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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 9, 2001
REGISTRATION NO. 333-36466
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HEARME
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 94-3217317
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
685 CLYDE AVE.
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 429-3900
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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LINDA R. PALMOR
CHIEF FINANCIAL OFFICER
HEARME
685 CLYDE AVE.
MOUNTAIN VIEW, CALIFORNIA 94043
650-429-3900
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
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COPIES TO:
JEFFREY Y. SUTO
RICHARD CHISHOLM
VENTURE LAW GROUP
A PROFESSIONAL CORPORATION
2800 SAND HILL ROAD
MENLO PARK, CA 94025
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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 UNTIL APRIL 3, 2001
OR UNTIL SUCH EARLIER TIME THAT ALL OF THE SHARES REGISTERED
HEREUNDER HAVE BEEN SOLD.
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If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |X|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
---------------------------------------------------
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 SECTION 8(A), MAY
DETERMINE.
================================================================================
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PROSPECTUS DATED JANUARY 9, 2001
HEARME
4,532,544 SHARES OF COMMON STOCK
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" REFERENCED ON PAGE 5 IN
DETERMINING WHETHER TO PURCHASE THE HEARME COMMON STOCK.
-------------------------
These shares of common stock are being offered by certain selling
stockholders, identified in this prospectus. We issued the shares to the selling
stockholders in connection with the acquisition of AudioTalk Networks, Inc. in
April, 2000. The selling stockholders may sell these shares from time to time on
the over-the-counter market in regular brokerage transactions, in transactions
directly with market makers or in certain privately negotiated transactions. For
additional information on the methods of sale, you should refer to the section
entitled "Plan of Distribution" on page 10. We will not receive any portion of
the proceeds from the sale of these shares.
Each of the selling stockholders may be deemed to be an "Underwriter,"
as such term is defined in the Securities Act of 1933, as amended.
HearMe's common stock is quoted on the Nasdaq National Market under the
symbol "HEAR."
On January 8, 2001, the last sale price of the common stock on the
Nasdaq National Market was $0.5938 per share.
<TABLE>
<CAPTION>
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UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNTS AND COMMISSION SELLING STOCKHOLDERS
PUBLIC COMMISSIONS SHAREHOLDERS
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<S> <C> <C> <C>
Per Share.......................
Total........................... See Text Above See Text Above See Text Above
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</TABLE>
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THE PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is January 9, 2001
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TABLE OF CONTENTS
PAGE
----
ADDITIONAL INFORMATION AVAILABLE TO YOU.......................................3
THE COMPANY...................................................................4
RECENT DEVELOPMENTS...........................................................4
RISK FACTORS..................................................................5
USE OF PROCEEDS..............................................................10
ISSUANCE OF COMMON STOCK TO SELLING STOCKHOLDERS.............................10
PLAN OF DISTRIBUTION.........................................................10
SELLING STOCKHOLDERS.........................................................11
LEGAL MATTERS................................................................13
EXPERTS......................................................................13
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We have not authorized any dealer, salesperson or other person to give
any information or represent anything not contained in this prospectus. You
should not rely on any unauthorized information. This prospectus does not offer
to sell or buy any shares in any jurisdiction in which it is unlawful. The
information in this prospectus is current as of the date on the cover.
ADDITIONAL INFORMATION AVAILABLE TO YOU
This prospectus is part of a Registration Statement on Form S-3 that we
filed with the Securities and Exchange Commission. Certain information in the
Registration Statement has been omitted from this prospectus in accordance with
the rules of the SEC. We file the annual, quarterly and special reports, proxy
statements and other information with the SEC. You can inspect and copy the
Registration Statement as well as reports, proxy statements and other
information we have filed with the SEC at the public reference room maintained
by the SEC at 450 Fifth Street, NW, Washington, D.C. 20549, and at the following
Regional Offices of the SEC: Seven World Trade Center, New York, New York 10048,
and Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois 60661.
You can obtain copies from the public reference room of the SEC at 450 Fifth
Street, NW, Washington, D.C. 20549 upon payment of certain fees. You can call
the SEC at 1-800-732-0330 for further information about the public reference
room. We are also required to file electronic versions of these documents with
the SEC, which may be accessed through the SEC's World Wide Web site at
http://www.sec.gov. Our common stock is quoted on The Nasdaq National Market.
Reports, proxy and information statements and other information concerning
HearMe may be inspected at The Nasdaq Stock Market at 1735 K Street, NW,
Washington, D.C. 20006.
