AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
PACIFIC ANIMATED IMAGING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 7371 11-2964894
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number Identification Number)
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOHN J. CADIGAN
PRESIDENT & CEO
PACIFIC ANIMATED IMAGING CORPORATION
326 FIRST STREET, SUITE 100
ANNAPOLIS, MD 21403
(410) 263-7761
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
MICHAEL JOSEPH, ESQUIRE
DYER ELLIS & JOSEPH
600 NEW HAMPSHIRE AVE., NW
WASHINGTON, D.C. 20037
(202) 944-3000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If any 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 of Amount To Be Offering Price Aggregate
Securities To Be Registered Registered Per Share (1) (2) Offering Price (2) Registration Fee
<S> <C> <C> <C> <C>
Common Stock (3).............. 80,000 $15.375 $1,230,000 $372.73
============================== ====================== ====================== ====================== ==================
</TABLE>
(1) THESE FIGURES ARE ESTIMATES MADE SOLELY FOR THE PURPOSE OF CALCULATING THE
REGISTRATION FEE PURSUANT TO RULE 457(C). (2) PROPOSED MAXIMUM OFFERING PRICE IS
BASED ON THE LAST SALE PRICE OF THE COMMON STOCK ON THE NASDAQ SMALLCAP MARKET
ON JANUARY 29, 1997.
(3) REGISTERED FOR RESALE BY CERTAIN SELLING SHAREHOLDERS.
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>
SUBJECT TO COMPLETION, DATED FEBRUARY 3, 1997
PROSPECTUS
1997
80,000 SHARES
PACIFIC ANIMATED IMAGING CORPORATION
COMMON STOCK
All of the 80,000 shares of Common Stock of Pacific Animated Imaging
Corporation (the "Company") offered hereby (the "Shares") are being offered by
the holders thereof (the "Selling Stockholders"). The Shares are issuable upon
the exercise of warrants (the "Warrants") issued to the underwriters of the
Company's December 1995 public offering of 920,000 shares of Common Stock. See
"Selling Stockholders." The Company will receive none of the proceeds from the
sale of the Shares. The proceeds from the exercise of the Warrants, aggregating
$567,000 if all of the Warrants are exercised, will be added to the Company's
working capital.
The Shares may be offered from time to time by the Selling
Stockholders, or by their pledgees, donees, transferees or other successors in
interest, in transactions (which may include block transactions) on the Nasdaq
SmallCap Market, the over-the-counter market, in private sales or negotiated
transactions, through the writing of options on Shares, or 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 related to such prevailing market
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 discounts, concessions,
or commissions from the Selling Stockholders and the purchasers of Shares for
whom such broker-dealers may act as agent or to whom they sell as principal, or
both (which compensation as to a particular broker-dealer may be in excess of
customary commissions). The Company has agreed to indemnify the Selling
Stockholders against certain liabilities, including liabilities arising under
the Securities Act of 1933, as amended.
The Common Stock is listed on the Nasdaq SmallCap Market and on the
Boston Stock Exchange. On January 31, 1997, the closing sale price of the Common
Stock on Nasdaq was $15.50 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
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 February , 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission") and with the National Association of Securities
Dealers, Inc. (the "NASD"). Reports and other information filed by the Company
with the Commission can be inspected and copied at the Commission's public
reference facilities, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
as well as at the Commission's regional offices located at 7 World Trade Center,
New York, New York 10007 and Northwest Atrium Center, 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 prescribed rates. The
Commission maintains an Internet web site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the Commission which is located at (http://www.sec.gov). In
addition, reports and other information concerning the Company also may be
inspected at the offices of the NASD, 1735 K Street, N.W., Washington, D.C.
20006.
The Company has filed with the Commission a Registration Statement under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the shares of Common Stock offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus omits certain information set
forth in the Registration Statement. The omitted information may be inspected
without charge at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of such information may be obtained upon
payment of the fees prescribed by the Commission. For further information
pertaining to the shares of Common Stock offered hereby, reference is made to
the Registration Statement, including the exhibits and schedules filed as a part
thereof.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the Company
are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
2. The Company's Quarterly Reports on Form 10-QSB for the
quarters ended March 31, June 30, and September 30, 1996.
