<PAGE> 1
As filed with the Securities and Exchange Commission on July 7, 1998
Registration No. 333-52679
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VOICE CONTROL SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1707970
(State of incorporation) (I.R.S. employer identification number)
14140 Midway Road
Suite 100
Dallas, Texas 75244
972-726-1200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Peter J. Foster
President and Chief Executive Officer
Voice Control Systems, Inc.
14140 Midway Road, Suite 100
Dallas, Texas 75244
972-726-1200
(Name, address including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Bruce H. Hallett
Crouch & Hallett, L.L.P.
717 N. Harwood St., Suite 1400
Dallas, Texas 75201
214-953-0053
Approximate date of commencement of proposed sale to the public: As
soon as practicable upon the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to a dividend or interest reinvestment plans, please check the
following box. [ ]
<PAGE> 2
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
(1) Estimated solely for purposes of calculating the amount of the
registration fee pursuant to the provisions of Rule 457(c) under the Securities
Act of 1933, as amended, based on the average of the high and low prices of the
registrant's common stock as reported on the Nasdaq National Market on May 11,
1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 3
Subject to Completion, dated July 7, 1998
2,120,920 Shares
VOICE CONTROL SYSTEMS, INC.
COMMON STOCK
The 2,120,920 shares (the "Shares") of Common Stock, $.01 par value
(the "Common Stock"), of Voice Control Systems, Inc., a Delaware corporation
(the Company"), offered hereby are being sold by the Selling Stockholders. See
"Selling Stockholders." The Company will not receive any of the proceeds from
the sale of the Shares offered hereby.
The Shares may be offered by the Selling Stockholders from time to time
in open market transactions (which may include block transactions) or otherwise
on the Nasdaq National Market at prices relating to prevailing market prices or
at negotiated prices. The Selling Stockholders may effect such transactions by
selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders and/or purchasers of the Shares for whom such
broker-dealers may act as agent or to whom they sell as principal or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions). The Selling Stockholders and any broker-dealer acting in
connection with the sale of the Shares offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Act"), in which event any discounts, concessions or commissions received by
them, which are not expected to exceed those customary in the types of
transactions involved, or any profit on resales of the Shares by them, may be
deemed to be underwriting commissions or discounts under the Act. See "Selling
Stockholders."
The costs, expenses and fees incurred in connection with the
registration of the Shares, which are estimated to be $12,000 (excluding selling
commissions and brokerage fees incurred by the Selling Stockholders), will be
paid by the Company.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 HEREOF FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY POTENTIAL PURCHASERS OF THE COMMON
STOCK.
The last reported sale price of the Common Stock on the Nasdaq National
Market on July 1, 1998 was $3.25 per share.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------------
The date of this Prospectus is July 7, 1998.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information concerning
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at its offices at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. In addition, such material can be inspected at the offices of the Nasdaq
Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Reports, proxy statements and other information concerning the Company
can also be obtained electronically through a variety of databases, including
among others, the Commission's Electronic Data Gathering, Analysis And Retrieval
("EDGAR") program, Knight-Ridder Information, Inc., Federal Filings/Dow Jones
and Lexis/Nexis. Additionally, the Commission maintains a Website (at
http://www.sec.gov) that contains such information regarding the Company.
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") with the Commission under the Act with respect to the
Shares. As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information, exhibits, and undertakings contained in
the Registration Statement. Reference is made to the Registration Statement and
to the exhibits thereto for further information, which may be inspected without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C., and copies of which may be obtained from the Commission at prescribed
rates. Statements contained in this Prospectus or in any document incorporated
by reference in this Prospectus relating to the contents of any contract or
other document referred to herein or therein are not necessarily complete and,
in each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or such other document. Each such
statement is qualified in its entirety by such reference.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1997; and
2. The Company's quarterly report on Form 10-QSB for the quarter
ended March 31, 1998; and
3. The description of the Company's Common Stock which is contained
in the Company's latest registration statement filed under the 1934 Act,
including any amendments or reports filed for the purpose of updating such
description.
