As filed with the Securities and Exchange Commission on December 1, 1997
Registration No. 333-40369
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3/A-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
RESEARCH FRONTIERS INCORPORATED
(Exact name of the Company as specified in its charter)
Delaware 2899 11-2103466
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification Number)
organization)
240 Crossways Park Drive
Woodbury, New York 11797-2033
(516) 364-1902
(Address, including zip code, and telephone number, including area code, of the
registrant's principal executive offices)
Robert L. Saxe, President
Research Frontiers Incorporated
240 Crossways Park Drive
Woodbury, New York 11797-2033
(516) 364-1902
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Joseph M. Harary, Vice President and General Counsel
Research Frontiers Incorporated
240 Crossways Park Drive
Woodbury, New York 11797-2033
(516) 364-1902
Approximate date of commencement of the 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 investment 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 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 of 1933, 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 of 1933, 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. [ ]
<PAGE>
PROSPECTUS RESEARCH FRONTIERS INCORPORATED
COMMON STOCK ISSUABLE UPON EXERCISE OF
$5,000,000 REDEEMABLE PREPAID WARRANT
AND WARRANTS ISSUABLE UPON CERTAIN
REDEMPTIONS THEREOF
This Prospectus relates to the sale from time to time by certain
stockholders (the "Selling Stockholders") of Research Frontiers
Incorporated, a Delaware corporation (the "Company") of an indeterminate
number of shares of common stock, $0.0001 par value per share, of the
Company issuable upon exercise of a $5,000,000 Redeemable Prepaid
Warrant and warrants issuable to the Selling Stockholders upon certain
redemptions of the Redeemable Prepaid Warrant by the Company (the "Shares").
The actual number of shares of Common Stock into which the Redeemable
Prepaid Warrant (and warrants issuable to the Selling Stockholders upon
certain redemptions of the Redeemable Prepaid Warrant by the Company)
are exercisable will depend upon future market conditions. Based upon
current market conditions, as of the date of this Prospectus, such warrants
would be exercisable into approximately 745,879 shares of Common Stock.
It is anticipated that the Shares will be offered from time to time in
brokerage transactions (which may include block transactions), in the over-
the-counter market or negotiated transactions at prices and terms prevailing
at the times of such sales, at prices related to such market prices or at
negotiated prices. Such shares may be sold directly to purchasers, through
broker-dealers acting as agents for the Selling Stockholders or to broker-
dealers who may purchase the Selling Stockholder's Shares as principals
and thereafter sell the Shares from time to time in the over-the-counter
market, in negotiated transactions or otherwise, or by a combination of
these methods. Broker-dealers who effect these transactions may receive
compensation in the form of discounts or commissions from the Selling
Stockholders or from the purchasers of the Shares for whom the broker-
dealers may act as an agent or to whom they may sell as a principal, or
both. See "SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION".
The Company has received $5,000,000 from the Selling Stockholders
upon issuance of the Redeemable Prepaid Warrant, which amount will be
credited toward payment of the exercise price of the Redeemable Prepaid
Warrant, and the Company may receive in the future the exercise price of
any warrants issuable to the Selling Stockholders upon certain redemptions
by the Company of the Redeemable Prepaid Warrant, if any. The
Company will not receive any proceeds from the sale of Common Stock
by the Selling Stockholders. Broker-dealers, if any, acting in connection
with such sales, might be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act of 1933, as amended (the "Securities
Act") and any commission received by them and any profit on the resale
of such securities might be deemed to be underwriting discounts and
commissions under the Securities Act. The Company has agreed to bear
all of the expenses in connection with the registration and sale of the
Shares (other than selling commissions and fees), estimated to be $18,500.
The Company has also agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities arising under the Securities
Act.
The Company's Common Stock trades on the Nasdaq National Market System
under the symbol "REFR". On November 28, 1997 as reported
by Nasdaq, the last sales price of a share of Common Stock was $8.375.
