As filed with the Securities and Exchange Commission on September 19, 1996
Registration No. 333-06447
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 ON FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CURTIS MATHES HOLDING CORPORATION
(Exact name of Registrant as specified in its charter)
Texas 3651 75-1975147
(Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation) Classification Code Number) Identification No.)
10911 Petal Street, Dallas, Texas 75238 (214) 503-8880
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Billy J. Robinson
Vice President, Secretary and General Counsel
Curtis Mathes Holding Corporation
10911 Petal Street, Dallas, Texas 75238 (214) 503-8880
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time after the registration statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.[X]
If the registrant elects to deliver its latest annual report to
security holders, or a complete legible facsimile thereof, pursuant to
Item 11(a)(1) of this Form, chech 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. [ ]
CALCULATION OF REGISTRATION FEE
Title of Each Proposed
Class of Maximum Amount of
Securities to Aggregate Registration
be Registered Offering Price(1) Fee
Common Stock, $.01 par value $3,728,561 $1,286(2)
(1) Estimated solely for the purpose of calculating the registration
fee. Pursuant to Rule 457(c), the offering price and registration fee
are calculated upon the basis of the average of the closing bid and
asked price of the Common Stock as reported by the NASDAQ SmallCap
Market on September 17, 1996 ($1.67). (2) $1,437 was previously paid with
filing of earlier Registration Statement on Form S-3 on June 20, 1996,
which filing was converted into this Registration Statement on Form S-2.
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, as amended,
or until this Registration Statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
1,468,671 of Common Stock Offered for Resale;
Up to 519,000 Shares of Common Stock Underlying Warrants,
Which Shares are being Registered for Resale upon Exercise of the
Warrants;
Up to 245,000 Shares of Common Stock Convertible from Preferred Stock,
Which Shares are being Registered for Resale upon Conversion of the
Preferred Stock.
CURTIS MATHES HOLDING CORPORATION
This Prospectus covers an aggregate total of 2,232,671 shares of
Common Stock, par value $.01 per share (the "Shares") of Curtis Mathes
Holding Corporation, a Texas corporation (the "Company.") 1,468,671
Shares are being offered for the account of security holders in a
secondary offering; 519,000 Shares underlying Warrants are being
registered for resale upon exercise of the Warrants; and 245,000 Shares
convertible from Preferred Stock are being registered for resale upon
conversion of the Preferred Stock. The common and preferred security
holders and warrant holders are hereinafter referred to as the "Selling
Stockholders." See "Selling Stockholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale by the
Selling Stockholders of the Shares to which this Prospectus relates. The
Company will only receive an economic benefit upon conversion of the
Preferred Stock and exercise of the warrants held by the Selling
Stockholders.
ANY INVESTMENT IN THE SECURITIES OFFERED HEREIN INVOLVES A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Price to Proceeds to Company
Public Discounts or other Persons
Per Share (1) (2) (3)
Total Maximum (4) (1) (2) (3)
(1) The Selling Stockholders may from time to time effect the sale of
their Shares at prices and at terms then prevailing or at prices
related to the then-current market price. The Common Stock of the
Company is traded on the NASDAQ SmallCap Market under the symbol
"CRTM." On September 17, 1996, the average closing bid and asked price
of the Common Stock as reported by the NASDAQ SmallCap Market was
$1.67 per share.
(2) The Selling Stockholders may pay regular brokers' commissions in
cash at the time(s) of the sale of their Shares.
(3) The Company will not receive any proceeds from the sales of the
Shares to which this Prospectus relates. The Selling Stockholders
will receive proceeds based on the market price of the Shares at
the time(s) of sale.
(4) Without deduction of expenses for the offering (all of which will
be borne by the Company), estimated to be approximately $7,937.
The date of this Prospectus is ______________________.
<PAGE>
(Inside front cover page of Prospectus)
AVAILABLE INFORMATION
The Company is an electronic filer and 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 Securities and Exchange
Commission (the "Commission"). The reports, proxy statements and other
information filed by the Company with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Regional Offices of the Commission at 7 World Trade
Center, Suite 1300, New York, New York 10048 and 500 W. Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material also can be
obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
also maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding
registrants that file electronically with the Commission.
The Company has filed with the Commission a Registration Statement
on Form S-2 (together with all amendments thereto, the "Registration
Statement") under the Securities Act, with respect to the shares of
Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. Such additional information may be obtained from the
Commission's principal office in Washington, D.C. Statements contained
in this Prospectus as to the contents of any contract or other document
referred to herein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as
an exhibit to the Registration Statement or to documents incorporated
therein by reference, each such statement being qualified in all respects
by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated
herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1996, dated August 7, 1996 (the "1996 10-K
Report.")
Any documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of this offering shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
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.
<PAGE>
To the extent that any proxy statement is incorporated by reference
herein, such incorporation shall not include any information contained in
such proxy statement which is not, pursuant to the Commission's rules,
deemed to be "filed" with the Commission or subject to the liabilities of
Section 18 of the Exchange Act.
This Prospectus is accompanied by a copy of the Company's latest
Form 10-K. The Company will additionally provide without charge to each
person, including any beneficial owner, to whom this Prospectus is
delivered, upon the written or oral request of such person, a copy of any
other documents incorporated herein by reference (other than exhibits to
such documents unless such exhibits are specifically incorporated by
reference into such documents). Any such request should be directed to
the Company's principal executive offices: Curtis Mathes Holding
Corporation, 10911 Petal Street, Dallas, Texas 75238, Attention:
Investor Relations; telephone number (214) 503-8880.
The Offering
Common Stock Offered by the 1,468,671 Shares
Selling Stockholders
Common Stock Offered by the Up to 519,000 Shares
Company Upon Exercise of
Warrants
Common Stock Offered by the Up to 245,000 Shares
Company Upon Conversion of
Preferred Stock
Common Stock Outstanding After 28,769,146
the Offering (1)
Use of Proceeds from Exercise Working capital and general
of Warrants corporate purposes
NASDAQ SmallCap Market Symbol CRTM
Risk Factors For a description of certain
risks inherent in an
investment in the Common
Stock, see "RISK FACTORS"
(1) Assumes the exercise of outstanding warrants to purchase 40,000
Shares at $4.50 per share, the exercise of outstanding warrants to
purchase 75,000 Shares at $3.28 per share, the exercise of
outstanding warrants to purchase 100,000 Shares at $3.125 per share,
the exercise of outstanding warrants to purchase 55,000 Shares at
$3.00 per share, the exercise of outstanding warrants to purchase
105,000 Shares at $1.25 per share, the exercise of outstanding
warrants to purchase 124,000 Shares at $1.00 per share, and the
exercise of outstanding warrants to purchase 20,000 Shares at $0.50
per share. Also assumes the conversion of Preferred Stock into
245,000 Shares at a minimum conversion price of $1.50.
RISK FACTORS
The following factors should be considered, together with the other
information in this Prospectus, in evaluating an investment in the
Company.
