AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 29, 2000.
REGISTRATION NO. 333-43780
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
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ZYGO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-0864500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
LAUREL BROOK ROAD
MIDDLEFIELD, CONNECTICUT 06455-0448
(860) 347-8506
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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J. BRUCE ROBINSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
LAUREL BROOK ROAD
MIDDLEFIELD, CONNECTICUT 06455-0448
(860) 347-8506
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies of all communications, including all communications
sent to the agent for service, should be sent to:
PAUL JACOBS, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, 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. [ ]
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.
The information in this prospectus is not complete and may be changed. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted before the registration statement becomes effective.
This prospectus is not an offer to sell securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
<PAGE>
ZYGO CORPORATION
2,303,934 Shares of Common Stock
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Zygo Corporation's common stock trades on the Nasdaq National Market under
the ticker symbol "ZIGO." On September 26, 2000, the closing sale price of the
common stock was $79 13/16.
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The stockholders of Zygo Corporation listed in this prospectus are offering
and selling an aggregate of 2,303,934 shares of our common stock under this
prospectus. We issued these selling stockholders their common stock on May 5,
2000 in connection with our acquisition of Firefly Technologies, Inc., which was
owned by these stockholders.
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The selling stockholders (and their donees and pledges) may offer their
Zygo common stock through public or private transactions, on or off the United
States exchanges, at prevailing market prices, or at privately negotiated
prices.
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SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS
THAT YOU SHOULD CONSIDERED BEFORE YOU INVEST IN THE SHARES BEING SOLD WITH THIS
PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is September 29, 2000.
<PAGE>
TABLE OF CONTENTS
PAGE
WHERE YOU CAN FIND MORE INFORMATION...........................................2
OUR COMPANY...................................................................4
RISK FACTORS..................................................................6
USE OF PROCEEDS..............................................................16
DIVIDEND POLICY..............................................................16
PRICE RANGE OF COMMON STOCK..................................................16
SELLING STOCKHOLDERS.........................................................17
PLAN OF DISTRIBUTION.........................................................18
LEGAL MATTERS................................................................18
EXPERTS......................................................................18
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
at the SEC's website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the selling stockholders sell all their
shares of Zygo stock. This prospectus is part of a registration statement we
filed with the SEC (Registration No. 333-43780).
(i) Our Annual Report on Form 10-K for the fiscal year ended June 30,
1999.
(ii) The description of our common stock contained in Item 1 of our
Registration Statement on Form 8-A/A, dated October 26, 1984.
(iii) Our Quarterly Reports on Form 10-Q for the quarters ended September
30, 1999, December 31, 1999 and March 30, 2000.
(iv) Our Current Report on Form 8-K/A, dated May 5, 2000, relating to our
acquisition of Firefly Technologies, Inc.
(v) Our Annual Report on Form 10-K for the fiscal year ended June 30,
2000.
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You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address
Zygo Corporation
Laurel Brook Road
Middlefield, Connecticut 06455
Attention: Michael J. Auth
Phone No. (860) 704-5180.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling stockholders will
not make an offer of these shares in any state where the offer is not permitted.
You should not assume that information in this prospectus or any supplement is
accurate as of any date other than the date on the front of these documents.
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<PAGE>
OUR COMPANY
This summary highlights selected information about us and may not contain
all of the information that is important to you. You should carefully read this
document with the documents we have incorporated by reference into this
prospectus for information on us and our financial statements.
We design and market noncontact measuring instruments, automation systems,
and optical components for high precision manufacturing industries. Our
instruments, systems and components are used as parts of products offered by
other companies and as key elements in our own products. Most of our
instruments, systems and accessories employ either a laser or white light source
to make noncontact measurements. We sell our products worldwide to leading
manufacturers in the semiconductor, industrial manufacturing, and optics
industries, including Cannon, Motorola, Texas Instruments, Seagate, Bausch &
Lomb, and Corning.
Our core business unit, Zygo Advanced Metrology Systems, located in
Middlefield, Connecticut, is home to our optical components business and our
interferometric based products. Zygo Advanced Metrology System's high
performance optical components are used in many applications, including laser
fusion research, semiconductor manufacturing equipment, and aerospace optical
systems, and are also an integral part of our own precision noncontact measuring
instruments. These noncontact measuring instruments and systems enable
manufacturers in high technology industries, such as semiconductor and precision
optics to become more efficient and increase production yields by identifying
and collecting quantitative data on product defects, both during and after the
manufacturing process. We produce these systems with proprietary laser and white
light optical technology combined with advanced software and electronics.
Zygo Advanced Metrology Systems' interferometric measurement instruments
are used by a variety of industries, such as the semiconductor industry, which
uses these products for high precision distance measurement and motion control.
Interferometry uses the optical path differences between a reference and a
measurement beam to produce a pattern of bright and dark lines. Our products
analyze the paterns and generate three-dimensional surface profiles, which are
used to detect product defects by determining the conformity of a part to its
specifications, and also to analyze and enhance manufacturing processes.
Interferometry provides a noncontact, quantitative, full field of view and an
ultra-high resolution surface analysis in three dimensions.
