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Filed pursuant to
Rule 424(b)(3),
Registration No. 333-10269
PROSPECTUS
QUARTERDECK CORPORATION
COMMON STOCK
($.001 PAR VALUE)
5,014,889 SHARES
This Prospectus relates to 5,014,889 shares of Common Stock,
par value $.001 per share ("Common Stock"), of Quarterdeck Corporation, a
Delaware corporation (the "Company"), which may be offered for sale from time to
time by the stockholders of the Company listed herein under "Selling
Stockholders" (the "Selling Stockholders"). The shares of Common Stock offered
hereby (hereinafter, the "Securities") were issued in connection with the
acquisition by the Company of Vertisoft Systems, Inc., Limbex Corporation and
certain assets of Interlink Technology Co. The Company is registering the
Securities pursuant to the terms of certain Registration Rights Agreements (the
"Registration Rights Agreements") between the Company and the Selling
Stockholders in order to provide the holders thereof with freely tradeable
securities, but the registration of the Securities does not necessarily mean
that all or any of the Securities will be sold by the Selling Stockholders.
The Company will not receive any of the proceeds from the sale
of the Securities. The Company will pay all of the expenses associated with
the registration of the Securities, estimated to be approximately $53,000.
The Selling Stockholders will pay the other costs, if any, associated with any
sale of the Securities.
See "Risk Factors" beginning on page 3 for certain
considerations relevant to an investment in the Securities.
The Common Stock is quoted on the Nasdaq National Market under
the symbol "QDEK." On October 10, 1996, the last reported sale price per share
of the Common Stock, as quoted on the Nasdaq National Market, was $6 5/8.
________________________________
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 October 11, 1996.
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AVAILABLE INFORMATION
The Company has filed Registration Statements on Form S-3 (the
"Registration Statements"), File No. 333-10269 with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), covering the Securities covered by this Prospectus. This
Prospectus omits certain information and exhibits included in the Registration
Statements, copies of which may be obtained upon payment of a fee prescribed by
the Commission or may be examined free of charge at the principal office of the
Commission in Washington, D.C.
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information filed
with the Commission by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located
at 500 West Madison Street, Room 1400, Chicago, Illinois 60606 and at the Jacob
K. Javits Federal Building, 75 Park Place, New York, New York 10278. 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are by this reference incorporated in and made a part of this
Prospectus: (i) the Annual Report on Form 10-K for the fiscal year ended
September 30, 1995, File No. 0-19207; (ii) the Quarterly Reports on Form 10-Q
for the quarters ended December 31, 1995, March 31, 1996 and June 30, 1996, File
No. 0-19207; (iii) the Registration Statement on Form 8-A filed April 26, 1991;
(iv) the Current Reports on Form 8-K dated December 29, 1995, March 28, 1996,
May 15, 1996, June 13, 1996, July 18, 1996, July 25, 1996, August 14, 1996,
August 27, 1996 and October 7, 1996 and Current Reports on Form 8-K/A dated
March 28, 1996 and July 18, 1996, and (v) all documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the filing of a post-effective amendment which
indicates that all Securities offered hereby have been sold or which deregisters
all Securities then remaining unsold. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be 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 a part of this
Prospectus.
Copies of all documents that are incorporated herein by
reference (not including the exhibits to such documents, unless such exhibits
are specifically incorporated by reference into such documents or into this
Prospectus) will be provided without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon a written or oral
request to Quarterdeck Corporation, Attention: Corporate Secretary, 13160
Mindanao Way, Third Floor, Marina del Rey, California 90292, telephone number
(310) 309-3700.
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THE COMPANY
The Company develops, markets and supports computer software
products primarily in the utilities and Internet areas. The Company's utility
products enhance the performance of personal computers running Microsoft Windows
3.x, Windows 95, Windows NT and DOS software. The Company's Internet products
and services relate to information management and communications/collaboration
solutions.
The Company was incorporated in California in 1982 as
Quarterdeck Office Systems. In June 1991, the Company changed its state of
incorporation from California to Delaware and in February 1995 changed its name
to Quarterdeck Corporation.
The principal offices of the Company are located at 13160
Mindanao Way, Third Floor, Marina del Rey, California 90292, telephone number
(310) 309-3700.
RISK FACTORS
The Securities offered hereby are speculative in nature and
involve a high degree of risk. In addition to the other information included
elsewhere in this Prospectus, the following factors should be considered
carefully in evaluating an investment in the Securities offered by this
Prospectus.