<PAGE>
Prior Claims on Future Earnings
One of the Company's primary operating subsidiaries, Curtis Mathes
Corporation (CMC), is currently operating under a six-year plan of
reorganization effective October 1, 1992 (the "Plan.") Accordingly, upon
acquiring CMC, the Company assumed the responsibility for certain claims
associated with CMC. Until termination, or otherwise settled, Deutsche
Financial Services Corporation (DFS) (f/k/a ITT Commercial Finance Corp.)
maintains the right to 1% of gross sales on CMC product sales only, as a
priority creditor in the Plan. Further, 1/2% of gross sales of CMC must
also be paid monthly to a Liquidating Trustee, which has been
designated by the Bankruptcy Court to administer such payments on behalf
of unsecured creditors in the order of priority.
Beyond these obligations to DFS and the Trustee, CMC remains
obligated to service past outstanding product warranties. Cash balances
have been set aside to cover these estimated product warranty costs and
an additional amount is accrued monthly to cover the estimated costs
associated with ongoing warranty support for current products sold. Many
of the warranties on products sold in the past are expiring and due to
lower product sales in the past few years CMC s warranty obligations are
slowly diminishing; however, until expiration of the Plan period or until
these pre-existing obligations are paid or otherwise settled, CMC's
profitability will be affected to the extent of the required
expenditures.
Increases in Cost of Finished Goods
CMC and Curtis Mathes Marketing Corporation ("CMMC") are both
dependent upon outside sources (original equipment manufacturers) for
manufacturing and assembly of all finished goods, and are therefore
subject to increases in the cost of such goods. Such costs are typically
stable in the short term because such goods are provided to CMC and CMMC
pursuant to seasonal contracts with suppliers at an agreed cost.
However, there can be no assurance that such costs will not increase
significantly in the future. Any such increase in cost could be
reflected in the sale price of the products at the consumer level, which
could in turn affect product sales levels.
Variable Economy
The consumer electronics industry is influenced significantly by
general economic conditions, including consumer behavior and consumer
confidence, the level of personal discretionary spending, interest rates
and credit availability. Variations in the general economy affecting
expendable consumer dollars impacts a consumer s willingness to expend
monies for the Company's product lines, which translates into
fluctuations in sales volumes for the Company. There can be no assurance
that a prolonged economic downturn would not have a material adverse
effect upon the profitability of the Company.
Excessive Inventory Levels
The market for consumer electronics products continues to be driven
by technological changes that are inherent to the industry. Management
makes every effort to maintain ample inventory to meet short term sale
requirements. However, the Company is in the same position as other
consumer electronics companies in attempting to accurately gauge consumer
demand, and there can be no assurance of sufficient consumer reaction and
<PAGE>
demand upon the Company's product lines in the future to avoid
accumulating excessive inventory levels. In the event that consumer
demand is less than reasonably estimated, inventory on hand could exceed
the minimally acceptable levels, resulting in reduced cash flows and a
further restriction on the use of the Company's capital which is
dedicated to the inventory. Excessive inventory levels could also lead
to inventory obsolesence, which is discussed in the following section.
Inventory Obsolescence
Closely tied to excessive inventory levels is the risk of inventory
obsolescence. If inventory on hand reaches such a level that new models
of products cannot be rotated for sale to the consumer within a
reasonable period of time, the risk will increase that the Company may
not be able to sell the older models at the expected margin, resulting is
markdowns to move the products, all of which affects the profitability of
the Company.
Dependence on New Product Introduction
The Company's future success will depend to a great extent upon the
timely introduction of successful new products to the marketplace, such
as the UniView recently announced by the Company. A significant delay in
the introduction of, or the presence of a defect in, one or more new
products could have a material adverse effect on the ultimate success of
such products and on the Company's business, operating results and
financial condition, particularly in view of the seasonality of the
Company's business. Further, because of the revenue typically associated
with initial shipments of a new product, delaying a product introduction
expected near the end of a fiscal quarter may materially adversely affect
operating results for that quarter. The process of developing television
Internet access products containing software-related components such as
UniView is extremely complex and is expected to become more complex and
expensive in the future as new platforms and technologies are addressed.
This new technology requires outside services which have not yet been
proven to be reliable, such as file servers, routers, modems, and other
similar devices commonly used in the computer industry, but not yet used
on a wide scale for television Internet access products.
In the past, the Company has experienced delays in the introduction
of certain new products, the Company anticipates that there may be
similar delays in developing and introducing new products in the future,
and there can be no assurance that new products will be introduced on
schedule in the future or at all. Further, the market for these new
products is evolving and, in comparison with the overall market for
consumer electronics products, is considered relatively small, making it
difficult to predict with any assurance the future growth rate and size
of the market. There can be no assurance that new products introduced by
the Company will achieve market acceptance or generate significant
revenues.
Changes in Technology and Industry Standards
The consumer electronics industry is undergoing rapid changes,
including evolving industry standards, frequent new product introductions
and changes in consumer requirements and preferences. The introduction
of new technologies and products can render the Company's existing and
announced products obsolete or unmarketable. The development cycle for
products utilizing new technology may be significantly longer than the
<PAGE>
Company's current development cycle for products on existing and
proposed technology and may require the Company to invest resources in
products that may not become profitable. There can be no assurance that
the expected demand for the Company's products will materialize or
continue or that the mix of the Company's future product offerings will
keep pace with technological changes or satisfy evolving consumer
preferences or that the Company will be successful in developing and
marketing future products. Failure to develop and introduce new products
and product enhancements in a timely fashion could have a material
adverse effect on the Company's business, operating results and financial
condition.
Risk of Product Failures
Television Internet access products containing software-related
components as complex as those recently announced by the Company may
contain undetected errors when first introduced. As any such undetected
errors become known to the Company, delays or lost revenues during the
period required to correct these errors can be expected. The Company has
experienced delays and significant technical support expenses in
connection with products in the past and there can be no assurance that,
despite testing by the company, errors will not be found in new products
or releases after commencement of commercial shipments, resulting in loss
of or delay in market acceptance, which could have a material adverse
effect on the Company's business, operating results and financial
condition.
Limited Protection of Intellectual Property and Proprietary Rights; Risk
of Litigation
The Company regards its television Internet access technology
containing software-related components as proprietary and relies
primarily on a combination of trademark, copyright and trade secret laws,
employee and third-party nondisclosure agreements and other methods to
protect these proprietary rights. Also, as the number of television
Internet access products in the industry increases and the functionality
of these products overlap, infringement claims may also increase. There
can be no assurance that third parties will not assert infringement
claims against the Company in the future with respect to current or
future products. As is common in the industry, from time to time the
Company receives notices from third parties claiming infringement of
intellectual property rights of such parties. The Company investigates
these claims and responds as it deems appropriate. Policing unauthorized
use of the Company's products is difficult and can be expected to be a
recurring problem. Further, the Company enters into transactions in
countries where intellectual property laws are not well developed or are
poorly enforced. Legal protections of the Company's rights may be
ineffective in such countries, and software-related products developed in
such countries may not be protectable in jurisdictions where protection
is ordinarily available. Any claims or litigation, with or without
merit, could be costly and could result in a diversion of management's
attention, which could have a material adverse effect on the Company's
business, operating results and financial condition. Adverse
determinations in such claims or litigation could also have a material
adverse effect on the Company's business, operating results and financial
condition.
<PAGE>
Dependence on Distribution Channels
CMC and CMMC expect to sell their products by direct mail, through
consumer electronics stores, computer stores, and mail order companies.
