As filed with the Securities and Exchange Commission on September 10, 1998
Commission File No. 0-16454
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CIMETRIX INCORPORATED
(Exact name of registrant as specified in its charter)
Nevada 87-0439107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6979 South High Tech Drive
Salt Lake City, Utah 84047-3757
(801) 256-6500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Riley G. Astill, Vice President of Finance
and Chief Financial Officer
6979 South High Tech Drive
Salt Lake City, Utah 84047-3757
(801) 256-6500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------
Copies to:
Randall A. Mackey, Esq.
Mackey Price & Williams
170 South Main Street, Suite 900
Salt Lake City, Utah 84101-1655
Telephone: (801) 575-5000
Approximate date of proposed sale to the
public: As soon as practicable 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. o
If any of the securities being registered on this Form are being offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reimbursement 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 for the same offering. o
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. o
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. o
---------------------------
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 or until the Registration Statement shall become effective on
such date as the Commission acting pursuant to said Section 8(a), may determine.
<PAGE>
<TABLE>
<CAPTION>
CIMETRIX INCORPORATED
Cross Reference Sheet
Form S-3 Item No. and Caption Prospectus Caption
<S> <C> <C>
Item 1. Front of Registration Statement and Outside Front Cover Page
Outside Front Cover Page of Prospectus
Item 2. Inside Front and Outside Back Cover Inside Front and Outside Back Cover Pages
Pages of Prospectus
Item 3. Summary Information , Risk Factors and Ratio Prospectus Summary; Risk Factors
of Earnings to Fixed Charges
Item 4. Use of Proceeds Use of Proceeds
Item 5. Determination of Offering Price Not Applicable
Item 6. Dilution Not Applicable
Item 7. Selling Security Holders Not Applicable
Item 8. Plan of Distribution Outside Front Cover Page; Plan of Distribution
Item 9. Description of Securities Outside Front Cover Page
Item 10. Interests of Named Experts and Counsel Legal Matters; Experts
Beneficial Owners and Management
Item 11. Material Changes Not Applicable
Item 12. Incorporation of Certain Information Documents Incorporated by Reference
by Reference
Item 13. Disclosure of Commission Position Description of Securities
on Indemnification for Securities Plan of Distribution
Act Liabilities
Item 14. Other Expenses of Issuance and Other Expenses of Issuance and Distribution
Distribution
Item 15. Indemnification of Directors Indemnification of Directors
and Officers and Officers
Item 16.. Exhibits Exhibits
Item 17. Undertakings Undertakings
</TABLE>
<PAGE>
PROSPECTUS
CIMETRIX INCORPORATED
9,109,722 Shares of Common Stock
This Prospectus (this "Prospectus") relates to (i) an aggregate of 829,000
shares of Common Stock issuable upon the exercise of 3,316 warrants, issued to
purchasers of the Company's 10% Senior Notes due 2002 (the "Senior Notes")
exercisable at $2.50 per share; and (ii) an aggregate of 2,000,000 shares of
Common Stock issuable upon the exercise of 2,000,000 options , exercisable at
$2.50 per share, which were authorized under the Company's 1998 Stock Option
Plan (the "1998 Stock Option Plan"). See "Description of Securities."
The Warrants were issued as part of an offering of Senior Notes which was
completed by the Company on November 21, 1997. Each purchaser of Senior Notes in
the offering received one common stock purchase warrant (the "Warrant") for each
$1,000 principal amount of Senior Notes purchased. Each Warrant entitled the
holder to purchase 250 shares of the Company's common Stock for $2.50 per share.
The Warrants are exercisable any time after October 31, 1998, and on or before
September 30, 2002, provided that no fractional shares of Common Stock will be
issued. The exercise price of the Warrants is payable at the holder's option,
either in cash or by the surrender of Senior Notes at their face amount plus
accrued interest. The Common Stock issuable upon the exercise of the Options is
pursuant to the 1998 Stock Option Plan, which became effective January 1, 1998
upon approval of the Company's shareholders at the Annual Meeting of
Shareholders held on May 16, 1998. The 1998 Stock Option Plan provides for the
grant to officers, employees and directors of Options to purchase up to
2,000,000 shares of Common Stock. The 1998 Stock Option Plan is an incentive
stock option plan within the meaning of Section 422 of the Internal Revenue
Code, as amended. See "Description of Securities."
This Prospectus also relates to the resale of an aggregate of 500,000 shares
of Common Stock issuable pursuant to a proposed exchange of securities with
holders of Senior Notes in which the Company will issue up to 500,000 shares of
Common Stock to the holders of Senior Notes in exchange for Senior Notes from
the holders of Senior Notes at an exchange rate to be determined by the
Company's Board of Directors. The Company will register for resale the shares
issued to the holders of Senior Notes in exchange for the Senior Notes.
The Prospectus additionally relates to the resale of 5,400,000 shares of
Common Stock, of which 3,000,000 shares are held by Overseas Holdings Limited
Partnership, a Nevada limited partnership, and 2,400,000 are held by The Paul A.
Bilzerian and Terri L. Steffen 1994 Irrevocable Trust for the Benefit of Adam J.