DEPENDENCE ON NEW PRODUCTS AND ADAPTATION TO TECHNOLOGICAL CHANGE
The computer software industry is subject to rapid
technological change often evidenced by new competing products and improvements
in existing products. The Company depends on the successful development of new
products, including upgrades of existing products, to replace revenues from
products introduced in prior years that have begun to experience reduced
revenues. If the Company's leading products become outdated and lose market
share or if new products or existing product upgrades are not introduced when
planned or do not achieve the revenues anticipated by the Company, the
Company's operating results could be materially adversely affected. Even with
normal development cycles, the market environment can change so quickly that
features in certain products can become outdated soon after market
introduction. These events may occur in the future and may have an adverse
effect on future revenues and operating results.
Many of the Company's existing products supplement and enhance
Windows 3.x and the DOS operating system by providing multitasking and memory
management capabilities. Microsoft Windows 95, which was released in August
1995, integrates a 32-bit version of Windows with DOS. As application programs
and device drivers are developed to take advantage of this 32-bit operating
environment, they are expected to lack certain of the memory limitations
inherent in current versions of DOS and Windows and in DOS-based applications.
With the introduction of Windows 95, the software market is
experiencing a shift to this new platform. The Company is focusing its
development efforts on Windows 95 and Windows NT, while continuing to support
Windows 3.x and DOS platforms. In September 1995, the Company released several
new utility products for Windows 95, including memory compression (MagnaRAM),
diagnostics (WINProbe) and disk management (CleanSweep). QEMM, the Company's
leading memory management product, has been upgraded to version 8; QEMM 8
enhancements include new memory solutions and reporting utilities for Windows
3.x and Windows 95, as well as continued support for DOS systems. It is the
Company's expectation that memory management products will continue to be
needed on Windows 95, but that memory management has experienced a shift from
16-bit DOS device driver management (older versions of QEMM) to complex
solutions such as memory compression and better use of virtual memory (QEMM 8).
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The Company is devoting substantial efforts to the development
of software products that are designed to operate on Microsoft's Windows 95 and
Windows NT. Should the Company not be able to continue to develop products
successfully and timely that function under Windows 95 and Windows NT, and
offer perceived value to Windows 95 and Windows NT users, future revenues would
be adversely affected. There can be no assurance that QEMM 8 or the Company's
other utility products for Windows 95 and Windows NT will be commercially
successful.
The Company is also focusing significant efforts on products
for the telecommunications and collaborative computing and Internet markets and
expects that a significant portion of future revenues will come from these
products. The revenues from such new products may be less than the Company
anticipates due to various factors including the timing of release in relation
to competitive products, and uncertainties surrounding the rate and extent of
development of these new and emerging markets. The Company's Internet-related
products are dependent upon the viability and continued growth of the Internet,
and its expanded use by businesses and individuals for networking and
communications.
COMPETITION
The personal computer market is intensely competitive, subject
to strategic alliances of hardware and software companies and characterized by
rapid changes in technology and frequent introductions of new products and
features. The Company's competitors include developers of operating systems,
applications and utility software vendors and personal computer manufacturers
that develop their own software products. The Company's current revenues and
profitability are dependent on the viability of the Microsoft Windows and DOS
operating systems and, with respect to the Company's Internet and
telecommunications and collaborative computing products, the continued
viability and growth of the Internet, the World Wide Web as well as the X
Window System market. The Company expects to encounter continued competition
both from established companies and from new companies that are now developing,
or may develop, competing products. Many of the Company's existing and
potential competitors have financial, marketing and technological resources
significantly greater than those of the Company.
The Company's memory management and other utility products
compete directly with the memory management and utility features of Microsoft
Windows 95 as well as Microsoft Windows 3.x and DOS, as well as with other
third-party memory management products and other utility software products.
The Company's telecommunications and collaborative computing products compete
with other telecommunications and collaborative computing and other PC X server
products from other third-party software vendors. These competitive products
are frequently bundled with computer hardware as well as with operating system
software.
Future competitive product releases may cause disruptions in
orders for the Company's products while users and the marketplace evaluate the
competitive products. The extent of the disruption in orders and the impact on
future orders of the Company's products will depend on various factors that are
not fully known at this time, including the level of functionality, performance
and features included in the final release of these competitive products and
the market's evaluation of competitive products compared to the then current
functionality, performance and features of the Company's products.