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THE COMPANY
We develop and license Voice over Internet Telephony, or VoIP,
application technology for business and personal communications applications. We
seek to empower our customers with next generation communications changing the
way people interact and companies do business. We provide a unique PC-to-phone
and PC-to-PC VoIP application platform that can be used in a number of different
business applications including customer relationship management and eCalling.
Our customer relationship management technology enables companies to
use live voice interaction to more efficiently and effectively handle customer
demands for information and assistance, providing increased productivity and
flexibility in communications. Our eCalling technology offers communications
providers the ability to provide enhanced and differentiated services to end
users, resulting in potential new revenue streams.
We were incorporated in Delaware under the name Amber Software, Inc.
and commenced operations in January 1995. We changed our name to Mpath
Interactive, Inc. in April 1995 and to HearMe in September 1999. The Company's
principal executive offices are located at 685 Clyde Avenue, Mountain View, CA
94043 and its telephone number is (650) 429-3900. As used in this prospectus,
the "Company" refers to HearMe, a Delaware corporation, and its wholly owned
subsidiaries.
RECENT DEVELOPMENTS
On December 20, 2000, we announced that we were divesting our Live
Communities/Mplayer business and restructuring our business plan to focus on our
VoIP technology licensing business. This divestiture is anticipated to be
completed during the first three months of fiscal 2001. The following risk
factors reflect our business after the divestiture has been completed.
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RISK FACTORS
WE HAVE A LIMITED OPERATING HISTORY MAKING IT DIFFICULT OR IMPOSSIBLE
FOR US TO PREDICT FUTURE RESULTS OF OPERATIONS.
We were founded in January 1995 and have a limited operating history.
We did not begin generating revenue from VoIP licensing until fiscal 2000. Due
to this limited operating history, it is difficult or impossible for us to
predict future results or operations. As a result, you should not expect future
revenue growth to be comparable to our recent revenue growth. We believe that
comparing different periods of our operating results is not meaningful, as you
should not rely on the results for any period as an indication of our future
performance. Some of the risks and difficulties that we face as an early stage
company in a new and rapidly evolving market include our:
o ability to increase demand for our products and services; and
o ability to develop and extend the HEARME brand.
We have had substantial losses since our inception and our operating
losses may increase in the future. Accordingly, we cannot assure you that we
will ever become or remain profitable.
WE HAVE HAD AN ACCUMULATED DEFICIT OF $135 MILLION AS OF SEPTEMBER 30,
2000 AND OUR HISTORY OF LOSSES MAY CONTINUE IN THE FUTURE.
We have had substantial losses since our inception and our operating
losses may increase in the future. If our revenues fail to grow at anticipated
rates, our operating expenses increase without a commensurate increase in our
revenues or we fail to adjust operating expense levels, accordingly, our
business, results of operations and financial condition will be adversely
affected. As of September 30, 2000, we had an accumulated deficit of $135
million.
We have not yet become profitable on a quarterly or annual basis and we
anticipate that we will continue to incur net losses for the foreseeable future.
The extent of these losses will be contingent, in part, on the amount of growth
in our revenues from technology licensing. We expect our operating expenses for
our technology licensing business to increase over time, especially in the areas
of engineering and sales and, as a result, we will need to generate increased
quarterly revenues to become profitable. Accordingly, we cannot assure you that
we will ever become or remain profitable.
WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT FUNDS TO GROW OUR BUSINESS.
We intend to continue to grow our business. Due to our limited
operating history and the nature of our industry, our future capital needs are
difficult to predict. Therefore, we may require additional capital to fund
unanticipated opportunities, strategic alliances, potential acquisitions,
changing business conditions, or unanticipated competitive pressures. Obtaining
additional financing will be subject to a number of factors, including market
conditions, our operating performance and investor sentiment. These factors may
make the timing, amount, terms and conditions of additional financings
unattractive to us. If we are unable to raise additional capital, our growth
could be impeded.
REVENUES FROM LICENSING OUR VOICE OVER INTERNET PROTOCOL TECHNOLOGY
HAVE ACCOUNTED FOR A MINIMAL PORTION OF OUR REVENUES TO DATE.
Historically, we have received most of our revenues from sales and
license agreements for products other our Voice over Internet Protocol
Technology. Therefore, the move away from these other revenue sources could have
a material adverse effect on our revenues and quarterly results of operations.
We believe that a customer's decision to license our technology is relatively
discretionary and, for large-scale users, often involves a significant long-term
commitment of resources.
