<PAGE> 1
As filed with the Securities and Exchange Commission on July 31, 1996
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
FORM S-3 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
IBIS TECHNOLOGY CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts
-------------------------------
(State or other jurisdiction of
incorporation or organization)
04-2987600
-------------------
(I.R.S. Employer
Identification No.)
32 Cherry Hill Drive, Danvers, Massachusetts 01923
(508) 777-4247
--------------------------------------------------
(Address, including zip code,
and telephone, including area code,
of registrant's principal executive offices)
Geoffrey Ryding, President
Ibis Technology Corporation
32 Cherry Hill Drive
Danvers, MA 01923
(508) 777-4247
----------------------------------------
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
Copy to:
Richard A. Goldman, Esquire
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
(617) 542-6000
----------------------------------------
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
<PAGE> 2
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 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
Proposed Proposed
maximum maximum
Title of each class offering aggregate Amount of
of securities to be Amount to be price per offering registration
registered registered unit (1) price (1) fee
- -------------------------------------------------------------------------------
Common Stock, par 791,314 $6.75 $5,341,369.50 $1,842
value $.008 per share
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, based upon the
closing sale price of the Common Stock as reported on The Nasdaq National
Market on July 25, 1996.
------------------------------
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> 3
PROSPECTUS
IBIS TECHNOLOGY CORPORATION
791,314 Shares of Common Stock
(Par Value $.008 Per Share)
The 791,314 shares of Common Stock, $.008 par value per share ("Common
Stock"), of Ibis Technology Corporation, a Massachusetts corporation (the
"Company" or "Ibis"), offered hereby (the "Shares") are being sold by the
selling stockholders identified herein (the "Selling Stockholders"). Such offers
and sales may be made on one or more exchanges, in the over-the-counter market,
or otherwise, at prices and on terms then prevailing, or at prices related to
the then-current market price, or in negotiated transactions, or by underwriters
pursuant to an underwriting agreement in customary form, or in a combination of
any such methods of sale. The Selling Stockholders may also sell such shares in
accordance with Rule 144 under the Securities Act of 1933, as amended (the "1933
Act"). The Selling Stockholders are identified and certain information with
respect to them is provided under the caption "Selling Stockholders" herein, to
which reference is made. The expenses of the registration of the securities
offered hereby, including fees of counsel for the Company, will be paid by the
Company. The following expenses will be borne by the Selling Stockholders:
underwriting discounts and selling commissions, if any, and the fee of legal
counsel, if any, for the Selling Stockholders. The filing by the Company of this
Prospectus in accordance with the requirements of Form S-3 is not an admission
that any person whose shares are included herein is an "affiliate" of the
Company.
The Selling Stockholders have advised the Company that they have not
engaged any person as an underwriter or selling agent for any of such shares,
but they may in the future elect to do so, and they will be responsible for
paying such a person or persons customary compensation for so acting. The
Selling Stockholders and any broker executing selling orders on behalf of any
Selling Stockholders may be deemed to be "underwriters" within the meaning of
the 1933 Act, in which event commissions received by any such broker may be
deemed to be underwriting commissions under the 1933 Act. The Company will not
receive any of the proceeds from the sale of the securities offered hereby. The
Common Stock is listed on The Nasdaq National Market ("Nasdaq") under the symbol
IBIS. On July 30, 1996, the closing sale price of the Common Stock, as reported
by Nasdaq, was $7.50 per share.
The executive offices of the Company are located at 32 Cherry Hill Drive,
Danvers, Massachusetts 01923. Its telephone number is (508) 777-4247.
--------------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 4 OF THIS PROSPECTUS.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
No person is authorized in connection with any offering made hereby to
give any information or to make any representations other than as contained in
this Prospectus, and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company. This Prospectus is
not an offer to sell, or a solicitation of an offer to buy, by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any sales made
hereunder shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
--------------------------
THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to certain informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). These reports, proxy statements and
other information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024 of the Commission's office at 450
Fifth Street, N.W., Judiciary Plaza, Washington, DC 20549, and at its regional
offices located at 7 World Trade Center, Suite 1300, New York, NY 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies
of such reports, proxy statements and other information can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, DC 20549 at prescribed rates. The Commission maintains a Web
site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants that file electronically.
Additional updating information with respect to the securities covered herein
may be provided in the future to purchasers by means of appendices to this
Prospectus.
The Company has filed with the Commission in Washington, DC a registration
statement (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the 1933 Act with respect to the securities
offered or to be offered hereby. This Prospectus does not contain all of the
information included in the Registration Statement, certain items of which are
omitted in accordance with the rules and regulations of the Commission. For
further information about the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto. The
Registration Statement has been filed electronically through the Commission's
Electronic Data Gathering, Analysis and Retrieval System and may be obtained
through the Commission's Web site (http://www.sec.gov.).
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any document incorporated herein by reference, excluding exhibits. Requests
should be made to Ibis Technology Corporation, 32 Cherry Hill Drive, Danvers, MA
01923, telephone (508) 777-4247 and directed to the attention of Debra L.
Carroll, Treasurer.
- 2 -
<PAGE> 5
TABLE OF CONTENTS
PAGE
RISK FACTORS.................................................................4
THE COMPANY.................................................................11
SELLING STOCKHOLDERS........................................................13
PLAN OF DISTRIBUTION........................................................15
LEGALITY OF COMMON STOCK....................................................16
EXPERTS.....................................................................16
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE...........................16
- 3 -
<PAGE> 6
An investment in the securities being offered by this Prospectus involves
a high degree of risk. In addition to the other information contained in this
Prospectus or incorporated herein by reference, prospective investors should
carefully consider the following risk factors before purchasing the shares of
Common Stock offered hereby.
