<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON _______________, 1998
REGISTRATION NO. _________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
GENUS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------
CALIFORNIA 94-2790804
- ------------------------------- ----------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1139 KARLSTAD DRIVE
SUNNYVALE, CA 94089
(408) 747-7120
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------
JAMES T. HEALY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
GENUS, INC.
1139 KARLSTAD DRIVE
SUNNYVALE, CA 94089
(408) 747-7120
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------
Copies to:
ANDREW J. HIRSCH, ESQ.
KELLY AMES MOREHEAD, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(650) 493-9300
FAX: (650) 845-5000
------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time as the several selling shareholders may decide.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Each Class Amount to be Offering Price Per Aggregate Offering Amount of
of Securities to be Registered Registered Share(1) Price(1) Registration Fee
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value . . . 3,460,098(2) $2.031 $7,027,459.04 $2,073.10
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
Registration fee pursuant to Rule 457(c). Based on the last reported
sale price for the Company's Common Stock on March 12, 1998.
(2) Pursuant to Rule 416 under the Securities Act of 1933, any additional
shares of Common Stock issued either as a result of the anti-dilution
provisions of the Certificate of Determination relating to the Series A
Stock or to the Warrants pursuant to which the Common Stock will be
issued or by reason of a reduction in the conversion price of the Series
A Stock in accordance with the terms thereof are deemed to be registered
herewith.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
<PAGE>
SUBJECT TO COMPLETION
DATED _______________, 1998
Prospectus
3,460,098 SHARES
GENUS, INC.
COMMON STOCK
This Prospectus relates to the resale by certain holders of securities
of Genus, Inc. (the "Company" or "Genus") named herein (the "Selling Security
Holders") of (i) up to 2,882,000 shares (the "Shares") of common stock, no
par value of the Company (the "Common Stock") issuable upon conversion of
Series A Convertible Preferred Stock of the Company (the "Series A Stock"),
(ii) 400,000 additional shares of Common Stock (the "Warrant Shares")
issuable upon exercise of certain warrants (the "Warrants") to purchase
Common Stock and (iii) up to 178,098 additional shares of Common Stock (the
"Dividend Shares") that may be issued as dividends on the Series A Stock.
The Shares, the Warrant Shares and the Dividend Shares collectively are
referred to herein as the "Securities." Because of the possibility of
antidilution adjustments to the conversion price of the Series A Stock (which
is based on the market price of the Common Stock) and the exercise price of
the Warrants, the number of shares of Common Stock issuable upon such
conversion or exercise and subject to this Prospectus is indeterminate and
this Prospectus relates to the resale of such entire indeterminate number of
shares of Common Stock. The Securities may be offered by the Selling
Security Holders from time to time in transactions in the over-the-counter
market through The Nasdaq Stock Market in privately negotiated transactions,
through the writing of options on the Securities, or through a combination of
such methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices relating to such prevailing market
prices or at negotiated prices. The Selling Security Holders may effect such
transactions by selling the Securities to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the Selling Security Holders and/or the purchasers of the
Securities for whom such broker-dealers may act as agents or to whom they may
sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). In connection
with any sales, the Selling Security Holders and any brokers participating in
such sales may be deemed to be "underwriters" within the meaning of the
Securities Act. See "Selling Security Holders" and "Plan of Distribution."
Information concerning the Selling Security Holders may change from time to
time and will be set forth in supplements to this Prospectus.
None of the proceeds from the sale of the Securities by the Selling
Security Holders will be received by the Company. The Company has agreed to
bear all expenses (other than selling commissions and fees and expenses of
counsel and other advisers to the Selling Security Holders) in connection
with the registration of the Securities being offered by the Selling Security
Holders. The Company has agreed to indemnify the Selling Security Holders
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended (the "Securities Act").
The Company sold the Series A Stock and the Warrants to the Selling
Security Holders in a private transaction on February 12, 1998. The Series
A Stock is convertible at the option of the holder at any time, or at the
option of the Company upon the satisfaction of certain conditions, unless
previously redeemed or repurchased, into the Shares at a conversion price
that is the lesser of (i) $3.47 or (ii) 82% of the average of the lowest 15
closing bid prices of the Common Stock on the Nasdaq Stock Market during the
45 trading days prior to the date of the conversion. If certain conditions
relating to the registration of the Shares are not timely met, the conversion
price shall be reduced by 2% per month for up to two months.
The Company's Common Shares are traded on The Nasdaq National Market
under the symbol "GGNS."
The Warrants are exercisable at any time until February 11, 2001 for
300,000 shares of Common Stock at a price of $3.67 per share and for 100,000
shares at a price of $4.50 per share.
The Series A Stock accrues a dividend ("Dividend") at a rate per share
(as a percentage of the Stated Value per share) of 6% per annum, payable in
cash or shares of Common Stock at the option of the Company. The aggregate
unconverted Stated Value of the issued and outstanding Series A Stock and
Warrants was $5.0 million on February 12, 1998.