Bilzerian and Dan B. Bilzerian (the "Bilzerian 1994 Irrevocable Trust"). As
consideration pursuant to an agreement dated March 21, 1994 (the "March 21, 1994
Agreement"), between the Company and Paul A. Bilzerian, President, Chief
Executive Officer and a director of the Company, relating to the employment of
Mr. Bilzerian as a management consultant to the Company, the Company has agreed
to register the shares issued to Overseas Holding Limited Partnership and the
Bilzerian 1994 Irrevocable Trust.
The Prospectus further relates to the resale of an aggregate of 200,000
shares of Common Stock, of which 100,000 shares are held by Lowell K. Anderson,
a director of the Company, and 100,000 shares are held by Lane Harrison. The
Company sold a total of 200,000 shares of Common Stock to Messrs. Anderson and
Harrison on June 5, 1998 in a private offering and agreed to register such
shares as a condition in the offering. The Prospectus finally relates to the
resale of 180,722 shares of Common Stock currently held by Xuguang Wang, a
former employee and, at times, a former officer, of the Company, and his wife.
These shares were issued to Mr. Wang during the term of his employment with the
Company from 1990 through June 26, 1998. The Company entered into a Purchase and
Sale Agreement with Mr. Wang as of July 21, 1998 (the "Purchase and Sale
Agreement"), whereby the Company agreed to purchase the 180,722 shares of Common
Stock from Mr. Wang for $125,000 in connection with the termination of his
employment agreement with the Company. The Company intends to resell these
shares to cover the costs of purchasing the shares from Mr. Wang.
The Company's Common Stock and Warrants are traded on the OTC Bulletin Board
under the symbols CMXX and CMXXW, respectively. On August 21, 1998, the last
sales prices for the Common Stock as reported by the OTC Bulletin Board was
$1.688 per share. The Warrants have not traded.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
See "Risk Factors."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION AND THE SECURITIES ADMINISTRATOR OF ANY STATE OR HAS THE
COMMISSION OR ANY SUCH ADMINISTRATOR PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Total of Each Class of Underwriting
Security Being Registered Amount of Exercise or Discounts and Proceeds to the
Securities Exchange Price Commissions Company
<S> <C> <C> <C> <C> <C>
Common Stock (1)...................... 829,000 $2.50 - $2,072,500
Common Stock (2)...................... 2,000,000 $2.50 - $5,000,000
Common Stock (3)...................... 500,000 $1.688 - -
Common Stock (4)...................... 5,400,000 - - -
Common Stock (5)...................... 200,000 - - -
Common Stock (6)...................... 180,722 - - -
====================================== ======================== =================== ===================== ========================
Total................................. 9,109,722 -- -- $7,072,500
====================================== ======================== =================== ===================== ========================
</TABLE>
(footnotes on following page)
The date of this Prospectus is September __, 1998
<PAGE>
(1) Consists of 829,000 shares of Common Stock underlying the Warrants with an
exercise price of $2.50 per share.
(2) Consists of 2,000,000 shares of Common Stock underlying the Options under
the Company's 1998 Stock Option Plan with an exercise price of $2.50 per
share.
(3) Consists of 500,000 shares of Common Stock issuable upon the exchange of
Senior Notes with holders of Senior Notes at an exchange rate to be
determined by the Company's Board of Directors.
(4) Consists of 3,000,000 shares of Common Stock for resale pursuant to the
registration rights granted by the Company to Overseas Holdings Limited
Partnership and 2,400,000 shares of Common Stock for resale pursuant to the
registration rights granted by the Company to the Bilzerian 1994 Irrevocable
Trust under the March 21, 1994 Agreement with Paul A. Bilzerian, President
and Chief Executive Officer of the Company.
(5) Consists of 100,000 shares of Common Stock for resale pursuant to the
registration rights granted by the Company to Lowell K. Anderson and 100,000
shares of Common Stock for resale pursuant to the registration rights
granted by the Company to Lane Harrison.
(6) Consists of 180,722 shares of Common Stock for resale in connection with the
purchase of shares of Common Stock from Xuguang Wang, a former employee and,
at times, a former officer of the Company, under the Purchase and Sale
Agreement.
(7) All expenses of this Offering are borne by the Company. The Company
estimates that it will incur approximately $21,000 in registration, legal,
accounting and printing fees in connection with this Offering.
(8) The net proceeds from this Offering to be received by the Company from the
issuance of 829,000 shares of Common Stock issuable upon exercise of the
Warrants is estimated to be $2,072,500. In addition, the net proceeds to be
received by the Company from the issuance of 2,000,000 shares of Common
Stock issuable upon the exercise of the Options under the 1998 Stock Option
Plan, assuming all the Options under the plan are granted and exercised, is
estimated to be $5,000,000. There can be no assurance that any of the
Warrants or Options will be exercised, and accordingly, the Company may not
receive any proceeds from this Offering. See "Use of Proceeds."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements and other information filed by the Company can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at its
regional offices at Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661-2511, and at 7 World Trade Center, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549
at prescribed rates. In addition, the Commission maintains a web site at
http:/www.sec.gov containing reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission,
including the Company.
The Company has filed with the Commission a Registration Statement (together
with all amendments and exhibits, the "Registration Statement") on Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Common Stock offered pursuant to this Prospectus. This Prospectus
does not contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Statements made in this Prospectus as to the contents of any
agreement or other document referred to herein are not necessarily complete and
reference is made to the copy of such agreement or to the Registration Statement
and to the exhibits and schedules filed therewith. Copies of the material
containing this information may be obtained from the Commission upon payment of
the prescribed fee.