THE COMMON STOCK OFFERED BY THIS PROSPECTUS
ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH A PURCHASE OF THE COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is December 1, 1997.<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information 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"). Such reports, proxy statements and other information
may be inspected and copied at the public reference facilities maintained
by the Commission at Room 1204, Judiciary Plaza, 450 Fifth Street, N.W.
Washington, D.C. 20549, and at the following Regional Offices of the
Commission: Suite 1400, 500 West Madison Street, Chicago, Illinois,
60661-2511 and Suite 1300, Seven World Trade Center, New York, New
York, 10048. Copies of such material can be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission also maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants, such as the Company, that file
electronically with the Commission and the address of such site is
http://www.sec.gov.
The Company has filed with the Commission a Registration
Statement on Form S-3 (including all amendments thereto, the
"Registration Statement"), with respect to the securities offered hereby. As
permitted by the rules and regulations of the Commission, this Prospectus
does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. The statements
contained in this Prospectus as to the contents of any contract or any other
document are not necessarily complete, and in each instance reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects
by such reference. For further information about the Company and the
securities offered hereby, reference is made to the Registration Statement
and the exhibits thereto, which may be examined without charge at the
public reference facilities maintained by the Commission at Room 1024 at
Judiciary Plaza, 450 Fifth Street, N.W. Washington, D.C. 20549, and
copies of all or any part thereof may be obtained from the Commission's
Public Reference Section at the same address upon payment of the
prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
are incorporated herein by reference and shall be deemed to be a part
hereof: (a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996: (b) Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997; (c)
Current Report on Form 8-K dated March 3, 1997, and (d) all other reports
filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange
Act since the end of the fiscal year ended December 31, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior
to the termination of the offering of the securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a
document incorporated 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
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.
A copy of any or all of the documents incorporated herein by
reference (other than exhibits unless such exhibits are specifically
incorporated by reference in any such document) will be provided without
charge to any person, including a beneficial owner, to whom a copy of this
Prospectus is delivered upon written or oral request. Requests for such
copies should be addressed to the Company at its principal executive
offices: 240 Crossways Park Drive, Woodbury, New York 11797-2033,
Attention: Investor Relations (Telephone: (516) 364-1902).
No person has been authorized to give any information or to make
any representation not contained in or incorporated by reference in this
Prospectus or in any supplement to this Prospectus and, if given or made,
such information or representation must not be relied upon as having been
authorized by the Company or by the Selling Stockholders. Neither the
delivery of this Prospectus or any supplement to this Prospectus nor any
sale made hereunder or thereunder shall under any circumstances create an
implication that there has been no change in the affairs of the Company
since their respective dates. This Prospectus and any supplement to this
Prospectus do not constitute an offer to sell or a solicitation of an offer to
buy any Common Stock offered hereby to any person, or by anyone, in any
jurisdiction in which such offer or solicitation may not lawfully be made.
RISK FACTORS
An investment in the Shares described herein entails a number of
significant risks. Because of these risks, funds should only be invested by
persons who are able to bear the risk of and withstand the loss of their
entire investment. Prospective investors should also consider the following
before making an investment decision.
History of Operating Losses and Accumulated Deficit. Since
inception, the Company has been primarily engaged in research and
development activities. To date, the Company's revenues have been
insufficient to fund operating expenses, and operating losses can be
expected for the foreseeable future. There can be no assurance the
Company will ever be profitable, or that if additional funding is necessary
to fund the Company's operations, that additional funding will be
available when needed, or if available, that its terms will be favorable or
acceptable to the Company.
Need for Additional Funds. The Company has been dependent upon
the proceeds of equity financings to fund operations. The Company
expects to use its cash and short-term investments to fund its research and
development of SPD light valves and for other working capital purposes.