4. The Company's Report on Form 8-K filed April 28, 1998 reporting
the completion of the merger of the Company and PureSpeech, Inc.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the termination of the
offering of the shares of Common Stock hereunder shall be deemed to be
incorporated herein by reference and shall be a part hereof from the date of the
filing of such documents. Any statements contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
replaced for purposes of this Prospectus to the extent that a statement
contained herein or in any other
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<PAGE> 5
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or replaces such statement. Any such statement so
modified or replaced shall not be deemed, except as so modified or replaced, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of the documents incorporated by reference
herein, other than exhibits to such documents not specifically incorporated by
reference. Such requests should be directed to Voice Control Systems, Inc.,
14140 Midway Road, Suite 100, Dallas, Texas 75244, Attention: Investor Relations
(telephone (972) 726-1200).
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<PAGE> 6
RISK FACTORS
Statements and information presented within this Prospectus contain
"forward-looking statements" within the meaning of Section 21E of the 1934 Act.
These forward-looking statements can be identified by the use of predictive,
future-tense or forward-looking terminology, such as "believes," "anticipates,"
"expects," "estimates," "may," "will" or similar terms. Forward-looking
statements also include projections of financial performance, statements
regarding management's plans and objectives and statements concerning any
assumptions relating to the foregoing. Such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
set forth in or implied by forward-looking statements. Factors that could cause
or contribute to such differences include those discussed below, as well as
those discussed elsewhere in this Prospectus. ln addition to the other
information contained and incorporated by reference in this Prospectus, the
following risk factors should be considered carefully in evaluating the Company
and its business before purchasing the Shares offered hereby.
HISTORY OF LOSSES
The Company has recorded cumulative losses of approximately $19.1
million through December 31, 1997. These losses reflect the results of
operations of VCS Industries, Inc. ("Industries") prior to its merger (the
"Scott Merger") with and into Scott Instruments Corporation ("Scott"); whereupon
Scott changed its name to the current company name of "Voice Control Systems,
Inc"), losses incurred by the Company after the Scott Merger; and losses
incurred by Voice Processing Corporation "VPC" prior to the merger. In addition,
Industries' predecessors incurred losses. While the Company was profitable for
the quarter ended December 31, 1997, there can be no assurance that the Company
will continue to generate profits.
INTEGRATION OF PURESPEECH OPERATIONS
On April 14, 1998, PureSpeech, Inc. ("PureSpeech") was acquired by the
Company in a merger (the "PureSpeech Merger"). The Company anticipates benefits
to be obtained as a result of the PureSpeech Merger, including the addition of
technology and products that are compatible, both strategically and technically,
with the Company's current products, the addition of significant technical and
management support for the Company's operations and a substantial increase in
the size and market capitalization of the Company with its related competitive
benefits. There can be, however, no assurance that the Company will be able to
achieve the anticipated level of benefits expected as a result of the PureSpeech
Merger or that any benefits, even if obtained, will be achieved within a period
of time currently anticipated by the Company's management.
The integration of PureSpeech into the Company will require dedication
of significant management resources in coordinating the product development and
distribution of the Company and PureSpeech products in order to realize the
anticipated benefits of the PureSpeech Merger. The dedication of these
management resources may temporarily detract from attention to the day-to-day
business of the Company. There can be no assurance that the Company or the
operations acquired from PureSpeech will be able to sustain its historical
levels of performance, whether due to internal factors or as a result of
increased competition.
RELIANCE ON MAJOR CUSTOMER
The Company is dependent to a significant extent on sales through OEMs.
Dialogic Corporation ("Dialogic"), a leading supplier of components for
building, assembling and programming voice processing systems, accounted for 29%
and 25% of the Company's revenues in 1997 and 1996, respectively.