PROSPECTUS SUMMARY
The Company
The Company is the developer of the world's first open architecture,
standards-based, personal computer (PC) software for controlling machine tools,
industrial robots and electronics industry automation equipment that operates on
the factory floor. The Cimetrix Open Development Environment ("CODE") software
products are based on standard computer platforms (Intel Pentium CPU with
ISA/PCI bus and Motorola PowerPC with VME bus) and run on standard operating
systems (UNIX and Microsoft Windows NT). Cimetrix software is currently
operational in production installations on a variety of general industrial
robots, specialized electronics industry assembly and surface mount technology
(SMT) machines, and to a limited extent, CNC machine tools.
Cimetrix also has developed two additional software products, GEM
Equipment Manager and GEM Host Manager. These software products enable
compliance with Generic Equipment Model ("GEM"), which is a standard for
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<PAGE>
communications between manufacturing equipment and the factory's host computer.
The GEM software products are designed to run on PCs and UNIX workstations.
The Offering
Securities Offered.............................9,109,722 shares of Common Stock,
consisting of the resale of
829,000 shares of Common Stock
issuable upon the exercise of
Warrants issued to purchasers of
Senior Notes, the resale of
2,000,000 shares of Common Stock
issuable upon the exercise of
Options granted under the
Company's 1998 Stock Option Plan,
the resale of 500,000 shares of
Common Stock issuable upon the
exchange of Senior Notes with
holders of Senior Notes, the
resale of 5,400,000 shares of
Common Stock pursuant to
registration rights granted to
Overseas Holdings Limited
Partnership and the Bilzerian
1994 Irrevocable Trust under the
March 31, 1994 Agreement, the
resale of 200,000 shares of
Common Stock pursuant to
registration rights granted to
Lowel K. Anderson and Lane
Harrison, and the resale of
180,722 shares of Common Stock
purchased by the Company from
Xuguang Wang in connection with
the termination of his employment
agreement with the Company, to be
resold to cover the costs of
purchasing such shares. See
"Description of Securities."
Common Stock outstanding prior to
the offering...................................24,743,928 shares.
Common Stock outstanding after the
offering(1)....................................28,060,928.shares.
Use of Proceeds................................All funds received by the Company
upon the exercise of the Warrants
and Options will be used for
working capital and general
corporate purposes.
Risk Factors/Dilution..........................The.offering involves a high
degree of risk. See "Risk
Factors."
OTC Bulletin Board Symbols
Common Stock..............................."CMXX."
Warrants..................................."CMXXW"
(1) Assumes exercise of all Warrants and Options, of which there can be no
assurance.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
(3) Quarterly Report on Form 10-Q for the quarter ended June 30, 1998;
(4) Definitive Proxy Statement for the Company's 1998 Annual Meeting of
Shareholders, as filed on April 20, 1998.
All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and prior to the
termination of this offering, shall be deemed to be incorporated by reference in
this Prospectus. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that 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.
The Company will provide, without charge, to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
that have been incorporated herein by reference, other than Exhibits to such
documents (unless such Exhibits are specifically incorporated by reference
therein). Requests for such copies should be directed to: Riley G. Astill, Vice
President of Finance and Chief Financial Officer, 6979 South High Tech Drive,
Salt Lake City, Utah 84047-3757.
3
<PAGE>
RISK FACTORS
The securities offered hereby are highly speculative in nature and
involve a high degree of risk. Prospective investors should carefully consider,
along with other information in this Prospectus, the following considerations
and risks in evaluating an investment in the Company. No investment in the
securities offered hereby should be made by any person who is not in a position
to lose the entire amount of such investment.
In connection with an investment in the Securities offered by this
Prospectus, prospective investors should consider carefully the following
factors that could affect the Company's current position and future prospects,
in addition to the other information set forth in this Prospectus. The following
factors and other information set forth in this Prospectus contain certain
forward-looking statements involving risks and uncertainties. The Company's
actual results could differ materially from the results anticipated in these
forward-looking statements as a result of certain factors set forth in this
section and elsewhere in this Prospectus.
Emphasis of Matter in Auditor's Report. The opinion rendered by Tanner
+ Co., the Company's independent auditors, on the financial statements of the
Company states as of December 31, 1997 the Company incurred a net loss of
$4,490,000. The Company had an accumulated deficit of $15,033,000 at December
31, 1997.
Limited Working Capital; Limited Operating History; Accumulated
Deficit; Anticipated Losses. As of June 30, 1998, the Company had working
capital of $2,573,000. The Company also has an accumulated deficit of
$15,033,000 as of December 31, 1997 and $15,272,000 as of June 30, 1998. Such
losses have resulted principally from costs incurred in connection with research
and development and marketing of the Company's CODE and GEM software product
suites. CODE software was introduced commercially in October 1995, and GEM was
introduced during 1997. The likelihood of success of the Company must be
considered in light of the problems, expenses, difficulties, complications and
delays fre quently encountered in connection with the development of new
products and the competitive environments in the industry in which the Company
operates. There can be no assurance that the Company will not encounter
substantial delays and unexpected expenses related to research, development,
production, marketing or other unforeseen difficulties.