3. The Company's Current Report on Form 8-K dated August 2, 1996,
as amended November 14, 1996.
4. The description of the Company's Common Stock contained in the
Prospectus included in the Company's Registration Statement on
Form SB-2 under the Securities Act (File No. 33-97776),
incorporated by reference into the Company's Registration
Statement on Form 8-A under the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the
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Shares shall be deemed to be incorporated by reference in this Prospectus and to
be a part hereof from the date of filing 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 other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any and all of the documents described above, other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
therein. Requests should be directed to: Pacific Animated Imaging Corporation,
Suite 100, 326 First Street, Annapolis, Maryland 21403, telephone (410)
263-7761.
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<PAGE>
THE COMPANY
The Company develops and markets multi-media software that replaces or
supplements technical manuals and operating documentation for equipment,
machinery, and industrial processes and provides alternative methods of
delivering employee training and sales and marketing presentations. Engaged in
the development of software since 1989, the Company, through two acquisitions in
1996, expanded its operations, first into the development and marketing of
interactive multi-media software for business communications and consumer
publishing, and thereafter into the providing of computer systems integration
and consulting services and remarketing of computer hardware.
The Company's address is 326 First Street, Annapolis, Maryland,
and its telephone number is (410) 263-7761.
RISK FACTORS
The Common Stock offered hereby is highly speculative in nature and
involves a high degree of risk. Prospective investors should carefully consider
the following risks and speculative factors inherent in and affecting the
business of the Company and the Common Stock prior to making an investment in
the Company. The Common Stock should not be purchased by investors who do not
have sufficient financial means to sustain the loss of their entire investment.
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICITS; UNCERTAINTY
REGARDING ACHIEVEMENT OF PROFITABILITY. The Company has incurred net losses in
each of its reported fiscal years since inception. The Company reported net
losses of $1.9 million for the year ended December 31, 1995 and $2.1 million for
the nine months ended September 30, 1996. The Company's accumulated deficit
through September 30, 1996 was $8.9 million. There is no assurance the Company
will ever achieve profitable operations.
NEED FOR ADDITIONAL CAPITAL. The Company believes, based upon current
projections, that cash currently on hand should be sufficient to sustain current
operations and finance planned expansion through approximately June 1997. The
Company will in all likelihood be required to obtain additional financing in
order to sustain operations beyond that date. There can be no assurance that
such additional financing will be available or, if available, that it will be on
terms acceptable to the Company.
UNCERTAINTY OF MARKET ACCEPTANCE FOR CUSTOM SOFTWARE; LENGTH AND
UNCERTAINTY OF SOFTWARE MARKETING EFFORTS. The Company's custom software
products are designed to replace more traditional forms of written and
audiovisual materials used for training in the workplace. Although there is a
substantial market for workplace training materials and products, there is no
assurance that computer-based training materials such as those developed by the
Company will replace the more traditional forms on a large scale. In order to
operate on a profitable basis, the Company will be required to increase
substantially the number and size of new custom software development contracts.
Because the Company's custom software products usually replace existing
methods of doing business, marketing of its products is normally a costly,
time-consuming process. The Company frequently experiences a significant delay
(in some cases up to one year) between the time of initial sales contact and the
signing of a contract and, in many instances, fails to obtain a contract
notwithstanding its marketing efforts. The substantial time and expense required
to procure contracts
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<PAGE>
and the failure to obtain contracts from potential customers that have been
solicited may adversely affect the Company's cash flow and create other
operational problems. Procurement and retention of contracts is also subject to
the risk that customers may decide to develop their own custom software
internally or may cancel their contracts with the Company.