Our customers often take a long time to evaluate our products and
services and many people are involved in the sales process. The long sales and
implementation cycles for our products and services and the timing of these
sales may cause license and service revenues and operating results to vary
significantly from period to period. We spend a lot of time educating and
providing information to our prospective customers regarding the use and
benefits of our products and services. Even after deciding to license our
products, our customers tend to deploy our products slowly and deliberately
depending on the expertise of the customer, the size of deployment, the
complexity of the
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customer's system architecture, the quantity of hardware and software involved
and the degree of hardware and software integration necessary to deploy our
products.
WE DEVELOP, MARKET AND SELL PRODUCTS FOR EMERGING MARKETS, MAKING IT
DIFFICULT OR IMPOSSIBLE FOR US TO PREDICT FUTURE RESULTS OF OPERATIONS AND
REQUIRING US TO ENGAGE IN NON-REVENUE GENERATING MARKET DEVELOPMENT ACTIVITIES.
Following the divestiture of our Live Communities/Mplayer division, we
now focus on the emerging market for VoIP technology. This market is emerging
and it is unclear how long it will take for this market to develop and it is
unclear whether this will ever become a large market. If potential customers do
not purchase our Software platforms or VoIP Applications, our business, results
of operations and financial condition will be adversely affected. In addition,
we may have to invest in market development activities, requiring us to work
with potential customers to educate them about the potential benefit of our
Software platforms and VoIP Applications. These market development activities do
not generate revenue and may not ever lead to sales and revenue generation for
us.
IF THE INTERNET DOES NOT CONTINUE TO GROW AS A MEDIUM FOR VOICE
COMMUNICATIONS, OUR BUSINESS WILL SUFFER.
The technology that allows voice communications over the Internet is
still in its early stages of development. Historically, the sound quality of
Internet calls was poor. As the industry has grown, sound quality has improved,
but the technology requires additional refinement. Additionally, the Internet's
capacity constraints may impede the acceptance of Internet telephony. Callers
could experience delays, errors in transmissions or other interruptions in
service. Making telephone calls over the Internet must also be accepted as an
alternative to traditional telephone service. Because the Internet telephony
market is new and evolving, predicting the size of this market and its growth
rate is difficult. If our market fails to develop, then we will be unable to
grow our customer base and our opportunity for profitability will be harmed.
WE DEVELOP TECHNOLOGY AND PRODUCTS FOR CUSTOMERS WHO ARE CURRENTLY
EXPERIENCING ECONOMIC HARDSHIP IN THEIR OWN BUSINESSES WHICH MAY IMPACT THEIR
DECISION TO PURCHASE OUR PRODUCTS AND TECHNOLOGY
We market and sell our Software platforms and VoIP Applications to
customers in the telecommunications industry. This industry is currently
experiencing a downturn as evidenced by the many companies in this sector that
have announced lower profit expectations for the fourth quarter of 2000. This
market downturn may result in our potential customers taking more time to make
purchase decisions. If potential customers delay, postpone or cancel their
decisions to purchase VoIP Software Platforms and Applications, our business,
results of operations and financial condition will be adversely affected.
WE DEVELOP PRODUCTS FOR A HIGHLY FRAGMENTED MARKET WITH THE POTENTIAL
FOR SIGNIFICANT COMPETITION FROM MUCH LARGER COMPANIES WITH SIGNIFICANTLY MORE
ECONOMIC RESOURCES THAN WE HAVE.
We develop and market VoIP Software Platforms and Applications for an
emerging market. The potential for competition in this market from large
companies in the telecommunications services and telecommunications equipment
industry is significant. If these large companies develop competing products or
if these large companies develop alternate substitute products to our VoIP
Software Platforms and Applications, our business, results of operations and
financial condition will be adversely affected.
YOU SHOULD NOT RELY ON OUR QUARTERLY OPERATING RESULTS AS AN INDICATION
OF OUR FUTURE PERFORMANCE BECAUSE OUR RESULTS OF OPERATIONS ARE SUBJECT TO
SIGNIFICANT FLUCTUATIONS.
Our quarterly operating results may fluctuate significantly in the
future as a result of a variety of factors, many of which are outside of our
control. These fluctuations make it difficult to predict our financial
performance and may adversely affect the trading price of our common stock.
These factors include:
o demand for and market acceptance of our products and services;
o budgeting cycles of customers;
o amount and timing of capital expenditures by our customers and other
costs relating to the expansion of our operations and future
acquisitions;
o engineering or development fees that we may pay for enhancements to
our products; and
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o general economic conditions.
