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As filed with the Securities and Exchange Commission on April 21, 1998
Registration No. 333-41061
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-effective Amendment No. 1 to Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
UNIVIEW TECHNOLOGIES CORPORATION
(Exact name of Registrant as specified in its charter)
(Formerly CURTIS MATHES HOLDING CORPORATION)
Texas 3651 75-1975147
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
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
uniView Technologies 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 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, 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.[ ]
CALCULATION OF REGISTRATION FEE
Title of Each Amount Proposed Proposed
Class of To Be Maximum Maximum Amount of
Securities to Registered(1) Offering Price Aggregate Registration
be Registered Per Unit(2) Offering Price(2) Fee (3)
Common Stock,
$.01 par value 24,000,000 $0.23 $5,520,000 $1,628.40
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(1) Includes up to a maximum of 22,900,000 estimated shares of
Common Stock, issuable upon conversion of or otherwise with respect to
the Registrant's Series M and Series N Convertible Preferred Stock.
(2) 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 high
and low trading prices of the Common Stock as reported by the Nasdaq
Stock Market on April 17, 1998.
(3) $898.18 was previously paid with the initial filing of this
Registration Statement on November 25, 1997, and the balance of $730.22
has been paid with this filing ($604.42 plus credit of $125.80.)
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.
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SUBJECT TO COMPLETION, DATED APRIL 21, 1998
1,000,000 Shares of Common Stock Offered for Resale;
Up to 100,000 Shares of Common Stock Underlying Warrants,
Which Shares are being Registered for Resale upon Exercise of the Warrants;
Up to 22,900,000 Shares of Common Stock Convertible from Preferred Stock,
Which Shares are being Registered for Resale upon Conversion of the
Preferred Stock.
UNIVIEW TECHNOLOGIES CORPORATION
This Prospectus covers an aggregate total of 24,000,000 (estimated)
shares of Common Stock, par value $.01 per share (the "Shares") of
uniView Technologies Corporation, formerly Curtis Mathes Holding
Corporation, a Texas corporation (the "Company.") 1,000,000 Shares are
being offered for the account of security holders in a secondary
offering; up to 100,000 Shares underlying Warrants are being registered
for resale upon the exercise of Warrants; and up to a maximum of
22,900,000 (estimated) shares of Common Stock issuable upon conversion of
the Company's Series M and Series N Convertible Preferred Stock (the
"Preferred Stock") are being registered for resale upon conversion of the
Preferred Stock. The common and preferred security holders and the
warrant holders are hereinafter referred to as the "Selling
Stockholders." See "Selling Stockholders" and "Plan of Distribution."
The number of Shares included in this Prospectus as "Common Stock
Convertible from Preferred Stock" is based on a conversion price, which
represents an average closing bid price of the Common Stock over five
consecutive trading days immediately prior to conversion. The Preferred
Stock is convertible at any time, and the actual conversion price and
number of actual Shares issuable upon conversion cannot be precisely
determined until such time as the Preferred Stock is actually converted.
The purpose of this Post-effective Amendment No. 1 is to register
additional Shares, which have become issuable as a result of the decrease
in market price of the Common Stock since the date of the original filing
of this Prospectus. Pursuant to the Registration Rights Agreement
between the Company and the preferred security holders, the Company
agreed to include in this Prospectus a number of Shares in excess of the
number that would be issuable if the Preferred Stock is converted as of a
current date. The current conversion price is used merely for the
purposes of estimating and setting forth a number of shares for this
Prospectus. The actual number of Shares issuable upon conversion of the
Preferred Stock is subject to adjustment, depending on the actual date of
conversion in the future, and could be materially less or more than such
estimated amount, depending on factors which cannot be predicted by the
Company including, among other things, the future market price of the
Common Stock. See "Risk Factors - Possible Volatility of Stock Price."
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 the 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 5 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.
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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 Stock Market under the symbol
"UVEW." On April 17, 1998, the average of the high and low trading
prices of the Common Stock as reported by the Nasdaq Stock Market
was $0.23 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 $2,698.
The date of this Prospectus is ______________.
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(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 World Wide Web site (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. As the Common
Stock of the Company is quoted on the Nasdaq Stock Market, reports, proxy
statements and other information concerning the Company may be inspected
at the offices of the National Association of Securities Dealers, Inc. at
1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement
on Form S-3 (together with all amendments thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (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 Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 1997, dated February 13, 1998 (the "December 1997
10-Q Report.")
(2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1997, dated November 12, 1997 (the "September
1997 10-Q Report.")
(3) The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997, dated August 6, 1997 (the "1997 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.
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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.
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.
The Company will 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 and all information
that has been 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: uniView Technologies
Corporation, 10911 Petal Street, Dallas, Texas 75238, Attention: Investor
Relations; telephone number (214) 503-8880.
The Offering
Common Stock Offered by the 1,000,000 Shares
Selling Stockholders
Common Stock Offered by the Up to 100,000 Shares
Company Upon Exercise of
Warrants
Common Stock Offered by the Up to 22,900,000 Shares
Company Upon Conversion of (estimated)
Preferred Stock
Common Stock Outstanding After 84,767,406 (estimated)
the Offering (1)
Use of Proceeds from Exercise Working capital and general
of Warrants corporate purposes
Nasdaq Stock Market Symbol UVEW
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 100,000
Shares at $1.50 per share and the conversion of Preferred Stock into
22,900,000 estimated Shares, which represents a number of Shares in
excess of the number that would be issuable if the Preferred Stock is
converted as of a current date.