The Series A Stock may be redeemed at the option of the Company on or
after February 12, 2003 at a redemption price equal to the product of (i) the
average of the closing bid prices for the five trading days immediately
preceding (a) February 12, 2003 or (b) the date of payment by the Company of
the redemption price, whichever is greater, and (ii) the conversion ratio
applicable to the Series A Stock calculated on February 12, 2003.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS,"
COMMENCING ON PAGE 3.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is _______________, 1998.
<PAGE>
AVAILABLE INFORMATION
As used in this Prospectus, unless the context otherwise requires, the
terms "Genus" and the "Company" mean Genus, Inc. and its subsidiaries. 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 statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports and proxy
statements and other information filed with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: New York Regional Office, 7 World Trade Center,
Suite 1300, New York, New York 10048; and Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
may be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, the Commission maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that filed electronically with the Commission. The address of
the site is http://www.sec.gov.
The Company's Common Stock is traded on the Nasdaq National Market.
Reports and other information concerning the Company may be inspected at the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
This Prospectus constitutes part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"), with respect
to the securities offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement, copies of which may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the fees prescribed by the Commission. Statements
contained in this Prospectus as to the contents of any contract or any other
document filed, or incorporated by reference, as an exhibit to the
Registration Statement, are qualified in all respects by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents, previously filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by
reference, except as superseded or modified herein:
Registration Statements on Form 8-A filed with the Commission on August
26, 1988 and May 3, 1990.
Current Report on Form 8-K filed with the Commission on February 17,
1998.
Annual Report on Form 10-K for the fiscal year ended December 31, 1997
(the "1997 Form 10-K" filed with the Commission on March 16, 1998).
Each document filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of this offering shall be deemed to be incorporated by reference
into this Prospectus and shall be part hereof from the date of filing of such
document. Any statement contained in any document incorporated or deemed to
be incorporated by reference in this Prospectus shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any document described above (other than exhibits).
Requests for such copies should be directed to Genus, Inc. at its principal
offices located at 1139 Karlstad Drive, Sunnyvale, California 94089,
telephone (408) 747-7120, attention: Investor Relations.
Genus-Registered Trademark- is a trademark of Genus, Inc.
-2-
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES BEING OFFERED BY THIS PROSPECTUS INVOLVES A
HIGH DEGREE OF RISK. THE FOLLOWING FACTORS, IN ADDITION TO THOSE DISCUSSED
ELSEWHERE IN THIS PROSPECTUS, SHOULD BE CAREFULLY CONSIDERED IN EVALUATING
THE COMPANY AND ITS BUSINESS PROSPECTS BEFORE PURCHASING SHARES OFFERED BY
THIS PROSPECTUS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A
RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH IN THE FOLLOWING RISK
FACTORS AND ELSEWHERE IN THIS PROSPECTUS.
HISTORICAL PERFORMANCE. Although the Company had net income of $19.3
million and $4.2 million in the years ended December 31, 1995 and 1994, the
Company experienced losses of $19.3 million, $9.2 million, and $6.9 million
for the years ended December 31, 1997, 1996 and 1993, respectively. As a
result of the Company's inconsistent sales and operating results in recent
years, there can be no assurance that the Company will be able to sustain
consistent future revenue growth on a quarterly or annual basis, or that the
Company will be able to maintain consistent profitability on a quarterly or
annual basis.
RELIANCE ON INTERNATIONAL SALES. International sales accounted for
approximately 82%, 86% and 88% of total net sales in the years ended 1997,
1996 and 1995, respectively. In addition, net sales to South Korean
customers accounted for approximately 50%, 59% and 63%, respectively, of
total net sales during the same periods. The Company anticipates that
international sales, including sales to South Korea, will continue to account
for a significant portion of net sales. As a result, a significant portion
of the Company's sales will be subject to certain risks, including unexpected
changes in regulatory requirements, tariffs and other barriers, political and
economic instability, difficulties in accounts receivable collection,
difficulties in managing distributors or representatives, difficulties in
staffing and managing foreign subsidiary operations and potentially adverse
tax consequences. Although the Company's foreign system sales are primarily
denominated in U.S. dollars and the Company does not engage in hedging
transactions, the Company's foreign sales are subject to the risks associated
with unexpected changes in exchange rates, which could have the effect of
making the Company's products more or less expensive. There can be no
assurance that any of these factors will not have a material adverse effect
on the Company's business, financial condition and results of operations.
Further, the Company has a wholly owned South Korean subsidiary
providing service and support to the installed base of customers and whose
functional currency is the won. As a result of the devaluation of the won in
the fourth quarter of 1997, the Company incurred a foreign exchange loss of
$1.1 million. There can be no assurance that the Company will not incur
currency losses or gains in future quarters as the currency fluctuates.