4
<PAGE> 7
DIALOGIC RELATIONSHIP - SHIFT TO OPEN ARCHITECTURE; SIGNIFICANT STOCKHOLDER
Prior to 1995, the Company technology was the only speech recognition
technology sold by Dialogic. In 1995, Dialogic began commercial distribution of
a new open architecture platform, Antares, for use in its SCSA product line. The
Company's Antares Software is currently in production for six computer operating
systems and in beta test for certain other computer operating systems. The
Company is developing support for additional operating systems. The Antares
platform supports several capabilities including speech recognition, thereby
making the speech recognition technology of the Company's competitors available
as an alternative to the Company's technology in systems using the SCSA
architecture. In addition, under the new architecture, the Company's sales to
Dialogic are expected to shift over time from predominantly hardware to
predominantly software. Moreover, customers may delay purchasing the Company
products from Dialogic until they are able to purchase a Dialogic SCSA product
incorporating the Company technology that meets their needs. These factors may
negatively impact the Company's sales and profitability through the Dialogic
distribution channel.
In addition, through a wholly owned subsidiary, Dialogic beneficially
owns approximately 12% of the Company Common Stock, as of December 31, 1997. As
a result of these relationships, Dialogic has the ability to influence the
business and affairs of the Company and to otherwise affect the outcome of
certain actions that require stockholder approval, including the adoption of
amendments to the Company's Certificate of Incorporation, mergers, sales of
assets and other business acquisitions or dispositions.
DEVELOPMENT OF MARKETS REQUIRED FOR SUCCESSFUL PERFORMANCE BY THE COMPANY
The market for speech recognition is relatively new. The financial
performance of the company will depend, in part, on the future development,
growth, and ultimate size of this market. The Company's speech recognition
products compete with more conventional means of information processing (e.g.,
data entry or access by keyboard or touch-tone phone). There can be no assurance
that the market for the Company's current or future products will develop, that
its technology will find general acceptance in the marketplace, or that sales of
its products will be profitable to the Company.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company's sales and profitability may vary significantly from
quarter to quarter due to a variety of factors, including the Company's
dependence upon a small number of customers, timing of customer orders, and
changes in the Company's product and customer mix. The Company typically
operates with relatively little backlog and substantially all of its revenues in
each quarter results from orders and royalty payments received in that quarter.
DEPENDENCE ON SALES BY THIRD PARTIES
The Company's revenues are dependent upon the ability of systems
integrators and OEMs to develop and sell systems that incorporate the Company's
technology, because the Company generally does not sell its technology directly
to end users. Factors that adversely affect the revenues of the Company's OEM
and systems integrator customers, such as economic conditions, patent positions,
their technology and other marketing restrictions, may have a substantial impact
upon the Company's financial results. No assurances can be given that the
Company's OEM and systems integrator customers will continue to use the Company
as a supplier of speech recognition technology or that customers of the Company
will not experience financial or other difficulties that will adversely affect
their revenues and, in turn, the results of operations and financial condition
of the Company.
5
<PAGE> 8
TECHNOLOGICAL CHANGES MAY ADVERSELY AFFECT THE COMPANY
The speech recognition field and the voice and communications industry
in which the company operates are characterized by rapid technological change.
The development of new technology by the Company's competitors may render the
Company's technology obsolete. Competition in the field of speech recognition is
based largely on technological superiority. Accordingly, the success of the
Company will depend upon its ability to continually enhance its current
products, to develop and introduce new products which keep pace with
technological developments and to address the changing needs of the marketplace.
Although the Company expects to devote significant resources to research and
development activities, there can be no assurance that these activities will
result in the successful development of new technologies and products or the
enhancement of existing technology and products. In addition, there can be no
assurance that the introduction of products, services or technological
developments by others will not have a material adverse effect on the Company's
operations.
COMPETITION
Competition in all areas of the Company's business is substantial and
is expected to increase. The Company competes with a variety of businesses
including: computer and semiconductor manufacturers, such as Apple Computer, IBM
and Toshiba; telecommunications and cellular equipment suppliers, such as AT&T,
Motorola and Nortel; affiliates of foreign telephone companies, such as British
Telecom, CNET, CSELT, Telefonica de Espana SA and Vocalis; system suppliers,
such as Altech, Nuance Communications, Parlance, Dragon Systems, Microsoft, and
Texas Instruments; and speech recognition suppliers, such as Lernout & Hauspie
Speech Products, Speech Systems, Inc. and Verbex. Many of the Company's
competitors are substantially larger than the Company, are well established, and
have greater financial, technical, marketing, service and operating resources
than the Company. The Company's competitors can be expected to continue to make
substantial commitments to research and product development.