RISK FACTORS
The following factors should be considered, together with the other
information in this Prospectus, in evaluating an investment in the
Company. When used in this Prospectus, the words "plans," "expects,"
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"anticipates," "estimates," "believes" and similar expressions are
intended to identify forward-looking statements. Such statements, which
may include statements contained in the following "Risk Factors" section,
are subject to risks and uncertainties, discussed in greater detail in
this section below and elsewhere in this Prospectus that could cause
actual results to differ materially from those projected or discussed.
These forward-looking statements speak only as of the date of this
Prospectus. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or change in the Company's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement may be based.
RISKS RELATED TO COMPANY OPERATIONS
Limited Cash Flow; Additional Financing Required
In recent years, the Company has not achieved a positive cash flow
from operations. Accordingly, the Company continues to rely on available
credit arrangements and continued sales of its common and preferred stock
to supplement its ongoing financial needs. The Company has recently
revised its business model and has moved away from manufacturing and
marketing consumer electronics products into developing and licensing to
third parties its state-of-the-art Internet-television convergence
technologies. It has become evident that to fully realize, or to achieve
earlier than otherwise possible, the expected financial returns on its
current business model, it will be necessary for the Company to join with
one or more major financial business partners which have the means to
fund the Company's operations during this introductory phase. Until the
Company becomes self-supporting or links with a substantial financial
business partner, additional equity or debt financing will be required.
Management continually evaluates opportunities with various investors to
raise additional capital, without which, the Company's operations, growth
and profitability would be restricted. Management has in the past been
able to raise necessary financing to fund ongoing operations, however,
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. A lack of sufficient financial resources to
fund operations until the Company's business plan begins to produce the
expected returns could have a material adverse effect on the Company's
business, operating results and financial condition.
Limited Operating History; Absence of Profitable Operations in Recent
Periods
The Company has reported a net loss in each of its last five fiscal
years from a combination of various operating segments. In 1992, the
Company purchased a computer chip company, Southwest Memory, Inc.
("SWM"). In 1993, it purchased Curtis Mathes Corporation ("CMC") and in
1994 it sold SWM. Also in 1994 the Company acquired the rights to, and
later received a patent on, the RealViewTM technology, which can be
incorporated into a ten-foot square projection television used in
commercial advertising applications. In 1996 the Company began
development of the uniViewTM technologies for the convergence of the
Internet and television mediums, and another subsidiary, uniView
Xpressway Corporation, initiated the uniView XpresswayTM Internet access
and online service and currently offers its services as an Internet
Service Provider and Online Service. The character of the Company has
changed over the recent past and there is a limited operating history for
the Company in its present form under its current business model. There
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can be no assurance that the Company's current business model or the
current combination of operating segments will be profitable in the
future.
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 the Company's 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, the shares being
registered under this Prospectus will become eligible for sale in the
public market after the Registration Statement becomes effective. The
shares are expected to have no underwriters and will therefore not be
subject to underwriter price stabilization transactions. No prediction
can be made as to the effect, if any, that sales of such securities, or
the availability of such securities for sale, will have on the market
prices prevailing from time to time for the Common Stock. However, even
the possibility that a substantial number of the Company's securities
may, in the near future, be sold in the public market may adversely
affect prevailing market prices for the Common Stock and could impair the
Company's ability to raise additional capital through the sale of its
equity securities. Such impaired ability, or inability, of the Company
to raise necessary financing for its ongoing operations could have a
material adverse effect on the Company's business, operating results and
financial condition. See "Risk Factors -- Limited Cash Flow; Additional
Financing Required."
Risks Related to Under-Priced Stocks
The Common Stock is currently listed on the Nasdaq SmallCap Market
("Nasdaq"). In order to continue to be listed on Nasdaq, the Company
must, as of February 23, 1998, maintain $2,000,000 in net tangible assets
(total assets less total liabilities and goodwill) or market
capitalization of $35,000,000 or $500,000 in net income for two of the
last three years, a $1,000,000 market value for the public float, two
market-makers, and a minimum bid price of $1.00 per share. The Company
has been notified that it complies with all of the above listing criteria
except the minimum bid price of its Common Stock. The Company has been
further notified that, based upon the price data covering the thirty (30)
consecutive trade dates immediately prior to February 23, 1998, its
Common Stock is not in compliance with the new minimum bid price
requirement, pursuant to NASD Marketplace Rule 4310(c)(04). The Company
has been provided ninety (90) calendar days, which expires May 28, 1998,
in order to regain compliance with this standard. The Company may regain
compliance if its Common Stock trades at or above the minimum requirement
for at least ten (10) consecutive trade days prior to May 28, 1998.
The Company expects to regain compliance with the minimum bid price
requirement by effecting a 10:1 reverse stock split and, in this regard,
the Company on January 29, 1998 obtained shareholder approval for the
reverse stock split and reclassification of its Common Stock from $0.01
par value to $0.10 par value. The Company plans to coordinate the timing
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and implementation of the reverse stock split and reclassification of its
Common Stock to comply with Nasdaq requirements and to maximize the
benefits to its shareholders.
