares of common stock. We intend
to use these funds for working capital.
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SELLING STOCKHOLDERS
The shares offered under this Reoffer Prospectus are being registered
for reoffers and resales by selling stockholders who have or may in the future
acquire their shares of common stock by exercising options granted to them under
our Equity Incentive Plan. The selling stockholders named in the following table
may resell all, a portion, or none of these shares of common stock. There is no
assurance that any of the selling stockholders will sell any or all of the
shares of common stock offered by them.
Participants under Equity Incentive Plan who are deemed to be
"affiliates" of the Company who acquire shares of common stock may be added to
the selling stockholders listed below from time to time by use of a prospectus
supplement filed pursuant to Rule 424(b) under the Securities Act of 1933, as
amended.
The following table sets forth certain information concerning the
selling stockholders as of the date of this Reoffer Prospectus, and as adjusted
to reflect the sale by the selling stockholders of the shares of common stock
offered, assuming sale of all of the shares offered:
<TABLE>
<CAPTION>
Number of Percentage of shares
Number of shares of of common stock
Shares of common stock to beneficially owned (4)
common stock be sold after -------------------------------
beneficially the exercise of Before After
Name owned (1) options (2)(3) Offering Offering (5)
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<S> <C> <C> <C> <C>
Douglas S. Zorn, 490,647 (6) 289,250 (7) 4.9% 1.9%
Chairman of the Board, Chief
Executive Officer,
President and Director
Ram V. Mani, Director 500,000 139,250 6.0% 4.7%
Robert J. Schmier, Director 75,000 (8) 25,000 * *
N. Bruce Walko, Director 75,000 (8) 25,000 * *
James Gillespie, 516,565 25,000 (9) 5.0% 4.8%
Former Director
</TABLE>
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*Represents less than 1%.
(1) Represents shares beneficially owned by the named individual, including
shares of common stock that the person has the right to acquire within
60 days of the date of this Reoffer Prospectus. Unless otherwise noted,
all persons listed have sole voting and sole investment power.
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(2) Includes all outstanding options to purchase shares of common stock
granted to the named individuals under the Equity Incentive Plan,
whether or not vested or exercisable within 60 days of the date of this
Reoffer Prospectus. Also includes all shares of common stock issued to
the named individuals upon the exercise of options granted under the
Equity Incentive Plan. Does not include any shares of common stock that
may be acquirable under future grants of options under the Equity
Incentive Plan.
(3) Does not constitute a commitment to sell any or all of the stated
number of shares of common stock. The number of shares of common stock
offered shall be determined from time to time by each selling
stockholder in his or her sole discretion.
(4) Based on 10,715,129 shares of common stock issued and outstanding
as of the date of this Reoffer Prospectus.
(5) Assumes all the shares of common stock are sold pursuant to this
Reoffer Prospectus and that no other shares of common stock are
acquired or disposed of by the selling stockholders prior to the
termination of this Reoffer Prospectus.
(6) Includes vested options to purchase 251,210 shares of common stock
and options to purchase 38,050 that will not vest within 60 days of
this Reoffer Prospectus.
(7) Includes 139,437 shares of common stock, warrants to purchase
100,000 shares of common stock and options to purchase 251,210 shares
of common stock.
(8) Includes options to purchase 25,000 shares of common stock and
warrants to purchase 50,000 shares of common stock.
(9) Represents 25,000 restricted shares of common stock received as a
result of the exercise of options, granted under the Equity Incentive
Plan in February, 1999.
HOW THE SHARES MAY BE DISTRIBUTED
The selling stockholders may sell their shares of common stock in
various ways and at various prices. Some of the methods by which the selling
stockholders may sell their shares of common stock include:
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- privately negotiated transactions;
- block trades in which the broker or dealer will attempt to sell the
shares of common stock as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by that
broker or dealer for the selling stockholder's account under this
Reoffer Prospectus;
- sales under Rule 144 rather than by using this Reoffer Prospectus;
- a combination of any of these methods of sale; and
- any other legally permitted method.