Sales to a limited number of distributors and retailers are anticipated
to constitute a substantial majority of the Company's net revenues.
Minimum purchase obligations of any principal distributor or retailer are
not expected to be significant and the Company expects to sell on a
purchase order basis without a long-term agreement to a majority of these
entities. The loss of, or significant reduction in sales attributable
to, any of these distribution channels could materially adversely affect
the Company's business, operating results and financial condition.
Distribution and retailing businesses in the consumer electronics
industry have from time to time experienced significant fluctuations in
their businesses and there have been a number of business failures among
these entities. The insolvency or business failure of any significant
distributor or retailer of the Company's products could have a material
adverse effect on the Company's business, operating results and financial
condition.
Seasonality of the Industry
CMC and CMMC are subject to decreased sales and profitability during
the first and second quarters of each calendar year, resulting from the
seasonal effect of the consumer buying season. CMC and CMMC operations
must be supplemented during such periods through their reserves or
through other operations of the Company. Although the Company typically
plans ahead for this seasonal variation in product sales, there can be no
assurance that past budgetary expectations will be adequate to cover such
periods in the future.
Highly Competitive Industry
The industry in which both CMC and CMMC operate is intensely and
increasingly competitive and includes a large number of both domestic and
foreign manufacturers of consumer electronics products. Competition
occurs principally in the areas of style, quality, functionality,
service, design and price. CMC has positioned itself over the years in a
niche market of high-end consumer electronics home entertainment products
made up primarily of 31" or larger televisions and has chosen to compete
primarily on quality, rather than price and volume. However, competition
from competitors, with greater sales volumes and greater financial
resources than CMC, could adversely affect CMC s operating results by
forcing it to reduce its sales prices, offer enhanced credit arrangements
including longer payment terms, increase customer discounts or
incentives, increase spending for co-operative advertising arrangements
with customers, incur additional shipping costs, or provide other
services which could adversely affect the profitability of the Company.
CMMC only recently announced its new line of television Internet
access products, but it is already apparent that competition in this new
area of cutting-edge technology is intense. Several existing and start-
up consumer electronics companies have also announced similar television
Internet access devices and, to the extent that these competitors achieve
product and brand name recognition, product quality, price or other
selling advantages, the Company could be adversely affected. There can
be no assurance that the Company will have the resources required to
respond effectively to market or technological changes or to compete
successfully in the future.
<PAGE>
Excessive Warranty Claims
CMC continues to provide a four-year warranty on all finished goods
sold. Provision for these claims is reserved at 2.5% of the total
product sales price. Although management believes that the 2.5% reserve
is adequate to meet claim requirements based upon historical data, there
can be no assurance that this amount will always cover warranty claims
filed during any particular period. If warranty claims during any
particular period exceed projections, the Company must cover such claims
out of current cash flow or other operating capital, thereby reducing the
profitability of the Company during such periods.
Off-Balance Sheet Risks
An "off-balance sheet risk" is one in which the ultimate obligation
of the Company may exceed the amount reported in the liability section of
the financial statements and which may be triggered by the default of a
third party on an obligation upon which the Company is contingently
liable. CMC is a party to financial instruments with such off-balance
sheet risks to meet the financing requirements of CMC's dealers. In the
normal course of business, CMC has transferred receivables from qualified
dealers to Deutsche Financial Services Corporation ("DFS") and Fidelity
Funding, Inc. under a repurchase agreement. The agreement requires CMC,
in the event of default by the dealer, to repurchase property that is
collateral (inventory consisting of consumer electronics products) for
the financing provided to the dealer. CMC is contingently liable to DFS
and Fidelity Funding, Inc. for the portion of the receivable which is
defaulted through nonpayment or nonrecovery of the collateral.
Since CMC's reorganization in October, 1992, DFS has charged off
approximately $454,365 due to dealer defaults which has been charged
against CMC's reserve account maintained with DFS. This amount has been
partially offset by recovery of unsold products from such dealers, which
can then be resold by CMC. As dealer defaults occur in the future and
the Company honors its repurchase obligations, the profitability of the
Company could be reduced accordingly.
Absence of Profitable Operations in Recent Periods
The Company has reported a net loss in each of its last five fiscal
years. The Company purchased CMC in November, 1993 and sold the computer
chip segment of its operations in December, 1994. In addition, in late
1994, the Company acquired the rights to RealViewTM, a ten foot square
projection television used in commercial advertising applications.
Further, in April, 1996, the Company acquired the rights to UniViewTM, an
interactive television technology. Although the character of the Company
has changed over the past couple of years, and management believes that
operations can be improved, there is a limited operating history for the
Company in its present form and there can be no assurance that the
present combination of operating segments will be profitable in the
future.
Limited Cash Flow
As of June 30, 1996, the Company had not achieved a positive cash
flow from operations. Accordingly, the Company relies on available
credit arrangements and continued sales of its common and preferred stock
to fund operations until a positive cash flow from operations can be
achieved. If the Company is unable to achieve a positive cash flow from
<PAGE>
operations, additional financing or placements will be required.
Management continually evaluates opportunities with various investors to
raise additional capital, without which, the Company's growth and
profitability could be restricted. Although management believes that
sufficient financing resources are available, there can be no assurance
that such resources will continue to be available to the Company or that
they will be available upon terms favorable to the Company.
Dependence on Key Personnel
The Company's success depends to a significant extent on the
performance and continued service of its senior management and certain
key employees. Competition for highly skilled employees with technical,
management, marketing, sales, product development and other specialized
training is intense, and there can be no assurance that the Company will
be successful in attracting and retaining such personnel. Specifically,
the Company may experience increased costs in order to attract and retain
skilled employees. In addition, there can be no assurance that employees
will not leave the Company or compete against the Company. The Company's
failure to attract additional qualified employees or to retain the
services of key personnel could materially adversely affect the Company's
business, operating results and financial condition.
Possible Volatility of Stock Price
The stock market has recently experienced significant price and
volume fluctuations that could continue in the future. These
fluctuations could adversely affect the market price of the Common Stock
without regard to the Company's operating performance. The market price
for shares of Common Stock has varied significantly and may be volatile
depending on news announcements and changes in general market conditions.
The Company believes that factors such as quarterly variations in the
Company's financial results or the financial results of competitors,
general industry conditions, including competitive developments, and
general economic conditions could also cause uncertain price fluctuations
in the Common Stock. In addition, registration of the Common Stock in
this offering could result in sales of a substantial number of shares of
Common Stock in the public market, which could adversely affect the
market price of the Common Stock.
Potential Dilution of Shareholders' Ownership Interests
As of September 17, 1996, there were 28,005,146 common shares of the
Company issued and outstanding. Assuming the issuance of 12,572,733
common shares in exchange for the total number of warrants outstanding as
of that date (without regard to whether such shares are being registered
hereunder), and the issuance of common shares in conversion to Common
Stock of all convertible preferred stock outstanding as of that date
(Preferred Stock convertible into approximately 2,329,776 common shares),
there would be approximately 42,907,655 common shares outstanding. In
such event, an existing shareholder before such issuances would
experience a dilution factor of approximately 38.2% by such issuance,
assuming such shareholder held none of the warrants or preferred stock
being exercised or converted. In other words, an existing 10%
shareholder before such issuances would become a 6.53% shareholder after
such issuance and other existing shareholders would experience a similar
dilution of their ownership interest in the Company.