Prior to May 28, 1998 and in the future, if the Company fails to
meet the minimum maintenance criteria it may result in the delisting of
the Company's securities from Nasdaq, and trading, if any, of the
Company's securities would thereafter be conducted in the non-Nasdaq over-
the-counter market. If the Company's securities are delisted, an
investor could find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, the Company's securities.
In addition, if the Common Stock were to become delisted from trading on
Nasdaq and the trading price of the Common Stock were to remain below
$5.00 per share, trading in the Common Stock would also be subject to the
requirements of certain other rules promulgated under the Securities
Exchange Act of 1934, as amended. Such rules require additional
disclosure by broker-dealers in connection with any trades involving a
stock defined as a "penny stock," i.e., any non-Nasdaq equity security
that has a market price of less than $5.00 per share, subject to certain
exceptions. Such rules further require the delivery of a disclosure
schedule explaining the penny stock market and the risks associated
therewith prior to entering into any penny stock transaction, and impose
various sales practice requirements on broker-dealers who sell penny
stocks to persons other than established customers and accredited
investors (generally institutions.) For these types of transactions, the
broker-dealer must make a special suitability determination for the
purchaser and must receive the purchaser's written consent to the
transaction prior to the sale. The additional burdens imposed upon
broker-dealers by such requirements could discourage broker-dealers from
effecting transactions in the Common Stock, which could severely limit
the market liquidity of the Common Stock and the ability of purchasers in
this offering to sell the Common Stock in the secondary market.
Potential Dilution of Shareholders' Ownership Interests
As of April 17, 1998, there were 60,767,406 common shares of the
Company issued and outstanding. Assuming the issuance of 10,723,230
common shares in exchange for the total number of warrants and vested
stock options 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 (all preferred stock convertible into
approximately 15,457,408 common shares, based upon the conversion price
as of April 17, 1998), there would be approximately 86,948,044 common
shares outstanding. Approximately 6,000,000 of the warrants have a
current exercise price above $1.00 and would not likely be exercised at
the current market price of the Company's stock. However, if all
outstanding warrants and vested stock options were exercised at their
current exercise price, an existing shareholder would experience dilution
of their ownership interest in the Company to the extent such shareholder
held none of the securities being exercised or converted. For example,
an existing 10% shareholder before such issuances would become a 6.98%
shareholder after such issuances, assuming such shareholder held none of
the warrants or preferred stock being exercised or converted, and other
existing shareholders would experience a similar dilution of their
ownership interest in the Company.
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Further assuming the exercise of all outstanding warrants and vested
stock options and the issuance of common shares in conversion to Common
Stock of all convertible preferred stock outstanding as of April 17,
1998, the pro forma net tangible book value of the Company would increase
by the amount of the proceeds paid to the Company for the Common Stock
issued in exchange for the warrants and vested stock options
(approximately $10,089,628 or $0.116 per share increase.) "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 stock options 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 and stock options.
The likelihood that the warrants and vested stock options will be
exercised increases as the market price of the stock rises above the
exercise price of the warrants and stock options. See "DESCRIPTION OF
SECURITIES: Warrants and Employee Stock Options."
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. 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 April
17, 1998 levels of Common and Preferred Stock, because of the Preferred
Stock preferences, a Common Shareholder could receive a distribution
which is approximately $0.06 per share less than it would otherwise
receive if there were no shares of Preferred Stock outstanding. See
"DESCRIPTION OF SECURITIES: Preferred Stock."
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.
<PAGE>
Prior Claims on Future Earnings
One of the Company's subsidiaries, Curtis Mathes Corporation
("CMC"), is currently operating under a six-year plan of reorganization,
which became effective on October 1, 1992 (the "Plan"). Until
termination of the Plan, 1/2% of gross sales of CMC, if any, must 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. CMC was the operating entity which
historically sold commodity consumer electronics products (televisions,
VCR's, camcorders, and related products) to consumers. In early 1996,
CMC sold its entire remaining inventory to a third party and negotiated a
satisfaction of its primary debt obligation with Deutsche Financial
Services Corporation ("DFS"). CMC has had no sales since that time.
However, in the event CMC does generate any future revenue, its
profitability will be affected to the extent of the required payments.
Warranty Claims
Beyond the claim of the Trustee on any potential future earnings of
CMC, and as required by the Plan, CMC remains obligated to service past
outstanding product warranties. Cash balances were set aside as required
by the Plan, to cover a portion of these estimated past product warranty
costs. CMC has additionally in the past accrued a portion of the total
product sales price to cover estimated product warranty costs. Although
management believes that the amount accrued is adequate to meet claim
requirements based upon historical data, there can be no assurance that
the accruals 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 its current
cash, thereby reducing the profitability of the Company during such
periods. Many of the warranties on products sold in the past are
expiring, and due to lower product sales by CMC in the past few years,
remaining warranty obligations are slowly diminishing; however, until
expiration of these past outstanding product warranties, the Company's
profitability will be affected to the extent the current required
warranty expenditures exceed the cash reserves designated for that
purpose.
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 former CMC dealers. In
the normal course of business, CMC has transferred receivables from
qualified dealers to Deutsche Financial Services Corporation ("DFS")
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 for the
portion of the receivable that is defaulted through nonpayment or non-
recovery of the collateral. This amount is partially offset by recovery
of unsold products from such dealers, which can then be resold. As
dealer defaults occur in the future and the Company honors its repurchase
obligations, the profitability of the Company could be reduced
accordingly.