Confocal Scanning Optical Microscopy, known as CSOM, is the key base
technology employed in Zygo Vision Systems' confocal systems, which are used for
both inspection and metrology measurement. Microscopes using white light CSOM
technology generate a high-intensity white light that illuminates a section of a
spinning disk containing pinholes arranged in multiple spiral patterns. Acting
as point illumination sources, the pinholes direct light to points on the
sample. Only light from points on the sample near the focal plane will pass
through the pinholes for imaging. The benefits of white light CSOM technology
imaging systems include: submicron definition, "real time" high resolution
images with no processing delay for image processing, transverse resolution and
extremely shallow depth of field. These features provide
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precise imaging of sub-half micron structures and lower cost of ownership than
other imaging systems. Our laser confocal systems employ a laser light source
that causes a sample to fluoresce. Laser CSOM systems produce a high resolution
image, and have ability to display many layers of translucent samples as a live
overlay of bright, perfectly registered optical sections.
Our Zygo Automation Systems unit allows us to integrate our traditional
metrology products into an automated system that can be placed directly into our
customer's production line. Zygo Automation Systems designs, develops,
manufactures, and markets comprehensive automated system solutions to enable
manufacturers in a variety of high technology industries, including the data
storage, semiconductor, and electronics industries, to enhance operation
efficiencies and product yields. Our high-speed production solutions reduce
downtimes, especially in manufacturing processes adaptable to the manufacture of
multiple products differing in size, features, and functionality.
Our newly acquired Zygo TeraOptix unit manufactures metrology equipment,
micro-optics, switches, and filters for the telecommunications industry. Its
telecommunications components are used in wave division multiplexers to increase
the capacity of optical fibers. Our automation, metrology, and precision optics
processing and assembly capability, combined with TeraOptix's intellectual
property and process knowledge of micro-optical components and assemblies for
switches, lenses, and tunable filters, provide us with a unique capability to
serve the rapidly expanding optical telecommunications marketplace. We expect
TeraOptix to become a major supplier to this marketplace over the course of the
next few years providing optical components, assemblies, automated test
equipment, and automated assembly equipment and systems.
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<PAGE>
RISK FACTORS
Before you invest in our common stock, you should carefully consider the
following factors and cautionary statements, as well as the other information
set forth herein. If any of the following risks actually occur, our business,
financial condition or results of operations may suffer. As a result, the
trading price of our common stock could decline, and you could lose a
substantial portion of the money you paid to buy our common stock.
IF WE DO NOT SUCCESSFULLY MANAGE THE TRANSFORMATION OF OUR BUSINESS TO ONE WITH
A FOCUS ON THE SALE OF COMPONENTS AND MODULES FOR THE TELECOMMUNICATIONS
INDUSTRY, OUR REVENUES MAY DECREASE AND WE MAY INCUR SIGNIFICANT OPERATING
LOSSES.
We may be unsuccessful in making the transition from a company primarily
involved in the design and manufacture of on-line yield enhancement products and
solutions, to a larger and more complex organization which will also focus on
the design and manufacture of optical components and modules for the
telecommunications industry. If we fail to make this transition successfully,
our revenues may decrease and we may incur significant operating losses. This
transition will require that we, among other things, make significant capital
expenditures and incur expenses, expand and refocus our global sales and
marketing force to sell optical components and modules for the
telecommunications industry, enhance our financial and management controls and
systems, and develop and market new products and services, and that we direct
resources away from the existing on-line yield enhancement products and
solutions business that generates our current revenues. We cannot provide any
assurance that we will succeed in managing this transition. Therefore, we may
fail to generate sufficient revenues from our sale of optical components and
modules for the telecommunications industry to justify our diversion of
resources to our optics unit and we may incur significant operating losses.
IF THE OPTICAL NETWORKING MARKET DOES NOT DEVELOP AND EXPAND AS WE ANTICIPATE,
DEMAND FOR OUR OPTICAL COMMUNICATIONS COMPONENTS PRODUCTS MAY BE LESS THAN
EXPECTED, WHICH WOULD NEGATIVELY IMPACT OUR NET SALES AND OPERATING RESULTS.
A significant portion of our business growth strategy is dependent on the
deployment of our optical communications components and modules. Our future
success in the optical communications market depends on the continued deployment
of optical networks, continued growth of the Internet as a widespread
communication and commerce medium, the continuing increase in the amount of data
transmitted over communications networks, or bandwidth, and the growth of
optical networks to meet the increased demand for bandwidth. Future demand for
our optical communications products is uncertain and will depend to a great
degree on the speed of the widespread adoption and upgrading of optical networks
and the acceptance of fiber optics as the replacement for copper wire. If the
transition to optical communications occurs too slowly, the market for our
optical communications products and the growth of our business will be
significantly limited.
The optical communications market is new and characterized by rapid
technological change, frequent new product introductions, changes in customer
requirements, unpredictable rates of product deployment and evolving industry
standards. Because this market is new, it is difficult to predict its potential
size or future growth rate. Our success in generating net sales in this emerging
market will depend on:
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o maintaining and enhancing our relationships with our customers;
o the awareness of potential end-user customers and network service
providers about the benefits of optical networks; and
o our ability to accurately predict and develop our products to meet
industry standards.