RELIANCE ON KEY PERSONNEL; ATTRACTION AND RETENTION OF PERSONNEL
The Company's success depends upon the continued contributions of its
officers and key personnel, many of whom would be difficult to replace. The
Company has an employment agreement with Thomas B. Schalk, Chief Technical
Officer. The agreement contain customary non-disclosure and non-competition
covenants, but there can be no assurance that these are enforceable under Texas
law, where the Company corporate offices are located. The Company's continued
growth depends on its ability to attract and retain skilled employees,
particularly in research and development, engineering and sales. The market for
technical and scientific personnel is highly competitive, and there can be no
assurance that the Company will be successful in attracting or retaining
sufficient numbers of qualified personnel.
DEPENDENCE ON OTHER COMPANIES FOR ASSEMBLY AND COMPONENT PARTS
The Company does not manufacture component parts for its products nor
does it have any plan to do so. The Company's products are assembled by
independent contractors. Other than one component which the Company obtains from
NEC Electronics, Inc., it is not dependent upon a single supplier for any
equipment or component parts. The Company generally does not have long-term
contracts with suppliers for the purchase and delivery of component parts or
contractors for the assembly of its products. Any interruption of supply in the
assembly services utilized by the Company or in the supply of key components,
for any reason, could result in significant delivery delays, thereby adversely
affecting the Company's revenues, profitability and customer relations.
6
<PAGE> 9
PROTECTION OF PROPRIETARY RIGHTS REQUIRED FOR SUCCESSFUL OPERATION OF THE
COMPANY
The Company relies on proprietary technology that it closely guards as
trade secrets. The Company has required nondisclosure and confidentiality
agreements to be executed by its employees, licensees and all parties for whom
it presently provides or contemplates providing engineering or research and
development services, and the Company expects to continue this requirement.
However, there can be no assurance that such non-disclosure and confidentiality
agreements will be sufficient to maintain the secrecy of the Company's
proprietary technology. In addition, there can be no assurance that competitors
will not develop this technology independently or otherwise obtain access to it.
The success of the Company will depend on its ability to maintain
confidentiality for its technology and upon third parties not developing similar
or better technology.
Several of the Company's competitors have obtained and can be expected
to obtain patents that cover products or services directly or indirectly related
to those offered by the Company. There can be no assurance that the Company is
aware of all patents containing claims that may pose a risk of infringement by
its products or services. In addition, patent applications are generally
confidential until a patent is issued and, accordingly, the Company cannot
evaluate the extent to which its products or services may infringe on future
patent rights held by others. In general, if it were determined that any of the
Company's products, services or planned enhancements (the "Offered Products")
infringed valid patent rights held by others, the company would be required to
either: (i) cease marketing the Offered Products, (ii) obtain licenses to
develop and market the Offered Products from the holders of the patents or (iii)
redesign the Offered Products to avoid infringement. There can be no assurance
that the Company would be able to obtain licenses on commercially reasonable
terms, or that it would be able to design and incorporate alternative
technologies, without a material adverse effect on its business.
ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS
Certain provisions of Delaware law and certain provisions of the
Company's amended Certificate of Incorporation permitting the issuance of
preferred stock, could make a merger, tender offer or proxy contest involving
the Company more difficult, even if such events would be beneficial to the
interests of the stockholders.
TECHNOLOGY ACQUISITION STRATEGY; STRATEGIC ALLIANCES
The Company intends to consider selected strategic acquisitions of
technologies that complement those of the Company. It may also enter into
beneficial strategic alliances to pursue certain market opportunities. There can
be no assurance, however, that the Company will be able to identify and acquire
suitable technology on favorable terms, successfully integrate newly acquired
technology with the Company's technology or create suitable strategic alliances.