<PAGE>
Further assuming the exercise of all outstanding warrants, the pro
forma net tangible book value of the Company would also increase by the
amount of the proceeds paid to the Company for the Common Stock
(approximately $20,184,490 or $0.47 per share.) "Pro forma net tangible
book value" represents the amount of total tangible assets less total
liabilities divided by the number of shares of Common Stock outstanding
after considering the issuance of Common Stock for outstanding warrants
and the conversion of Preferred Stock into Common Stock. The increase
results from giving effect to the receipt by the Company of the net
proceeds from the exercise of the warrants.
The likelihood that the warrants will be exercised increases as the
market price of the stock rises above the exercise price of the warrants.
(See page 17 herein for further discussion of the Warrants.)
Preferred Stock's Preference Over Common Stock
The Company's Preferred Stock has preferences over the Common Stock
in payment of dividends and in distributions to shareholders upon
dissolution of the Company. (See the description of Preferred Stock
beginning on page 16 herein for a more detailed description of these
preferences.) During ongoing operation of the Company, these preferences
mean very little; payment of dividends to Preferred Shareholders has no
adverse effect upon Common Shareholders because the Company has not in
the past, and does not expect in the foreseeable future, to declare any
dividends on its Common Stock. However, in the event it became necessary
to dissolve the Company, to the extent of any assets remaining after
payment of all creditors of the Company, Preferred Shareholders would
receive the face amount and all accrued dividends on their Preferred
Stock before any distributions could be made to Common Shareholders. In
the event of a dissolution of the Company at the currently outstanding
levels of Common and Preferred Stock, because of the Preferred Stock
preferences, a Common Shareholder could receive a distribution which is
approximately $0.07 per share less than it would otherwise receive if
there were no shares of Preferred Stock outstanding.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sales of
the Shares by Selling Stockholders. The likelihood of the Company
receiving any proceeds from the exercise of the warrants increases as the
market price of the Company's stock increases above the exercise price of
the warrants. If the market price of the stock does not increase to the
required levels, the Company will most likely not receive any proceeds
from this offering. Assuming the full exercise of the warrants to
purchase 40,000 Shares at $4.50 per share (expiring in mid-1999), the
exercise of outstanding warrants to purchase 75,000 Shares at $3.28 per
share (expiring in mid-2001), the exercise of outstanding warrants to
purchase 100,000 Shares at $3.125 per share (expiring in mid-1999), the
exercise of outstanding warrants to purchase 55,000 Shares at $3.00 per
share (expiring in mid-1999), the exercise of outstanding warrants to
purchase 105,000 Shares at $1.25 per share (expiring in mid-2000), the
exercise of outstanding warrants to purchase 124,000 Shares at $1.00 per
share (expiring in mid-1999), and the exercise of outstanding warrants to
purchase 20,000 Shares at $0.50 per share (expiring in mid-1999), the net
proceeds to the Company from the sale of 519,000 Shares issuable upon
exercise of the warrants would be approximately $1,160,813 after
deducting expenses payable by the Company.
<PAGE>
Any proceeds received by the Company upon exercise of the warrants
will be used for general corporate purposes, including, but not limited
to, operating and working capital requirements. Various uses of the
proceeds may include additional advertising and promotion, further
promotion and development of RealView and UniView. Potential other uses
of the proceeds may include acquisition of additional products or
technologies, although the Company currently has no commitments or
agreements with respect to any such transactions. Pending such uses, the
net proceeds would be invested in investment grade, interest-bearing
securities.
SELLING STOCKHOLDERS
This Prospectus relates to 891,806 Shares and an additional 245,000
Shares issuable upon the conversion of Preferred Stock, all of which were
issued pursuant to Securities Purchase Agreements (the "Securities
Purchase Agreements") between the Company and certain Selling
Stockholders. This Prospectus also relates to 60,000 Shares and an
additional 115,000 Shares issuable upon the exercise of warrants, which
were issued to M.J. Segal & Company/Private Investors Equity Group,
("MJS"), pursuant to an agreement dated June 1, 1995, (the "MJS
Agreement"), as consideration for $1,150,000 of capital raised by MJS for
the Company. This Prospectus also relates to 75,000 Shares issuable upon
the exercise of warrants, which were issued to M.J. Segal & Associates,
Michael D. Moore, and Shipley Raidy Capital Partners, L.P., pursuant to
an agreement dated May 17, 1996, (the "Shipley Raidy Agreement"), as
consideration for $1,375,000 of capital raised by Shipley Raidy for the
Company. This Prospectus also relates to 516,865 Shares and an
additional 329,000 Shares issuable upon the exercise of warrants, which
were issued to certain other Selling Stockholders pursuant to other
private placements in the past. See "Plan of Distribution."
The "Number of Shares," the "Number of Shares Underlying Warrants,"
and the Maximum Number of Shares Convertible from Preferred Stock set
out in the table below represent the total number of Shares beneficially
owned by the Selling Stockholders before the offering. All of such
Shares are being offered for the account of the Selling Stockholders and
after the offering the Selling Stockholders will each own no Common Stock
of the Company.
Maximum
Relationship Number of Number of
to Number Shares Shares
Selling the of Underlying Convertible from
Stockholder Company Shares Warrants Preferred Stock
SECURITIES ACQUIRED PURSUANT TO A SECURITIES PURCHASE AGREEMENT:
Bulldog Capital
Partners,L.P. Private Investor 200,000 N/A N/A
John Eastman
Clark, M.D.,
Trustee for the
John Eastman Clark
Ltd. Money Purchase
Pension Plan Private Investor 134,977 N/A N/A
<PAGE>
DC Investments
Partners
Opportunity
Fund, L.P. Private Investor 253,130 N/A N/A
Generation
Capital
Associates Private Investor N/A N/A 70,000
Daniel German Private Investor N/A N/A 70,000
HCA Enterprises
Worldwide, LLC Private Investor 236,210 N/A N/A
JDN Partners, L.P. Private Investor N/A N/A 70,000
Warren E. Palitz Private Investor N/A N/A 17,500
Pine Street Asset
Management,L.P. Private Investor 67,489 N/A N/A
Elizabeth D. Ryan Private Investor N/A N/A 17,500
SUBTOTAL 891,806 N/A 245,000
COMMON STOCK AND WARRANTS ACQUIRED PURSUANT TO THE MJS
AGREEMENT:
M.J. Segal
& Associates(1) Finder 27,750 53,625 N/A
Michael D. Moore(1) Finder 27,750 53,625 N/A
Private Investors
Equity Group(1) Finder 4,500 7,750 N/A
SUBTOTAL 60,000 115,000 N/A
WARRANTS ACQUIRED PURSUANT TO THE SHIPLEY RAIDY AGREEMENT:
M.J. Segal
& Associates(2) Finder N/A 11,250 N/A
Michael D. Moore(2) Finder N/A 11,250 N/A
Shipley Raidy
Capital Partners,
L.P. (2) Finder N/A 52,500 N/A
SUBTOTAL N/A 75,000 N/A
COMMON STOCK AND WARRANTS ACQUIRED PURSUANT TO PAST PRIVATE
PLACEMENTS:
Bernard S. Appel, Director 50,000 N/A N/A
Associates Affiliated
Funding with a 10%
Group, Inc., Beneficial Owner 136,865 N/A N/A
Josephine Amason, Employee 500 N/A N/A
Alissa M. Baker Employee 250 N/A N/A
Dan Blanton Employee 350 N/A N/A
Malissa A. Bonnin Employee 3,500 N/A N/A
Kenneth D.Caviness Employee 1,500 N/A N/A
Charlotte Cravey Employee 400 N/A N/A
Catherine J. Emery Employee 250 N/A N/A
Cynthia D. Greenlee Employee 750 N/A N/A
Jack Roy Houser Employee 250 N/A N/A
Doris J. Lake Employee 750 N/A N/A
Reagan Melton Employee 350 N/A N/A
Nancy J. Parker Employee 400 N/A N/A
Patricia Richards Former Employee 1,500 N/A N/A
<PAGE>
F. Shelton
Richardson, Jr. Current Officer 15,000 N/A N/A
Elena Y. Rohweder Former Employee 1,500 N/A N/A
Mary E. Stout Employee 250 N/A N/A
Mary E. Wood Employee 2,500 N/A N/A
John Beardmore Private Investor N/A 40,000 N/A
Ralph L. Colosimo Private Investor N/A 14,000 N/A
Scott D. Cook (3) Private Investor 50,000 N/A N/A
Ivor J. Flannery Private Investor N/A 25,000 N/A
Charles Hays Private Investor N/A 80,000 N/A
Philip A. LaBarbera Private Investor N/A 40,000 N/A
Donald F.