COMPETITION. The markets for both the Company's custom software and its
systems integration and consulting services are highly competitive. The Company
competes with other companies that produce interactive training software and
other third-party suppliers of training and marketing materials, as well as
internal training departments of potential customers. In addition, the Company
expects competition from existing software companies and book publishers seeking
to broaden their product lines, and the continued improvement in computer
programming tools may enable businesses to develop their own training software
internally. There are also numerous providers of systems integration and
consulting services, as well as computer hardware resellers, in the markets in
which the Company currently operates and is likely to operate in the future.
Many of the Company's current and potential competitors have substantially
greater financial, technical, sales, marketing, and other resources, as well as
greater name recognition, than the Company.
DEPENDENCE ON LIMITED NUMBER OF CUSTOMERS. For the year ended December
31, 1995, and the nine months ended September 30, 1996, the Company's three
largest customers in the aggregate accounted for approximately 47% and 33%,
respectively, of the Company's total revenues. The Company anticipates the same
trends to continue in 1997 for its custom software products. The loss of any of
the Company's major customers, or the inability to collect accounts receivable
from one or more of them, could adversely effect the Company's business,
operating results, and financial condition.
LIMITED INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS. Under most of its
contracts, the Company regards its software as proprietary, in that title to and
ownership of its software generally reside with the Company. The Company grants
nonexclusive licenses to customers for software developed by the Company for
such customers. Like many software firms, the Company has no patents. The
Company attempts to protect its rights with a combination of copyright, trade
secret laws, and employee and third-party nondisclosure agreements. Despite
these precautions, it may be possible for unauthorized third parties to copy
certain portions of the Company's products or obtain and use information that
the Company regards as proprietary, such as source codes or programming
techniques that generate high quality animation on low end platforms.
As the number of software products increases and their functionality
further overlaps, the Company believes that software programs will increasingly
become the subject of infringement claims. Although the Company's products have
never been the subject of an infringement claim, there can be no assurance that
third parties will not assert infringement claims against the Company in the
future or that any such assertion may not require the Company to enter into
royalty arrangements or result in costly litigation.
DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL. The Company
has employment agreements with John Cadigan, its chief executive officer, and
Peter Steele, president of its systems integration subsidiary, that expires on
August 31, 1998 and July 14, 1999, respectively. The loss of their services or
those of other key personnel could have a material adverse effect on the
Company. The Company will also be required to attract and retain additional
managerial, sales and
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<PAGE>
marketing, financial, and technical personnel in order to expand its business.
There is no assurance the Company can attract and retain qualified employees.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS. The Company's quarterly
operating results are subject to significant fluctuations, since sales of custom
commercial software products and services are to a limited number of customers
for individual projects and because of the unpredictability of contract awards
and timing of payment thereunder. Such fluctuations may increase in the future
as the Company attempts to secure larger contracts.
NO PRODUCT LIABILITY INSURANCE. The Company could be subject to product
liability claims in connection with the use of its products. There can be no
assurance that the Company would have sufficient resources to satisfy any
liability resulting from these claims or would be able to have its customers
indemnify or insure the Company against such claims. The Company does not
currently carry product liability insurance and there can be no assurance that
such coverage, if obtainable, would be adequate in terms and scope to protect
the Company against material adverse effects in the event of a successful
product liability claim.
POSSIBLE DELISTING OF COMMON STOCK FROM NASDAQ SYSTEM. The Company's
Common Stock has been listed on the Nasdaq SmallCap Market since November 1993.
In order to continue to be listed on Nasdaq, the Company is required to maintain
$2 million in total assets ($2 million in net tangible assets under proposed new
listing requirements) and $1 million in total capital and surplus. As of
December 31, 1996, the Company's total assets were approximately $2.8 million,
its total capital and surplus was approximately $1.4 million, and its net
tangible assets were approximately $1.4 million. In addition, continued listing
currently requires two market-markers, a minimum bid price of $1.00 per share
and a public float of 100,000 shares, and the proposed new listing requirements
will increase the public-float requirement to 500,000 shares having a minimum
market value of $1 million. The failure to meet the maintenance criteria in the
future may result in the delisting of the Common Stock from Nasdaq, and trading,
if any, in the Common Stock would thereafter be conducted in the non-Nasdaq
over-the-counter market. As a result of such delisting, investors could find it
more difficult to dispose of, or to obtain accurate quotations as to the market
value of, the Common Stock.