<PAGE>
RISKS RELATED TO COMPANY TECHNOLOGIES
Changes in Technology and Industry Standards
The marketplace in which the Company operates is undergoing rapid
changes, including evolving industry standards, frequent new technologies
and product introductions and changes in consumer requirements and
preferences. The introduction of new technologies, products and product
features can render the Company's existing and announced technologies and
product features obsolete or unmarketable. The development cycle for
products utilizing new technologies may be significantly longer than the
Company's current development cycle for products on existing and proposed
technologies and may require the Company to invest resources in products
and technologies that may not become profitable. There can be no
assurance that the expected demand for the Company's technologies will
materialize, or that the mix of the Company's future technologies or
product features will keep pace with technological changes. There can
also be no assurance that the Company will be successful in developing
and marketing future technologies or product features that will satisfy
evolving consumer preferences.
The Company further expects that it may be required to modify its
Internet access technologies in the future to accommodate advanced online
distribution technologies such as cable, satellite, broadcast and
enhanced telephone distribution, and to offer advanced services such as
voice and full-motion video. Currently, the uniView Xpressway services
are accessed primarily through standard telephone systems via modems. As
the online and interactive digital services of the uniView Xpressway
service, including Internet access, entertainment and information
services, become accessible by digital subscriber lines, coaxial and
fiber optic cable, the Company may have to develop new technologies or
modify its existing technologies to keep pace with these developments.
Competitors of the Company may have better access to those technologies
and could gain advantage by implementing new access technologies more
quickly and at lower cost than the Company.
Pursuit of these technological advances will require substantial
expenditures, and there can be no assurance that the Company will succeed
in adapting its technologies as rapidly or as successfully as its
competitors. Failure to adapt its technologies or to develop and
introduce new technologies and product enhancements in a timely fashion
could have a material adverse effect on the Company's business, operating
results and financial condition.
Dependence on Introduction of New Product Features
The Company's future success will depend to a great extent upon the
timely introduction and market acceptance of new product features of the
uniView Internet-television convergence product and online content of the
uniView Xpressway service and other new technologies. A significant
delay in the introduction of, or the presence of a defect in, one or more
new product features or new technologies could have a material adverse
effect on the ultimate success of such products. In such event, the
Company's business, operating results and financial condition,
particularly in view of the seasonality of the Company's business, could
also be materially and adversely affected. (See "Risk Factors -
Seasonality"). Further, because of the revenue typically associated with
initial shipments of a product containing new features, delaying
introduction of such a product until near the end of a fiscal quarter may
<PAGE>
materially adversely affect the operating results for that quarter. The
process of developing Internet-television convergence products containing
software-related components such as those contained in uniView products
and those used in connection with the uniView Xpressway Internet service
is extremely complex and is expected to become more complex and expensive
in the future as new platforms and technologies are introduced or
incorporated. These new technologies also require and depend upon
externally manufactured hardware components, 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 Internet-television
convergence products.
In the past, the Company has experienced delays in the introduction
of certain new products and product features. The Company anticipates
that there may be similar delays in developing and introducing such
products and product features in the future and there can be no assurance
that they will be introduced on schedule in the future or at all.
Further, the market for these new products and product features is
evolving and, in comparison with the overall market for consumer
electronics and Internet access 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 technologies
or new product features introduced by the Company will achieve market
acceptance or generate significant revenues.
Risk of Product Failures
Internet-television convergence products containing software-related
components as complex as those developed by the Company may contain
undetected errors when first introduced. If any undetected errors occur,
delays or lost revenues during the period required to correct these
errors could be expected. The Company has in the past experienced delays
and significant technical support expenses in connection with developing
technologies and product features. There can be no assurance that,
despite testing by the Company, errors will not be found in new
technologies or product features or releases after commencement of
commercial shipments. This type of problem could result in a delay in,
or loss of market acceptance, which could have a material adverse effect
on the Company's business, operating results and financial condition.
Dependence on Licensees and Distribution Channels
The Company expects to be dependent upon licensees and other outside
sources in the future for the manufacturing of all finished products
incorporating the Company's technologies. The Company expects future
licensees to sell licensed products through consumer electronics stores,
computer stores, mail order companies, direct mail, and through the
Internet. Sales to a limited number of distributors and retailers could
be expected to constitute a substantial portion of net revenues of such
licensees, and consequently, any royalties and subscription fees payable
to the Company related to the uniView technologies. Minimum purchase
obligations of any principal distributor or retailer of a licensee are
not expected to be significant and the Company would expect any licensees
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 licensees or these distribution channels could
materially adversely affect the Company's business, operating results and
financial condition. In addition, manufacturing, distribution and
retailing businesses in the consumer electronics industry have from time
<PAGE>
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 licensee or of any
significant distributor or retailer of licensed products in the future
could have a material adverse effect on the Company's business, operating
results and financial condition.
Dependence on the Internet
The Company expects to derive a substantial portion of its future
income from its Internet-related technologies and Internet advertising
revenues. The Company's future success will depend to a great extent
upon the continued growth in the use of the Internet by consumers and the
increased use of the Internet for commercial purposes, including use as
an advertising medium. If the expected rate of growth in the use of the
Internet does not occur, or if it occurs at a slower pace than expected,
the Company's business, operating results and financial condition could
be materially adversely affected.