Moorehead, Jr. Private Investor N/A 40,000 N/A
George Moorehead and
Nancy Moorehead Private Investor N/A 20,000 N/A
North-South Capital
Partners, Ltd. Private Investor 250,000 N/A N/A
Dwight Romanica and
Nancy Romanica Private Investor N/A 50,000 N/A
Jeff Webb and
Gina Webb Private Investor N/A 20,000 N/A
SUBTOTAL 516,865 329,000 N/A
TOTAL 1,468,671 519,000 245,000
GRAND TOTAL 2,232,671
(1) These Shares and warrants were issued by the Company to M.J. Segal &
Associates, Michael D. Moore, and Private Investors Equity Group
pursuant to the MJS Agreement.
(2) These warrants were issued by the Company to M.J. Segal &
Associates, Michael D. Moore, and Shipley Raidy Capital Partners,
L.P. pursuant to the Shipley Raidy Agreement.
(3) Scott D. Cook is a director of First Southwest Company, which is a
former financial advisor of the Company.
PLAN OF DISTRIBUTION
Securities Being Registered
The following securities are covered by this Prospectus:
1. The resale of 891,806 Shares owned by those security holders
who received Common Stock of the Company pursuant to a Securities
Purchase Agreement.
2. The resale of 60,000 Shares owned by MJS, who acquired Common
Stock of the Company pursuant to the MJS Agreements.
3. The resale of 516,865 Shares owned by certain security holders
who acquired Common Stock of the Company pursuant to past private
placements.
<PAGE>
4. The resale by MJS of up to 115,000 Shares that may be acquired
upon the exercise of warrants issued pursuant to the MJS Agreement to
purchase 20,000 Shares at $0.50 per share, 55,000 Shares at $3.00 per
share, and 40,000 Shares at $4.50 per share.
5. The resale by M.J. Segal & Associates, Michael D. Moore, and
Shipley Raidy Capital Partners, L.P. of up to 75,000 Shares that may be
acquired upon the exercise of warrants issued pursuant to the Shipley
Raidy Agreement to purchase 75,000 Shares at $3.28 per share.
6. The resale by the respective holders thereof of up to 329,000
Shares that may be acquired upon the exercise of warrants issued pursuant
to past private placements to purchase 100,000 Shares at $3.125 per
share, 105,000 Shares at $1.25 per share, and 124,000 Shares at $1.00 per
share.
7. The resale by the respective holders thereof of up to 245,000
Shares that may be acquired upon the conversion of Preferred Stock issued
pursuant to a Securities Purchase Agreement to acquire up to 245,000
Shares at a minimum conversion price of $1.50 per share.
Plan of Distribution
The Shares being registered hereunder may be sold from time to time
by any of the Selling Stockholders, or by pledgees, donees, transferees
or other successors in interest, or by additional selling stockholders.
The Shares may be disposed of from time to time in one or more
transactions through any one or more of the following: (i) to purchasers
directly, (ii) in ordinary brokerage transactions and transactions in
which the broker solicits purchasers, (iii) through underwriters or
dealers who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholders or
such successors in interest and/or from the purchasers of the Shares for
whom they may act as agent, (iv) the pledge of the Shares as security for
any loan or obligation, including pledges to brokers or dealers who may,
from time to time, themselves effect distributions of the Shares or
interests therein, (v) purchases by a broker or dealer as principal and
resale by such broker or dealer for its own account pursuant to this
Prospectus, (vi) a block trade in which the broker or dealer so engaged
will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction and (vii)
an exchange distribution in accordance with the rules of such exchange,
including the NASDAQ SmallCap Market, prices and at terms then prevailing
or at prices related to the then current market price or at negotiated
prices and terms. In effecting sales, brokers or dealers may arrange for
other brokers or dealers to participate. The Selling Stockholders or
such successors in interest, and any underwriters, brokers, dealers or
agents that participate in the distribution of the Shares, may be deemed
to be "underwriters" within the meaning of the Securities, Act, and any
profit on the sale of the Shares by them and any discounts, commissions
or concessions received by any such underwriters, brokers, dealers or
agents may be deemed to be underwriting commissions or discounts under
the Securities Act.
The Company will pay all of the expenses incident to the offering
and sale of the Shares to the public other than underwriting discounts or
commissions, brokers' fees and the fees and expenses of any counsel to
the Selling Stockholders related thereto.
<PAGE>
In the event of a material change in the plan of distribution
disclosed in this Prospectus, the Selling Stockholders will not be able
to effect transactions in the Shares pursuant to this Prospectus until
such time as a post-effective amendment to the Registration Statement is
filed with, and declared effective by, the Commission.
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized by its articles of incorporation, as
amended, to issue up to 40,000,000 shares of Common Stock, $.01 par
value, of which 28,005,146 shares were outstanding as of September 17,
1996. Holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders and do not have
cumulative voting rights in the election of directors. Accordingly, the
holders of a majority of the outstanding Common Stock can, if they so
choose, elect all directors. The vote of the holders of a majority of
the shares entitled to vote, present in person or represented by proxy,
shall decide any question brought before a meeting of the Company's
shareholders at which a quorum is present. A quorum consists of a
majority of the issued and outstanding shares of the Common Stock
entitled to vote. The articles of incorporation of the Company specify
that a majority vote of shareholders shall be determinative regardless of
provisions requiring more than a majority vote under the Texas Business
Corporation Act.
All of the outstanding shares of Common Stock are, and the shares
issuable upon exercise of warrants and conversion of preferred stock will
be fully paid and nonassessable. Holders of the Common Stock have no
preemptive or other subscription rights, and shares of Common Stock have
no redemption, sinking fund, or conversion privileges. Holders of Common
Stock are entitled to receive dividends when, as and if declared by the
board of directors of the Company, out of funds legally available
therefor. In the event of liquidation or dissolution of the Company,
holders of Common Stock are entitled to share ratably in all assets
available for distribution to such shareholders.