The Company's Internet-related products compete with Internet
access, creation and server tools from a variety of companies, including
Netscape Communications Corporation, Microsoft Corporation and other
connectivity, networking and Internet software application developers,
Internet access providers and other on-line service providers, as well as
operating system vendors, including Microsoft and IBM. The original Mosaic
browser developed by the National Center for Supercomputing Applications is
made available to be downloaded in electronic format for free from the
Internet. Certain competitors have also made versions of their Internet
access, creation and server products available on the Internet for users to
download at no charge or for extended evaluation. In addition, the market for
Internet products may be adversely impacted to the extent that vendors of PC
hardware or PC operating systems incorporate Internet tools, functions or
capabilities within their operating systems or PC hardware and thereby reduce
the market for stand-alone Internet products.
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The Company is dedicating substantial efforts on products and
services for the telecommunications and collaborative computing and Internet
markets and expects that a significant portion of future revenues will come
from these products and services. The revenues from such new products and
services may be less than the Company anticipates due to various factors
including the timing of release in relation to competitive products and
services, and uncertainties surrounding the rate and extent of development of
these new and emerging markets. The Company's Internet-related products and
services are dependent upon the viability and continued growth of the Internet,
and its expanded use by businesses and individuals for networking and
communications.
The Company anticipates that the type and level of competition
experienced to date will continue and may increase and that future sales of its
products will be dependent upon the Company's ability to timely and
successfully develop or acquire new products or enhanced versions of its
existing products for Windows 95 and Windows NT, Apple Macintosh and/or other
operating systems that may gain market acceptance, and to demonstrate to the
user a need for the Company's products while developers of operating systems
and competitive software products continue to enhance their products. To the
extent that operating system enhancements, competitive products or bundling of
competitive products with operating systems or computer hardware reduce the
number of users who perceive a benefit from the Company's products, sales of
the Company's products in the future would be adversely impacted.
FLUCTUATIONS IN OPERATING RESULTS AND STOCK PRICE
The Company's future operating results and stock price could be
subject to significant fluctuations and volatility. The Company's revenues and
quarterly operating results may experience significant fluctuations and be
unpredictable as the result of a number of factors including, among others,
introduction of new or enhanced products by the Company or its competitors,
rapid technological changes in the Company's markets, seasonality of revenues,
changes in operating expenses and general economic conditions. The Company's
net revenues and net income (loss) have fluctuated significantly from year to
year since the Company's initial public offering in June 1991. The Company's
pattern of revenues and earnings may also be affected by the phenomenon known as
"channel fill." Channel fill occurs following the introduction of a new product
or a new version of a product as distributors buy significant quantities of the
new product or version in anticipation of sales of such product or version.
Following such purchases, the rate of distributors' purchases often declines,
depending on the rates of purchases by end users or "sell-through." The
phenomenon of "channel fill" may also occur in anticipation of price increases
or in response to sales promotions or incentives, some of which may be designed
to encourage customers to accelerate purchases that might otherwise occur in
later periods. Channels may also become filled simply because the distributors
are unable to, or do not, sell their inventories to retail distribution or end
users as anticipated. If sell-through does not occur at a sufficient rate,
distributors will delay purchases or cancel orders in later periods or return
prior purchases in order to reduce their inventories. In addition, between the
date the Company announces a new version or new product and the date of release,
distributors, dealers and end users often delay purchases, cancel orders or
return products in anticipation of the availability of the new version of the
product. Such order delays or cancellations can cause material fluctuations in
revenues from one quarter to the next. Net revenues may be materially affected
favorably or adversely by these effects.
For the third quarter ended June 30, 1996, the Company suffered
a net loss of $22.9 million primarily due to a significant decline in
sell-through levels for memory management products, a decline to historic rates
of sell-through of PROCOMM PLUS data communication software following unusually
high sales after a new product launch in the prior quarter and slower than
planned integration of acquisitions. Additionally, on October 7, 1996, the
Company announced that results for the fourth quarter ended September 30, 1996
and for the 1996 fiscal year will fall well below expectations. Costs
associated with a comprehensive corporate restructuring that is expected to
reduce the workforce by approximately 40%, charges related to various recent
acquisitions and less than expected revenues in the quarter will result in a net
loss for the fourth quarter and will contribute to a net loss for the fiscal
year.