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<PAGE> 10
THE COMPANY
The Company's principal offices are located at 14140 Midway Road, Suite
100, Dallas, Texas 75244, and its telephone number is (972) 726-1200.
SELLING STOCKHOLDERS
The table below sets forth the beneficial ownership of the Common Stock
by the persons selling shares of Common Stock pursuant to this Prospectus (the
"Selling Stockholders") at May 1, 1998, and after giving effect to the sale of
the shares of Common Stock offered hereby. The Company believes that each of the
persons named below has sole voting and investment power with respect to the
shares of Common Stock beneficially owned by him or it, except pursuant to
community property laws.
Unless otherwise indicated, the Selling Stockholders were former
security holders of PureSpeech. Pursuant to the terms of the Agreement and Plan
of Merger, dated as of March 28, 1998, by and among PureSpeech, the Company and
a subsidiary of the Company, the Company granted registration rights to the
holders of PureSpeech's common stock and certain securities convertible into
PureSpeech common stock with respect to their shares of Company's common stock
acquired in the PureSpeech Merger or to be acquired upon the conversion of
certain convertible securities issued by PureSpeech and assumed by the Company
in the PureSpeech Merger. In connection with the PureSpeech Merger, former
holders of securities issued by PureSpeech received approximately 2,016,920
shares of Common Stock (including shares issuable under certain options,
warrants, preferred stock and notes issued by PureSpeech prior to the Merger).
In addition to sales by the former security holders of PureSpeech, this
Prospectus also covers sales of Common Stock issued or to be issued by the
Company upon the exercise of certain warrants granted to its outside directors.
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<PAGE> 11
<TABLE>
<CAPTION>
Percentage of
Outstanding
Shares Shares
Name of Shares Owned Shares Owned After Owned After
Shareholder Before the Offering(1) Offered Hereby the Offering(2) the Offering
- ----------- ---------------------- -------------- --------------- ------------
<S> <C> <C> <C> <C>
FORMER PURESPEECH SECURITY
HOLDERS:
Guirez Arshad 17,347 17,347 -- --
Ben Chigier 318,919 318,919 -- --
Jose & Norman Chigier 16,933 16,933 -- --
Eric J. Chin 834 834 -- --
Compaq Computer Corporation 88,875 88,875 -- --
Keith M. Costorf 1,129 1,129 -- --
Fenwick Partners 1,422 1,422 -- --
William S. Flynn 8,525 8,525 -- --
Stephen Gaal 29,094 29,094 -- --
Arthur L. Goldstein 13,939 13,939 -- --
James Goldstein 26,662 26,662 -- --
Jonathan Harber 13,439 13,439 -- --
Harris & Harris 268,343 268,343 -- --
Highland Capital Partners 984,587 984,587 -- --
Imperial Bank 86,336 86,336 -- --
Waldemar Jantz 8,449 8,449 -- --
Alicia Katz 177 177 -- --
Leigh Fibers Phillip Lerner 8,673 8,673 -- --
Robert V. Matthews 3,110 3,110 -- --
Carol Mazuy 3,888 3,888 -- --
Anthony Medaglia, Jr. 20,166 20,166 -- --
Mark O'Brien 888 888 -- --
Richard Pallan 8,673 8,673 -- --
Curt Rawley 19,443 19,443 -- --
Tim Reiter 142 142 -- --
William Sahlman 7,862 7,862 -- --
Norman A. Schwartz 746 746 -- --
Daniel Singer 5,386 5,386 -- --
Rene Thibault 3,888 3,888 -- --
Ralph Wagner 27,461 27,461 -- --
Charles Warden 11,666 11,666 -- --
Gregory Warden 9,918 9,918 -- --
OTHER:
Neal J. Robinson(3) (4) 474,997 80,000 394,997 3.48%
Mel Goodman (5) 453,720 5,000 448,720 4.02%
John Lucas-Tooth (5) 5,000 5,000 -- --
John Torkelsen (5) 300,631 5,000 295,631 2.65%
Stanley Westreich (5) 61,625 10,000 51,625 *
</TABLE>
* Less than 1%
- ---------------------
(1) Assumes the conversion of all convertible securities issued by PureSpeech
into shares of the Company's common stock.