RISK RELATING TO PENNY STOCKS. If the Common Stock were to become
delisted from trading on Nasdaq and the trading price of the Common Stock were
to fall below $5.00, trading in the Common Stock would become subject to the
requirements of certain rules promulgated under the Exchange Act that require
additional disclosure by broker-dealers in connection with any trades involving
a stock defined as a penny stock (generally, any non-Nasdaq equity security that
has a market price of less than $5.00 per share, subject to certain exceptions).
Such rules require the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith, and impose various sales practice requirements on broker-dealers who
sell penny stocks to persons other than established customers and accredited
investors (generally institutions). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchase and
have received the purchaser's written consent to the transaction prior to sale.
If the Common Stock were delisted from Nasdaq and the per share price declined
below $5.00, the additional burdens imposed upon broker-dealers by such
requirements may discourage broker-dealer from effecting transactions in the
Common Stock, which could severely limit the market liquidity of the Common
Stock and the ability of holders to sell the Common Stock in the secondary
market.
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<PAGE>
OUTSTANDING OPTIONS AND WARRANTS--POTENTIAL FURTHER DILUTION TO
SHAREHOLDERS. As of the date of this Prospectus, there are outstanding options
and warrants to purchase an aggregate of 378,636 shares of Common Stock with
exercise prices ranging from $7.875 to $39.20 per share. The terms upon which
the Company may be able to obtain additional equity capital may be adversely
affected by such options and warrants, because the holders thereof can be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain any needed capital on terms more favorable to the Company than
those provided by the terms of such warrants or options.
ANTI-TAKEOVER PROVISIONS. The Certificate of Incorporation and By-Laws
of the Company contain provisions which provide for up to three-year terms for
the directors of the Company and the election of such directors on a staggered
basis. In addition, in certain circumstances, Delaware law requires the approval
of two-thirds of all shares eligible to vote for certain business combinations
involving a stockholder owning 15% or more of the Company's voting securities,
excluding the voting power held by such stockholder. Furthermore, Mr. Cadigan's
employment contract provides for a lump sum payment of 299% of his base salary
in the event of a change in control of the Company and his subsequent
termination without cause. In addition to the potential impact on future
takeover attempts and the possible perpetuation of management, the existence of
each of the above provisions and employment agreement could have an adverse
effect on the market price of the Common Stock.
NO DIVIDENDS AND NONE ANTICIPATED. The payment by the Company of
dividends, if any, in the future rests within the discretion of its Board of
Directors and will depend, among other things, upon the Company's earnings, its
capital requirements and its financial condition, as well as other relevant
factors. The Company has not paid or declared any dividends upon its Common
Stock since its inception and does not contemplate or anticipate making any
distributions with respect to its Common Stock in the foreseeable future.
POSSIBLE VOLATILITY OF STOCK PRICES. Although the Common Stock has been
traded on the Nasdaq SmallCap Market and Boston Stock Exchange since November
1993, the Common Stock has generally been traded on a limited basis and in small
volumes. The trading price for the Common Stock may be significantly affected by
such factors as the operating results of the Company, the United States and
global economic conditions, and various other factors generally affecting the
computer software industry. Furthermore, the stock market has from time to time
experienced extreme price and volume fluctuations that have particularly
affected the market prices of the stocks of small and emerging growth companies
traded on the Nasdaq SmallCap market. These extreme fluctuations, which often
have been unrelated to the operating performance of any particular company or to
any group of companies, may adversely affect the market price of the Common
Stock.
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SELLING STOCKHOLDERS
The 80,000 shares of Common Stock offered hereby, when offered and
sold, will have been acquired by the Selling Stockholders upon the exercise of
the Warrants held by the Selling Stockholders. The Warrants were issued to the
underwriters of the Company's December 1995 public offering of 920,000 shares of
Common Stock as part of their underwriting compensation. The Warrants are
exercisable by the Selling Stockholders at any time through December 14, 1999 at
an exercise price of $7.0875 per share of Common Stock.