A substantial portion of the Company's sales are in Asia. Recent
turmoil in the Asian financial markets has resulted in dramatic currency
devaluations, stock market declines, restriction of available credit and
general financial weakness. In addition, Dynamic Random Access Memory
("DRAM") prices have fallen dramatically and may continue to do so as some
Asian integrated circuit ("IC") manufacturers may be selling DRAMs at less
than cost in order to raise cash. These developments may affect the Company
in several ways. Currency devaluation may make dollar-denominated goods,
such as the Company's, more expensive for Asian clients. Asian manufacturers
may limit capital spending. Furthermore, the uncertainty of the DRAM market
may cause manufacturers everywhere to delay capital spending plans. These
circumstances may also affect the ability of Company customers to meet their
payment obligations, resulting in the cancellations or deferrals of existing
orders and the limitation of additional orders. Some of the Company's South
Korean customers have rescheduled their required delivery dates for orders
previously placed and have announced delays in the facilitization of their
new manufacturing areas. In addition, some portion of IC fabrication plant
construction has been subsidized by Asian governments. Financial turmoil may
weaken these governments' willingness to continue such subsidies. Such
developments could have a material adverse affect on the Company's business,
financial condition and results of operations.
-3-
<PAGE>
RELIANCE ON A SMALL NUMBER OF CUSTOMERS. The Company continued its
efforts to expand its customer base in 1997 and was successful, with new
customers in Taiwan and North America. Historically, the Company has relied
on a limited number of customers for a substantial portion of its net sales.
In 1997, two customers, Samsung Electronics Company, Ltd. and Innotech
Corporation, accounted for 47% and 17%, respectively, of the Company's net
sales. In 1996, these same two customers accounted for 53% and 18%,
respectively, of the Company's net sales. Because the semiconductor
manufacturing industry is concentrated in a limited number of generally
larger companies, the Company expects that a significant portion of its
future product sales will be concentrated within a limited number of
customers. None of these customers has entered into a long-term agreement
requiring it to purchase the Company's products. Furthermore, sales to
certain of these customers may decrease in the future when those customers
complete their current semiconductor equipment purchasing requirements for
new or expanded fabrication facilities. The loss of a significant customer
or any reduction in orders from a significant customer, including reductions
due to customer departures from recent buying patterns, market, economic or
competitive conditions in the semiconductor industry or in the industries
that manufacture products utilizing ICs, could have a material adverse effect
on the Company's business, financial condition and results of operations.
CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY. The Company's business
depends upon the capital expenditures of semiconductor manufacturers, which
in turn depend on the current and anticipated market demand for ICs and
products utilizing ICs. The semiconductor industry is cyclical and
experiences periodic downturns, which have an adverse effect on the
semiconductor industry's demand for semiconductor manufacturing capital
equipment. Semiconductor industry downturns have adversely affected the
Company's revenues, operating margins and results of operations. There can
be no assurance that the Company's revenues and operating results will not
continue to be materially and adversely affected by future downturns in the
semiconductor industry. In addition, the need for continued investment in
R&D, substantial capital equipment requirements and extensive ongoing
worldwide customer service and support capability limits the Company's
ability to reduce expenses. Accordingly, there is no assurance that the
Company will be able to attain profitability in the future.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS. The Company's revenue and
operating results may fluctuate significantly from quarter to quarter. The
Company derives its revenue primarily from the sale of a relatively small
number of high-priced systems, many of which may be ordered and shipped
during the same quarter. The Company's results of operations for a
particular quarter could be adversely affected if anticipated orders, for
even a small number of systems, were not received in time to enable shipment
during the quarter, anticipated shipments were delayed or canceled by one or
more customers or shipments were delayed due to manufacturing difficulties.
The Company's revenue and operating results may also fluctuate due to the mix
of products sold and the channel of distribution.
COMPETITION. The semiconductor manufacturing capital equipment industry
is highly competitive. The Company faces substantial competition throughout
the world. The Company believes that to remain competitive, it will require
significant financial resources in order to offer a broader range of
products, to maintain customer service and support centers worldwide and
invest in product and process R&D. Many of the Company's existing and
potential competitors have substantially greater financial resources, more
extensive engineering, manufacturing, marketing and customer service and
support capabilities, as well as greater name recognition than the Company.
The Company expects its competitors to continue to improve the design and
performance of their current products and processes and to introduce new
products and processes with improved price and performance characteristics.
If the Company's competitors enter into strategic relationships with leading
semiconductor manufacturers covering MeV or CVD products similar to those
sold by the Company, it would materially adversely affect the Company's
ability to sell its products to these manufacturers. There can be no
assurance that the Company will continue to compete successfully in the
United States or worldwide. The Company faces direct competition in CVD WSiX
from Applied Materials, Inc. and Tokyo Electron, Ltd. In the MeV
marketplace, the Company's MeV ion implantation systems compete with MeV
systems marketed by Eaton Corporation. There can be no assurance that these
or other competitors will not succeed in developing new technologies,
offering products at lower prices than those of the Company or obtaining
market acceptance for products more rapidly than the Company.