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<PAGE>
The applicable sales price may be affected by the type of transaction.
The selling stockholders may also pledge their shares of common stock
as collateral for a margin loan under their customer agreements with their
brokers. If there is a default by the selling stockholders, the brokers may
offer and sell the pledged shares of common stock.
Brokers or dealers may receive commissions or discounts from the
selling stockholders (or, if the broker-dealer acts as agent for the purchaser
of the shares of common stock, from that purchaser) in amounts to be negotiated.
These commissions are not expected to exceed those customary in the types of
transactions involved.
We cannot estimate at the present time the amount of commissions or
discounts, if any, that will be paid by the selling stockholders in connection
with sales of the shares of common stock.
The selling stockholders and any broker-dealers or agents that
participate with the selling stockholders in sales of the shares of common stock
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended, in connection with such sales. In that event, any commissions
received by broker-dealers or agents and any profit on the resale of the shares
of common stock purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act of 1933, as amended.
Under the securities laws of certain states, the shares of common stock
may be sold in those states only through registered or licensed broker-dealers.
In addition, the shares of common stock may not be sold unless the shares of
common stock have been registered or qualified for sale in the relevant state or
unless the shares of common stock qualify for an exemption from registration or
qualification.
We have agreed to pay all fees and expenses incident to the
registration of the shares of common stock.
The selling stockholders and other persons participating in the
distribution of the shares of common stock offered under this Reoffer Prospectus
are subject to the applicable requirements of Regulation M promulgated under the
Securities Exchange Act of 1934, in connection with sales of the shares of
common stock.
LEGAL OPINION
Broad and Cassel, a partnership including professional associations,
201 South Biscayne Boulevard, Suite 3000, Miami, Florida 33131, is giving an
opinion regarding the validity of the offered shares of common stock.
EXPERTS
The financial statements incorporated by reference in this Reoffer
Prospectus have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the periods set forth in their report
incorporated herein by reference, and are incorporated herein
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<PAGE>
in reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with Securities and Exchange Commission. You may read and copy
any report or document we file at the public reference facilities maintained by
the Securities and Exchange Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the Securities and Exchange Commission's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please
call the SEC at 1-800-SEC-0880 for more information about the public reference
rooms. Our Securities and Exchange Commission filings are also available from
the Securities and Exchange Commission's website located at http://www.sec.gov.
Quotations for the prices of our common stock appear on the Nasdaq
SmallCap Market, and reports, proxy statements and other information about us
can also be inspected at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this Reoffer
Prospectus, and later information that we file with the Securities and Exchange
Commission will automatically update and supersede this information.
We incorporate by reference the following filings and any future
filings made with the Securities and Exchange Commission under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
- The description of the common stock contained in the our
registration statement on Form S-B2 (File Number 333-15563), filed
on January 13, 1997;
- Our Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1999;
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<PAGE>
- Our Quarterly Report on Form 10-QSB for the quarterly period ended
December 31, 1999;
- Our Current Report on Form 8-K filed with the SEC on December 23,
1999;
- Our Current Report on Form 8-K filed with the SEC on February 7,
2000.
We have filed with the Securities and Exchange Commission a
registration statement on Form S-8 under the Securities Act of 1933, as amended,
with respect to the common stock covered by this Reoffer Prospectus. This
Reoffer Prospectus, which is a part of the registration statement, does not
contain all the information set forth in, or annexed as exhibits to, the
registration statement, as permitted by the SEC's rules and regulations. For
further information with respect to us and the common stock offered under this
Reoffer Prospectus, please refer to the registration statement, including the
exhibits, copies of which may be obtained from the locations described above.
Statements concerning any document filed as an exhibit are not necessarily
complete and, in each instance, we refer you to the copy of the document filed
as an exhibit to the registration statement.
You may request, at no cost, a copy of any or all of the information
incorporated by reference by writing or telephoning us at:
NHancement Technologies, Inc.