The Company's working capital and capital requirements depend upon
numerous factors, including the results of research and development
activities, competitive and technological developments, the timing and cost
of patent filings, and the development of new licensees and changes in the
Company's relationships with its existing licensees. The degree of
dependence of the Company's working capital requirements on each of the
foregoing factors cannot be quantified; increased research and development
activities and related costs would increase such requirements; the addition
of new licensees may provide additional working capital or working capital
requirements, and changes in relationships with existing licensees would
have a favorable or negative impact depending upon the nature of such
changes. Based upon existing levels of expenditures, assumed ten percent
annual increases therein, existing cash reserves and budgeted revenues, the
Company believes that it would not require additional funding for at least
the next four years. There can be no assurance that expenditures will not
exceed the anticipated amounts or that additional financing, if required,
will be available when needed or, if available, that its terms will be
favorable or acceptable to the Company. Eventual success of the Company
and generation of positive cash flow will be dependent upon the
commercialization of products using the Company's technology by the
Company's licensees and payments of continuing royalties on account
thereof.
Research and Development Company; Unproven Technology. The
Company is subject to all of the risks inherent in the development of new
technologies and products. There can be no assurance that the Company's
future operations will generate significant revenues or be profitable. The
likelihood of the Company's success must be considered in light of the
problems, expenses and delays frequently encountered in the
commercialization and marketing of new technologies and the competitive
environment in which the Company operates.
All Products Being Developed Depend on Viability of the Company's
Light Valve Technology. All products being developed by the Company's
licensees depend on the viability of the Company's light valve technology.
No commercial products have yet been produced for sale. The Company
has not developed any other technology. Thus, if commercially acceptable
products cannot be developed from the Company's light valve technology,
the Company will not be successful.
Absence of Manufacturing and Marketing Capability. The
Company's light valve technology is currently licensed to eight companies
and is being evaluated by others for possible exploitation in various
commercial applications. In the past, some entities have evaluated the
Company's technology without proceeding to enter into further
negotiations or agreements with the Company. The Company intends to
continue to exploit its light valve technology by licensing it to
manufacturers of end products and to one or more other companies to
manufacture the Company's light-controlling films. The Company
anticipates that its licensee(s) would have primary responsibility for
marketing and manufacturing activities. There can be, however, no
assurance that any definitive future agreements or arrangements will
materialize. To date, neither the Company nor any of its licensees has
produced a commercial product incorporating the Company's light valve
technology. The Company cannot control the activities of its licensees.
There can be no assurance as to when or whether the licensees will produce
any commercial product using the Company's light valve technology or,
if produced, that such product will become commercially viable.
Dependence on Key Personnel. The success of the Company is
dependent on, among other things, the services of its senior management,
the loss of whose services could have a material adverse effect upon the
prospects of the Company.
Competition with Proven Technologies. The Company's light valve
technology will compete with other light control and display technologies
which are being commercially exploited with great success, such as LEDs,
plasma displays, and LCDs. Companies with liquid crystal, electrochromic
and possibly other technologies are now competing or probably will
compete against the Company in the field of so-called "smart windows."
In general, the companies which will compete against the Company have
substantially greater financial, marketing, technical and other resources and
name recognition than the Company. There can be no assurance that the
Company's light valves (whose performance and long-term reliability have
not yet been fully ascertained) will be able to displace other devices being
used commercially or otherwise find a niche for commercial application.
Technological Obsolescence. While the Company believes that its
light valves will have certain advantages over some existing display
devices, other types of so-called "smart windows" and photochromic
eyeglasses, there can be no assurance that one or more of the numerous
existing companies which manufacture or may manufacture such products,
or any company formed after the date hereof, will not be able to develop
products using alternative technologies that would render the Company's
products difficult to market or technologically or otherwise obsolete.