The Company had available at December 31, 1997, unused tax operating
loss carryforwards of approximately $14,658,000 that may be applied against
future taxable income and expire in various years beginning 2004 through 2011.
Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes
(FASB 109) requires the Company to provide a net deferred tax asset or liability
equal to the expected future tax benefit or expense of temporary reporting
differences between book and tax accounting and any available operating loss or
tax credit carryforwards. At December 31, 1997, the total of all deferred tax
assets was approximately $4,430,000 and the total of all deferred tax
liabilities was approximately $316,000. Because of the uncertainty about whether
the Company will generate sufficient future taxable income to realize the
deferred tax assets, the Company has established a valuation allowance of
$4,746,000 to offset all its deferred tax assets.
Dependence on Significant Customers. Customer "A" accounted for
approximately 27% and 16% of the Company's sales in 1997 and the first half of
1998, respectively, and is expected to account for approximately 20% of its
sales in 1998. Customer "B" accounted for approximately 36% of the Company's
sales in the first half of 1998. The loss of either customer's business could
have a material adverse effect on the Company. Additionally, the quantity of
customer A's business with the Company depends substantially on market
acceptance of their Surface Mount Technology ("SMT") equipment that utilizes the
Company's software products. The Company could be materially adversely affected
by a downturn in Company A's equipment sales or their failure to meet sales
expectations. The Company will likely from time to time have other customers
that account for a significant portion of its business.
Dependence on Relatively New Products. The Company has only recently
begun to install and implement its products with customers. The Company's CODE
software system was introduced commercially in October 1995, and its GEM
software product suite has been developed during the past three years and was
commercially introduced during 1997. As a result, the Company has only limited
history with these products, and there can be little assurance that they will
achieve market acceptance. The Company's future success will depend on sales of
these products, and the failure of these products to achieve market acceptance
would have a materially adverse effect on the Company. In addition, the Company
has limited experience with the installation, implementation and operation of
its products at customer sites. There is no assurance that the Company's
products will not require substantial modifications to satisfy performance
requirements or to fix previously undetected errors. If customers were to
experience significant problems with the Company's products, or if the Company's
customers were dissatisfied with the products' functionality, performance, or
support, the Company would be materially adversely affected.
Product Life Cycle; Need to Develop New Products and Enhancements. The
markets for the Company's products are new and emerging. As such, these markets
are characterized by rapid technological change, evolving requirements,
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<PAGE>
developing industry standards, and new product introductions. The dynamic nature
of these markets can render existing products obsolete and unmarketable within a
short period of time. Accordingly, the life cycle of the Company's products is
difficult to estimate. The Company's future success will depend in large part on
its ability to enhance its products and develop and introduce, on a timely
basis, new products that keep pace with technological developments and emerging
industry standards. The success of the Company's software development efforts
will depend on various factors, including its ability to integrate these
products with third-party products. If a competitor succeeds in duplicating or
surpassing the Company's technological advances, the Company's prospects might
be materially adversely affected.
Competition. The motion controller market is extremely competitive.
Management believes that most, if not all, of the Company's competitors
currently have greater financial resources and market presence than it does.
Accordingly, these competitors may be able to compete very effectively on
pricing and to develop technology to increase the flexibility of their products.
Further, manufacturers of industrial robots, machine tools, and other automation
equipment which use their own proprietary controllers and software have already
established a share of the market for their products and may find it easier to
limit market penetration by the Company because of the natural tie-in of their
controllers and software to their mechanisms. Management is uninformed as to
whether any of these competitors are presently developing additional technology
that will directly compete with the Company's product offerings.
International Sales. International sales accounted for approximately
45%, 30% and 58% of the Company's business in 1996, 1997 and the first half of
1998, respectively. To service the needs of these customers, the Company must
provide worldwide sales and product support services. There are a number of
risks inherent in international expansion, including currency risks, increased
risk of software piracy, unexpected changes in regulatory requirements, tariffs
and other trade barriers, costs and risks of localizing products for foreign
companies, longer account receivable cycles and increased collection risks,
potentially adverse tax consequences, difficulty in repatriating earnings, and
the burdens of complying with a wide variety of foreign laws. Thus far, all the
Company's export sales have been payable in United States dollars.
Dependence on Certain Individuals. The Company is highly dependent on
the services of its key managerial and engineering personnel, including Paul A.
Bilzerian, President and Chief Executive Officer, Bradley A. Palser, Vice
President of Software Engineering, David P. Faulkner, Executive Vice President
of Marketing and Robert H. Reback, Executive Vice President of Sales. Any
material change in the Company's senior management team could adversely affect
the Company's profitability and business prospects. The Company does not
maintain key man insurance for any of its key management and engineering
personnel.
Copyright Protection and Proprietary Information. The Company's
software innovations are proprietary in nature, and the Company has obtained
copyright protection for them. It is possible, however, for infringement to
occur. Although the Company intends to prosecute diligently any infringement of
its proprietary technology, copyright litigation can be extremely expensive and
time-consuming, and the results of litigation are generally uncertain. Further,
the use by a competitor of the Company's proprietary software to create similar
software through "reverse engineering" may not constitute an infringing use. The
Company relies on confidentiality and nondisclosure agreements with employees
and customers for additional protection against infringements, and the Company's
software is encoded to further protect it from unauthorized use.