6663 Owens Drive
Pleasanton, California 94588
Telephone Number (925) 251-3200
Attention: Corporate Secretary
You should only rely on the information incorporated by reference or
provided in this Reoffer Prospectus or any supplement. We have not authorized
anyone else to provide you with different information. Our common stock is not
being offered in any state where the offer is not permitted. You should not
assume that the information in this Reoffer Prospectus or any supplement is
accurate as of any date other than the date on the front of those documents.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Certificate of Incorporation and Bylaws include provisions that (i)
eliminate the personal liability of its directors for monetary damages resulting
from breaches of their fiduciary duty to the extent permitted by the General
Corporation Law of the State of Delaware and (ii) indemnify its directors and
officers to the fullest extent permitted by the Delaware General Corporation
Law, including circumstances in which indemnification is otherwise
discretionary. We believe that these provisions are necessary to attract and
retain qualified persons as directors and officers.
We maintain a directors and officers' liability policy insuring any
person who is or was our director or officer against any liability incurred
by such person in any such capacity or arising out of such person's status as
such. The insurer's limit of liability under the policy is a $5.0 million
coverage limit per occurrence
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<PAGE>
and $5.0 million in the aggregate per policy year. The policy contains various
reporting requirements and is subject to certain exclusions and limitations.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to our directors, officers, and
controlling persons pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference into this
Registration Statement:
1. The Registrant's Annual Report on Form 10-KSB, for the year ended
September 30, 1999;
2. The description of the Registrant's Common Stock contained in the
Registrant's registration statement on Form 8-A filed on January 13, 1997;
3. The Registrant's Quarterly Report on Form 10-QSB, for the quarter
ended December 31, 1999;
4. The Registrant's Current Report on Form 8-K, filed on December 23,
1999; and
5. The Registrant's Current Report on Form 8-K, filed on February 7,
2000.
In addition, all documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, after the date
hereof and prior to the filing of a post-effective amendment which indicates
that all securities registered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof 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 Registration Statement to the extent that a statement contained herein, or
in a subsequently filed document incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
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<PAGE>
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation and Bylaws include
provisions that (i) eliminate the personal liability of its directors for
monetary damages resulting from breaches of their fiduciary duty to the extent
permitted by the General Corporation Law of the State of Delaware and (ii)
indemnify its directors and officers to the fullest extent permitted by the
Delaware General Corporation Law, including circumstances in which
indemnification is otherwise discretionary. The Registrant believes that these
provisions are necessary to attract and retain qualified persons as directors
and officers.
The Registrant maintains a directors and officers' liability policy
insuring any person who is or was a director or officer of the Registrant
against any liability incurred by such person in any such capacity or arising
out of such person's status as such. The insurer's limit of liability under
the policy is a $5.0 million coverage limit per occurrence and $5.0 million
in the aggregate per policy year. The policy contains various reporting
requirements and is subject to certain exclusions and limitations.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, 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 Securities Act of 1933 and is, therefore, unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Equity Incentive Plan(1)
5.1 Opinion of Broad and Cassel
23.1 Consent of Broad and Cassel (contained in its opinion filed as
Exhibit 5.1 to this Registration Statement)
23.2 Consent of BDO Seidman, LLP
24.1 Power of Attorney (included in the signature page of this
Registration Statement)
----------------------------
(1) Incorporated by reference to the document bearing exhibit number
10.12 as contained in Amendment No. 2 to Registrant's
Registration Statement on Form SB-2, File Number 333-15563, as
filed on January 13, 1997.
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ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) To 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) if, 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 Statement; and
(c) To include any additional or changed material information on
the plan of distribution;
PROVIDED, HOWEVER, that paragraphs (1)(a) and (1)(b) shall 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 the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, 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 termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, 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.
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<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, 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 Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933, as amended, and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Pleasanton, State of California on this 1st day
of May, 2000.
NHANCEMENT TECHNOLOGIES, INC.