Uncertain Patent Protection. Although aspects of the Company's
technology are covered by 19 United States patents, 2 pending patent
applications in the United States, 24 foreign patents, and 66 foreign patent
applications, a number of those patents cover earlier versions and features
of the Company's light valves which the Company does not intend to
exploit. Moreover, the issuance of a patent does not carry any certainty of
successful application or commercial success. There can be no assurance
that these patents will be upheld if the Company seeks to enforce its patent
rights against an infringer or that the Company will have sufficient
resources to prosecute its rights. The Company also relies, to a lesser
extent, on trade secrets and confidential disclosure agreements to protect
its technology. Neither the issuance of patents nor the use of trade secrets
will necessarily protect the Company from other persons using
technologies similar to those covered by the Company's patents or trade
secrets. In addition, there can be no assurance that any particular aspect of
the Company's technology will not be found to infringe the claims of other
existing patents.
No Cash Dividends. The Company has never paid any cash
dividends and does not anticipate paying any cash dividends for the
foreseeable future.
Volatility of Stock Price. Since the initial public offering of the
Company's securities in July 1986, the market for the Company's
securities has been volatile. The trading price of the Company's securities
may continue to fluctuate significantly based on, among other things,
announcements by the Company and its competitors and price and volume
fluctuations relating to high-technology companies generally.
No Use of Proceeds. The Company will not receive any proceeds from
the sale of Common Stock by the Selling Stockholders. On October 29, 1997
the Company received the $5,000,000 aggregate exercise price of the
Redeemable Prepaid Warrant being registered hereunder. The Company may
also receive, in the future, the exercise price of any warrants issuable to
the Selling Stockholders in the event the Company makes certain redemptions
of the Redeemable Prepaid Warrant, if any.
Authorization of Additional Securities. The Company is authorized
to issue 100,000,000 shares of Common Stock. As of the date of this
prospectus, there were 10,229,510 shares of Common Stock issued and
outstanding. The Company's Board of Directors has the power to issue any
and all unissued shares without stockholder approval. To the extent that
additional shares of Common Stock are issued, dilution to the interests of
the Company's stockholders will occur. See "DESCRIPTION OF SECURITIES."
THE COMPANY
General
Research Frontiers Incorporated (the "Company") was incorporated
in New York in 1965 and reincorporated in Delaware in 1989. Since its
inception, the Company has primarily engaged in the development and
licensing of suspended particle technology and devices to control the
transmission of light. Such suspended particle devices, often referred to
as "SPDs" or "light valves" use a suspension of microscopic particles that
is either in the form of a liquid suspension or a film, which is usually
enclosed between two conductively-coated glass or plastic plates, at least
one of which is transparent. When an electrical voltage is applied, the
microscopic particles are aligned, thereby permitting a range of
transparency within which light transmission can be rapidly varied to any
degree desired depending upon the voltage applied. The first light valve
of this type was invented by Dr. Edwin Land of Polaroid Corporation in
1934. Since its incorporation the Company has developed its own
technology embodied in patents, trade secrets and know how. Light valves
using the Company's proprietary suspensions and related technology may
have wide commercial applications in devices of many types where
variable light transmission is desired, such as "smart" windows, variable
light transmission eyewear and goggles, self-dimmable automotive
sunroofs, sun visors and mirrors, and flat panel information displays for
use in computers, televisions, telephones and other electronic instruments.
DIVIDENDS
The Company has never paid any cash dividends and does not
anticipate paying any cash dividends for the foreseeable future.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common
Stock by the Selling Stockholders. On October 29, 1997 the Company
received the $5,000,000 aggregate exercise price of the Redeemable
Prepaid Warrant being registered hereunder. The Company may also
receive, in the future, the exercise price of any warrants issuable to the
Selling Stockholders in the event the Company makes certain redemptions
of the Redeemable Prepaid Warrant, if any. The Company expects that any
net proceeds from the exercise of the warrants will be used for working
capital and general corporate purposes, including research and development.