As a strategic response to changes in the competitive environment, we
may from time to time make certain pricing, service or marketing decisions or
business combinations that could have a material adverse effect on our business,
results of operations and financial condition.
Due to our relatively short operating history in the VoIP industry, we
have limited meaningful historical financial data upon which to base our planned
operating expenses. Accordingly, our expense levels are based in part on our
expectations as to future revenues from software licensing fees and any
consulting fees which we may generate. We cannot be certain that we will be able
to accurately predict our revenues, particularly in light of the emerging nature
of the VoIP market, our limited operating history and the uncertainty as to the
broad acceptance of the Web as a medium for voice traffic.
WE DEPEND HEAVILY ON OUR STRATEGIC PARTNERS AND OUR BUSINESS WILL BE
MATERIALLY AFFECTED IF ANY STRATEGIC PARTNER DISCONTINUES ITS RELATIONSHIP FOR
ANY REASON.
Although we view our strategic relationships with networking companies,
service providers, system integrators and other technology companies as a key
factor in our overall business strategy, we cannot be certain that we will be
successful in developing new strategic relationships or that our strategic
partners will view such relationships as significant to their own business or
that they will continue their commitment to us in the future. Our business,
results of operations and financial condition and our stock price may be
materially adversely affected if any strategic partner discontinues its
relationship with us for any reason. Additionally, any party to a strategic
agreement with us may fail to perform its contractual obligations and we cannot
be certain that we could enforce any such agreement. We do not generally
establish minimum performance requirements for our strategic partners but
instead rely on their voluntary efforts. In addition, most of these agreements
may be terminated by either party with little notice. Therefore, we cannot be
certain that these relationships will be successful.
ANY ACQUISITIONS WE MAKE COULD RESULT IN DILUTION, UNFAVORABLE
ACCOUNTING CHARGES AND DIFFICULTIES IN MANAGING SUCCESSFULLY OUR BUSINESS.
As part of our business strategy, we review acquisition prospects that
would complement our existing business or enhance our technological
capabilities. We have engaged in acquisitions in the past and expect to continue
to do so in the future. Future acquisitions by us could result in potentially
dilutive issuances of equity securities, large and immediate write-offs, the
incurrence of debt and contingent liabilities or amortization expenses related
to goodwill and other intangible assets, any of which could materially and
adversely affect our results of operations. Furthermore, acquisitions entail
numerous risks and uncertainties, including:
o difficulties in the assimilation of operations, personnel,
technologies, products and the information systems of the acquired
companies;
o diversion of management's attention from other business concerns;
o risks of entering geographic and business markets in which we have no
or limited prior experience and
o potential loss of key employees and customers of acquired
organizations.
Other risks associated with acquisitions include those relating to the
correct assessment of the relative percentages of in-process research and
development expense which can be immediately written off as compared to the
amount which must be amortized over the appropriate life of the asset, the
failure to successfully develop and integrate acquired in-process technology
resulting in the impairment of amounts capitalized as intangible assets,
unanticipated expenses related to technology integration and the maintenance of
uniform standards, controls, procedures and policies. We may not be successful
in addressing these risks or any other problems encountered with such
acquisitions.
WE DEVELOP AND MARKET COMMUNICATIONS PRODUCTS FOR CUSTOMERS THAT ARE
SUBJECT TO REGULATION
Some of our communications products customers are subject to varying
degrees of federal, state and local regulation. The jurisdiction of the Federal
Communications Commission ("FCC") extends to the communications industry,
including broadband access. Although FCC regulations and other governmental
regulations have not
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impacted our operations to date, there can be no assurance that future
regulations adopted by the FCC or other regulatory bodies will not have a
material impact in the future.
INDUSTRY STANDARDS FOR THE VOICE OVER INTERNET TELEPHONY TECHNOLOGY ARE
EVOLVING AND IF THE STANDARDS WERE TO DEVIATE FROM THOSE USED IN OUR PRODUCTS,
OUR SALES WILL SUFFER.
Our products are based upon industry standards which are currently
evolving, including Session Initiation Protocol ("SIP") and H.323. Our success
depends in part upon the adoption of these industry standards by potential
customers and partners in the eCRM and eCalling markets. There can be no
assurance that this adoption will occur and if this adoption does not occur our
operating and financial results may be materially adversely affected. In
addition, there can be no assurance that other protocols may evolve as accepted
standards and that we are successful in migrating our products to be compatible
with these new standards. If this occurs, our business, operating results and
financial condition would be materially adversely affected.