Risk of Capacity Constraints; System or Security Failures
The Company expects at some point in the future to generate a high
volume of use of its licensed products and the uniView Xpressway service.
The performance of each of these technologies is critical to the
Company's reputation, its ability to attract subscribers to the uniView
Xpressway service, and to market acceptance of its technologies. Any
system capacity constraint or failure that causes interruption of or
increases in response time of the uniView Xpressway service would reduce
the attractiveness of the licensed products and services to existing and
potential subscribers and content providers. Additionally, the Company's
network operations are dependent in part upon its ability to protect its
operating systems against physical damage from fire, floods, earthquakes,
power loss, telecommunications failures, break-ins and similar events.
The Company currently does not have redundant, multiple site capacity in
the event of any such occurrence. Despite the implementation of network
security measures by the Company, its servers are also vulnerable to
computer viruses, break-ins and similar disruptions from unauthorized
tampering with the related systems. Any significant, prolonged or
chronic system capacity constraint or interruption of services or other
malfunction of the Company's operating systems could have a material
adverse effect on the Company's business, operating results and financial
condition.
Relationships with Providers
As the marketplace in which the Company operates changes and as
competition intensifies, it may become more difficult or more expensive
to secure and maintain relationships with electronic commerce,
advertising, marketing, technology and content providers. Failure to
maintain relationships, establish new relationships or the loss of a
number of relationships, or significantly increased costs in doing so,
could have a material adverse effect on the Company's business, financial
condition and operating results.
<PAGE>
RISKS RELATED TO THE INDUSTRY
Highly Competitive Industry
The industry in which the Company and its licensees operate is
intensely and increasingly competitive and includes a large number of
technology development companies, Internet service providers and
manufacturers of consumer electronics products. A number of companies
have announced development of, or have introduced Internet-television
convergence devices and technologies similar to the Company's uniView
technologies. Such competitors include, among others: (i) suppliers of
low-cost Internet access technologies, such as "network computer" devices
promoted by Oracle and others, (ii) "set top" boxes developed by WebTV
Networks, Scientific Atlanta and others, the Apple Pippin, the NewCom Web
Pal, and other devices that are under development by companies such as
Navio, as well as (iii) video game devices that provide Internet access
such as the Sega Saturn, the Sony Playstation and the Nintendo 64. In
addition, manufacturers of television sets have announced plans to
introduce Internet access and Web browsing capabilities into their
products or through set-top boxes, using technologies supplied by others.
Personal computer manufacturers, such as Gateway 2000, are introducing
products that offer full-fledged television viewing, combined with
Internet access. Operators of cable television systems also plan to offer
Internet access in conjunction with cable service. The Company also
competes with various national and local Internet service providers, such
as the Microsoft Network, AT&T Corp., MCI Communications Corporation,
Netcom and others, and commercial on-line services such as America
Online, Inc., ICTV and @Home Network, Road Runner Group (owned by Time
Warner Inc.).
Competition occurs principally in the areas of style, quality,
functionality, service, design, product features and price of the
licensed product. There can be no assurance that the Company's
competitors will not develop Internet access products and services that
are superior to, and priced competitively with, those of the Company,
thereby achieving greater market acceptance than the Company's offerings.
Many of the Company's current competitors and potential future
competitors may have greater financial, technical, marketing and/or
personnel resources than the Company. This competitive environment
could: (i) limit the number of licensees that are willing to license the
Company's technologies, (ii) require price reductions and increased
spending on product development, marketing, network capacity, and content
procurement, (iii) limit the Company's opportunities to enter into and/or
renew agreements with content providers and distribution partners, (iv)
limit its ability to develop new products, product features and services,
(v) limit its ability to increase its uniView Xpressway subscriber base,
and (vi) result in attrition in the uniView Xpressway subscriber base.
Any of the foregoing events could have a material adverse effect on the
Company's business, financial condition and operating results.
In addition, certain of the Company's current and prospective
competitors may be acquired by, receive investments from or enter into
other commercial relationships with larger, well-established and well-
funded companies. There can be no assurance that the Company will have
the resources required to continue to respond effectively to these
competitive pressures.
<PAGE>
Seasonality of the Industry
Sales of licensed products and services are expected to decrease
during the first and second quarters of each calendar year as a result of
the seasonal effect of the consumer buying season, resulting in decreased
royalties, subscription fees and advertising revenues payable to the
Company during such periods. Revenues generated by online subscription
fees to the uniView Xpressway service are expected to be more uniform
than sales revenues of the licensed products, but consumer-buying cycles
are still expected to affect these revenues. Although it is too early to
predict with any certainty, advertising revenues generated by the uniView
Xpressway service may also prove to be related to consumer buying cycles
and the budgeting cycles of its potential advertisers. The Company's
operations must be supplemented during periods of lower seasonal revenues
through its reserves or through other operations or licensing activities
of the Company. Although the Company typically plans ahead for seasonal
variations in revenues, there can be no assurance that past budgetary
expectations will be adequate to cover such periods in the future.
Variable Economy
The Company primarily plans to license its technologies to third
parties in return for licensing fees, product royalties, and Internet
access subscription fees. All fees payable to the Company, except the
initial licensing fees, would be directly related to the number of units
of licensed products sold or otherwise placed with consumers. 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 products which incorporate the Company's technologies, which would
translate into fluctuations in sales volumes for licensees and in
royalties and subscription fees payable to 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 in the future.