Pending utilization, the Company intends to invest such funds in money market
funds and other interest-bearing obligations.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock as of November
30, 1997, adjusted to reflect the sale of the Common Stock by each Selling
Stockholder. The persons named in the table have sole voting and
investment power with respect to all Common Stock shown as beneficially
owned by them, subject to community property laws where applicable. The
information given assumes that all Common Stock received upon exercise
of the warrants described herein which are held by the Selling Stockholders
are sold. The Common Stock offered by the Selling Stockholders may be
offered for sale from time to time at market prices prevailing at the time of
sale or at negotiated prices, and without payment of any underwriting
discounts or commissions except for usual and customary selling
commissions paid to brokers or dealers. The Selling Stockholders may sell
all, a part, or none of the number of Common Stock offered by this
Prospectus. None of the Selling Stockholders has any position, office or
other material relationship with the company (or had any such position,
office or material relationship within the past three (3) years). Because the
number of Shares into which the Redeemable Prepaid Warrant (and
warrants issuable to the Selling Stockholders upon certain redemptions
of the Redeemable Prepaid Warrant by the Company) are exercisable into
depends upon the market price of the Company's common stock from time
to time, it is not possible to calculate the number of shares of Common Stock
which will be ultimately issued upon exercise of the Redeemable Prepaid Warrant.
Therefore, the aggregate exercise price of the Redeemable Prepaid Warrant
subscribed for by each Selling Stockholder is listed below in place of the
number of shares beneficially owned by such Selling Stockholder prior to
this offering and in place of the number of shares offered by such Selling
Stockholder. Because of this, it is not possible to calculate the percentage
of the Company's outstanding Common Stock beneficially owned by each
Selling Stockholder.
Aggregate Shares Beneficially
Warrant Owned After Offering
Exercise by Selling Stockholders
Beneficial Owner Price Number %
Ramius Capital Group, L.L.C. $1,500,000 0 0
Leonardo, L.P. $1,400,000 0 0
AG Super Fund International
Partners, L.P. $ 300,000 0 0
Raphael, L.P. $ 400,000 0 0
Ramius Fund, Ltd. $ 400,000 0 0
Heracles Fund $ 500,000 0 0
Themis Partners, L.P. $ 500,000 0 0
========== = =
$5,000,000 0 0
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 100,000,000 shares of Common
Stock, $0.0001 par value per share, of which 10,229,510 shares were
outstanding as of November 30, 1997. Because the number of Shares into
which the Redeemable Prepaid Warrant (and warrants issuable to the
Selling Stockholders upon certain redemptions of the Redeemable Prepaid
Warrant by the Company) are exercisable into depends upon the market
price of the Company's common stock from time to time, it is not possible
to calculate the number of shares of Common Stock which will be ultimately
issued upon exercise of the Redeemable Prepaid Warrant.
Holders of Common Stock are entitled (i) to receive ratable
dividends from funds legally available for distribution when and if
declared by the board of directors; (ii) to share ratably in all of the
Company's assets available for distribution upon liquidation, dissolution
or winding up of the Company after all obligations to the holders of
Redeemable Prepaid Warrant have been satisfied; and (iii) to one vote for
each share held of record on each matter submitted to a vote of
stockholders. All outstanding shares of Common Stock are fully paid for
and non-assessable. Holders of Common Stock do not have cumulative
voting rights; therefore, a minority stockholder may be less able to gain
representation on the Board of Directors of the Company. The Common
Stock has no preemptive or similar rights.