Preferred Stock
The Company is authorized to issue up to 1,000,000 shares of
Preferred Stock, $1.00 par value, in one or more series, which, if
issued, would have certain preferences over the Common Stock. The
articles of incorporation of the Company vest the board of directors with
authority to establish and designate series of Preferred Stock and to fix
and determine the relative rights and preferences of any series so
established. As of September 17, 1996, outstanding Preferred Stock
consisted of (a) 140,000 shares of Series A Preferred Stock with an
annual dividend rate of 6%, a redemption value of $1.00 per share, and no
right to convert into Common Stock; (b) 14 shares of Series H Preferred
Stock with an annual dividend rate of 5%, a redemption value of $25,000
per share, and the right to convert such Preferred Stock into 233,335
shares of Common Stock at a minimum conversion price of $1.50 per share;
<PAGE>
and (c) 3,114 shares of Series I Preferred Stock with an annual dividend
rate of 0%, a redemption value of $1,250 per share, and the right to
convert such Preferred Stock into 2,096,441 shares of Common Stock at a
variable conversion price based upon the stock price of the Company's
common stock for a period immediately preceding the date of conversion
($1.2468750 per share as of September 17, 1996.)
Such Preferred Stock has no voting rights. It has preference over
the Common Stock as to dividends, and no dividends can be declared or
paid on the Common Stock unless full dividends on all Preferred Stock
then outstanding for all past dividend periods and for the current period
had been declared and paid. Dividends on all Preferred Stock, regardless
of series, are cumulative. No dividend may be declared on shares of any
series of Preferred Stock for any dividend period unless all dividends
accumulated for all prior dividend periods have been declared on all
Preferred Stock then outstanding and a dividend for the same period is
declared at the same time upon all Preferred Stock outstanding in like
proportions to the dividend rate then declared. In the event of
dissolution, liquidation or winding up of the Company, whether voluntary
or involuntary, the holders of each series of the then outstanding
Preferred Stock would be entitled to receive the amount fixed for such
purpose in the resolution of the board of directors establishing the
respective series of Preferred Stock plus a sum equal to the amount of
all accumulated and unpaid dividends thereon. After such payment to the
holders of Preferred Stock, the remaining assets and funds of the Company
could be distributed pro rata among the holders of the Common Stock. The
whole or any part of outstanding Preferred Stock may be called for
redemption and redeemed at any time at the option of the Company,
exercisable by the board of directors upon thirty days' notice by mail to
the holders of such shares as are to be redeemed.
Warrants
As of September 17, 1996, the Company had outstanding warrants held
by various investors exercisable for a total of 12,572,733 shares of
Common Stock. Exercise prices of the warrants range from a high of $3.94
per share, to a low of $0.50 per share. Such warrants have expiration
dates ranging from January, 1997 through June, 2001.
Debentures
As of September 17, 1996, the Company had no outstanding debentures.
The transfer agent and registrar for Common Stock is KeyCorp
Shareholder Services, Inc., 1201 Elm Street, Suite 5050, Dallas, Texas
75270.
RECENT DEVELOPMENTS
There have been no material changes in the Company's affairs since
the filing of the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996 which report has been incorporated herein by
reference.
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the validity of the
securities offered hereby have been passed upon for the Company by Billy
J. Robinson. Mr. Robinson is an attorney who acts as counsel to the
Company. Mr. Robinson is also a director and owns 65,000 shares of
Common Stock.
EXPERTS
The financial statements and the related financial statement
schedules incorporated in this prospectus by reference from the Company's
Annual Report on Form 10-K for the fiscal years ended June 30, 1996 and
on 1995 have been audited by King, Burns & Company, P.C., independent
certified public accountants, as stated in their report which is
incorporated herein by reference, and has been so incorporated in
reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the Company's Articles of
Incorporation or Bylaws, or otherwise, the registrant has been advised
that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of
such issue.
<PAGE>
(Outside back cover page of Prospectus)
TABLE OF CONTENTS
Page
The Offering (summary) 3
Risk Factors 4
Use of Proceeds 11
Selling Stockholders 11
Plan of Distribution 14
Description of Securities 15
Recent Developments 17
Legal Matters 17
Experts 17
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities 17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission
registration fee $1,436.66
Transfer agent's fees 500.00
Costs of printing 2,500.00
Legal fees and expenses 1,500.00
Accounting fees and expenses 500.00
Blue sky fees and expenses 500.00
Miscellaneous expenses 1,000.00
Total estimated fees $ 7,936.66
All amounts estimated except for Securities and Exchange Commission
registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02(16) and 2.02-1 of the Texas Business Corporation Act
empowers a corporation to indemnify its directors and officers or former
directors or officers and to purchase insurance with respect to liability
arising out of their capacity or status as directors and officers.
Article XIII of the Company's Articles of Incorporation, as amended,
provides that a director of the Company shall not be personally liable to
the Company or its shareholders for monetary damages for any act or
omission in his capacity as a director, except to the extent otherwise
expressly provided by a statute of the State of Texas. Article IX of the
Company's Bylaws provides for indemnification of officers and directors.
The Company has to date entered into no Indemnity Agreements with any of
its officers or directors, although it is permitted to do so.
ITEM 16. EXHIBITS
For a list of all exhibits filed as a part of this Registration
Statement on Form S-2, including those incorporated herein by reference,
please refer to the Exhibit Index located at the end of this Registration
Statement, immediately preceding the exhibits.
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:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
<PAGE>
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to
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) The undersigned Registrant hereby undertakes that: (1) For
purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus 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.
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-2 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas, State of Texas, on
September 19, 1996.
CURTIS MATHES HOLDING CORPORATION
By: /s/ PAT CUSTER
Patrick A. Custer
President and Chief Executive Officer
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Patrick A. Custer and F.
Shelton Richardson, Jr., each of whom may act without joinder of the
other, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign, execute and file with the
Commission and any state securities regulatory board or commission any
documents relating to the proposed issuance and registration of the
securities offered pursuant to this Registration Statement on Form S-2
under the Securities Act of 1933, including any amendment or amendments
relating thereto, which amendments may make such changes in the
Registration Statement as such attorney may deem appropriate, with all
exhibits and any and all documents required to be filed with respect
thereto with any regulatory authority, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done
in and about the premises in order to effectuate the same as fully to all
intents and purposes as he might or could do if personally present,
hereby ratifying and confirming all that said attorneys-in-fact and
agents, or either of them, or their or his substitute or substitutes, may
lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act, this
Registration Statement on Form S-2 has been signed by the following
persons in the capacities and on the dates indicated.
Principal Executive Officer
/s/ PAT CUSTER Chairman of the Board, September 19, 1996
Patrick A. Custer President, Chief Executive Officer
and Director
Principal Financial and Accounting Officer
/s/ F. SHELTON RICHARDSON, JR. Vice President, September 19, 1996
F. Shelton Richardson, Jr. Chief Financial Officer
<PAGE>
Additional Directors
/s/ BILLY J. ROBINSON Vice President, Secretary, September 19, 1996
Billy J. Robinson General Counsel and Director
/s/ BERNARD S. APPEL Director September 19, 1996
Bernard S. Appel
EXHIBIT INDEX
Exhibit Number
4.1 Articles of Incorporation of the Company, as amended, defining
the rights of security holders (filed as Exhibit "4.1" to the
Company's Registration Statement on Form S-3 originally filed
with the Commission on June 20, 1996 and incorporated herein by
reference.)