Government Regulation; Legal Uncertainties; International Business Risks
The Federal Communications Commission ("FCC") provides mandatory
guidelines for the electronic emissions of licensed consumer products
containing the Company's technologies. The Internet itself and commercial
Internet services are further impacted by several federal and state
government agencies, legislative bodies and courts, including the FCC,
the Federal Trade Commission and the Internal Revenue Service. In most
other countries in which the Company expects to conduct operations in the
future, the Company is not currently subject to direct regulation other
than pursuant to laws applicable to consumer electronics products and to
businesses generally. A number of legislative and regulatory proposals
from various international bodies and foreign and domestic governments in
the areas of telecommunication regulation, access charges, encryption
standards, content regulation, consumer protection, intellectual
property, privacy, electronic commerce, and taxation, among others, are
currently under consideration (including Directive 95/46/EC of the
European Parliament and of the European Council on the protection of
individuals with regard to the processing of personal data and on the
free movement of such data, to become effective in the individual member
states by October 24, 1998). The Company is unable at this time to
predict which, if any, of such proposals may be adopted and, if adopted,
whether such proposals would be favorable or unfavorable to the industry.
<PAGE>
There are certain other significant risks inherent in doing business
on an international level, such as laws governing content that differ
greatly from those in the United States, unexpected changes in regulatory
requirements, political risks, export restrictions, export controls
relating to encryption technology such as that utilized by the uniView
technologies, tariffs and other trade barriers, fluctuations in currency
exchange rates, issues regarding intellectual property and potentially
adverse tax consequences, any or all of which could impact the Company's
future planned international operations. Adverse changes in the legal or
regulatory environment relating to the consumer electronics or Internet
industry in the United States, Europe, Japan or elsewhere, or potentially
unfavorable future application of various existing domestic and foreign
laws governing content, export restrictions, privacy, consumer
protection, export controls on encryption technology, tariffs and other
trade barriers, intellectual property and taxes could have a material
adverse effect on the Company's business, financial condition and
operating results.
Limited Protection of Intellectual Property and Proprietary Rights; Risk
of Litigation
The Company regards its Internet-television convergence technologies
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. As the number of Internet-television
convergence 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
technologies or product features. 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 also difficult and
can be expected to be a recurring problem. Further, the Company and
Company's licensees enter 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 claim 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.
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 exercise of the warrants to purchase
100,000 Shares at $1.50 per share (expiring in mid-2000), the net
proceeds to the Company from the sale of Shares issuable upon exercise of
the warrants would be approximately $150,000.
<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 advertising, promotion, and continued development
and refinement of the uniView technologies.
SELLING STOCKHOLDERS
This Prospectus relates to 1,000,000 Shares, and to a maximum of
22,900,000 estimated Shares issuable upon the conversion of Preferred
Stock, which was issued pursuant to Securities Subscription Agreements
(the "Securities Subscription Agreements") between the Company and
certain Selling Stockholders. This Prospectus also relates to 100,000
Shares issuable upon the exercise of warrants, which were issued to J.P.
Carey, Inc., ("J.P. Carey"), pursuant to an agreement dated August 8,
1997, (the "J.P. Carey Agreement"), as partial consideration for
$2,000,000 of capital raised by J.P. Carey for the Company. See "Plan of
Distribution."
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
Number of Number of
Shares Shares
Relationship Number of Underlying Convertible from
Selling Stockholder to the Company Shares Warrants Preferred Stock
- - ------------------- -------------- --------- --------- ----------------
SECURITIES ACQUIRED PURSUANT TO A SECURITIES SUBSCRIPTION AGREEMENT:
Arnold Pent Private Investor 1,000,000 N/A N/A
Thomson Kernaghan
& Co. Ltd. Private Investor N/A N/A 22,900,000
--------- --------- ----------
SUBTOTAL 1,000,000 N/A 22,900,000
WARRANTS ACQUIRED PURSUANT TO THE J.P. CAREY AGREEMENT:
J.P.Carey, Inc. (1) Finder N/A 100,000 N/A
--------- --------- ----------
SUBTOTAL N/A 100,000 N/A
TOTAL 1,000,000 100,000 22,900,000
GRAND TOTAL 24,000,000
(1) These warrants were issued by the Company to J.P. Carey, Inc.
pursuant to the J.P. Carey Agreement.
<PAGE>
PLAN OF DISTRIBUTION
Securities Being Registered
This Prospectus covers the following securities:
1. The resale of 1,000,000 Shares owned by certain security
holders who acquired Common Stock of the Company pursuant to a Security
Subscription Agreement.
2. The resale by J.P. Carey of up to 100,000 Shares that may be
acquired upon the exercise of warrants issued pursuant to the J.P. Carey
Agreement.
3. The resale by the respective holders thereof of a maximum of
22,900,000 estimated Shares that may be acquired upon the conversion of
Preferred Stock issued pursuant to a Securities Subscription Agreement.
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 80 million shares of Common Stock, $.01 par
value, of which 60,767,406 shares were issued and outstanding as of April
17, 1998. Shareholders of the Company, on January 29, 1998, approved a
resolution authorizing the Board of Directors to amend the articles of
incorporation of the Company to reclassify the Common Stock as $.10 par
value and to implement a ten to one reverse split of the Common Stock.