On October 29, 1997, the Company sold pursuant to a private
placement to the Selling Stockholders, who are all accredited investors,
a Redeemable Prepaid Warrant with the aggregate exercise price of
$5,000,000 which was paid to the Company at the closing. The
Redeemable Prepaid Warrant is exercisable for a period of five years
(which period may be extended under certain circumstances). The exercise
price of the Redeemable Prepaid Warrant is the lesser of (a) 110% of the
average of the high and low trading prices of the Company's Common
Stock for the seven trading days prior to the closing date, and (b) 82%
(subject to adjustment under certain circumstances) of the average of the
high and low trading prices of the Company's Common Stock for the five
trading days prior to any exercise date. The holder of a Redeemable
Prepaid Warrant may not exercise such warrant at any time that the
exercise price is less than or equal to $5.10 (the "Floor Price"); provided,
however, that in the event that the closing price of the Company's
Common Stock is less than or equal to the Floor Price for 60 consecutive
calendar days, the foregoing prohibition on exercise will, upon the
expiration of such 60-day period, be inoperative, subject to reinstatement
in the event that subsequently the exercise price is equal to or greater than
$8.37 for a period of ten consecutive trading days. Also, if the closing bid
price of the Company's Common Stock is less than or equal to $3.00 on an
exercise date, in lieu of issuing the shares of Common Stock to which the
warrant holder is entitled, the Company has the option to pay the warrant
holder an amount equal to the product of (x) the closing bid price of the
Common Stock on the exercise date and (y) the number of shares which
would have been issued upon such exercise. In addition, if the closing
price per share of Common Stock is less than or equal to $6.00 for fifteen
(15) consecutive trading days , the Company may redeem the warrant, in
whole or in part, at a redemption price equal to 105% of the then
outstanding amount of the warrant being redeemed payable in cash,
together with one new five year Common Stock purchase warrant for every
three shares of Common Stock underlying the unexercised portion of such
redeemed warrant, with such new warrant having an exercise price of
115% of the bid price for the Common Stock on the day of redemption. If
the closing price per share of Common Stock is greater than or equal to
$14.00 for any fifteen (15) consecutive trading days after the registration
statement of which this Prospectus is a part shall be declared effective, the
Company may redeem the warrant, in whole or in part, at a redemption
price equal to 100% of the then outstanding amount of the warrants (unless
exercised by the Selling Stockholders prior to redemption) being redeemed
upon 120 days' notice, such notice not to be given earlier than October 29,
1999. The Company is obligated to register the issuance of all shares of
Common Stock issuable upon exercise of the Redeemable Prepaid Warrant
(and warrants issuable to the Selling Stockholders upon certain
redemptions of the Redeemable Prepaid Warrant by the Company). Also,
under certain circumstances, the Company may be required to redeem
the outstanding warrants at a premium over the then outstanding amount,
which amount shall equal 115% of the then outstanding amount in the
event of a merger, consolidation, spin off or other extraordinary corporate
action, and at an amount equal to 125% of the then outstanding amount if
the Company defaults on certain obligations to the Selling Stockholders.
Under the terms of their agreement with the Company, at no time will a
Selling Stockholder and their affiliates own in excess of 4.9% of the total
issued and outstanding shares of the Common Stock.
PLAN OF DISTRIBUTION
The Selling Stockholders are entitled to distribute from time to time
the Common Stock issuable upon exercise of the Redeemable Prepaid
Warrant (and warrants issuable to the Selling Stockholders upon certain
redemptions of the Redeemable Prepaid Warrant by the Company). Based
upon current market conditions, as of November 30, 1997, the outstanding
warrants being registered hereunder would be exercisable into approximately
745,879 shares of Common Stock, representing approximately 6.8% of the
issued and outstanding Common Stock of the Company after taking into
account the issuance of such Common Stock upon exercise of such warrants.
The Company will not receive any proceeds from the sale of
Common Stock by the Selling Stockholders who hold Redeemable Prepaid
Warrant and will only receive the $5,000,000 aggregate exercise price of
the Redeemable Prepaid Warrant being registered hereunder which has
already been received by the Company, or the exercise price of any
warrants issuable to the Selling Stockholders upon certain redemptions
of the Redeemable Prepaid Warrant by the Company, if any. The distribution
of the Common Stock by the Selling Stockholders may be effected from time
to time in one or more transactions (which may involve block transactions) on
NASDAQ, on any exchange on which the Common Stock may then be listed,
in the over-the-counter market, in negotiated transactions, through the writing
of options on shares, or a combination of such methods of sale, at market prices
prevailing prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholders
and/or purchasers of Common Stock for whom they may act as agent
(which compensation may be in excess of customary commissions).