WE MAY NOT BE ABLE TO PROTECT AGAINST OR RESPOND IN AN APPROPRIATE
MANNER TO UNAUTHORIZED ACCESS, COMPUTER VIRUSES AND OTHER DISRUPTION PROBLEMS
Despite the implementation of security measures, our networks may be
vulnerable to unauthorized and illegal access, computer viruses and other
disruptive problems. Eliminating computer viruses and alleviating other security
problems may require interruptions, delays or cessation of service to our
customers, which could have a material adverse effect on our business, results
of operations and financial condition. A party who is able to circumvent
security measures could misappropriate proprietary information or cause
interruptions in our Internet operations. Internet service providers and online
service providers have in the past experienced and may in the future experience,
interruptions in service as a result of the accidental or intentional actions of
Internet users, current and former employees or others. We may be required to
expend significant capital or other resources to protect against the threat of
security breaches or to alleviate problems caused by breaches. Although we
intend to continue to implement industry-standard security measures, we cannot
be certain that measures implemented by us will not be circumvented in the
future.
OUR PRODUCTS ARE NEW AND FACE RAPID TECHNOLOGICAL CHANGES, AND IF WE DO
NOT RESPOND APPROPRIATELY, WE WOULD BE ADVERSELY AFFECTED
Our future success depends upon our ability to enhance our current
products and services and to develop and introduce new products and services
that will achieve market acceptance in the emerging eCRM and eCalling markets.
If we do not adequately respond to the need to develop and introduce new
products or services, then our business, operating results and financial
condition will be adversely affected.
The market for our products is characterized by:
o rapid technological advances,
o evolving standards in the Internet, communications and software
markets,
o changes in customer requirements and
o frequent new product and service introductions and enhancements.
We cannot be certain that we will be successful at integrating new
technology into our HearMe Technology Products on a timely basis. In addition,
the integration of new technology may degrade the responsiveness and speed of
our HearMe Technology Products and we cannot be certain that, once integrated,
the new technology will function as expected. Major product enhancements and new
products and services often require long development and testing periods to
achieve market acceptance. In addition, our software products are complex and,
despite vigorous testing and quality control procedures, may contain undetected
errors or "bugs" when first introduced or updated. Any inability to timely
deliver quality products and services could have a material adverse effect on
our business, results of operations and financial condition.
WE WILL INCREASINGLY DEPEND ON OTHERS TO PROPERLY DISTRIBUTE OUR HEARME
TECHNOLOGY PRODUCTS AND SERVICES.
We currently sell the vast majority of our HearMe Technology Products
and services through our internal sales staff. If demand for our products and
services increases, however, we will need to enter into reseller
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arrangements with service providers, system integrators, enterprise applications
resellers and OEM partners to distribute our products and technologies. If we do
not adequately develop and maintain a network of resellers and OEMs, our
business, results of operations and financial condition could be adversely
impacted. Resellers and OEMs frequently have exclusive sales territories
pursuant to individually negotiated contracts, which may limit our ability to
build and expand our network of resellers and OEMs. In addition, some resellers
and OEMs may offer products of one or more of our competitors and they may
emphasize our competitors' products at the expense of our products.
SOME OF THE PROVISIONS OF OUR CHARTER DOCUMENTS MAY HAVE ANTI-TAKEOVER
EFFECTS THAT COULD PREVENT A CHANGE IN OUR CONTROL
Some of the provisions of our Amended and Restated Certificate of
Incorporation and bylaws could make it more difficult for a third party to
acquire us, even if a change of control would be beneficial to our stockholders.
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USE OF PROCEEDS
The proceeds from the sale of the common stock offered pursuant to this
prospectus (the "Shares") are solely for the account of the selling
stockholders. Accordingly, the Company will not receive any proceeds from the
sale of the Shares from the selling stockholders.
ISSUANCE OF COMMON STOCK TO STOCKHOLDERS
On April 3, 2000, the Company issued an aggregate of 4,520,327 shares
of common stock to the stockholders of AudioTalk Networks, Inc. ("AudioTalk"),
285,384 shares of common stock in the form of assuming outstanding AudioTalk
options and 12,217 shares issued upon the exercise of options since April 3,
2000 pursuant to an Agreement and Plan of Merger (the "Merger Agreement") among
the Company, AT Acquisition Corporation, a Delaware corporation and wholly-owned
subsidiary of the Company (the "Sub"), and AudioTalk. Under the terms of the
Merger Agreement, Sub merged into AudioTalk and AudioTalk became a wholly-owned
subsidiary of the Company (the "Merger").