(2) Assumes that all of the Shares offered hereby are sold.
(3) Assumes the exercise of all options and warrants.
(4) Mr. Robinson currently serves as the Chairman of the Board of the Company.
(5) Current directors of the Company.
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<PAGE> 12
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been
passed upon by Crouch & Hallett, L.L.P., Dallas, Texas.
EXPERTS
The consolidated financial statements of the Company at December 31,
1997 and for each of the years in the two-year period ended December 31, 1997,
incorporated by reference herein have been incorporated by reference herein in
reliance upon the report of BDO Seidman, LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
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<PAGE> 13
================================================================================
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OF
SHARES OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, ANY SELLING STOCKHOLDER OR BY ANY OTHER PERSON. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY
COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
Risk Factors.....................................4
The Company......................................8
Selling Stockholders.............................9
Plan of Distribution.............................1
Legal Matters...................................10
Experts.........................................10
</TABLE>
================================================================================
2,121,920 SHARES
VOICE CONTROL SYSTEMS, INC.
COMMON STOCK
------------------------
PROSPECTUS
JULY 7, 1998
------------------------
================================================================================
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following expenses incurred in connection herewith will be paid by the
Company.
<TABLE>
<CAPTION>
Item Amount (1)
- ---- ----------
<S> <C>
SEC registration fee $ 3,166
Legal fees and expenses 5,500
Accounting fees 2,500
Miscellaneous 834
-------
Total $12,000
</TABLE>
- --------
(1) All items other than SEC registration fee are estimated
Item 15. Indemnification of Directors and Officers.
Article VI of the registrant's Bylaws expressly directs the registrant
to indemnify any director, officer, employee, or agent of the registrant or any
person serving at the request of the registrant as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, or other
enterprise against expenses (including attorney's fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred in connection with
any threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the registrant) to which such person is a party by
virtue of such status if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the registrant and,
with respect to any criminal action or proceeding, if he had no reasonable cause
to believe his conduct was unlawful. The termination of such action, suit or
proceeding by judgment, order, settlement, conviction or upon a please of nolo
contendere or its equivalent, will not create a presumption that such person did
not act in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the registrant and, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Article VI also provides that the registrant shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the registrant to
procure a judgment in the registrant's favor by reason of the fact that such
person is or was a director, trustee, officer, employee or agent of the
registrant, or is or was serving at the request of the registrant as a director,
trustee, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
and amounts paid in settlement actually and reasonably incurred by such person
in connection with the defense or settlement of such action or suit if such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the registrant; however, no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for gross negligence or
willful misconduct in the performance of such person's duty to the registrant
unless and only to the extent that, the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of such
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as such court
shall deem proper. The termination of any action or suit by judgment or
settlement shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which such person reasonably believed to be in
or not opposed to the best interest of the registrant.
II-1
<PAGE> 15
'
The Bylaws further provide that any indemnification shall be made only
upon a determination that such indemnification is proper under the standards
described above. Such determination shall be made (i) by a majority vote of a
quorum of the Company's Board of Directors, or (ii) if such quorum is not
obtainable, by a quorum of disinterested directors, or (iii) by independent
legal counsel or (iv) by the stockholders. If successful, in whole or in part,
on the merits of any action, a person shall be indemnified for expenses actually
and reasonably incurred.
Expenses incurred in defending a civil or criminal action, suit or
proceeding shall be paid by the registrant, at any time or from time to time in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the registrant in Article VI of the Bylaws. The indemnification
and advancement of expenses provided by or granted pursuant to Article VI shall
not be deemed exclusive of any other rights to which those indemnified or those
seeking advancement of expenses may be entitled under any law, bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in such person's official capacity and as to action in another capacity while
holding such office and shall continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors and
administrators of such person.