Participating brokers and dealers may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commissions received
by them and any profit on the resale of the Common Stock purchased by
them may be deemed to be underwriting commissions or discounts under
the Securities Act.
To comply with certain states' securities laws, if applicable, the
Common Stock will not be offered or sold in a particular state unless the
Common Stock has been registered or qualified for sale in such state or an
exemption from registration or qualification is available and complied
with.
EXPERTS
The financial statements of the Company as of December 31, 1996 and 1995,
and for each of the years in the three-year period ended December 31, 1996,
have been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
LEGAL MATTERS
The legality of the securities offered hereby has been passed upon by
Joseph M. Harary, Esq., the Company's Vice President and General
Counsel. Mr. Harary holds Common Stock and options to purchase
Common Stock granted pursuant to the Company's 1992 Stock Option
Plan aggregating 197,824 shares.
No dealer, salesperson or other individual has been authorized to give
any information or make any representations other than those contained in
this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company This
Prospectus does not constitute an offer by the Company to sell, or a
solicitation of an offer to buy, the securities offered hereby in any
jurisdiction where, or to any person to whom, it is unlawful to make an
offer or solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create an implication that
there has been any change in the affairs of the Company since the date
hereof or that the information contained herein is correct or complete as of
any time subsequent to the date hereof. The information set forth herein
and in all publicly disseminated information about the Company, includes
"forward-looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and is subject to the safe
harbor created by that section. Readers are cautioned not to place undue
reliance on these forward-looking statements as they speak only as of the
date hereof and are not guaranteed.<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 13. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities.
As described in Item 15, the Articles of Company provide for the
indemnification of certain persons. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 (the "Act") may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the Certificate of Incorporation or By-Laws of the Company,
or otherwise, the registrant has been informed that in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event 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 Act and will be governed by the final
adjudication of such issue.
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses relating to the distribution of the Common Stock
registered herein are set forth below. Such expenses will be paid by the
Company.
Registration Fee under the Securities Act of 1933 $ 1,515.15
Printing and engraving expenses . . . . . . . . . $ 500.00
Accounting fees and expenses . . . . . . . . . . $ 5,000.00
Transfer agent and registrar fees . . . . . . . . $ 1,000.00
Legal fees and expenses . . . . . . . . . . . . . $ 10,000.00
Miscellaneous expenses. . . . . . . . . . . . . . $ 484.85
Total . . . . . . . . . . . . . . . . . . . . . . $ 18,500.00
All of the amounts set forth above, except for the filing fees for the
Securities and Exchange Commission, are estimated and subject to future
contingencies.
Item 15. Indemnification of Directors and Officers.
Article EIGHTH of the Company's Certificate of Incorporation
provides for the indemnification of the Company's officers and directors
to the fullest extent permitted by Section 145 of the Delaware General
Corporation Law (the "GCL").
Section 145 of the GCL provides as follows:
145 Indemnification of Officers, Directors, Employees and Agents;
Insurance
(a) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he 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, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he 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 conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he 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 reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he 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, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other
court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
(f) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who 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, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good faith
and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by,
or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Article NINTH of the Company's Certificate of Incorporation
provides for the elimination of any personal liability for monetary damages
of directors to the Corporation or its stockholders for breach of fiduciary
duty, for negligence or for taking or omitting to take any action to the
fullest extent permitted by Section 102(b) (7) of the GCL.
Section 102(b) (7) of the GCL provides as follows:
(b) In addition to the matters required to be set forth in the certificate
of incorporation by subsection (a) of this section, the certificate of
incorporation may also contain any or all of the following matters:
(7) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that such provision shall
not eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under section 174 of this Title or (iv) for
any transaction from which the director derived an improper personal
benefit. No such provision shall eliminate or limit the liability of a director
for any act or omission occurring prior to the date when such provision
becomes effective. All references in this subsection to a director shall also
be deemed to refer to a member of the governing body of a corporation
which is not authorized to issue capital stock.
Item 16. Exhibits.