If we fail to address changing market conditions, the sales of our optical
communications products may not materialize, which would harm our net sales. In
addition, since we have and will continue to make an investment in the
development of products for this market, the failure of optical networks to gain
widespread acceptance may significantly negatively impact our operating results.
IF WE ARE UNABLE TO COMMIT TO DELIVER SUFFICIENT QUANTITIES OF OUR PRODUCTS TO
SATISFY MAJOR CUSTOMERS' NEEDS, WE MAY NOT ATTRACT NEW ORDERS AND CUSTOMERS AND
WE MAY LOSE CURRENT ORDERS AND CUSTOMERS.
Communications service providers and equipment manufacturers typically
require that suppliers commit to provide specified quantities of products over a
given period of time. If we are unable to commit to deliver sufficient
quantities of our products to satisfy a customer's anticipated needs, we may
lose the order and the opportunity for significant sales to that customer for a
lengthy period of time. We would be unable to pursue many large orders if we do
not have sufficient manufacturing capacity to enable us to commit to provide
customers with specified quantities of products.
OUR LENGTHY AND VARIABLE QUALIFICATION AND SALES CYCLE MAKES IT DIFFICULT TO
PREDICT THE TIMING OF A SALE OR WHETHER A SALE WILL BE MADE, WHICH MAY CAUSE
US TO HAVE EXCESS MANUFACTURING CAPACITY OR INVENTORY AND NEGATIVELY IMPACT OUR
OPERATING RESULTS.
Customers typically expend significant efforts in evaluating and qualifying
our products and manufacturing process. This evaluation and qualification
process frequently results in a lengthy sales cycle. While our customers are
evaluating our products and before they place an order with us, we may incur
substancial sales and marketing and research and development expenses, expend
significant management efforts, increase manufacturing capacity and order
long-lead-time supplies prior to receiving an order. Even after this evaluation
process, it is possible a potential customer will not purchase our products for
deployment. In addition, product purchases are frequently subject to unplanned
processing and other delays, particularly with respect to larger customers for
which our products represent a very small percentage of their overall purchase
activity.
If we increase capacity and order supplies in anticipation of an order that
does not materialize, our gross margins will decline and we will have to carry
or write off excess inventory. Even if we receive an order, the additional
manufacturing capacity that we add to service the customer's requirements may be
underutilized in a subsequent quarter. Either situation could cause our results
of operations to be below the expectations of investors and public market
analysts, which would, in turn, cause the price of our common stock to decline.
Our long sales cycles, as well as the practice of companies in the
telecommunications industry to sporadically place large orders with short lead
times, may cause our revenues and operating results to vary significantly and
unexpectedly from quarter to quarter.
INTEGRATION OF OUR BUSINESSES WITH BUSINESSES OF FIREFLY TECHNOLOGY MAY PROVE
DIFFICULT.
On May 5, 2000, we purchased all of the capital stock and other outstanding
securities of Firefly Technology for approximately 20% of our outstanding
capital stock. We cannot give assurances that the integration of our businesses
with the businesses of Firefly will be successful or that we will be able to
achieve the synergies we anticipate.
BECAUSE WE ARE DEPENDENT ON A SMALL NUMBER OF SUPPLIERS FOR RAW MATERIALS, WE
MAY SUFFER DELAYS AND INCREASED EXPENSES IF THESE SUPPLIERS DO NOT PERFORM THEIR
OBLIGATIONS.
If any relationship with a key supplier is terminated or a supplier fails
or is unable to provide reliable services or equipment and we are unable to
reach suitable alternative arrangements quickly, we may experience significant
delays and additional costs in the manufacture of our optical components and
modules. We are dependent on suppliers for raw materials and various electrical
and optical supplies, including fiber, which we use to manufacture our optical
products. In particular, currently there are few companies that are capable of
supplying optical fibers in the quantity and of the quality we require. If these
companies were to cease manufacturing optical fibers, if their manufacturing
operations were interrupted for any significant amount of time, or if they were
unable or unwilling to supply us for any other reason, including capacity
restraints, then we would be at least temporarily unable to obtain sufficient
supplies of fiber, thus exposing us to significant delays and additional costs.
IF WE FAIL TO PREDICT OUR MANUFACTURING REQUIREMENTS ACCURATELY, WE COULD INCUR
ADDITIONAL COSTS OR EXPERIENCE MANUFACTURING DELAYS, WHICH COULD CAUSE US TO
LOSE ORDERS OR CUSTOMERS AND RESULT IN LOWER REVENUES.
We currently use a rolling 12-month forecast based primarily on our
anticipated product orders and our limited product order history to determine
our requirements for components and materials. It is very important that we
accurately predict both the demand for our products and the lead time required
to obtain the necessary components and raw materials. Lead times for materials
and components that we order vary significantly and depend on factors such as
the specific supplier, the size of the order, contract terms and demand for each
component at a given time. If we underestimate our requirements, we may have
inadequate manufacturing capacity or inventory, which could interrupt
manufacturing of our products and result in delays in shipments and revenues. If
we overestimate our requirements, we could have excess inventory of parts.
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<PAGE>
We also may experience shortages of components from time to time, which also
could delay the manufacturing of our products and could cause us to lose orders
or customers.