PLAN OF DISTRIBUTION
Shares of common stock covered hereby may be offered and sold from time
to time by the selling stockholders. The selling stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The selling stockholders may sell the Shares being
offered hereby: (i) on The Nasdaq National Market, or otherwise at prices and at
terms then prevailing or at prices related to the then current market price; or
(ii) in private sales at negotiated prices directly or through a broker or
brokers, who may act as agent or as principal or by a combination of such
methods of sale. The selling stockholders and any underwriter, dealer or agent
who participate in the distribution of such shares may be deemed to be
"underwriters" under the Securities Act, and any discount, commission or
concession received by such persons might be deemed to be an underwriting
discount or commission under the Securities Act. The Company has agreed to
indemnify the selling stockholders against certain liabilities arising under the
Securities Act.
Any broker-dealer participating in such transactions as agent may
receive commissions from the selling stockholders (and, if acting as agent for
the purchaser of such shares, from such purchaser). Usual and customary
brokerage fees will be paid by the selling stockholders. Broker-dealers may
agree with the selling stockholders to sell a specified number of shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable to
do so acting as agent for the selling stockholders, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
the selling stockholders. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or by a
combination of such methods of sale or otherwise at market prices prevailing at
the time of sale or at negotiated prices, and in connection with such resales
may pay to or receive from the purchasers of such shares commissions computed as
described above.
The Company has advised the selling stockholders that the
anti-manipulation rules under the Exchange Act may apply to sales of Shares in
the market and to the activities of the selling stockholders and their
affiliates. The selling stockholders have advised the Company that during such
time as the selling stockholders may be engaged in the attempt to sell shares
registered hereunder, they will: (i) not engage in any stabilization activity in
connection with any of the Company's securities; (ii) not bid for or purchase
any of the Company's securities or any rights to acquire the Company's
securities, or attempt to induce any person to purchase any of the Company's
securities or rights to acquire the Company's securities other than as permitted
under the Exchange Act; (iii) not effect any sale or distribution of the Shares
until after the prospectus shall have been appropriately amended or
supplemented, if required, to set forth the terms thereof; and (iv) effect all
sales of Shares in broker's transactions through broker-dealers acting as
agents, in transactions directly with market makers, or in privately negotiated
transaction where no broker or other third party (other than the purchaser) is
involved.
The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such
broker-dealers, and any profits received on the resale of such shares, may be
deemed to be underwriting discounts and commissions under the Securities Act if
any such broker-dealers purchase shares as principal.
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In order to comply with the securities laws of certain states, if
applicable, the Company's common stock will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states, the common stock may not be sold unless such shares have been registered
or qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.
We have advised the Selling Stockholders that the anti-manipulation
rules under Regulation M of the Exchange Act may apply to sales of the Shares in
the market. The Selling Stockholders may also be subject to trading windows
imposed by the Company.
The Company has agreed to use its best efforts to maintain the
effectiveness of this Registration Statement with respect to the shares of
common stock offered hereunder by the selling stockholders until the earlier of
the sale of such shares or April 3, 2001. No sales may be made pursuant to this
prospectus after such date unless the Company amends or supplements this
prospectus to indicate that it has agreed to extend such period of
effectiveness. There can be no assurance that the selling stockholders will sell
all or any of the shares of common stock offered hereunder.
SELLING STOCKHOLDERS
All of the Common Shares registered for sale pursuant to this
Prospectus will be owned immediately after registration by the Selling
Stockholders as the former stockholders of AudioTalk and all of the shares
offered by the Selling Stockholders were acquired in connection with the Merger.
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's common stock as of April
26, 2000 by each selling shareholder. The following table assumes that the
selling stockholders sell all of the Shares. The Company is unable to determine
the exact number of Shares that actually will be sold.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO THE OFFERING SHARES AFTER THE OFFERING(1)
--------------------- OFFERED BY ---------------------
SELLING STOCKHOLDERS SHARES PERCENT(2) THIS PROSPECTUS SHARES PERCENT(2)
--------------------- ------ ------- --------------- ------ -------
<S> <C> <C> <C> <C> <C>
Paul Bock 7,315 * 7,315 0 *
Kevin L. Cheek 11,704 * 11,704 0 *
James Chu 11,704 * 11,704 0 *
John Chu 17,556 * 17,556 0 *
Corey Gates(3) 314,266 1.1% 314,266 0 *
CTI Limited 957,832 3.3% 957,832 0 *
Devadas Varma, Trustee of the * 0 *
Varma Family Trust under Agr.