As a result of recent results, the Company's cash from
operations was less than expected in the last two quarters of fiscal 1996. On
September 30, 1996, the Company improved its cash position and strengthened its
balance sheet with the completion of a $20 million convertible preferred stock
and warrant offering. The Company may in the future explore various other
financing alternatives, if necessary, in order to finance the core business of
the Company and help provide adequate working capital for operations. There can
be no assurance that the Company will not suffer additional losses in the
future, that adequate operating funds will be internally generated, or that
additional financing, if necessary, will be available, or if available, will be
available on acceptable terms. Should product shipments be delayed, or should
the Company continue to experience significant shortfalls in anticipated
revenues or experience unforeseen expenses, the Company might not have
sufficient capital to meet its operating expenses.
The Company also has experienced wide fluctuations in its stock
price and may be subject to significant fluctuations in the future over a short
period of time. The trading price of the Common Stock increased from
approximately $3.00 in January 1995 to a high of approximately $39.00 in
December 1995 to a low of approximately $6.00 in September 1996. Fluctuations
may be due to factors specific to the Company, to changes in analysts'
estimates, or to factors affecting the computer industry or the securities
markets in general. In addition, any decline in revenues or quarterly operating
results, or failure to meet market expectations, could have an immediate and
significant adverse effect on the trading price of the Common Stock in any given
period.
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MANAGEMENT OF ACQUISITIONS AND GROWTH
Since June 1995, the Company has consummated a number of
acquisitions. The Company may make additional acquisitions in the future. While
these acquisitions have broadened the Company's product portfolio and sales
distribution channels, the acquisitions have resulted in the Company's competing
with companies and in markets where it has not previously competed. As a result,
there is uncertainty regarding customer acceptance of the combined products.
There can be no assurance that the Company will be successful in realizing
benefits from a broadened product portfolio and sales distribution channels. In
addition, it is critical to the Company's success to integrate effectively the
operations and businesses of the acquired companies, and to utilize effectively
acquired intellectual property. On October 7, 1996, the Company announced a
comprehensive corporate restructuring that is expected to reduce the workforce
by approximately 40%, primarily through the elimination of redundant positions
resulting from the ten acquisitions made by the Company since June 1995.
SUBSTANTIAL DEPENDENCE ON DISTRIBUTION CHANNELS
A substantial portion of the Company's domestic and
international sales are made through a limited number of personal computer
hardware and software distributors which represent the Company on a
non-exclusive basis. If the Company were to lose all or a significant portion
of the revenue attributable to any of its principal distributors, or if its
principal distributors were to lose sales of the Company's products to any of
their principal accounts, the loss could have a material adverse affect on the
Company's operating results. In addition, there has been a trend toward
consolidation of distributors of personal computer hardware and software
products. A reduction in the number of software distributors will increase the
Company's dependence upon its major distributors and could affect their
willingness to distribute and promote products of the Company.
PRODUCT RETURNS
Like other manufacturers of package software products, the
Company is exposed to the risk of product returns from distributors and reseller
customers. There can be no assurance that actual returns in excess of recorded
allowances will not result in a material adverse effect on business, operating
results and financial condition.
DEPENDENCE ON AND INTENSE COMPETITION FOR KEY PERSONNEL
Recruitment of personnel in the computer software industry is
highly competitive. The Company's success depends to a significant extent upon
the performance of its executive officers and other key personnel. The loss of
the services of key individuals could have a material adverse effect on the
Company. The Company's future success will depend in part upon its continued
ability to attract and retain highly qualified personnel. There can be no
assurance that the Company will be successful in attracting and retaining such
personnel.
PATENTS AND PROPRIETARY INFORMATION
The Company relies on a combination of trade secret, patent,
copyright and trademark laws, and license agreements to protect its rights to
its products. The Company holds two United States patents relating to memory
management, one of which expires in 2010 and the other of which expires in
2011. The Company believes that its software products are proprietary and
protects them with copyrights, trade secrets and non-disclosure agreements.
The Company provides its products to end users under a non-exclusive,
non-transferable license. Under the Company's current form of software license
agreement, software is to be used solely for internal operations on designated
computers at specified sites. The ability of software companies to enforce
such licenses has not been finally determined and there can be no assurance
that misappropriation will not occur. The Company's trademark and service mark
rights include rights associated with its use of its trademarks and
servicemarks, and rights obtained by registrations of its trademarks and
servicemarks ("marks"). The Company has applied for or obtained United States
trademark registrations for certain marks and has applied for or obtained
registrations in various international jurisdictions. The use and registration
rights of the Company for its marks do not assure that the Company has superior
rights to others that may have registered or used identical or related
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marks on related goods or services, nor that such registrations or uses will
not be used to attempt to foreclose use of a particular mark by the Company.