BECAUSE WE HAVE ONLY RECENTLY BEGUN SELLING PRODUCTS TO THE OPTICAL NETWORKING
INDUSTRY, REVENUES FROM THESE PRODUCTS MAY BE DIFFICULT TO PREDICT, NET REVENUES
AND RESULTS OF OPERATIONS MAY FLUCTUATE AND OUR STOCK PRICE MAY BE MORE
VOLATILE.
We have only recently begun selling our fiber optic components, equipment
and modules to the optical communications industry, and generating revenues from
the sales of these products. We may be unable to accurately forecast our
revenues from sales of these products, and we have limited meaningful historical
financial data upon which to plan future operating expenses. In addition, many
of our expenses are fixed in the short term, and we may not be able to quickly
reduce spending if our revenue is lower than we project. Major new product
introductions will also result in increased operating expenses in advance of
generating revenues, if any. Therefore, net losses in a given quarter could be
greater than expected. We may not be able to address the risks associated with
our limited operating history in an emerging market and our business strategy in
this market may not be sustainable. Resulting quarterly fluctuations in our net
revenues could result in volatility or a decline in our stock price.
CYCLICALITY IN OUR BUSINESS HAS HISTORICALLY LED TO SUBSTANTIAL DECREASES IN
DEMAND FOR OUR PRODUCTS AND MAY FROM TIME TO TIME CONTINUE TO DO SO.
Our business has historically been significantly dependent on capital
expenditures by manufacturers of components for the computer disk drive industry
and the semiconductor industry. These industries are cyclical and historically
experienced periods of oversupply, which result in significantly reduced demand
for capital equipment, including the products manufactured and marketed by us.
For the foreseeable future, our operations will continue to be dependent on the
capital expenditures in these industries, which, in turn, are largely dependent
on the market demand for hard disk drives and products containing integrated
circuits. Our net sales and results of operations may be materially adversely
affected if downturns or slowdowns in the computer disk drive or semiconductor
markets occur in the future.
OUR BACKLOG MAY NOT RESULT IN FUTURE SALES.
We schedule the production of our systems based in part upon order backlog.
Due to possible customer changes in delivery schedules and cancellations of
orders, our backlog at any particular date is not necessarily indicative of
actual sales for any succeeding period. There can be no assurance that amounts
included in backlog will ultimately result in future sales. A reduction in
backlog during any particular period, or the failure of our backlog to result in
future sales, could harm our business.
WE FACE RISKS RELATING TO OUR INTERNATIONAL SALES AND OUR FOREIGN OPERATIONS.
Our products are sold internationally, including to customers in Japan and
throughout the Pacific Rim. Net sales to customers outside the United States
accounted for 44%, 46%, and 44%
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of our net sales in each of the fiscal years ended June 30, 2000, 1999, and
1998, respectively, and are expected to continue to account for a substantial
percentage of our net sales. International sales and foreign operations are
subject to inherent risks. These risks include:
o longer payment cycles;
o greater difficulty in accounts receivable collection;
o compliance with foreign laws;
o changes in regulatory requirements;
o tariffs or other barriers;
o difficulties in obtaining export licenses;
o difficulties in staffing and managing foreign operations;
o exposure to currency exchange fluctuations;
o reduced protection for intellectual property rights;
o political and economic instability;
o transportation delays; and
o potentially adverse tax consequences.
Substantially all our sales and costs are negotiated for and paid in U.S.
dollars. However, changes in the values of foreign currencies relative to the
value of the U.S. dollar can render our products comparatively more expensive to
the extent locally produced alternative products are available. These exchange
rate fluctuations could negatively impact international sales of our products
and our foreign operations, as would changes in the general economic conditions
in those markets. Any measures we take to protect us from exchange rate
fluctuations may not adequately protect us from their potential harm.
WE RELY HEAVILY ON OUR MIDDLEFIELD, CONNECTICUT AND HOLLISTON, MASSACHUSETTS
MANUFACTURING FACILITIES.
We manufacture substantially all of our metrology, bulk optics and
instrumentation products at our facility in Middlefield, Connecticut and our
microoptical components at our wafer lab in Holliston, Massachusetts. Any
extended interruption of optical component production at the Middlefield or
Holliston manufacturing facilities could have a material adverse effect on our
business.
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OUR QUARTERLY AND ANNUAL OPERATING RESULTS MAY FLUCTUATE AND THE PRICE OF OUR
COMMON STOCK MAY CHANGE IN RESPONSE TO THOSE FLUCTUATIONS.
Our quarterly and annual operating results have varied in the past and may
in the future vary significantly depending on factors such as:
o the effect of our acquisitions;
o the size, timing and recognition of revenue from significant orders;
o increased competition;
o our ability to develop innovative products;
o the timing of new product releases by us or our competitors;
o market acceptance of our products;
o changes in our and our competitors' pricing policies;
o budgeting cycles of our customers;
o changes in operating expenses and personnel changes;
o changes in our business strategy; and
o general economic factors.
Due to these and other factors we believe that quarter-to-quarter comparisons of
our operating results may not be meaningful. You should not rely on our results
for one quarter as any indication of our future performance. It is [likely] that
in future periods our operating results may be below the expectations of public
market analysts or investors. If this occurs, the price of our common stock
would likely decrease.