After implementation of the reverse stock split, approximately 6,076,741
shares would be outstanding, and authorized shares would remain at 80
million. 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 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 April 17, 1998, outstanding Preferred Stock consisted
of (a) $140,000 face value of Series A Preferred Stock with an annual
dividend rate of 6%, and no right to convert into Common Stock; (b)
$75,000 face (and redemption) value of Series H Preferred Stock with an
annual dividend rate of 5% and the right to convert such Preferred Stock
into 50,000 shares of Common Stock at a minimum conversion price of $1.50
per share; and (c) $2,600,000 combined face value of Series M Preferred
Stock and Series N Preferred Stock with a 3% dividend rate, a redemption
<PAGE>
value of $3,458,000, and the right to convert such Preferred Stock, as of
April 17, 1998, into approximately 15,407,408 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.
The number of shares issuable upon conversion of Series M Preferred Stock
and Series N Preferred Stock fluctuates with the stock price of the
Company's common stock, as reported by the Nasdaq Stock Market; as the
stock price increases, the number of shares issuable on conversion
decreases; as the stock price decreases, the number of shares issuable on
conversion increases. Conversions of Series M Preferred Stock and Series
N Preferred Stock are limited by the holdings of their owners; each owner
may not hold more than 4.9% of the Company's outstanding common stock at
any one time.
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 Series A, Series H, Series M, and Series
N 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 and Employee Stock Options
As of April 17, 1998, the Company had outstanding warrants held by
various investors and vested stock options held by directors and various
employees which were exercisable for a total of 10,723,230 shares of
Common Stock. Directors and certain key employees hold a total of
2,200,000 additional stock options, which vest at various times over the
next two years. Exercise prices of the warrants and stock options range
from a high of $4.50 per share, to a low of $0.11 per share and
expiration dates range from June 1998 through April 2003.
Debentures
As of April 17, 1998, none of the Company's debentures carried any
right to convert into Common Stock.
The transfer agent and registrar for Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.
<PAGE>
RECENT DEVELOPMENTS
There have been no material changes in the Company's affairs since
the filing of the Company's December 1997 10-Q Report, which report has
been incorporated herein by reference.
LEGAL MATTERS
Billy J. Robinson has passed upon certain legal matters for the
Company in connection with the validity of the securities offered hereby.
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 and
holds vested options to purchase another 125,000 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 as of June 30, 1997 and 1996, and for each of
the years in the three-year period ended June 30, 1997 have been audited
by King Griffin & Adamson 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>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission registration fee paid $ 898
Transfer agent's fees 150
Costs of printing 150
Legal fees and expenses 500
Accounting fees and expenses 250
Blue sky fees and expenses 250
Miscellaneous expenses 500
------
Total estimated fees $2,698
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 entered into Indemnity Agreements with all of its
officers, directors, and designated agents indemnifying them in
connection with services performed for the Company to the fullest extent
allowed by law.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
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>
ITEM 16. EXHIBITS
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-3, including those incorporated herein
by reference.
Exhibit
Number Description of Exhibit
4.1 Articles of Incorporation of the Company, as amended,
defining the rights of security holders (filed as Exhibit
"3(i)" to the Company's Quarterly Report on Form 10-Q filed
with the Commission on February 13, 1998 and incorporated
herein by reference.)
4.2 Bylaws of the Company, as amended (filed as Exhibit
"3(ii)" to the Company's Quarterly Report on Form 10-Q filed
with the Commission on February 13, 1998 and incorporated
herein by reference.)
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 filed with the Commission on June 20, 1996 and incorporated
herein by reference.)
4.5 Form of warrant issued in connection with Series K
Preferred Stock (filed as Exhibit "4.4" to the Company's
Current Report on Form 8-K dated May 14, 1997 and incorporated
herein by reference.)
4.6 Series M Preferred Stock terms and conditions, as amended
(filed as Exhibit "4.7" to the Company's Registration Statement
on Form S-3 originally filed with the Commission on August 18,
1997 and incorporated herein by reference.)
4.7 Series N Preferred Stock terms and conditions (filed as
Exhibit "4.7" to the Company's Registration Statement on Form S-
3 originally filed with the Commission on November 25, 1997 and
incorporated herein by reference.)
4.8 Form of warrant issued in connection with the J.P. Carey
Agreement (filed as Exhibit "4.8" to the Company's Registration
Statement on Form S-3 originally filed with the Commission on
November 25, 1997 and incorporated herein by reference.)
5 Opinion of Billy J. Robinson.
23.1 Consent of King Griffin & Adamson P.C.
23.2 Consent of Billy J. Robinson (included in his opinion filed as
Exhibit 5.)
<PAGE>
24 Powers of Attorney (included on the Signature Page of the
Company's Registration Statement on Form S-3 originally filed
with the Commission on November 25, 1997 and incorporated
herein by reference.)
99.1 Agreement between the Company and J.P. Carey, Inc. dated
August 8, 1997 (the "J.P. Carey Agreement")(filed as Exhibit
"99.2" to the Company's Registration Statement on Form S-3
originally filed with the Commission on August 18, 1997 and
incorporated herein by reference.)
99.2 Form of Securities Subscription Agreement for Series M and
Series N Preferred Stock (filed as Exhibit "99.2" to the
Company's Registration Statement on Form S-3 originally filed
with the Commission on November 25, 1997 and incorporated
herein by reference.)