By: /s/ Douglas S. Zorn
---------------------------------------
Douglas S. Zorn
President and Chief Executive Officer
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<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Douglas S. Zorn as his or her true and lawful attorney-in-fact and agent with
full power of substitution and resubstitution for him or her and in his or her
name, place and stead in any and all capacities to execute in the name of each
such person who is then an officer or director of the Registrant any and all
amendments (including post-effective amendments) to this Registration Statement,
and any registration statement relating to the offering hereunder pursuant to
Rule 462 under the Securities Act of 1933, as amended, and to file the same with
all exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents and each of them full power and authority to do and perform each and
every act and thing required or necessary to be done in and about the premises
as fully as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Douglas S. Zorn Chairman of the Board, Chief Executive
- ------------------------------ Officer, President and Director
Douglas S. Zorn (Principal Executive, Financial and May 1, 2000
Accounting Officer)
/s/ Ram V. Mani Director
- ------------------------------
Ram V. Mani May 1, 2000
/s/ Robert L. Schmier Director
- ------------------------------
Robert L. Schmier May 1, 2000
/s/ N. Bruce Walko Director
- ------------------------------
N. Bruce Walko May 1, 2000
/s/ William M. Stephens Director
- ------------------------------
William M. Stephens May 1, 2000
</TABLE>
23
<PAGE>
EXHIBIT INDEX (1)
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<S> <C>
5.1 Opinion of Broad and Cassel
23.1 Consent of Broad and Cassel (included in Exhibit 5.1)
23.2 Consent of BDO Seidman, LLP
24.1 Power of Attorney (included in the signature page of this
Registration Statement)
--------------------------------
</TABLE>
(1) All other exhibits listed in Item 8 of Part II of this
Registration Statement have been incorporated by reference herein,
as indicated in Item 8.
24
<PAGE>
EXHIBITS 5.1
OPINION AND CONSENT OF BROAD AND CASSEL
BROAD AND CASSEL
201 South Biscayne Boulevard
Suite 3000
Miami, Florida 33131
May 1, 2000
NHancement Technologies Inc.
6663 Owens Drive
Pleasanton, California 94588
Re: NHANCEMENT TECHNOLOGIES INC.
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
You have requested our opinion with respect to the shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), included
in the Registration Statement on Form S-8 (the "Form S-8") filed with the U.S.
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Securities Act").
As counsel to the Company, we have examined the original or certified
copies of such records of the Company, and such agreements, certificates of
public officials, certificates of officers or representatives of the Company and
others, and such other documents as we deem relevant and necessary for the
opinions expressed in this letter. In such examination, we have assumed the
genuineness of all signatures on original documents, and the conformity to
original documents of all copies submitted to us as conformed or photostatic
copies. As to various questions of fact material to such opinions, we have
relied upon statements or certificates of officials and representatives of the
Company and others.
Based on, and subject to the foregoing, we are of the opinion that the
shares of Common Stock being registered in the Form S-8 will, once issued as
contemplated under the Form S-8, shall have been duly and validly issued, and
shall be fully paid and non-assessable.
In rendering this opinion, we advise you that members of this Firm are
members of the Bar of the State of Florida, and we express no opinion herein
concerning the applicability or effect of any laws of any other jurisdiction,
except the securities laws of the United States of America referred to herein.
This opinion has been prepared and is to be construed in accordance
with the Report on Standards for Florida Opinions, dated April 8, 1991, as
amended and supplemented, issued by the Business Law Section of The Florida Bar
(the "Report"). The Report is incorporated by reference into this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Form S-8. In giving such consent, we do not thereby admit that we are included
within the category of persons whose consent is required under Section 7 of the
Securities Act, or the rules and regulations promulgated thereunder.
Very truly yours,
/s/ Broad and Cassel
BROAD AND CASSEL
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
NHancement Technologies Inc.
Pleasanton, California
We hereby consent to the incorporation by reference in the Reoffer Prospectus
constituting a part of this Registration Statement of our report dated December
14, 1999, relating to the consolidated financial statements and schedules of
NHancement Technologies Inc. appearing in the Company's Annual Report on Form
10-KSB for the year ended September 30, 1999.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
(Signed manually)
BDO SEIDMAN, LLP
San Francisco, California
May 1, 2000