WE MAY EXPAND OUR BUSINESS THROUGH NEW ACQUISITIONS THAT COULD DISRUPT OUR
BUSINESS AND HARM OUR FINANCIAL CONDITION.
Our growth strategy includes expanding our products and services, and we
may seek acquisitions to expand our business. We regularly review various
acquisition prospects of businesses, technologies or products complementary to
our business and periodically engage in discussions regarding such possible
acquisitions. Acquisitions involve numerous risks, including some or all of the
following:
o substantial cash expenditures;
o potentially dilutive issuance of equity securities;
o incurrence of debt and contingent liabilities;
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o amortization of expenses related to goodwill and other intangible
assets;
o difficulties in assimilating the operations and products of the
acquired companies;
o diverting our management's attention away from other business
concerns;
o risks of entering markets in which we have limited or no direct
experience; and
o potential loss of key employees of the acquired companies in the
process of integrating personnel with disparate business backgrounds
and combining different corporate cultures.
We cannot assure you that any acquisition will result in long-term benefits
to us or that our management will be able to effectively manage the acquired
businesses. We may also incorrectly judge the value or worth of an acquired
company or business. In addition, our future success will depend in part on our
ability to manage the rapid growth associated with these acquisitions. We may
not be able to make the combination of our business with the businesses of an
acquired company's work or be successful. Furthermore, the development or
expansion of our business or any acquired business may require a substantial
capital investment by us. We may not have the necessary funds nor may they be
readily available to us on acceptable terms or at all. We may also seek to raise
funds by selling shares of our stock, which could dilute your ownership interest
in our company.
SALES TO OUR LARGEST CUSTOMER ACCOUNT FOR A SIGNIFICANT PORTION OF OUR NET
SALES.
During fiscal 2000, 1999 and 1998, sales to Canon Inc. and Canon Sales Co.,
Inc. (collectively, "Canon"), our largest customer in those periods, accounted
for approximately 19%, 21% and 18%, respectively, of our net sales. We expect
that sales to Canon, which owns approximately 8.5% of our outstanding shares of
Common Stock and is a distributor of some of our products in the Japanese
market, will continue to represent a significant percentage of our net sales for
the foreseeable future. Our customers generally, including Canon, do not enter
into long-term agreements obligating them to purchase our products. A reduction
or delay in orders from this customer, including reductions or delays due to
market, economic, or competitive conditions in the semiconductor or computer
disk drive industries, could have a material adverse effect upon our results of
operations.
WE MAY BE UNABLE TO EFFECTIVELY RESPOND TO TECHNOLOGICAL CHANGE.
The market for our products is characterized by rapidly changing
technology. Our future success will depend upon our ability to enhance our
current products and to develop and introduce new products that keep pace with
technological developments and evolving industry standards, respond to changes
in customer requirements and achieve market acceptance. If we fail to anticipate
or respond adequately to technological developments and customer requirements,
or experience significant delays in product development or introduction, our
business, results of operations, financial condition and liquidity will be
negatively affected.
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In order to develop new products successfully, we depend on close
relationships with our customers and their willingness to share proprietary
information about their requirements and participate in collaborative efforts
with us. We cannot assure you that our customers will continue to provide us
with timely access to such information. We may also fail to successfully develop
and market new products and services or product and service enhancements on a
timely basis, including in the optical communications market where we have very
limited experience, and we may not respond effectively to technological changes
or new product announcements by others.
IF WE FAIL TO MANAGE OUR GROWTH EFFECTIVELY, OUR BUSINESS MAY NOT SUCCEED.
We are experiencing a period of rapid growth and expansion due to both
acquisitions and internal growth. Our growth and expansion has placed, and could
continue to place, a significant strain on our management, personnel and other
resources.
To accommodate our recent growth and to compete effectively and manage
future growth we will be required to continue to implement and improve our
operational, financial and management information systems, procedures and
controls on a timely basis and to expand, train, motivate and manage our
workforce. Our inability to satisfy increased customer orders in a timely
fashion, or at all, could result in termination of customer relationships or
cause customers to seek alternative sources for their products. In addition, our
financial control systems and infrastructure may not be adequate to maintain and
effectively monitor our future growth. We cannot assure you that our personnel,
systems, procedures and controls will be adequate to support our existing and
future operations.
ENVIRONMENTAL REGULATIONS APPLICABLE TO OUR MANUFACTURING OPERATIONS COULD LIMIT
OUR ABILITY TO EXPAND OR SUBJECT US TO SUBSTANTIAL COSTS.
We are subject to a variety of environmental regulations relating to the
use, storage, discharge and disposal of hazardous chemicals used during our
manufacturing processes. Any failure by us to comply with present and future
regulations could subject us to future liabilities or the suspension of
production. In addition, such regulations could restrict our ability to expand
our facilities or could require us to acquire costly equipment or to incur other
significant expenses to comply with environmental regulations.
WE MAY NOT BE ABLE TO CONTINUE TO ATTRACT AND RETAIN QUALIFIED EMPLOYEES.
Our future success depends on our ability to attract and retain qualified
personnel in the following areas:
o engineering;
o management;
o manufacturing;
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o research and development;
o sales and marketing; and
o support.
Competition for these individuals is intense and many qualified individuals are
attracted to Internet businesses on the West Coast, and we cannot assure you
that we will be able to retain our existing personnel or attract and retain
additional personnel.