-4-
<PAGE>
DEPENDENCE ON NEW PRODUCTS AND PROCESSES. The Company believes that its
future performance will depend in part upon its ability to continue to
enhance its existing products and their process capabilities and to develop
and manufacture new products with improved process capabilities. As a
result, the Company expects to continue to invest in R&D. The Company also
must manage product transitions successfully, as introductions of new
products could adversely affect sales of existing products. There can be no
assurance that the market will accept the Company's new products or that the
Company will be able to develop and introduce new products or enhancements to
its existing products and processes in a timely manner to satisfy customer
needs or achieve market acceptance. The failure to do so could have a
material adverse effect on the Company's business, financial condition and
results of operations. Furthermore, if the Company is not successful in the
development of advanced processes or equipment for manufacturers with whom it
has formed strategic alliances, its ability to sell its products to those
manufacturers would be adversely affected.
PRODUCT CONCENTRATION; RAPID TECHNOLOGICAL CHANGE. Semiconductor
manufacturing equipment and processes are subject to rapid technological
change. The Company derives its revenue primarily from the sale of its MeV
ion implantation and WSiX CVD systems. The Company estimates that the life
cycle for these systems is generally three to five years. The Company
believes that its future prospects will depend in part upon its ability to
continue to enhance its existing products and their process capabilities and
to develop and manufacture new products with improved process capabilities.
As a result, the Company expects to continue to make significant investments
in R&D. The Company also must manage product transitions successfully, as
introductions of new products could adversely affect sales of existing
products. There can be no assurance that future technologies, processes or
product developments will not render the Company's product offerings obsolete
or that the Company will be able to develop and introduce new products or
enhancements to its existing and future processes in a timely manner to
satisfy customer needs or achieve market acceptance. The failure to do so
could adversely affect the Company's business, financial condition and
results of operations. Furthermore, if the Company is not successful in the
development of advanced processes or equipment for manufacturers with whom it
currently does business, its ability to sell its products to those
manufacturers would be adversely affected.
DEPENDENCE ON KEY SUPPLIERS. Certain of the components and
sub-assemblies included in the Company's products are obtained from a single
supplier or a limited group of suppliers. Disruption or termination of these
sources could have a temporary adverse effect on the Company's operations.
The Company believes that alternative sources could be obtained and qualified
to supply these products, if necessary. Nevertheless, a prolonged inability
to obtain certain components could have a material adverse effect on the
Company's business, financial condition and results of operations.
DEPENDENCE ON INDEPENDENT DISTRIBUTORS. The Company currently sells and
supports its MeV ion implantation and CVD products through direct sales and
customer support organizations in the U.S., Western Europe and South Korea
and through five exclusive sales representatives and distributors in the
U.S., Japan, Taiwan and Singapore. Although the Company believes that
alternative sources of distribution are available, the disruption or
termination of its existing distributor relationships could have a temporary
adverse effect on the Company's business, financial condition and results of
operations.
LIQUIDITY AND CAPITAL RESOURCES. The Company's primary source of funds
at December 31, 1997 consisted of $8.7 million in cash and cash equivalents.
The Company has a $10.0 million revolving line of credit which is secured by
substantially all of the assets of the Company and expires in June 1998. At
December 31, 1997, the Company had $2.8 million in unused letters of credit
and borrowings of $7.2 million outstanding under the line of credit.
Availability of borrowings is based on eligible accounts receivable and
inventory. Based on eligible accounts receivable and inventory at December
31, 1997, the Company's borrowing capacity under the revolving credit
facility was in excess of $10 million. A monthly borrowing base certificate
is required by the bank.
The Company incurred operating losses during each of the two years in
the period ended December 31, 1997 and, as of December 31, 1997, had an
accumulated deficit of $48.9 million. Additionally, the Company's bank line
of credit is scheduled to expire in June 1998. The accompanying consolidated
financial statements have been prepared assuming the Company will continue as
a going concern and do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets and
liabilities that may result from the outcome of this uncertainty.
In connection with the issuance of Series A Stock for gross proceeds of
$5 million, the same investors in the Company's Series A Stock have committed
to providing additional equity financing upon fulfillment of certain
conditions. Assuming the Company fulfills these conditions and receives the
proceeds from this additional preferred stock financing and assuming the
Company is able to secure borrowings upon renewal of its existing bank line
of credit or under a new line of credit, the Company believes that its
existing cash resources together with funds from this additional preferred
stock financing and line of credit will be sufficient to fund the Company's
expected working capital requirements for at least the next 12 months.
However, the exact amount and timing of these working capital requirements
and the Company's ability to continue as a going concern will be determined
by numerous factors, including the level of and gross margin on future sales,
the payment terms extended to and by the Company and the timing of capital
expenditures. Furthermore, there can be no assurance that funds will be
received or become available from the additional preferred stock financing or
line of credit or that these funds, together with the Company's existing cash
resources, will be sufficient to implement the Company's operating strategy
or meet the Company's other working capital requirements. Accordingly, the
Company may be required to seek additional equity or debt financing. There
can be no assurance that the Company would be able to obtain additional debt
or equity financing, if and when needed, on terms that the Company finds
acceptable. Any additional equity or debt financing may involve substantial
dilution to the Company's shareholders, restrictive covenants or high
interest costs.