The Certificate of Incorporation, as amended, of the registrant
eliminates personal liability of directors to the fullest extent permitted by
Delaware law.
Item 16. Exhibits.
2.1 -- Agreement and Plan of Merger, dated as of March 28, 1998, by
and among the Registrant, a subsidiary of the Registrant and
PureSpeech, Inc. (1)
3(i) -- Certificate of Incorporation of the Registrant, as
amended (filed with the Securities and Exchange Commission
on March 11, 1986, as Exhibit 3.1 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31,
1985, and amendment thereto filed on March 30, 1987, as
Exhibit 3.1 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1986, and amendments
thereto filed July 8, 1993 as Exhibit 4.3 to Form S-8
Registration Statement of Scott, as further amended by the
Certificate of Merger between Scott Instruments and VCS
Industries, Inc., dated August 9, 1994 filed on March 23,
1995, as Exhibit 3.1 to the Registrant's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1994 and
incorporated by reference herein).
3(ii) -- Bylaws of the Registrant (filed with the Securities and
Exchange Commission on March 11, 1986, as Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1985, and amendment thereto filed on
March 30, 1987, as Exhibit 3.2 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31,
1986, and amendment thereto filed on March 23, 1995, as
Exhibit 3.2 to the Registrant's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1994, and
incorporated by reference herein).
5.1 -- Opinion of Crouch & Hallett, L.L.P. (2)
23.1 -- Consent of BDO Seidman, LLP (2)
23.2 -- Consent of Crouch & Hallett, L.L.P. (included in opinion
filed as Exhibit 5).
24 -- Power of Attorney (included on p. II-5).
- ----------------
(1) Filed as an exhibit to the Registrant's Form 8-K filed with the Commission
on April 28, 1998 and incorporated by reference herein.
(2) Previously filed.
II-2
<PAGE> 16
Item 17. Undertakings.
(a) The registrant hereby undertakes (1) to file, during any period in
which offers or sales are being made of the Shares registered hereby, a
post-effective amendment to this Registration Statement, to include any material
information with respect to the plan of distribution not previously disclosed in
this Registration Statement or any material change to such information in this
Registration Statement; (2) that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and (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.
(b) The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Company'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
herein, 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 of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the 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 Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 17
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-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas and the State of Texas, on the 7th day of
July, 1998.
VOICE CONTROL SYSTEMS, INC.
By: /s/ Peter J. Foster
----------------------------------
Peter J. Foster, President and
Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Peter J. Foster and Kim S.
Terry and each of them (with full power to act alone), as attorneys and agents
for the undersigned, with full power of substitution, for and in the name, place
and stead of the undersigned, to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933 any and all amendments and exhibits
to this Registration Statement and any and all applications, instruments and
other documents to be filed with the Securities and Exchange Commission
pertaining to the registration of the securities covered hereby, with full power
and authority to do and perform any and all acts and things whatsoever requisite
or desirable.
II-4
<PAGE> 18
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Date
- ---------- ----
<S> <C>
/s/ Peter J. Foster, Attorney-in-Fact July 7, 1998
- -------------------------------------------------
Neal J. Robinson
Chairman and Director
/s/ Peter J. Foster July 7, 1998
- -------------------------------------------------
Peter J. Foster
President, Chief Executive Officer and Director
/s/ Kim S. Terry July 7, 1998
- -------------------------------------------------
Kim S. Terry
Vice President Finance and Corporate Secretary
(Principal Financial and Accounting Officer)
/s/ Peter J. Foster, Attorney-in-Fact July 7, 1998
- -------------------------------------------------
Melvyn J. Goodman
Director
/s/ Peter J. Foster, Attorney-in-Fact July 7, 1998
- -------------------------------------------------
John Lucas-Tooth
Director
/s/ Peter J. Foster, Attorney-in-Fact July 7, 1998
- -------------------------------------------------
John B. Torkelsen
Director
</TABLE>
II-5