OUR PRODUCTS ARE DEPLOYED IN LARGE AND COMPLEX SYSTEMS AND MAY CONTAIN DEFECTS
THAT ARE NOT DETECTED UNTIL AFTER OUR PRODUCTS HAVE BEEN INSTALLED, WHICH COULD
DAMAGE OUR REPUTATION AND CAUSE US TO LOSE CUSTOMERS.
We design some of our products for deployment in large and complex optical
networks. Because of the nature of these products, they can only be fully tested
for reliability when deployed in networks for long periods of time. Our fiber
optic products may contain undetected defects when first introduced or as new
versions are released, and our customers may discover defects in our products
only after they have been fully deployed and operated under peak stress
conditions. In addition, our products are combined with products from other
vendors. As a result, should problems occur, it may be difficult to identify the
source of the problem. If we are unable to fix defects or other problems, we
could experience, among other things:
o loss of customers;
o damage to our brand reputation;
o failure to attract new customers or achieve market acceptance;
o diversion of development and engineering resources; and
o legal actions by our customers.
The occurrence of any one or more of the foregoing factors could cause us to
experience losses, incur liabilities and cause our net sales to decline.
WE FACE INTENSE COMPETITION, AND IF WE ARE UNABLE TO COMPETE SUCCESSFULLY, WE
WILL LOSE MARKET SHARE AND OUR BUSINESS WILL SUFFER.
We face competition from a number of companies in all of our markets, some
of which have greater manufacturing and marketing capabilities, and greater
financial, technological and personnel resources. We also compete with current
and prospective customers' attempts to become vertically integrated. Although we
believe that we have certain technical and other advantages over some of our
competitors, maintaining these advantages will require us to continue to invest
in research and development, sales, marketing and service. We cannot assure
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<PAGE>
you that we will have sufficient resources to continue to make these investments
or that we will be able to make the technological advances necessary to maintain
any competitive advantages.
NECESSARY LICENSES OF THIRD-PARTY TECHNOLOGY MAY NOT BE AVAILABLE TO US OR MAY
BE VERY EXPENSIVE, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO MANUFACTURE AND
SELL OUR PRODUCTS.
From time to time we may be required to license technology from third
parties to develop new products or product enhancements. We cannot assure you
that third-party licenses will be available to us on commercially reasonable
terms, or at all. The inability to obtain any third-party license required to
develop new products and product enhancements could require us to obtain
substitute technology of lower quality or performance standards or at greater
cost, either of which could seriously harm our ability to manufacture and sell
our products.
IF WE FAIL TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, WE MAY NOT BE ABLE
TO COMPETE.
Our success is heavily dependent upon our proprietary technology. We cannot
assure you that the steps we have taken to protect our proprietary technology
will be adequate to prevent misappropriation of our technology by third parties
or will be adequate under the laws of some foreign countries, which may not
protect our proprietary rights to the same extent as do laws of the United
States. Also, we cannot assure you that others will not "reverse engineer" our
products in order to determine their method of operation and introduce competing
products or that others will not develop competing technology independently. We
cannot assure you that our existing or future patents will not be challenged,
invalidated or circumvented. Any such adverse circumstances could have a
material adverse effect on our results of operations.
We rely on trade secret protection for our technology, in part through
confidentiality agreements with our employees, consultants and third parties.
However, employees may breach these agreements, and we may not have adequate
remedies for any breach. In any case, others may come to know about or determine
our trade secrets through a variety of methods.
IF OUR PRODUCTS INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES,
OUR BUSINESS MAY SUFFER IF WE ARE SUED FOR INFRINGEMENT OR CANNOT OBTAIN
LICENSES TO THESE RIGHTS ON COMMERCIALLY ACCEPTABLE TERMS.
We are subject to the risk of adverse claims and litigation alleging
infringement by us of the intellectual property rights of others. Although we
believe our services and products do not infringe the intellectual property
rights of others, it is possible that claims could be asserted against us in the
future. Many participants in the technology industry have an increasing number
of patents and patent applications and have frequently demonstrated a readiness
to take legal action based on allegations of patent and other intellectual
property infringement. Further, as the number of our products increase, the
markets in which our products are sold expand and the functionality of our
products grows and overlaps with products offered by our competitors, we believe
that we may become increasingly subject to infringement claims. If we become the
subject of a claim for infringement we would have to expend potentially
significant funds and
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<PAGE>
resources to defend the claim and, if we were to be deemed to infringe the
intellectual property rights of others, we could be forced to pay significant
license fees or damages for infringement.
OUR NEWLY ACQUIRED SUBSIDIARY'S NAME WAS CHANGED FROM FIREFLY TECHNOLOGIES, INC.
TO ZYGO TERAOPTIX AND THE NEW NAME IS NOT YET RECOGNIZED AS A BRAND NAME IN THE
MARKETPLACE, AS A RESULT OF WHICH PRODUCT SALES FROM OUR ZYGO TERAOPTIX UNIT
COULD SUFFER.
The loss of the brand name Firefly Technologies, Inc. may hinder our
ability to establish new relationships. When we acquired Firefly, we changed its
brand name and most of the trademarks and trade names under which it conducted
its business. The new name is not yet recognized in the marketplace and as a
result the product sales from our Zygo TeraOptix unit could suffer.