If the Company is unable to obtain sufficient funds to satisfy its cash
requirements, it will be forced to curtail operations, dispose of assets or
seek extended payment terms from its vendors. There can be no assurance that
the Company would be able to reduce expenses or successfully complete other
steps necessary to continue as a going concern. Such events would materially
and adversely affect the value of the Company's equity securities.
-5-
<PAGE>
VOLATILITY OF STOCK PRICE; EFFECT OF CONVERSION OF SERIES A STOCK ON THE
STOCK PRICE. The Company's Common Stock has experienced substantial price
volatility, particularly as a result of quarter-to-quarter variations in the
actual or anticipated financial results of, or announcements by, the Company,
its competitors or its customers, announcements of technological innovations
or new products by the Company or its competitors, changes in earnings
estimates by securities analysts and other events or factors. Also, the
stock market has experienced extreme price and volume fluctuations which have
affected the market price of many technology companies, in particular, and
which have often been unrelated to the operating performance of these
companies. These broad market fluctuations, as well as general economic and
political conditions in the United States and the countries in which the
Company does business, may adversely affect the market price of the Company's
Common Stock. Furthermore, trading in the stock is thin and because the
Series A Stock is convertible at a discount to the market price, the holders
of Series A Stock can convert the Series A Stock into Common Stock and sell
such Common Stock at a profit at any time, which may have a depressive effect
on the stock price. In addition, the occurrence of any of the events
described in these "Risk Factors" could have a material adverse effect on
such market price. In addition, the occurrence of any of the events described
in these "Risk Factors" could have a material adverse effect on such market
price. See "Market for the Registrant's Common Equity and Related
Shareholder Matters" in the "1997 Form 10-K."
READINESS FOR YEAR 2000. Many existing computer systems and
applications, and other control devices, use only two digits to identify a
year in the date field, without considering the impact of the upcoming change
in the century. These computer systems and applications could fail or create
erroneous results unless corrected so that they can process data related to
the year 2000. The Company relies on its systems, applications and devices
in operating and monitoring all major aspects of its business, including
financial systems (such as general ledger, accounts payable and payroll
modules), customer service, infrastructure, embedded computer chips, networks
and telecommunications equipment and end products. The Company also relies
on external systems of business enterprises such as customers, suppliers,
creditors, financial organizations, and of governments both domestically and
globally, directly for accurate exchange of data and indirectly. During
1997, the Company started the implementation of a new business system. One
criteria for the selection of the enterprise software was compliance with
Year 2000 issues. Accordingly, the Company's current estimate is that the
costs associated with the Year 2000 issue, and the consequences of incomplete
or untimely resolution of the Year 2000 issue, will not have a material
adverse affect on the result of operations or financial position of the
Company in any given year. However, despite the Company's efforts to address
the Year 2000 impact on its internal systems, there can be no assurance that
the Company has fully identified such impact or that it can resolve it
without disruption of its business and without incurring significant expense.
In addition, even if the internal systems of the Company are not materially
affected by the Year 2000 issue, the Company could be affected through
disruption in the operation of the enterprises with which the Company
interacts.
-6-
<PAGE>
SELLING SECURITY HOLDERS
The following table sets forth certain information with respect to the
beneficial ownership by the Selling Security Holders of shares of the
Company's Common Stock. The Selling Security Holders purchased from the
Company in a private transaction on February 12, 1998 an aggregate of 100,000
shares of Series A Stock, Warrants to purchase an aggregate of 400,000 shares
of Common Stock and may receive dividends of 6% per annum on the Series A
Stock payable in Common Stock. The Securities offered by this Prospectus are
being acquired by the Selling Security Holders upon conversion of the Series
A Stock, exercise of the Warrants and as dividends on the Series A Stock.
The Registration Rights Agreement requires the Company to register a
total of 3,460,098 shares of the Company's Common Stock, even though less or
more than that amount may be required to be issued by the Company upon the
conversion of all of the shares of Series A Stock, the exercise of the
Warrants or as dividends on the Series A Stock as of the date of this
Prospectus. The Selling Security Holders named below may sell the shares of
Common Stock offered hereby from time to time and may choose to sell less
than all or none of such shares.
<TABLE>
<CAPTION>
MAXIMUM
NUMBER OF
SHARES THAT SHARES SHARES OWNED
NAME MAY BE SOLD (1) OFFERED (1) AFTER OFFERING (2)
- ----------------------------------- --------------- ----------- ------------------
<S> <C> <C> <C>
SOUTHBROOK INTERNATIONAL INVESTMENTS, LTD. 1,680,048 1,680,048 0
c/o Trippoak Advisors, Inc.