Dated
November 20, 1998 43,890 43,890
Virgil Dobjanschi 328,896 1.1% 328,896
Frank Chu (4) 526,231 1.8% 526,231 0 *
Gene Choy (5) 70,847 * 70,847 0 *
Barjinderpal S. Gill 58,520 * 58,520 0 *
Weibing Hung 7,315 * 7,315 0 *
Katherine Kwan 87,767 * 87,767 0 *
Shi-Wei Chu and Sho-Mei Chu 29,260 * 29,260 0 *
Douglas W. Tsui 171,168 * 171,168 0 *
Ho Man-Ling 73,150 * 73,150 0 *
Rong Kuo Wei 43,890 * 43,890 0 *
WQ Investments LLC 14,630 * 14,630 0 *
Angel (Q) Investors II, L.P. 156,775 * 156,775 0 *
BelAir Internet Partners 31,355 * 31,355 0 *
Jerry Chen 62,710 * 62,710 0 *
Chiu Living Trust dtd 12-2/86 9,406 * 9,406 0 *
Chiu Living Trust dtd 12-2-87 9,406 * 9,406 0 *
Craig and Suzanne McHugh 31,355 * 31,355 0 *
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO THE OFFERING SHARES AFTER THE OFFERING(1)
--------------------- OFFERED BY ---------------------
SELLING STOCKHOLDERS SHARES PERCENT(2) THIS PROSPECTUS SHARES PERCENT(2)
--------------------- ------ ------- --------------- ------ -------
<S> <C> <C> <C> <C> <C>
David C. Weng and Jessie F. Weng 31,355 * 31,355 0 *
Living Trust dtd 6/14/96
Evoke Incorporated 313,551 1.1% 313,551 0 *
Avraham Freedman 15,677 * 15,677 0 *
Tony Huang 7,838 * 7,838 0 *
Julia Yeh & Chin Cho Lee JT WROS 31,355 * 31,355 0 *
Mark Kaleem 31,355 * 31,355 0 *
Warren Kaplan 31,355 * 31,355 0 *
Mark M. Lee 6,271 * 6,271 0 *
Leow, M.D., F.R.C.S. Chon Kar 313,551 1.1% 313,551 0 *
1999 Mannan H. and Margaret A. 15,677 * 15,677 0 *
Latif Revocable Trust
Pacific Line Investment, Ltd. 31,355 * 31,355 0 *
The Lo Family Trust dtd 11-22-99 7,838 * 7,838 0 *
Erika Rottenberg 4,703 * 4,703 0 *
Sibayan and Associates 31,355 * 31,355 0 *
Paul Steiner 7,838 * 7,838 0 *
Roger R. Su 7,838 * 7,838 0 *
The Au Revocabe Trust dtd 9-8-99 31,355 * 31,355 0 *
Kwok Lung Matthew Tong 62,710 * 62,710 0 *
Luen Wuu Wey 25,084 * 25,084 0 *
Eddie Brayman 16,299 * 16,299 0 *
Scott Brear 13,582 * 13,582 0 *
Chuck Chan 13,582 * 13,582 0 *
Bing Chen 8,149 * 8,149 0 *
Michael Chiu 8,149 * 8,149 0 *
Kingston Choy 13,582 * 13,582 0 *
Herb Dessling 717 * 717 0 8
Aruna Erra 8,149 * 8,149 0 *
Dennis Fernandez 5,975 * 5,975 0 *
Anthony Hayter 8,149 * 8,149 0 *
Charles Herrera 21,732 * 21,732 0 *
Mike Hewitt 62,480 * 62,480 0 *
Joseph Ng and Mo-Lan Chan as JT 2,797 * 2,797 0 *
Peng Kiat Phneah 2,987 * 2,987 0 *
Naia Kuhn 2,538 * 2,538 0 *
Bruce Kwan 19,015 * 19,015 0 *
Lawrence Kwan 2,172 * 2,172 0 *
C. Hock Leow 19,015 * 19,015 0 *
Sohail Mallick 1,628 * 1,628 0 *
Diana Medina 8,149 * 8,149 0 *
Lily Miao 9,507 * 9,507 0 *
Mathew Mickllin 13,582 * 13,582 0 *
Shane Moore 2,716 * 2,716 0 *
Shelley Prill 10,865 * 10,865 0 *
RFWK Distribution Partners 3,803 * 3,803 0 *
Tim Riley 54,330 * 54,330 0 *
David Roberts 15,756 * 15,756 0 *
Bren Smith 12,224 * 12,224 0 *
William Tai 9,507 * 9,507 0 *
Ketan Tantod 4,074 * 4,074 0 *
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO THE OFFERING SHARES AFTER THE OFFERING(1)
--------------------- OFFERED BY ---------------------
SELLING STOCKHOLDERS SHARES PERCENT(2) THIS PROSPECTUS SHARES PERCENT(2)
--------------------- ------ ------- --------------- ------ -------
<S> <C> <C> <C> <C> <C>
Kulin Tantod 19,015 * 19,015 0 *
Michelle Varno 13,582 * 13,582 0 *
Michael Wehle 20,374 * 20,374 0 *
Dan Wright 15,280 * 15,280 0 *
Kyle Yoshida 4,074 * 4,074 0 *
-----------------
</TABLE>
* Less than 1%.