Control. Investors in the Common Stock (through exercise of the Options
or Warrants) will be entitled to vote in the election of the Company's
directors, but will not be entitled to separate board representation. The
executive officers and directors of the Company have the power to vote
approximately 28.2% of the outstanding shares of Common Stock for the election
of directors and on other ordinary shareholder matters, after giving effect to
voting proxies and the exercise of options held by those individuals as of June
27, 1996. Paul A. Bilzerian, President, Chief Executive Officer and a director
of the Company, has the sole or shared power to vote approximately 22% of these
shares. The voting power represented by the officers and directors' shares,
though not an absolute majority, is probably sufficient to provide these persons
with effective control over most affairs of the Company.
Marketability of Common Stock. The Common Stock is currently traded
through 13 market makers, but is not listed on any securities exchange or quoted
on an automated interdealer quotation system, which would provide automated
quotations of the stock's price. Trading through market makers tends to limit
the volume of sales and can cause wide fluctuations in a stock's price, based on
the available supply and demand for the stock at any particular time.
Anti-Takeover Provisions. Certain provisions of the Nevada General
Corporation Law have anti-takeover effects and may inhibit a non-negotiated
merger or other business combination. These provisions are intended to encourage
any person interested in acquiring the Company to negotiate with, and to obtain
the approval of, the Company's Board of Directors in connection with such a
transaction. However, certain of these provisions may discourage a future
acquisition of the Company, including an acquisition in which the shareholders
might otherwise receive a premium for their shares. As a result, shareholders
who might desire to participate in such a transaction may not have the
opportunity to do so. See "Description of Securities -- Certain Provisions of
Nevada Law."
Shares Eligible for Future Sale. Upon completion of this Offering, the
Company could potentially have a total of 28,060,928 shares of Common Stock
outstanding. Of these shares, approximately 22,600,966 shares of Common Stock
will be freely tradable by persons other than directors, officers and affiliates
of the Company, without restriction or need for
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<PAGE>
registration under the Securities Act of 1933, as amended (the "Securities
Act"). All of the remaining shares of Common Stock are "restricted securities"
as defined by Rule 144 promulgated under the Securities Act ("Rule 144"). Those
shares are eligible for sale, subject to the manner of sale, volume, notice, and
information requirements of Rule 144. Sales of substantial amounts of Common
Stock in the public market, or the availability of a substantial amount of
Common Stock for future sale, could adversely affect the market price of the
shares of Common Stock issuable on exercise of the Warrants.
USE OF PROCEEDS
Holders of Warrants and Options are not obligated to exercise any of
their Warrants or Options, respectively. However, assuming exercise of all of
the Warrants and Options, the net proceeds from this Offering to be received by
the Company from the issuance of 2,829,000 shares of Common Stock covered by
this Prospectus and issuable upon the exercise of the Warrants and the Options
(after deducting estimated Offering expenses of $21,000) is estimated to be
$7,051,500. The closing bid price of the Common Stock on the OTC Bulletin Board
was $1.688 per share on August 25, 1998. All of the Warrants and Options are
exercisable at prices above $1.688. Accordingly, there is no assurance that any
of these Warrants or Options will be exercised and the Company may not receive
any proceeds from this Offering. The Company will not receive any proceeds from
the issuance of shares of Common Stock upon the exchange of Senior Notes for
Common Stock with holders of Senior Notes. The Company anticipates that it will
use the net proceeds of this Offering, if any, to fund working capital
requirements.
DESCRIPTION OF SECURITIES
Common Stock. The Company's authorized capital consists of 100,000,000
shares of Common Stock, par value $.0001 per share, which are entitled to one
vote per share on all matters. There were 24,743,928 shares of Common Stock
outstanding as of August 15, 1998 . Also, as of August 15, 1998, the Company had
outstanding unexercised options to purchase 462,000 shares of Common Stock under
the Company's 1994 Stock Option Plan. In addition, as of August 15, 1998, the
Company had authorized options to purchase 2,000,000 shares of Common Stock
under the Company's 1998 Stock Option Plan, of which 1,108,500 are outstanding
and all are unexercised.
Furthermore, there are currently 3,316 Warrants authorized and
outstanding, issued to purchasers of the Company's Senior Notes. Each warrant
entitles the holder to purchase 250 shares of Common Stock, representing a total
of 829,000 shares. The Company's Common Stock is quoted on the OTC Bulletin
Board under the symbol "CMXX" and the Warrants are quoted under the symbol
"CMXXW." The transfer agent and registrar for the Common Stock is Colonial Stock
Transfer in Salt Lake City, Utah.
The holders of the Common Stock are entitled to share ratably in all
dividends declared by the Company's Board of Directors out of funds legally
available and, upon liquidation, in all the assets of the Company, if any,
remaining after the payment of liabilities of the Company. Under Nevada law, no
dividend or other distribution to shareholders is permitted if, after giving
effect to the distribution, the Company would not be able to pay its debts as
they become due in the usual course of business, or if the Company's total
liabilities would exceed its total assets. The Common Stock does not have
redemption rights, conversion rights, cumulative voting rights, or preemptive or
other subscription rights.