Robert L. Miller
630 Fifth Avenue, Suite 2000
New York, NY 10111
WESTOVER INVESTMENTS L.P. 537,616 537,616 0
Will Rose
777 Main Street, Suite 2750
Fort Worth, Texas 76102
MONTROSE INVESTMENTS, LTD. 806,424 806,424 0
Will Rose
777 Main Street, Suite 2750
Fort Worth, Texas 76102
BROWN SIMPSON STRATEGIC GROWTH FUND, L.P. 82,502 82,502 0
Mitchell Kaye
152 West 57th Street, 40th Floor
New York, NY 10019
BROWN SIMPSON STRATEGIC GROWTH FUND, LTD. 253,507 253,507 0
Mitchell Kaye
152 West 57th Street, 40th Floor
New York, NY
CIBC OPPENHEIMER CORP. 100,000 100,000 0
Matthew J. Maryles
200 Liberty Street, 7th Floor
New York, NY 10281
</TABLE>
- -----------------
(1) The Registration Rights Agreement requires that the Company register an
aggregate of 3,460,098 shares of Common Stock pursuant to the Registration
Statement of which this Prospectus is a part. As of March 12, 1998, an
aggregate of 3,224,098 shares would be required to be issued upon conversion
of the Series A Stock (assuming a conversion price of $1.89), exercise of the
Warrants and as dividends on the Series A Stock. The maximum number
-7-
<PAGE>
of shares that each Selling Security Holder may sell (except for CIBC
Oppenheimer Corp.) includes (i) two times the number of shares of Common
Stock issuable upon conversion of the Series A Stock, assuming a conversion
price of $3.47 (which price may fluctuate from time to time based on changes
in the market price of the Common Stock and provisions in the conversion
formula pursuant to the Convertible Preferred Stock Purchase Agreement
pursuant to which the Series A Preferred Stock and the Warrants were sold),
(ii) the number of shares of Common Stock issuable upon exercise of the
Warrants (iii) the number of shares of Common Stock issuable as dividends on
the Series A Stock assuming the Selling Security Holder held the Series A
Stock for two years and (iv) an indeterminate number of additional shares
which may become issuable upon conversion by reason of adjustments and
fluctuations of the conversion price. If any Selling Security Holder's
ownership exceeds this amount, this Prospectus will be amended. CIBC
Oppenheimer Corp.'s ownership includes only the number of shares of Common
Stock issuable upon exercise of its Warrant.
(2) Assumes all shares offered by this Prospectus are sold and no
beneficially owned shares are sold other than by this Prospectus.
No Selling Security Holder has held any position or office or had any
other material relationship with the Company or any of its affiliates within
the past three years other than CIBC Oppenheimer Corp., which received a
finder's fee in connection with the sale of the Series A Stock and Warrants.
Each Selling Security Holder has represented to the Company that it
purchased the Securities for investment, with no present intention of
distribution. However, in recognition of the fact that investors, even
though purchasing the Securities for investment, may wish to be legally
permitted to sell their securities when they deem appropriate, the Company
has filed with the Commission under the Securities Act the Registration
Statement with respect to the resale of the Shares, the Warrant Shares and
the Dividend Shares from time to time in the over-the-counter market through
The Nasdaq Stock Market or in privately negotiated transactions, through the
writing of options on the Shares, the Warrant Shares or the Dividend Shares,
or through a combination of the foregoing. The Company has agreed to prepare
and file such amendments and supplements to the Registration Statement as may
be necessary to keep the Registration Statement effective for two years from
the date the Registration Statement is declared effective or such earlier
date when all Securities covered by such Registration Statement have been
sold.
DESCRIPTION OF EQUITY SECURITIES
The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, no par value per share, and 2,000,000 shares of
Preferred Stock, no par value per share, of which 100,000 have been
designated Series A Convertible Preferred Stock. As of February 27, 1998,
approximately 17,129,260 shares of Common Stock were outstanding, held of
record by approximately 479 shareholders. As of February 27, 1998, 100,000
shares of Series A Stock were outstanding, held of record by approximately 5
shareholders.
-8-
<PAGE>
PLAN OF DISTRIBUTION
The sale of the Securities by the Selling Security Holders may be
effected from time to time in transactions in the over-the-counter market
through Nasdaq, in privately negotiated transactions, through the writing of
options on the Securities, or through a combination of such methods of sale,
at fixed prices, that may be changed, at market prices prevailing at the time
of sale, at prices relating to such prevailing market prices or at negotiated
prices. The Selling Security Holders may effect such transactions by selling
the Securities to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions
from the Selling Security Holders and/or the purchasers of the Securities for
whom such broker-dealers may act as agents or to whom they may sell as
principals, or both (which compensation as to a particular broker-dealer may
be in excess of customary compensation). Any broker-dealer may act as a
broker-dealer on behalf of one or more of the Selling Security Holders in
connection with the offering of certain of the Securities by the Selling
Security Holders.
The Selling Security Holders and any broker-dealers who act in
connection with the sale of the Securities hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and profit on any resale of the Securities
as principal might be deemed to be underwriting discounts and commissions
under the Securities Act. The Company has agreed to indemnify the Selling
Security Holders against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon for
Genus by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo
Alto, California. As of the date of this Prospectus, members of Wilson
Sonsini Goodrich & Rosati, Professional Corporation, who have represented the
Company in connection with this offering, beneficially own approximately
11,500 shares of the Company's Common Stock. Mario M. Rosati, a Director and
Secretary of the Company, is a member of Wilson Sonsini Goodrich & Rosati,
Professional Corporation.