OUR EXECUTIVE OFFICERS AND DIRECTORS, TOGETHER WITH THEIR AFFILIATES,
BENEFICIALLY OWN APPROXIMATELY 18% OF OUR COMMON STOCK AND THEY MAY BE IN A
POSITION TO CONTROL AND DIRECT OUR AFFAIRS AND BUSINESS, INCLUDING THE ELECTION
OF ALL THE DIRECTORS.
Our executive officers and directors, through their affiliation with
certain stockholders and their stock option holdings, may be deemed to
beneficially own approximately 18% of our outstanding shares of common stock. As
a result, these individuals may have the ability to control us and direct our
affairs and business, including the election of all the directors.
WE EXPECT TO EXPERIENCE VOLATILITY IN OUR SHARE PRICE, WHICH COULD NEGATIVELY
AFFECT YOUR INVESTMENT, AND YOU MAY NOT BE ABLE TO RESELL YOUR SHARES AT OR
ABOVE THE OFFERING PRICE.
This offering price may vary from the market price of our common stock
after the offering. If you purchase shares of common stock, you may not be able
to resell those shares at or above the offering price. The market price of our
common stock has fluctuated significantly since our initial public offering and
we expect that our common stock price will fluctuate significantly in the future
due to:
o any deviations in our net revenues, gross margins or net losses from
levels expected by securities analysts;
o changes in financial estimates by securities analysts;
o changes in market valuations of other companies in the same or similar
markets; and
o future sales of common stock or other securities.
In addition, the Nasdaq National Market's National Market has experienced
extreme volatility that has often been unrelated to the performance of
particular companies. Future market fluctuations may cause our stock price to
fall regardless of our performance.
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<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by the
selling stockholders.
DIVIDEND POLICY
We have never declared or paid any dividends on our stock. We currently
anticipate that we will retain all future earnings to support our growth
strategy. Accordingly, we do not anticipate paying cash dividends on our stock
in the foreseeable future. The payment of any future dividends will be at the
discretion of our board of directors and will depend upon, among other things,
future earnings, operations, capital requirements, our general financial
condition, and general business conditions.
PRICE RANGE OF COMMON STOCK
Our common stock is quoted on the Nasdaq National Market under the symbol
"ZIGO." The following table sets forth, for the periods indicated, the high and
low reported sale prices per share for our common stock as reported by the
Nasdaq National Market.
HIGH LOW
-------- -------
YEAR ENDED JUNE 30, 1999:
First quarter.................................. $15 3/8 $ 6 3/8
Second quarter................................. $12 3/4 $ 5
Third quarter.................................. $15 3/4 $ 8 1/2
Fourth quarter. ............................... $13 1/8 $ 7 1/4
YEAR ENDED JUNE 30, 2000:
First quarter.................................. $14 5/8 $ 9 1/4
Second quarter ................................ $25 1/16 $13
Third Quarter.................................. $74 5/16 $19 3/8
Fourth Quarter................................. $94 $20 3/4
YEAR ENDING JUNE 30, 2001:
First quarter (through September 27, 2000)..... $98 3/8 $50 1/2
The number of stockholders of record of our common stock on September 27,
2000 was approximately 463. The last reported sale price of our common stock on
the Nasdaq National Market on September 26, 2000 was $79 13/16.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information regarding the selling
stockholders' beneficial ownership of our common stock as of August 31, 2000.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NUMBER OF SHARES SHARES OF COMMON SHARES OF COMMON
OF COMMON STOCK NUMBER OF SHARES OF STOCK BENEFICIALLY STOCK BENEFICIALLY
BENEFICIALLY OWNED COMMON STOCK OWNED AFTER THIS OWNED AFTER THIS
SELLING STOCKHOLDER (1) PRIOR TO THIS OFFERING REGISTERED HEREIN OFFERING OFFERING
----------------------- ---------------------- ------------------- ------------------------ ------------------------
<S> <C> <C> <C> <C>
John Berg (3) 532,984 532,934 50 *
Patrick Tan (4) 336,363 336,363 0 *
TeraStor Corporation 86,775 86,775 0 *
David Kindler 106,618 106,618 0 *
David Buswell 91,290 91,290 0 *
Mark Wilder 69,350 69,350 0 *
Thomas Killoren 103,753 103,753 0 *
Digital Papyrus Corporation 43,387 43,387 0 *
Easen Ho 43,387 43,387 0 *
David Kent 94,568 94,568 0 *
Phillip Malyak 94,568 94,568 0 *
Michael Harrington 81,581 81,581 0 *
Don Clausing 13,073 13,073 0 *
John Howard 25,536 25,536 0 *
Michael Terrio 14,566 14,566 0 *
Jeffrey Murzycki 6,580 6,580 0 *
Borislav Naidenov 15,356 15,356 0 *
Robert Natale 8,042 8,042 0 *
Lydia Heckman 8,803 8,803 0 *
Barry Mitchel 4,416 4,416 0 *
Deborah O'Connor 8,833 8,833 0 *
Kenneth Mueller 2,251 2,251 0 *
John Ritter 117,010 117,010 0 *
Lori Duncan 58,505 58,505 0 *
Scott Friends 50,648 50,648 0 *
Chongwon Byun 49,729 49,729 0 *
Hae Kwon Chung 49,729 49,729 0 *
John Watson 29,252 29,252 0 *
Mark Steinback 24,702 24,702 0 *
Leonard Croteau 21,521 21,521 0 *
Guy Messier 21,939 21,939 0 *
Wayne Smith 15,439 15,439 0 *
Joseph DeWolfe 12,788 12,788 0 *
Diane Briggs 8,441 8,441 0 *
Gary Potwin 8,692 8,692 0 *
Marjorie Swenson 7,763 7,763 0 *
Leonid Tesmenitsky 7,243 7,243 0 *
Robert Kusy 5,822 5,822 0 *
Carol Dana Berg 6,457 6,457 0 *
Robert Shillinsky II 5,823 5,823 0 *
Scot Barrows 6,519 6,519 0 *
Robert Cudmore 3,882 3,882 0 *
</TABLE>
--------------
* Less than one percent.