The extent to which U.S. and foreign copyright and patent laws
protect software as well as the enforceability of end-user licensing agreements
has not been fully determined. In addition, changes in the interpretation of
copyright and patent laws could expand or reduce the extent to which the
Company or its competitors are able to protect their software and related
intellectual property.
Because the computer industry is characterized by
technological changes, the policing of the unauthorized use of computer
software is a difficult task. Software piracy is expected to continue to be a
persistent problem for the packaged software industry. Despite steps taken by
the Company to protect its software products, third parties still make
unauthorized copies of the Company's products for their own use or for sale to
others. These concerns are particularly acute in certain international
markets. The Company believes that the knowledge, abilities and experience of
its employees, its timely product enhancements and upgrades and the
availability and quality of its support services provided to users are more
significant factors in protecting its software products than patent, trade
secret and copyright protection laws.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
There are currently few laws or regulations directly
applicable to access to or commerce on the Internet. However, due to the
increasing popularity and use of the Internet, it is possible that a number of
laws and regulations may be adopted with respect to the Internet. Such laws
and regulations may cover issues such as user privacy, pricing and
characteristics and quality of products and services. The Telecommunications
Act of 1996 (the "1996 Act"), which was recently enacted and the judicial
interpretation of which is uncertain, imposes criminal penalties for
transmission of or allowing access to certain obscene communications over the
Internet and other computer services and contains additional provisions
intended to protect minors. In addition, America's Carriers Telecommunication
Association ("ACTA") recently filed a Petition for Declaratory Ruling Special
Relief, and Institution of Rulemaking (the "ACTA Petition") before the Federal
Communications Commission ("FCC"), arguing that the FCC has authority to
regulate the Internet and, as such, should regulate, as the telecommunications
carriers, providers of computer software products (such as the Company) which
enable voice transmission over the Internet. The ACTA Petition requests the
FCC to declare its authority over interstate and international
telecommunications services using the Internet, to order providers of the
aforementioned software to cease the sale of such software pending a
rulemaking, and to institute a rulemaking body to govern the use of the
Internet as a means for providing telecommunications services. The enactment
of the 1996 Act, and of any similar laws or regulations in the future, may
decrease the growth or use of the Internet, which could in turn decrease the
demand for the Company's services and products and increase the Company's cost
of doing business or otherwise have an adverse effect on the Company's
business, operating results and financial condition.
INTERNATIONAL OPERATIONS
The Company has operations in various foreign locations.
International operations are subject to certain risks common to international
activities, such as changes in foreign governmental regulations, tariffs and
taxes, export license requirements, the imposition of trade barriers,
difficulties in staffing and managing foreign operations, and political and
economic instability.
The Company conducts business in various foreign currencies and
is therefore subject to the transaction exposures that arise from foreign
exchange rate movements between the dates that foreign currency transactions are
recorded and the date that they are consummated. The Company is also subject to
certain exposures arising from the translation and consolidation of the
financial results of its foreign subsidiaries. The Company has from time to
time taken limited actions to attempt to mitigate the Company's foreign
transaction exposure. However, there can be no assurance that actions taken to
manage such exposure will be successful or that future changes in currency
exchange rates will not have a material impact on the Company's future operating
results. The Company does not hedge either its translation risk or its economic
risk.
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INTENTION REGARDING PAYMENT OF COMMON STOCK DIVIDENDS
The Company currently retains all of its earnings for use in
the expansion and operation of its business, and does not anticipate paying any
cash dividends in the foreseeable future. There can be no assurance that the
Company will pay cash dividends at any time, or that the failure to pay
dividends for a period of time will not adversely affect the market price of
the Common Stock.
DILUTION
The Company has made, and may make in the future, acquisitions
using shares of the Common Stock. An acquisition using shares of the Common
Stock would have the effect of reducing the percentage ownership of the Company
by each pre-acquisition stockholder.