99.3 Form of Securities Subscription Agreement for private
placement of Common Stock (filed as Exhibit "99.3" to Amendment
No. 1 to the Company's Registration Statement on Form S-3 filed
with the Commission on February 19, 1998 and incorporated
herein by reference.)
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;
(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.
<PAGE>
(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
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-3 and has duly caused this
Post-effective Amendment No. 1 to the Company's Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Dallas, State of Texas, on April 21, 1998.
UNIVIEW TECHNOLOGIES CORPORATION
By: /s/ PAT CUSTER
Patrick A. Custer
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this
Registration Statement on Form S-3 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, April 21, 1998
Patrick A. Custer President, Chief
Executive Officer
and Director
Principal Financial and Accounting Officer
/s/ F. SHELTON RICHARDSON, JR. Vice President, April 21, 1998
F. Shelton Richardson, Jr. Chief Financial
Officer
Additional Directors
/s/ BILLY J. ROBINSON Vice President, Secretary, April 21, 1998
Billy J. Robinson General Counsel and Director
/s/ PAT CUSTER Director April 21, 1998
Patrick A. Custer,
as attorney-in-fact for
Edward M. Warren
/s/ PAT CUSTER Director April 21, 1998
Patrick A. Custer,
as attorney-in-fact for
Bernard S. Appel
<PAGE>
EXHIBIT INDEX
Exhibit Number
4.1 Articles of Incorporation of the Company, as amended,
defining the rights of security holders (filed as Exhibit
"3(i)" to the Company's Quarterly Report on Form 10-Q filed
with the Commission on February 13, 1998 and incorporated
herein by reference.) N/A
4.2 Bylaws of the Company, as amended (filed as Exhibit
"3(ii)" to the Company's Quarterly Report on Form 10-Q filed
with the Commission on February 13, 1998 and incorporated
herein by reference.) N/A
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.) N/A
4.4 Series H Preferred Stock terms and conditions (filed as
Exhibit "4.4" to the Company's Registration Statement on Form S-
3 filed with the Commission on June 20, 1996 and incorporated
herein by reference.) N/A
4.5 Form of warrant issued in connection with Series K
Preferred Stock (filed as Exhibit "4.4" to the Company's
Current Report on Form 8-K dated May 14, 1997 and incorporated
herein by reference.) N/A
4.6 Series M Preferred Stock terms and conditions, as amended
(filed as Exhibit "4.7" to the Company's Registration Statement
on Form S-3 originally filed with the Commission on August 18,
1997 and incorporated herein by reference.) N/A
4.7 Series N Preferred Stock terms and conditions (filed as
Exhibit "4.7" to the Company's Registration Statement on Form S-
3 originally filed with the Commission on November 25, 1997 and
incorporated herein by reference.) N/A
4.8 Form of warrant issued in connection with the J.P. Carey
Agreement (filed as Exhibit "4.8" to the Company's Registration
Statement on Form S-3 originally filed with the Commission on
November 25, 1997 and incorporated herein by reference.) N/A
5* Opinion of Billy J. Robinson. 30
23.1* Consent of King Griffin & Adamson P.C. 31
23.2 Consent of Billy J. Robinson (included in his opinion filed as
Exhibit 5.) N/A
24 Powers of Attorney (included on the Signature Page of the
Company's Registration Statement on Form S-3 originally filed
with the Commission on November 25, 1997 and incorporated
herein by reference.) N/A
<PAGE>
99.1 Agreement between the Company and J.P. Carey, Inc. dated
August 8, 1997 (the "J.P. Carey Agreement") (filed as Exhibit
"99.2" to the Company's Registration Statement on Form S-3
originally filed with the Commission on August 18, 1997 and
incorporated herein by reference.) N/A
99.2 Form of Securities Subscription Agreement for Series M and
Series N Preferred Stock (filed as Exhibit "99.2" to the
Company's Registration Statement on Form S-3 originally filed
with the Commission on November 25, 1997 and incorporated
herein by reference.) N/A
99.3 Form of Securities Subscription Agreement for private
placement of Common Stock (filed as Exhibit "99.3" to Amendment
No. 1 to the Company's Registration Statement on Form S-3 filed
with the Commission on February 19, 1998 and incorporated
herein by reference.) N/A
_________________
* Filed herewith.
<PAGE>
April 21, 1998
uniView Technologies Corporation
10911 Petal Street
Dallas, Texas 75238
Gentlemen:
I have acted as counsel to uniView Technologies Corporation, a Texas
corporation (the "Company") in connection with the proposed public
offering of up to 24,000,000 shares of the Company's Common Stock, $.01
par value (the "Common Stock"), as described in Post-effective Amendment
No. 1 to the Registration Statement on Form S-3 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 the Company and 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, in the case of the shares of Common Stock
to be sold by the Selling Stockholders, 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, 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
uniView Technologies Corporation
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of uniView Technologies Corporation on Form S-3 of our report
dated August 6, 1997 appearing in the Annual Report on Form 10-K of
uniView Technologies Corporation as of June 30, 1997 and 1996 and for
each of the years in the three-year period ended June 30, 1997 and to the
reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.
/s/ King Griffin & Adamson P.C.
KING GRIFFIN & ADAMSON P.C.
Dallas, Texas
April 21, 1998