Warrants. Each Warrant entitles the holder to purchase 250 shares of
the Common Stock at a price of $2.50 per share, subject to adjustment. The
Warrants may be exercised after October 31, 1998 and on or before October 1,
2002, by paying the exercise price of $2.50 per share, subject to adjustment,
and may be exercised in whole or in part, provided that no fractional shares of
Common Stock will be issued. The exercise price of Warrants may be paid by the
surrender of Senior Notes at the face amount of the Senior Notes plus accrued
interest. The number of shares of Common Stock that may be purchased upon
exercise of the Warrants, and the exercise price for those shares, will be
adjusted to reflect the effect of any issuance of Common Stock to the
shareholders as a stock dividend or distribution or as a result of a
combination, subdivision or certain reclassifications of the Common Stock. As a
result, the number of shares that may be purchased upon exercise of a Warrant
may be more or less than 250 and the exercise price may be higher or lower than
$2.50. No fractional Warrants will be issued upon transfer or exercise of
Warrants. The Warrants do not convey on their holders voting or other rights as
a shareholder of the Company.
A Warrant may be exercised on surrender of the Warrant Certificate
before the expiration of the Warrant exercise period, with the form of "Election
to Purchase" on the reverse side of the Warrant Certificate executed as
indicated, and accompanied by payment of the full exercise price for the shares
of Common Stock being purchase. The Company will act as transfer agent and
registrar for the Warrants. The Company may appoint a transfer agent or
registrar for the Warrants.
In order for a holder to exercise his Warrants, the shares of Common
Stock issuable on exercise of the Warrants must be registered with the
Commission pursuant to a current and effective registration statement under the
Securities Act and registered or qualified for sale or exemption under the
securities laws of the states where the Warrantholder resides. The Company will
use its best efforts to register with the Commission the shares of Common Stock
issuable on exercise
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<PAGE>
of the Warrants before November 1, 1998, but there is no assurance that it will
succeed in registering the Warrant shares with the Commission. The Company will
make commercially reasonable efforts to qualify the shares of Common Stock
underlying the Warrants for resale in those states where the Senior Notes are
offered for sale. However, the Company could be denied registration or
qualification or may determine in its sole discretion not to register or qualify
the shares of Common Stock issuable pursuant to the Warrants in any jurisdiction
where the time and expense of doing so is not justified. A Warrant holder may be
deprived of any value of the Warrants, if the shares issuable on exercise of the
Warrants are not registered with the Commission or not registered or qualified
for offer and sale in the state in which the Warrantholder resides, in which
case the Warrantholder may not be able to sell the Warrants or the Warrants may
expires unexercised. Certain Provisions of Nevada Law
Nevada's "Combination with Interested Stockholders Statute" and "Control
Share Acquisition Statute" may have the effect of delaying or making it more
difficult to effect a change in control of the Company. See "Risk Factors --
Anti- Takeover Provisions."
The Combination with Interested Stockholders Statute prevents an
"interested stockholder" and an applicable Nevada corporation from entering into
a "combination," unless certain conditions are met. A combination is defined to
mean, among other things, (i) any merger or consolidation with an "interested
stockholder"; (ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition, in one transaction or a series of transactions with an
"interested stockholder" having an aggregate market value equal to 5% or more of
the aggregate market value of the assets of a corporation, 5% or more of the
aggregate market value of all outstanding shares of a corporation, or
representing 10% or more of the earning power or net income of the corporation;
(iii) the adoption of a plan or proposal for the liquidation or dissolution of a
corporation proposed by an "interested stockholder"; (iv) any reclassification,
recapitalization, merger, or consolidation proposed by an "interested
stockholder"; or (v) any receipt by an "interested stockholder" of any loan,
advancement, guarantee, pledge, or other financial assistance or any tax credit
or other tax advantage provided by or through a corporation. An "interested
stockholder" is defined to mean the beneficial owner of 10% or more of the
voting shares of a corporation, or an affiliate or associate thereof. A
corporation may not engage in a "combination" with an "interested stockholder"
for a period of three years from the date of the acquisition by the "interested
stockholder" of its shares in the corporation unless the combination or purchase
of shares made by the interested stockholder is approved by the Board of
Directors before the interested stockholder acquired such shares. If such
approval is not obtained, after the expiration of the three-year period, the
business combination may be consummated with the approval of the Board of
Directors or a majority of the voting power held by disinterested stockholders,
or if the consideration to be paid by the interested stockholder is at least
equal to the highest of (i) the highest price per share paid by the interested
stockholder within the three years immediately preceding the date of the
announcement of the combination or in the transaction in which he became an
interested stockholder, whichever is higher; or (i) the market value per common
share on the date of announcement of the combination or the date the interested
stockholder acquired the shares, whichever is higher.
Nevada's Control Share Acquisition Statute prohibits an acquirer, under
certain circumstances, form voting shares of a target corporation's stock after
crossing certain threshold ownership percentages, unless the acquirer first
obtains approval therefor from the target corporation's stockholders. The
Control Share Acquisition Statute specifies the following three thresholds for
which such approval is required (i) one-fifth or more but less than one-third;
(ii) one-third or more but less than a majority; and (iii) a majority or more,
of the voting power of the corporation in the election of directors. Once an
acquirer crosses one of the above thresholds, such shares so acquired, along
with those shares acquired within the preceding 90 days, become "control
shares," which shares are deprived of the right to vote until such time as the
disinterested stockholders of the corporation restore such right. The Control
Share Acquisition Statute also provides that in the event "control shares" are
accorded full voting rights and the acquiring person has acquired a majority or
more of all voting power of the corporation, any stockholder of record who has
not voted in favor of authorizing voting rights for the "control shares" may
demand payment for the fair value of such stockholder's shares. In such case,
the corporation is required to comply with the demand within 30 days of the
delivery thereof to the corporation.