(1) Assumes that each Selling Shareholder will sell all of the
Shares set forth under "Shares Offered." There can be no assurance that
the Selling Stockholders will sell all or any of the Shares offered
hereunder.
(2) Based on 29,206,986 shares outstanding at January 4, 2001.
(3) Includes 14,630 shares held by Mr. Gates and his wife.
(4) Includes 74,197 shares held by Mr. Chu and his wife and 4,346 shares
held in trust for Mr. Chu's children.
(5) Includes 29,260 shares held by Mr. Choy and his wife.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon by Venture Law Group, A Professional Corporation, Menlo Park,
California, counsel to the Company. Employees of Venture Law Group own 11,130
shares of Common Stock.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1999 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accountancy.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant will bear no expenses in connection with any sale or
other distribution by the selling stockholders of the shares being registered
other than the expenses of preparation and distribution of this Registration
Statement and the prospectus included in this Registration Statement. Such
expenses are set forth in the following table. All of the amounts shown are
estimates except the Securities and Exchange Commission ("SEC") registration fee
and the NASD listing fee.
SEC registration fee $9,000
Legal fees and expenses $15,000
Accounting fees and expenses $2,000
NASD listing fee $17,500
Miscellaneous expenses $5,000
Total $48,500
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit indemnification under
specific circumstances for liabilities including reimbursement for expenses
incurred arising under the Securities Act. Article X of Registrant's Certificate
of Incorporation and Article VII, Section 6 of Registrant's Bylaws provide for
indemnification of Registrant's directors, officers, employees and other agents
to the maximum extent permitted by Delaware law. In addition, Registrant has
entered into indemnification agreements (Exhibit 10.1) with its officers and
directors.
Item 16. EXHIBITS.
EXHIBITS.
--------
5.1 Opinion of Venture Law Group, A Professional Corporation
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants (see page II-4)
23.2 Consent of Venture Law Group, A Professional Corporation
(included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
Item 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement to include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each 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 this offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement
relating to
II-1
<PAGE>
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities 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, as amended,
HearMe certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, on January 9, 2001.
HEARME
By: /S/ LINDA PALMOR
--------------------------------------------------
Linda Palmor
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- -----
<S> <C> <C>
/S/ * Director and Chief Executive Officer January 9, 2001
------------------------------------ (Principal Executive Officer)
Robert Csongor
/S/ * Chief Financial Officer (Principal January 9, 2001
------------------------------------ Financial and Accounting Officer)
Linda Palmor
/S/ * Director January 9, 2001
------------------------------------
Brian A. Apgar
/S/ * Director January 9, 2001
------------------------------------
David A. Brown
/S/ * Director January 9, 2001
------------------------------------
Paul Matteucci
/S/ * Director January 9, 2001
------------------------------------
William McCall
/S/ * Director January 9, 2001
------------------------------------
Jeremy Verba
By: /S/ LINDA PALMOR
---------------------------------
Linda Palmor
Attorney-in-fact
</TABLE>
II-3
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated January 21, 2000 relating
to the financial statements, which appears in HearMe's Annual Report on Form
10-K for the year ended December 31, 1999. We also consent to the incorporation
by reference of our report dated January 21, 2000 relating to the financial
statement schedules, which appears in such Annual Report on Form 10-K. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers LLP
------------------------------
San Jose, California
January 9, 2001
II-4
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
5.1 Opinion of Venture Law Group, A Professional
Corporation
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants (see page II-4)
23.2 Consent of Venture Law Group, A Professional
Corporation (included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
II-5