EXPERTS
The Consolidated Financial Statements of the Company, as of December 31,
1997 and 1996 and for each of the three years in the period ended December
31, 1997 and the Financial Statement Schedule of the Company for each of the
three years in the period ended December 31, 1997, incorporated by reference
in this Prospectus and elsewhere in the Registration Statement, have been
incorporated herein in reliance on the reports, one of which includes an
explanatory paragraph regarding the Company's ability to continue as a going
concern, of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
-9-
<PAGE>
No dealer, salesperson or other person has been authorized in connection
with any offering made hereby to give any information or to make any
representations other than those contained in or incorporated by reference in
this Prospectus, and, if given or made, such information or representations
must not be relied upon as having been authorized. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any security
other than the securities offered hereby, nor do they constitute an offer to
sell or a solicitation of any offer to buy any of the securities offered
hereby to any person in any jurisdiction in which such offer or solicitation
would be unlawful or to any person to whom it is unlawful. Neither the
delivery of this Prospectus nor any offer or sale made hereunder shall, under
any circumstances, create any implication that there has been no change in
the affairs of the Company or that the information contained herein is
correct as of any time subsequent to the date hereof.
-----------------
TABLE OF CONTENTS
-----------------
Page
Available Information. . . . . . . . . . . . . . . . . . . . . . . 2
Information Incorporated by Reference . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Selling Security Holders . . . . . . . . . . . . . . . . . . . . . 7
Description of Equity Securities . . . . . . . . . . . . . . . . . 8
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . 9
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-----------------
GENUS, INC.
3,460,098 SHARES OF COMMON STOCK
----------
PROSPECTUS
----------
__________, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with
the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are
estimates except the Securities and Exchange Commission registration fee and
the Nasdaq National Market listing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . . . $ 2,073
Nasdaq National Market listing fee . . . . . . . . . . . 17,500
Printing and engraving expenses . . . . . . . . . . . . . 1,200
Legal fees and expenses . . . . . . . . . . . . . . . . . 6,000
Accounting fees and expenses . . . . . . . . . . . . . . 5,000
Transfer agent and registrar fees and expenses . . . . . 10,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 5,000
Total . . . . . . . . . . . . . . . . . . . . . . . . $ 46,773
-----------
-----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 317 of the California General Corporation Law authorizes a court
to award, or a corporation's Board of Directors to grant, indemnity to
directors and officers who are parties or are threatened to be made parties
to any proceeding (with certain exceptions) by reason of the fact that the
person is or was an agent of the corporation, against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with the proceeding if that person acted in good faith and in a
manner the person reasonably believed to be in the best interests of the
corporation. This limitation on liability has no effect on a directors'
liability (i) for acts or omissions that involve intentional misconduct or a
knowing and culpable violation of law, (ii) for acts or omissions that a
director believes to be contrary to the best interests of the corporation or
its shareholders or that involve the absence of good faith on the part of the
director, (iii) relating to any transaction from which a director derived an
improper personal benefit, (iv) for acts or omissions that show a reckless
disregard for the director's duty to the corporation or its shareholders in
circumstances in which the director was aware, or should have been aware, in
the ordinary course of performing a director's duties, of a risk of a serious
injury to the corporation or its shareholders, (v) for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication
of the directors' duty to the corporation or its shareholders, (vi) under
Section 310 of the California General Corporation Law (concerning contracts
or transactions between the corporation and a director) or (vii) under
Section 316 of the California General Corporation Law (directors' liability
for improper dividends, loans and guarantees). The provision does not extend
to acts or omissions of a director in his capacity as an officer. Further,
the provision has no effect on claims arising under federal or state
securities laws and does not affect the availability of injunctions and other
equitable remedies available to the Company's shareholders for any violation
of a director's fiduciary duty to the Company or its shareholders. Although
the validity and scope of the legislation underlying the provision have not
yet been interpreted to any
II-1
<PAGE>
significant extent by the California courts, the provision may relieve
directors of monetary liability to the Company for grossly negligent conduct,
including conduct in situations involving attempted takeovers of the Company.
In accordance with Section 317, the Restated Articles of Incorporation,
as amended (the "Articles"), of the Company limits the liability of a
director to the Company or its shareholders for monetary damages to the
fullest extent permissible under California law, and authorizes the Company
to provide indemnification to it agents (including officers and directors),
subject to the limitations set forth above. The Company's Bylaws further
provide for indemnification of corporate agents to the maximum extent
permitted by the California General Corporation Law.
Pursuant to the authority provided in the Articles, the Company has
entered into indemnification agreements with each of its officers and
directors, indemnifying them against certain potential liabilities that may
arise as a result of their service to the Company, and providing for certain
other protection.
The Company also maintains insurance policies which insure its officers
and directors against certain liabilities.
The foregoing summaries are necessarily subject to the complete text of
the statute, the Articles, the Bylaws and the agreements referred to above
and are qualified in their entirety by reference thereto.