PLAN OF DISTRIBUTION
The resale of the Common Stock by the holders of Warrants and Options
that elect to exercise their respective Warrants or Options and purchase Common
Stock or the holders of Senior Notes that elect to exercise their rights under
the proposed securities exchange agreement and exchange their Senior Notes for
shares of Common Stock (collectively, the "Selling Securityholders"), may be
effected from time to time in transactions (which may include block transactions
by or for the account of the Selling Securityholders) in the over-the-counter
market or in negotiated transactions, a combination of such methods of sale or
otherwise. Sales may be made at fixed prices which may be changed, at market
prices prevailing at the time of sale, or at negotiated prices.
7
<PAGE>
Selling Securityholders may effect such transactions by selling their
shares of Common Stock directly to purchasers, through broker-dealers acting as
agents for the Selling Securityholders or to broker-dealers who may purchase
securities as principals and thereafter sell the Common Stock from time to time
in the over-the-counter market, in negotiated transactions or otherwise. Such
broker-dealers, if any, may receive compensation in the form of discounts,
concessions or commissions from the Selling Securityholders or the purchasers
for whom such broker-dealers act as agents or to whom they may sell as
principals or otherwise (which compensation as to a particular broker-dealer may
exceed customary commissions). The Selling Securityholders will pay all
commissions, transfer taxes, and other expenses associated with the sale of
Common Stock by them.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered
hereby and certain other legal matters in connection have been passed upon for
the Company by Mackey Price & Williams, Salt Lake City, Utah.
INDEPENDENT AUDITORS
The financial statements of the Company included in this Prospectus, to
the extent and for the periods indicated in their reports, have been audited by
Tanner & Co., independent auditors, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in auditing and accounting.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses payable by the Company in
connection with the issuance and distribution of the securities being registered
(all amounts except the Securities and Exchange Commission filing fee are
estimated):
Filing fee -- Securities and Exchange Commission........................$ 5,166
Printing and engraving expenses...........................................2,500
Legal fees and disbursements..............................................7,500
Accounting fees and disbursements.........................................1,500
Blue Sky fees and expenses (including legal fees).........................3,000
Miscellaneous ............................................................1,314
Total expenses..........................................................$21,000
Item 15. Indemnification of Directors and Officers.
Pursuant to the Articles, Bylaws and indemnification agreements between
the Company and each of its officers and directors, the Company is obligated to
indemnify each of its directors and officers to the fullest extent permitted by
law with respect to all liability and loss suffered, and reasonable expense
incurred, by the person in any action, suit or proceeding in which the person is
or was a director or officer of the Company. The Company could be obligated to
advance the reasonable expenses of indemnified directors or officers in
defending such proceedings if the indemnified party agrees to repay all amounts
advanced if it is ultimately determined that such person is not entitled to
indemnification.
The Nevada General Corporation Law (the "Nevada Act") authorizes Nevada
corporations to indemnify any person who was or is a party to any proceeding
(other than an action by, or in the right of, the corporation), by reason of the
fact that he or she is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation or other entity,
against liability incurred in connection with such proceeding, including any
appeal thereof, if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or on behalf of a corporation, indemnification may not be made if the
person seeking indemnification is adjudged liable, unless the court in which
such action was brought determines such person is fairly and reasonably entitled
to indemnification. The indemnification provisions of the Nevada Act require
indemnification if a director of officer has been successful on the merits or
otherwise in defense of any action, suit, or proceeding to which he or she was a
party by reason of the fact that he or she is or was a director of officer of
the corporation. The indemnification authorized under Nevada law is not
exclusive and is in addition to any other rights granted to officers and
directors under the Articles of Incorporation or Bylaws of the
8
<PAGE>
corporation or any agreement between officers and directors and the corporation.
A corporation may purchase and maintain insurance or furnish similar protection
on behalf of any officer or director against any liability asserted against the
officer or director and incurred by the officer or director in such capacity, or
arising out of the status, as an officer or director, whether or not the
corporation would have the power to indemnify him or her against such liability
under the Nevada Act.
The Company's Bylaws provide for the indemnification of directors and
executive officers of the Company to the maximum extent permitted by Nevada law
and for the advancement of expenses incurred in connection with the defense of
any action, suit, or proceeding that the director of executive officer was a
party to by reason of the fact that he or she is or was a director or executive
officer of the Company upon the receipt of an undertaking to repay such amount,
unless it is ultimately determined that such person is not entitled to
indemnification.
Under provisions of the Company's Articles of Incorporation that are
authorized by the Nevada Act, a director is not personally liable for monetary
damages to the Company or any other person for acts or omissions in his or her
capacity as a director except in certain limited circumstances such as certain
violations of criminal law and transactions in which the director derived an
improper person benefit. As a result, shareholders may be unable to recover
monetary damages against directors for actions taken by them which constitute
negligence or gross negligence or which are in violation of their fiduciary
duties, although injunctive or other equitable relief may be available.