FORWARD LOOKING STATEMENTS
When used herein or in documents incorporated herein by
reference, words such as "anticipates," "expects" and similar conditional
expressions and any other statements not based on historical fact are intended
to identify forward looking statements. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those expressed in any of the forward-looking statements. Such risks and
uncertainties include, in addition to those set forth under "Risk Factors,"
those noted in the documents incorporated herein by reference.
SELLING STOCKHOLDERS
Except for the stockholders specified below, the Selling
Stockholders listed below received their shares of Common Stock in connection
with the Company's acquisition of Vertisoft Systems, Inc. ("Vertisoft") and
Limbex Corporation ("Limbex") by way of mergers (the "Mergers") of wholly owned
subsidiaries of the Company with and into Vertisoft and Limbex, respectively.
Interlink Technology Co. ("Interlink") received 205,000 shares
of Common Stock (the "Interlink Shares") in connection with the Company's
acquisition of substantially all of the assets of Interlink (the "Acquisition").
Interlink distributed the Interlink Shares to its shareholders on a pro rata
basis. As a result of such distribution, the persons listed below as
shareholders of Interlink are Selling Stockholders of up to the number of
shares of Common Stock set forth opposite their respective names.
As part of the Mergers and the Acquisition and pursuant to the
terms of the Registration Rights Agreements, the Company agreed to use its best
efforts to register the Common Stock issued or distributed to the Selling
Stockholders for offer or sale to the public. The registration of the
Securities, however, does not necessarily mean that all or any of the Securities
will be sold by the Selling Stockholders. Except as noted below, the Shares
offered represent all Shares owned by the respective Selling Stockholders.
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<TABLE>
<CAPTION>
Shares Offered
Selling Stockholder Hereby
------------------- --------------
<S> <C>
Anatoly Tikhman 2,442,214
Philip Johnson 832,212
Bradley Allen 602,964
Alexander Jacobson 576,640
Jacob Graudenz 225,573
Harold Lund(1) 82,000
Joseph Niosi(1) 82,000
Inference Corporation 77,897
Thomas Conticello(1) 41,000
Howard Morgan(2) 34,984
Thelma Birks 13,388
Clay Chisum 2,678
Michelle Kraus 1,339
</TABLE>
- ------------
(1) Shareholder of Interlink.
(2) Mr. Morgan owns an aggregate of 95,426 shares of Common Stock.
(3) Mr. Chisum owns an aggregate of 3,678 shares of Common Stock.
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USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale
of the Securities offered hereby.
PLAN OF DISTRIBUTION
The Securities may be sold from time to time by the Selling
Stockholders, or by pledgees, donees, tranferees or other successors in
interest. Such sales may be made on one or more exchanges or in the
over-the-counter market or otherwise, at prices and at terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. The Securities may be sold by one or more of the following: (a) a
block trade in which the broker-dealer so engaged will attempt to sell the
Securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker-dealer as
principal and resale by such broker-dealer for its account pursuant to this
Prospectus; (c) an exchange distribution in accordance with the rules of such
exchange; and (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers. In effecting sales, broker-dealers engaged by the
Selling Stockholders may arrange for other broker-dealers to participate in the
resales. In addition, any securities covered by this Prospectus which qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.
The Selling Stockholders may also sell Securities short and
redeliver the Securities to close out such short positions. The Selling
Stockholders may also enter into option, hedging or other transactions with
broker-dealers which require the delivery to the broker-dealer of the Securities
registered hereunder, which the broker-dealer may resell or otherwise transfer
pursuant to this Prospectus. The Selling Stockholder may also loan or pledge
the Securities registered hereunder to a broker-dealer and the broker-dealer may
sell the Securities so loaned or upon a default the broker-dealer may effect
sales of the pledged Securities pursuant to this Prospectus.
Broker-dealers or agents may receive compensation in the form
of commissions, discounts or concessions from Selling Stockholders in amounts to
be negotiated in connection with the sale. Such broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Act"), in connection
with such sales and any such commission, discount or concession may be deemed to
be underwriting discounts or commissions under the Act.
The Selling Stockholders may agree to indemnify any
broker-dealer or agent that participates in transactions involving sales of the
Securities against certain liabilities, including liabilities arising under the
Act.
There is no assurance that any of the Selling Stockholders
will offer for sale or sell any or all of the Securities covered by this
Prospectus.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by
Gibson, Dunn & Crutcher LLP, Los Angeles, California.
MISCELLANEOUS
NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED
IN THIS PROSPECTUS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. 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
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MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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