4.1 Subscription Agreement between the Company and the Selling
Stockholders dated as of October 29, 1997. (1)
4.2 Redeemable Prepaid Warrant between the Company and the Selling
Stockholders dated as of October 29, 1997. (1)
4.3 Registration Rights Agreement between the Company and the Selling
Stockholders dated as of October 29, 1997. (1)
5.1 Opinion re legality of the Common Stock and issuance thereof. (Filed
herewith)
23.1 Consent of KPMG Peat Marwick LLP (Filed herewith).
23.2 Consent of Joseph M. Harary (included in Exhibit 5.1)
24. Power of Attorney. Included as part of signature page to this
Registration Statement on Form S-3 (No. 333-40369).
- ------------------------------------
(1) Incorporated by reference to the exhibit filed with the Company's
Registration Statement on Form S-3 (No. 333-40369).
Item 17. Undertakings.
The undersigned registrant undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
any employee benefit plan's annual report pursuant to section 15(d) of the
Securities Act of 1934) that is incorporated by reference in the registration
statement shall be 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 of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Woodbury, State of New York,
on December 1, 1997.
RESEARCH FRONTIERS INCORPORATED
(Registrant)
By:/s/ Robert L. Saxe
Robert L. Saxe, President,
Treasurer, Principal Executive,
Financial and Accounting Officer.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Robert L. Saxe Chairman of the Board, President December 1, 1997
Robert L. Saxe Treasurer and Director (Principal
Executive, Financial and Accounting Officer)
/s/ Robert M. Budin* Director December 1, 1997
Robert M. Budin
/s/ Bernard D. Gold* Director December 1, 1997
Bernard D. Gold
/s/ Joseph M. Harary Director December 1, 1997
Joseph M. Harary
/s/ Robert I. Thompson Director December 1, 1997
Robert I. Thompson
*By: /s/ Robert L. Saxe
Robert L. Saxe as attorney-in-fact<PAGE>
EXHIBIT 5.1
December 1, 1997
Research Frontiers Incorporated
240 Crossways Park Drive
Woodbury, New York 11797-2033
Gentlemen:
I am the Vice President and General Counsel of Research Frontiers
Incorporated (the "Company"), a Delaware corporation, and render this
opinion in connection with the registration pursuant to a Registration
Statement on Form S-3 (the "Registration Statement") by the Company
under the Securities Act of 1933, as amended (the "Act"), of $5,000,000
Redeemable Prepaid Warrant, and warrants issuable to the Selling
Stockholders pursuant to certain redemptions thereof by the Company
(the "Warrants"), and shares of the Company's common stock, $0.0001
par value (the "Common Stock"), to be issued pursuant to the exercise
from time to time of the Warrants.
I have examined the Company's Certificate of Incorporation and
By-Laws, both as amended, and minute books and such other documents
and records as I have deemed necessary and relevant as a basis for my
opinions hereinafter set forth. For the purposes of this opinion, I have
assumed the genuineness of all signatures and the conformity to original
documents of all instruments furnished to me for review or examination
as copies.
Based on the foregoing and having regard to such legal
considerations as I have deemed relevant, it is my opinion that:
1. The Company is a corporation duly organized under the laws of
the State of Delaware.
2. The Common Stock covered by the Registration Statement has
been validly authorized.
3. When the Common Stock has been duly registered under the
Act, when certificates for the Common Stock have been duly delivered,
and when the Company shall have received the consideration to be
received by it pursuant to and upon exercise of the related Warrants, the
Common Stock will be validly issued, fully paid and non-assessable by
the Company, with no personal liability attaching to ownership thereof.
I hereby consent to the inclusion of this opinion in the Registration
Statement and to the references to me contained therein.
Very truly yours,
/s/ Joseph M. Harary
Joseph M. Harary, Esq.
Vice President and General Counsel<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Research Frontiers Incorporated
We consent to the use of our report incorporated herein
by reference and to the reference to our firm under the
heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Jericho, New York
December 1, 1997