The Company also has entered into agreements with each of its current
directors and executive officers pursuant to which it is obligated to indemnify
those persons to the fullest extent authorized by law and to advance payments to
cover defense costs against an unsecured obligation to repay such advances if it
is ultimately determined that the recipient of the advance is not entitled to
indemnification. The Company is not required to indemnify a director or officer
if the indemnified loss results from any of the following: (a) a violation of
Section 16(b) of the Securities and Exchange Act of 1934, as amended; (b) a
violation of criminal law; (c) a transaction from which the officer or director
received an improper personal benefit; (d) willful misconduct or a conscious
disregard for the Company's best interests; or (e) a transaction for which the
director is liable pursuant to Section 78.300.2 of the Nevada Act for certain
distributions from the corporation to its shareholders.
The foregoing provisions of the Nevada Act and the Company's Articles
of Incorporation and Bylaws could have the effect of preventing or delaying a
person from acquiring or seeking to acquire a substantial equity interest in, or
control of, the Company.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is therefore unenforceable.
Item 16. Exhibits.
(a) Exhibits
Exhibit No. Document Name
<TABLE>
<C> <S>
3.1 Articles of Incorporation (1)
3.2 Articles of Merger with Cimetrix (USA) Incorporated (5)
3.3 Bylaws (1)
5. Opinion of Mackey Price & Williams
10.1 Proxy Agreement between the Seolas family and Paul A. Bilzerian (3)
10.2 Consulting and Option Agreement with Paul A. Bilzerian (3)
10.3 Indemnity Agreement with former officers and directors (4)
10.4 Technology Sale and Purchase Agreement with Brigham Young University (5)
10.5 1994 Stock Option Plan (2)
10.6 Lease with Capitol Properties Four, L.C. (6)
10.7 Agreement with Bicoastal Holding Company for services by Paul A. Bilzerian
and Terri L. Steffen (6)
10.8 1998 Incentive Stock Option Plan (7)
23.1 Consent of Mackey Price & Williams (8)
23.2 Consent of Tanner & Co. (8)
- -----------------------
</TABLE>
<TABLE>
<C> <S>
(1) Incorporated by reference to Annual Report on Form 10-K for the fiscal year ended December 31, 1993.
(2) Incorporated by reference to Annual Report on Form 10-K for the fiscal year ended December 31, 1994.
(3) Incorporated by reference to Quarterly Report on Form 10-Q for the quarter ended March 31, 1994.
(4) Incorporated by reference to Quarterly Report on Form 10-Q for the quarter ended June 30, 1994.
(5) Incorporated by reference to Quarterly Report on Form 10-Q for the quarter ended September 30, 1995.
(6) Incorporated by reference from the Registration Statement on Form S-2, File No. 333-60, as filed on July 2, 1997.
(7) Incorporated by reference from the Proxy Statement dated April 20, 1998, pertaining to the 1998 Annual Meeting
of Shareholders.
(8) Incorporated by reference from the Form S-3 Registration Statement as
filed on August 31, 1998.
</TABLE>
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<PAGE>
(b) Reports on Form 8-K
None.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes (a) subject to the terms
and conditions of Section 15(d) of the Securities Exchange Act of 1934, to file
with the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section; (b) to provide the Underwriter at the
closing specified in the Underwriting Agreement certificates in such
denominations and registered in the names as required by the Underwriters to
permit prompt delivery to each purchaser; (c) if any public offering by the
Underwriters is to be made on terms differing from those set forth on the cover
page of the Prospectus, to file a post-effective amendment setting forth the
terms of such offering; and (d) to deregister, by means of a post-effective
amendment, any securities covered by this Registration Statement that remain
unsold at the termination of this offering.
Insofar as indemnification for liabilities arising under the 1933 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 Securities and Exchange Commission
such indemnification is against public policy as expressed in the 1933 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 preceding) 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 policy
as expressed in the 1933 Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the 1933 Act, the
information omitted from the form of prospectus filed as part of a 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 Rule 497(h) under the
1933 Act shall be deemed to be part of this Registration Statement as of the
time it was declared effective.
(2) For the purposes of determining any liability under the 1933 Act,
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 of those securities.
S3-910M.CMT
10
<PAGE>
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 Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Salt Lake City, State of Utah, on the 10th day of September,
1998.
CIMETRIX INCORPORATED
By: /s/ Paul A. Bilzerian
---------------------------
Paul A. Bilzerian, President and
Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Paul A. Bilzerian as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to this Registration Statement, and to file the same, with
all Exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Paul A. Bilzerian President, Chief Executive September 10, 1998
- ---------------------------------
Paul A. Bilzerian Officer and Director
(Principal Executive Officer)
/s/ Dr. Lowell K. Anderson* Director September 10, 1998
Dr. Lowell K. Anderson
/s/ Dr. Ron Lumia * Director September 10, 1998
- ----------------------------------
Dr. Ron Lumia
/s/ Randall A. Mackey Director September 10, 1998
- -------------------------------
Randall A. Mackey
/s/ John W. Van Drumen* Director September 10, 1998
- -----------------------------
John W. Van Drumen
/s/ Riley G. Astill Vice President of Finance and September 10, 1998
- ------------------------------------
Riley G. Astill Chief Financial Officer
(Principal Financial and
Accounting Officer)
</TABLE>
/s/ Paul A. Bilzerian
- -----------------------
* By Paul A. Bilzerian
Attorney-in-Fact
11