The following table includes the name of each Selling Stockholder, the
number of shares of Common Stock owned by each Selling Stockholder as of the
date of this Prospectus (including the shares to be acquired upon exercise of
the Warrants), the number of shares to be sold by such Selling Stockholder, and
the number of shares to be owned by each Selling Stockholder after the Offering
(assuming the sale of all of the shares offered hereby).
<TABLE>
<CAPTION>
Shares to be
Shares Shares Owned after
Name Owned To Be Sold Offering
<S> <C> <C> <C>
Starr Securities, Inc 40,000 40,000 0
Kenneth A. Orr 32,000 32,000 0
Michael L. Metter 8,000 8,000 0
</TABLE>
EXPERTS
The consolidated financial statements of the Company as of December 31,
1994 and 1995 and for the years then ended included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1995, and the financial
statements of U.S. Technologies, Inc. as of December 31, 1995 and the year then
ended included in the Company's report on Form 8-K/A dated August 2, 1996 as
amended on November 14, 1996, which are incorporated herein by reference, have
been incorporated herein in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, upon the authority of said firm as experts in
accounting and auditing.
The statements of operations, stockholder's deficit, and cash flows of
U.S. Technologies, Inc. for the year ended December 31, 1994 included in the
Company's report on Form 8-K/A dated August 2, 1996 as amended on November 14,
1996, which are incorporated herein by reference, have been incorporated herein
in reliance upon the report of Nicholas Lanese, C.P.A., independent accountant,
upon his authority as an expert in accounting and auditing.
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PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable in connection with
the registration of the Common Stock that is the subject of this Registration
Statement, all of which shall be borne by the Company. All the amounts shown are
estimates.
To Be Paid By
Registrant
Printing and engraving expenses $ 500
Legal fees and expenses 15,000
Accounting fees and expenses 6,000
Miscellaneous 3,500
-----------
Total $ 25,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL")
permits a corporation to indemnify its directors, officers, employees and other
agents under certain circumstances and subject to certain limitations. The
Company's Bylaws provide that the Company shall indemnify its directors and
officers under the circumstances specified in the DGCL and gives authority to
the Company to purchase insurance with respect to such indemnification.
The Company has entered into indemnification agreements (the
"Indemnification Agreements") with certain officers and directors. Each
Indemnification Agreement provides, among other things, for: (i) indemnification
by the Company of such individual to the fullest extent permitted by the law as
of the date of the Indemnification Agreement against any and all expenses,
judgments, fines, and amounts paid in settlement of any claim against an
indemnified party (the "Indemnitee") unless it is determined, as provided in the
Indemnification Agreement, that the indemnification is not permitted under the
law; and (ii) the prompt advancement of expenses to any Indemnitee in connection
with his or her defense against any threatened or pending claim. Similar
indemnification agreements may from time to time be entered into with additional
officers of the Company or certain other employees or agents of the Company.
ITEM 16. EXHIBITS.
(a) The following is a list of exhibits furnished:
5.1 Opinion of counsel as to legality of securities being registered.
23.1 Consent of counsel (contained in opinion of counsel filed as Exhibit 5.1).
23.2 Consent of Lanese & Associates, Inc.
23.3 Consent of Coopers & Lybrand, L.L.P.
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ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference 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 such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act 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 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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
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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.
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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 Annapolis, Maryland on January 30, 1997.