Reference is made to the Convertible Preferred Common Stock Purchase
Agreement incorporated by reference as an exhibit to the Registration
Statement for provisions regarding indemnification of the Company's officers,
directors and controlling persons against liabilities, including liabilities
under the Securities Act.
ITEM 16. EXHIBITS
4.1* Common Shares Rights Agreement, dated as of April 27, 1990, between
the Registrant and Bank of America, N.T. and S.A., as Rights Agent.
4.2** Convertible Preferred Stock Purchase Agreement, dated February 2,
1998, among the Registrant and the Investors.
4.3** Registration Rights Agreement, dated February 2, 1998, among the
Registrant and the Investors.
4.4** Certificate of Determination.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
23.1 Consent of Independent Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1 filed herewith).
24.1 Power of Attorney (included at page II-4).
- ------------------
* Incorporated by reference to the exhibit filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1990.
** Incorporated by reference to the exhibit filed with the Registrant's
Current Report on Form 8-K filed February 17, 1998.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sale are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or
the most recent post-effective amendment hereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in this Registration Statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that the undertakings set forth in paragraph (i) and
(ii) above shall not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange of 1934 (the "Exchange Act") that are incorporated
by reference in this Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) 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.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. Insofar as indemnification of liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15
above, 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 Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registration of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
4. The undersigned Registrant hereby undertakes that:
(a) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.
(b) For the purpose of determining any liability under the
Securities 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
thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all 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 Sunnyvale, State of California, on
March 13, 1998.
GENUS, INC.
By /s/ MARY F. BOBEL
----------------------------------
Mary F. Bobel
Executive Vice President and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, James T. Healy and Mary F. Bobel,
jointly and severally, his true and lawful attorneys-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
amendments (including post-effective amendments) to this Amendment, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully as to intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
- -------------------------- ------------------------------- --------------
/s/ WILLIAM W. R. ELDER Chairman of the Board March 13, 1998
- -------------------------
(William W. R. Elder)
/s/ JAMES T. HEALY President and Chief Executive March 13, 1998
- ------------------------- Officer (Principal Executive
(James T. Healy) Officer)
/s/ MARY F. BOBEL Executive Vice President, Chief March 13, 1998
- ------------------------- Financial Officer, Corporate
(Mary F. Bobel) Controller, Chief Accounting
Officer and Treasurer
(Principal Financial Officer
and Chief Accounting Officer)
/s/ TODD S. MYHRE Director March 13, 1998
- -------------------------
(Todd S. Myhre)
/s/ MARIO M. ROSATI Director and Secretary March 13, 1998
- -------------------------
(Mario M. Rosati)
/s/ STEPHEN F. FISHER Director March 13, 1998
- -------------------------
(Stephen F. Fisher)
/s/ G. FREDERICK FORSYTH Director March 13, 1998
- -------------------------
(G. Frederick Forsyth)
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibits
4.1* Common Shares Rights Agreement, dated as of April 27,
1990, between the Registrant and Bank of America, N.T. and
S.A., as Rights Agent
4.2** Convertible Preferred Stock Purchase Agreement, dated
February 2, 1998, among the Registrant and the Investors
4.3** Registration Rights Agreement, dated February 2, 1998,
among the Registrant and the Investors
4.4** Certificate of Determination
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Consent of Independent Accountants
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1 filed herewith)
24.1 Power of Attorney (included at page II-4)
- --------------
* Incorporated by reference to the exhibit filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1990.
** Incorporated by reference to the exhibit filed with the Registrant's
Current Report on Form 8-K filed February 17, 1998.
<PAGE>
EXHIBIT 5.1
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050 JOHN ARNOT WILSON
TELEPHONE 650-493-9300 RETIRED
FACSIMILE 650-493-6811
March 13, 1998
Genus, Inc.
1139 Karlstad Drive
Sunnyvale, California 94089
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed with
the Securities and Exchange Commission (the "Registration Statement"), in
connection with the registration under the Securities Act of 1933, as
amended, of a shelf offering of 3,460,098 shares of your Common Stock (the
"Shares"), to be issued upon the conversion of issued and outstanding shares
of the Series A Convertible Preferred Stock (the "Series A Stock"), exercise
of Warrants to Purchase Common Stock (the "Warrants") and dividends on the
Series A Stock in accordance with the Articles of Incorporation as currently
in effect. As your counsel, we have examined the proceedings proposed to be
taken in connection with the sale and issuance of the above-referenced
securities.
In our opinion, the Shares, when issued upon conversion of the Series A
Stock, the exercise of the Warrants and as dividends on the Series A Stock,
will be legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in
the Registration Statement, including the Prospectus constituting a part
thereof, and any amendment thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Form S-3 of Genus, Inc. (the "Company") of our report, which
includes an explanatory paragraph regarding the Company's ability to continue
as a going concern, dated January 26, 1998, except for Notes 1, 5 and 12, as
to which the date is March 2, 1998, and of our report dated January 26, 1998,
on our audits of the consolidated financial statements and financial
statement schedule, respectively, of the Company. We also consent to the
reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
San Jose, California
March 13, 1998