4.2 Bylaws of the Company, as amended (filed as Exhibit "3(ii)" to
the Company's annual report on Form 10-K for the fiscal year
ended June 30, 1994 and incorporated herein by reference.)
<PAGE>
4.3 Series A Preferred Stock terms and conditions (filed as Exhibit
"4.3" to the Company's annual report on Form 10-K for the
fiscal year ended June 30, 1994 and incorporated herein by
reference.)
4.4 Series H Preferred Stock terms and conditions (filed as Exhibit
"4.4" to the Company's Registration Statement on Form S-3
originally filed with the Commission on June 20, 1996 and
incorporated herein by reference.)
4.5 Series I Preferred Stock terms and conditions (filed as Exhibit
"4.5" to the Company's Registration Statement on Form S-3
originally filed with the Commission on June 20, 1996 and
incorporated herein by reference.)
5* Opinion of Billy J. Robinson.
10.1 Sublicense Agreement dated June 1, 1994 between SysPower
Corporation and Animated Systems and Presentations, Inc. (filed
as Exhibit "10.4" to the Company's annual report on Form 10-K
for the fiscal year ended June 30, 1994 and incorporated herein
by reference.)
10.2** Written description of employment arrangement with Mr. Robinson
filed as Exhibit "10.5" to the Company's annual report on Form
10-K for the fiscal year ended June 30, 1994 and incorporated
herein by reference.)
10.3 Business Financing Agreement dated as of October 27, 1992
between Curtis Mathes Corporation and Deutsche Financial
Services Corporation (f/k/a ITT Commercial Finance Corp.)
(filed as Exhibit "10.8" to the Company's annual report on Form
10-K for the fiscal year ended June 30, 1995 and incorporated
herein by reference.)
10.4 Amendment to Business Financing Agreement dated as of July 15,
1994 between Curtis Mathes Corporation and Deutsche Financial
Services Corporation (f/k/a ITT Commercial Finance Corp.)
(filed as Exhibit "10.9" to the Company's annual report on Form
10-K for the fiscal year ended June 30, 1995 and incorporated
herein by reference.)
10.5 Addendum to Business Financing Agreement dated as of August 13,
1994 between Curtis Mathes Corporation and Deutsche Financial
Services Corporation (f/k/a ITT Commercial Finance Corp.)
(filed as Exhibit "10.10" to the Company's annual report on
Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.6 Letter Agreement dated as of September 19, 1994 between Curtis
Mathes Corporation and Deutsche Financial Services Corporation
(f/k/a ITT Commercial Finance Corp.) (filed as Exhibit "10.11"
to the Company's annual report on Form 10-K for the fiscal year
ended June 30, 1995 and incorporated herein by reference.)
<PAGE>
10.7 Amendment to Business Financing Agreement dated as of January
17, 1995 between Curtis Mathes Corporation and Deutsche
Financial Services Corporation (f/k/a ITT Commercial Finance
Corp.) (filed as Exhibit "10.12" to the Company's annual report
on Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.8 Floorplan Purchase Agreement dated as of October 27, 1992
between Curtis Mathes Corporation and Deutsche Financial
Services Corporation (f/k/a ITT Commercial Finance Corp.)
(filed as Exhibit "10.13" to the Company's annual report on
Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.9 Amendment to Floorplan Purchase Agreement dated as of April 30,
1993 between Curtis Mathes Corporation and Deutsche Financial
Services Corporation (f/k/a ITT Commercial Finance Corp.)
(filed as Exhibit "10.14" to the Company's annual report on
Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.10 Financing Program Agreement dated as of October 27, 1992
between Curtis Mathes Corporation and Deutsche Financial
Services Corporation (f/k/a ITT Commercial Finance Corp.)
(filed as Exhibit "10.15" to the Company's annual report on
Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.11 Amendment to Financing Program Agreement dated as of November
6 , 1992 between Curtis Mathes Corporation and Deutsche
Financial Services Corporation (f/k/a ITT Commercial Finance
Corp.) (filed as Exhibit "10.16" to the Company's annual report
on Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.12 Amendment to Financing Program Agreement dated as of April 15,
1993 between Curtis Mathes Corporation and Deutsche Financial
Services Corporation (f/k/a ITT Commercial Finance Corp.)
(filed as Exhibit "10.17" to the Company's annual report on
Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.13 Amendment to Financing Program Agreement dated as of September
8 , 1993 between Curtis Mathes Corporation and Deutsche
Financial Services Corporation (f/k/a ITT Commercial Finance
Corp.) (filed as Exhibit "10.18" to the Company's annual report
on Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.14 Revolving Credit and Security Agreement dated March 17, 1994
between Curtis Mathes Corporation and Fidelity Funding, Inc.
(filed as Exhibit "10.19" to the Company's annual report on
Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
<PAGE>
10.15 Asset Purchase Agreement between Curtis Mathes Marketing
Corporation and Hughes Training, Inc. dated as of October 25,
1994, relating to the purchase of the RealView technology
(filed as Exhibit "10.20" to the Company's annual report on
Form 10-K for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.16** Letter Consulting Agreement between the Company and Mr. Appel
dated January 30, 1995 (filed as Exhibit "10.21" to the
Company's annual report on Form 10-K for the fiscal year ended
June 30, 1995 and incorporated herein by reference.)
10.17 Trademark License Agreement dated June 1, 1994 between Curtis
Mathes Corporation, as Licensor, and Animated Systems and
Presentations, Inc., as Licensee, relating to CM trademark
license for LED sign systems (filed as Exhibit "10.25" to the
Company's annual report, as amended, on Form 10-K/A for the
fiscal year ended June 30, 1995 and incorporated herein by
reference.)
10.18 First Amended Partial Assignment of Rights Under Sublicense
Agreement dated February 28, 1995 between Animated Systems and
Presentations, Inc. and Curtis Mathes Marketing Corporation,
relating to LED sign technology (filed as Exhibit "10.26" to
the Company's annual report, as amended, on Form 10-K/A for the
fiscal year ended June 30, 1995 and incorporated herein by
reference.)
10.19 Trademark License Agreement dated February 28, 1995 between
Curtis Mathes Corporation, as Licensor, and Curtis Mathes
Marketing Corporation, as Licensee, relating to CM trademark
license for RealView products and LED sign systems (filed as
Exhibit "10.27" to the Company's annual report, as amended, on
Form 10-K/A for the fiscal year ended June 30, 1995 and
incorporated herein by reference.)
10.20 Trademark License Agreement dated April 17, 1996 between Curtis
Mathes Corporation, as Licensor, and Curtis Mathes Marketing
Corporation, as Licensee, relating to CM trademark license for
UniView products (filed as Exhibit "10.20" to the Company's
annual report on Form 10-K for the fiscal year ended June 30,
1996 and incorporated herein by reference.)