Pacific Animated Imaging Corporation
By:/s/ JOHN J. CADIGAN
John J. Cadigan
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Pacific Animated Imaging
Corporation, hereby severally constitute and appoint John J. Cadigan and Suzanne
C. Brown, and each of them, our true and lawful attorneys-in-fact and agents,
with full power of substitution and re-substitution, for us and in our stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement and all documents relating thereto,
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 agents, and each of them, full power and authority to
do and perform each and every act and thing necessary or advisable to be done in
and about the premises, as fully as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ JOHN J. CADIGAN Chairman of the Board and January 30, 1997
- --------------------------------
John J. Cadigan Chief Executive Officer
/s/ SUZANNE C. BROWN Chief Financial Officer January 30, 1997
- -----------------------------
Suzanne C. Brown
/s/ A. DAVID ROSSIN, Ph.D. Director January 30, 1997
A. David Rossin, Ph.D.
/s/ FREDERICK PETTIT Director January 30, 1997
Frederick Pettit
Director January , 1997
Joseph Amato
</TABLE>
13
Exhibit 5
Palmarella & Sweeney, P.C.
2 Radnor Corporate Center
Suite 310
100 Matsonford Road
Radnor, Pennsylvania 19087
(610) 975-3333
January 31, 1997
Pacific Animated Imaging Corporation
326 First Street
Annapolis, MD 21403
Ladies and Gentlemen:
We are general counsel to Pacific Animated Imaging Corporation, a Delaware
Corporation (the "Company"). We are aware that the Company is preparing and
filing a Registration Statement on Form S-3 under the Securities Act of 1933, as
amended, relating to the registration of 80,000 shares of Common Stock, par
value $0.0001, of the Company (the "Shares") issuable upon exercise of the
warrants issued pursuant to the Warrant Agreement, dated as of December 19,
1995, between the Company and Starr Securities, Inc. and First Cambridge
Securities Corporation (the "Warrants"). We have been asked by Dyer, Ellis and
Joseph, Special Counsel to the Company, to render an opinion regarding certain
matters relating to the Registration Statement and the issuance of the Shares as
set forth herein.
In rendering this opinion, we have examined such of the Company's documents,
records, certificates, papers and legal matters as we deem necessary to form the
basis for our opinion as expressed herein. Based upon the foregoing, we are of
the opinion that the Shares have been duly authorized and, when issued after
payment of the entire amount of the consideration upon exercise of the Warrants,
will be fully-paid and non-assessable under the laws of the State of Delaware.
The foregoing opinion is limited to matters governed by the business corporation
law of the State of Delaware, in force on the date of this opinion. This opinion
is rendered as of the date hereof and is applicable only the matters
specifically referenced in this opinion. We have no responsibility to update
this opinion and disclaim any continuing responsibility for matters occurring
after the date of this opinion. This opinion is rendered solely for your benefit
in connection with the Registration Statement on Form S-3 respecting the Shares
and may not be relied upon, quoted or used by any other person or entity for any
other purpose without the prior consent of a principal of this firm.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement on Form S-3 relating to the sale of the Shares.
Very truly yours,
PALMARELLA & SWEENEY, P.C.
Ernest D. Palmarella
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-3 of our
report, dated March 10, 1995, on our audit of the financial statements of U.S.
Technologies, Inc. for the year ended December 31, 1994. We also consent to the
reference to our firm under the caption "experts in accounting and auditing".
Lanese & Associates, Inc.
February 3, 1997
Riverview, FL
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Pacific Animated Imaging Corporation on Form S-3 of our report dated March 1,
1996, on our audits of the consolidated financial statements of Pacific Animated
Imaging Corporation as of December 31, 1994 and 1995, and for the years then
ended, which report is included in the Pacific Animated Imaging Corporation
Annual Report on Form 10-KSB for the year ended December 31, 1995, and our
report, which contains an explanatory paragraph regarding U.S. Technologies,
Inc.'s ability to continue as a going concern, dated September 27, 1996, except
for Note 1 for which the date is November 8, 1996, on our audit of the financial
statements of U.S. Technologies, Inc. as of December 31, 1995 and for the year
then ended, which report is included in the Pacific Animated Imaging Corporation
Form 8-K/A dated August 2, 1996, as amended on November 14, 1996. We also
consent to the reference to our firm under the caption "Experts".
Coopers & Lybrand L.L.P.
February 3, 1997
McLean, Virginia