(1) The selling stockholders received their shares of common stock in
connection with our acquisition of Firefly Technologies, Inc. on May 5,
2000.
(2) Assumes that all shares offered by each selling stockholder are sold in
this offering.
(3) Mr. Berg serves as a director of Zygo Corporation.
(4) Mr. Tan serves as a director of Zygo Corporation.
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PLAN OF DISTRIBUTION
The selling stockholders (and their donees and pledgees) may offer their
shares at various times in one or more transactions on the Nasdaq National
Market, in special offerings, exchange distributions, secondary distributions,
negotiated transactions or a combination of these. They may sell at market
prices at the time of sale, at prices related to the market price or at
negotiated prices. The selling stockholders may use broker-dealers to sell their
shares. If this happens, broker-dealers will either receive discounts or
commissions from the selling stockholder, or they will receive commissions from
purchasers of shares for whom they acted as agents.
LEGAL MATTERS
For the purpose of this offering, our outside counsel, Fulbright & Jaworski
L.L.P., New York, New York 10103, is giving its opinion on the validity of the
shares. Paul Jacobs, a partner in Fulbright & Jaworski L.L.P., is our Secretary
and, as of September 27, 2000, beneficially owned 4,000 shares of our common
stock.
EXPERTS
The consolidated financial statements and schedules of Zygo Corporation
included in this prospectus and in the registration statement have been audited
by KPMG LLP, independent certified public accountants, to the extent and for the
periods set forth in their reports appearing elsewhere in this prospectus and in
the registration statement, and are included in reliance upon such reports given
upon the authority of that firm as experts in auditing and accounting.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered (other than underwriting
accounts and commissions) are estimated to be as follows:
SEC Registration Fee.......................................... $38,857.24
Accountants' Fees and Expenses................................ 13,000.00
Legal Fees and Expenses....................................... 15,000.00
Printing Fees................................................. 10,000.00
Miscellaneous................................................. 1,142.76
----------
Total........................................................ $78,000.00
==========
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware permits
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article VI of the By-Laws
of the Registrant contains provision for the indemnification of directors,
officers and employees within the limitations permitted by Section 145. In
addition, the Company has entered into Indemnity Agreements with its directors
and officers which provide the maximum indemnification allowed by Section 145.
The Company's officers and directors are insured against losses arising from any
claim against them as such for wrongful acts or omissions, subject to certain
limitations.
Item 16. EXHIBITS
NO. DESCRIPTION
--- -----------
*5 Opinion of Fulbright & Jaworski L.L.P. regarding legality.
*23 (a) Consent of Fulbright & Jaworski L.L.P. (to be filed as part
of Exhibit 5.1).
(b) Consent of KPMG LLP
24 Power of Attorney (included on signature page).
----------
* Previously filed.
Item 17. Undertakings.
(a) 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
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<PAGE>
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 of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(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 undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) 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 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 of the Registrant 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Middlefield, State of Connecticut, on September 29,
2000.
ZYGO CORPORATION
By: /s/ J. Bruce Robinson
-----------------------------------------
(J. Bruce Robinson, President and CEO)
------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints J. Bruce Robinson and Michael J. Auth, or either
of them, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
---------------------------------------- ----------------------------- --------------
<S> <C> <C>
By: /s/ J. Bruce Robinson President, Chief Executive September 29, 2000
---------------------------------------- Officer, and Director
*By: J. Bruce Robinson (Principal Executive Officer)
As Attorney-in-fact
* Vice President, Finance, September 29, 2000
---------------------------------------- Treasurer and Chief Financial
Michael J. Auth Officer
(Principal Financial and
Accounting Officer)
* Chairman of the Board September 29, 2000
----------------------------------------
Gary K. Willis
* Director September 29, 2000
----------------------------------------
John Berg
* Director September 29, 2000
----------------------------------------
Paul F. Forman
* Director September 29, 2000
----------------------------------------
Seymour E. Liebman
* Director September 29, 2000
----------------------------------------
Robert G. McKelvey
* Director September 29, 2000
----------------------------------------
Patrick Tan
* Director September 29, 2000
----------------------------------------
Robert B. Taylor
* Director September 29, 2000
----------------------------------------
Carl A. Zanoni
</TABLE>
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