10.21 Settlement and Release Agreement dated as of March 9, 1996
between the Company and Deutsche Financial Services
Corporation, f/k/a ITT Commercial Finance Corp. (filed as
Exhibit "10.1" to the Company's quarterly report on Form 10-Q
for the quarter ended March 31, 1996 and incorporated herein by
reference.)
10.22 Contract for Sale of Goods dated March 15, 1996 between Curtis
Mathes Corporation and R.S. Haas and Silverman Retail
Consultants, Inc. for the sale of CM inventory in connection
with DFS Settlement and Release Agreement (filed as Exhibit
"10.22" to the Company's annual report on Form 10-K for the
fiscal year ended June 30, 1996 and incorporated herein by
reference.)
<PAGE>
10.23 Letter of Intent dated April 29, 1996 between Curtis Mathes
Corporation, Warranty Repair Corporation, and Inman's
Corporation relating to CM warranty service (filed as Exhibit
"10.23" to the Company's annual report on Form 10-K for the
fiscal year ended June 30, 1996 and incorporated herein by
reference.)
10.24 Warranty Service Agreement dated May 10, 1996 between Curtis
Mathes Corporation, Warranty Repair Corporation, and Inman s
Corporation relating to CM warranty service (filed as Exhibit
"10.24" to the Company's annual report on Form 10-K for the
fiscal year ended June 30, 1996 and incorporated herein by
reference.)
10.25 Memorandum of Asset Purchase Agreement dated June 19, 1996
between Warranty Repair Corporation and Inman s Corporation
relating to sale of WRC s parts inventory (filed as Exhibit
"10.25" to the Company's annual report on Form 10-K for the
fiscal year ended June 30, 1996 and incorporated herein by
reference.)
10.26 Promissory Note from Inman s Corporation to Warranty Repair
Corporation dated June 19, 1996 relating to sale of WRC parts
inventory (filed as Exhibit "10.26" to the Company's annual
report on Form 10-K for the fiscal year ended June 30, 1996 and
incorporated herein by reference.)
10.27 Security Agreement dated June 19, 1996 between Inman s
Corporation and Warranty Repair Corporation relating to sale of
WRC parts inventory (filed as Exhibit "10.27" to the Company's
annual report on Form 10-K for the fiscal year ended June 30,
1996 and incorporated herein by reference.)
10.28 Technology License Agreement dated April 23, 1996 between
Interactive Video Publishing, Inc., as Licensor, and Curtis
Mathes Marketing Corporation, as Licensee, relating to
UniView (Vista and KOSMOS) technology (filed as Exhibit
"10.28" to the Company's annual report on Form 10-K for the
fiscal year ended June 30, 1996 and incorporated herein by
reference.)
10.29 Trademark License Agreement dated April 23, 1996 between Curtis
Mathes Corporation, as Licensor, and Interactive Video
Publishing, Inc., as Licensee, relating to CM trademark license
for Vista set-top units (filed as Exhibit "10.29" to the
Company's annual report on Form 10-K for the fiscal year ended
June 30, 1996 and incorporated herein by reference.)
16 Letter regarding change in certifying accountant (filed as
Exhibit to the Company's current report on Form 8-K/A dated
November 15, 1994 and incorporated herein by reference.)
23.1* Consent of King, Burns & Company, P.C.
23.2* Consent of Billy J. Robinson (included in his opinion filed as
Exhibit 5).
24* Powers of Attorney (included on the Signature Page of the
Registration Statement.)
<PAGE>
99.1 Agreement between the Company and M.J. Segal & Company/Private
Investors Equity Group dated June 1, 1995 (the "MJS
Agreement")(filed as Exhibit "99.1" to the Company's
Registration Statement on Form S-3 originally filed with the
Commission on August 7, 1995 and incorporated herein by
reference.)
99.2 Form of the Securities Purchase Agreement for 200,000 Shares
(filed as Exhibit "99.2" to the Company's Registration
Statement on Form S-3 originally filed with the Commission on
June 20, 1996 and incorporated herein by reference.)
99.3 Form of the Securities Purchase Agreement for up to 916,668
Shares issuable upon the conversion of Series H Preferred
Stock (filed as Exhibit "99.3" to the Company's Registration
Statement on Form S-3 originally filed with the Commission on
June 20, 1996 and incorporated herein by reference.)
99.4 Form of the Registration Rights Agreement covering up to
916,668 Shares issuable upon the conversion of Series H
Preferred Stock (filed as Exhibit "99.4" to the Company's
Registration Statement on Form S-3 originally filed with the
Commission on June 20, 1996 and incorporated herein by
reference.)
99.5 Form of Warrant (filed as Exhibit "99.5" to the Company's
Registration Statement on Form S-3 originally filed with the
Commission on June 20, 1996 and incorporated herein by
reference.)
99.6 Agreement between the Company and Shipley Raidy Capital
Partners, L.P., dated May 17, 1996 (the Shipley Raidy
Agreement )(filed as Exhibit "99.6" to the Company's
Registration Statement on Form S-3 originally filed with the
Commission on June 20, 1996 and incorporated herein by
reference.)
_________________
* Filed herewith.
** Management contract or compensation plan or arrangement required to be
filed as an exhibit.
<PAGE>
Exhibit 5
September 19, 1996
Curtis Mathes Holding Corporation
10911 Petal Street
Dallas, Texas 75238
Gentlemen:
I have acted as counsel to Curtis Mathes Holding Corporation, a
Texas corporation (the "Company") in connection with the proposed public
offering of up to 2,232,671 shares of the Company's Common Stock, $.01
par value (the "Common Stock"), as described in the Registration
Statement on Form S-2 filed with the Securities and Exchange Commission
on the date hereof (the "Registration Statement").
I have, as counsel, as I have deemed necessary examined such
corporate records, certificates and other documents and reviewed such
questions of law as I have deemed necessary, relevant or appropriate to
enable me to render the opinions expressed below. In rendering such
opinions, I have assumed the genuineness of all signatures and the
authenticity of all documents examined by me. As to various questions of
fact material to such opinions, I have relied upon representations of the
Company.
Based upon such examination and representations, I advise you that,
in my opinion:
A. The shares of Common Stock which are to be sold and delivered
by certain selling stockholders of the Company (the "Selling
Stockholders") as contemplated by the Plan of Distribution specified in
the Registration Statement, have been duly and validly authorized by the
Company and have been validly issued and are fully paid and non-
assessable.
B. The shares of Common Stock which are to be sold and delivered
by the Company pursuant to the exercise of the warrants and the
conversion of preferred stock, when issued and delivered in accordance
with the terms of the warrants, will be validly issued, fully paid, and
non-assessable.
I consent to the filing of this opinion as Exhibit "5" to the
Registration Statement and to the reference to myself under the caption
"Legal Matters" in the prospectus contained therein.
Sincerely,
/s/ Billy J. Robinson
Billy J. Robinson, General Counsel
Curtis Mathes Holding Corporation
<PAGE>
Exhibit 23.1
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Curtis Mathes Holding Corporation on Form S-2 of our report
dated August 7, 1996, appearing in the Annual Report on Form 10-K of
Curtis Mathes Holding Corporation for the fiscal years ended June 30,
1996 and 1995 and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
KING, BURNS & COMPANY, P.C.
Dallas, Texas
September 19, 1996