RISK FACTORS
This Prospectus contains and incorporates by reference forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Such statements are based on
management's current expectations and are subject to a number of factors and
uncertainties which could cause actual results to differ materially from those
described in the forward-looking statements. Reference is made in particular to
the description of the Company's plans and objectives for future operations,
assumptions underlying such plans and objectives and other forward-looking
statements included or incorporated in this Prospectus. Factors which could
cause such results to differ materially from those described in the
forward-looking statements include those set forth in the risk factors below.
History of Net Losses, Accumulated Deficit and Future Net Losses. The
Company incurred net losses of $1,159,157, $1,474,299 and $3,992,795 for the
years ended December 31, 1993, 1994 and 1995, respectively, and $556,412 for the
six month period ended June 30, 1996, and at June 30, 1996 had an accumulated
deficit of $10,668,869. The net loss incurred by the Company for the year ended
December 31, 1994 and the accumulated deficit as of June 30, 1996 each would
have been $2,000,000 greater if the Company had not received $2,000,000 in
key-man life insurance proceeds in June 1994 as a result of the death of Dr.
Michael Guerra, a founder of the Company and its former Chief Executive Officer
and Chairman of the Board. The Company expects net losses to continue for the
foreseeable future and there can be no assurance that the Company will be
profitable. The Company anticipates that it may be required to raise substantial
additional capital in the future in order to finance expansion of its
manufacturing capacity and its research and development programs. There can be
no assurance, however, that such capital will be available on acceptable terms,
if at all. See "Selected Financial Data" in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1995 (the "1995 Form 10-K"),
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the 1995 Form 10-K, the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 (the "March 31, 1996 Form 10-Q") and "Risk
Factors--Availability of Capital."
Quarterly Fluctuations in Operating Results. The Company has experienced
and expects to continue to experience significant fluctuations in its quarterly
operating results. The Company believes that fluctuations in quarterly results
may cause the market price of its Common Stock to fluctuate, perhaps
substantially. Factors which have had an influence on and may continue to
influence the Company's operating results in a particular quarter include the
timing of receipt of orders from major customers, product mix, product
obsolescence and changes in pricing policies by the Company, its competitors or
its suppliers, the relative proportions of sales for commercial and military
applications, the Company's ability to manufacture and ship products on a
cost-effective and timely basis, the development and introduction of new
production Ibis 1000 implanters by the Company, market acceptance of new and
enhanced versions of the Company's products or implanters, the cyclical nature
of the semiconductor industry, the evolving and unpredictable nature of the
markets for the products incorporating the Company's SIMOX wafers, the amount of
research and development expenses associated with new or enhanced products or
implanters and the availability of government funding.
The Company places blanket orders to purchase its materials from
independent vendors several months in advance, often prior to receiving orders
from its customers. If customers cancel or reschedule shipments or if production
difficulties delay shipments, expense and inventory levels could be
disproportionately high. A significant portion of the Company's expenses is
fixed and the timing of increases in variable expenses is based in large part on
the Company's forecast of future revenues. As a result, if revenues do not meet
the Company's expectations,
- 4 -
<PAGE> 7
it may be unable to quickly adjust expenses to levels appropriate given actual
revenues, which could have a material adverse effect on the Company's business,
operating results and financial condition. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the 1995 Form 10-K
and the March 31, 1996 Form 10-Q.
Development Stage of Commercial Market for SIMOX Wafers. The sources of
the Company's revenue have shifted from primarily research and development
contracts and sales of SIMOX wafers for military applications to primarily sales
of SIMOX wafers for commercial applications. To date, most customers who have
purchased SIMOX wafers from the Company in the commercial field have done so
only for the purpose of characterizing and evaluating the wafers. The Company is
aware of only one semiconductor manufacturer that is currently using SIMOX
wafers in mainstream commercial applications. There can be no assurance that the
performance advantages of SIMOX wafers will be realized commercially or that a
commercial market for SIMOX wafers will continue to develop.
Competition and Technological Advances. The semiconductor industry is
highly competitive and has been characterized by rapid and significant
technological advances. A number of established semiconductor and materials
manufacturers, including certain of the Company's customers, have expended
significant resources in developing improved wafer substrates. There can be no
assurance that the Company's competitors or others, many of which have
substantially greater financial, technical and other resources than the Company,
will not succeed in developing technologies and products that are equal to or
more effective than any which are being developed by the Company or which would
render the Company's technology obsolete or noncompetitive. In addition to
competition from other manufacturers of SIMOX wafers, the Company faces
competition from manufacturers using bulk silicon and epitaxial wafer
technology, compound materials technology such as silicon-germanium,
gallium-arsenide and indium phosphide and SOI technology other than SIMOX
technology. Although the Company believes that SIMOX wafers offer integrated
circuit performance advantages, there is no assurance that semiconductor
manufacturers will not develop improvements to existing bulk silicon or
epitaxial wafer technology, or that competing compound materials or SOI
technologies will not be more successfully developed, that would eliminate or
diminish the performance advantages of SIMOX wafers. The Company's ability to
compete with other manufacturers of SIMOX wafers and manufacturers of competing
SOI wafers, as well as with bulk silicon, epitaxial and compound materials wafer
manufacturers, will depend on numerous factors within and outside the Company's
control, including the success and timing of product introductions by the
Company and its competitors, product distribution, customer support, sufficiency
of funding available to the Company and the price, quality and performance of
competing products and technologies.
No Assurances of Successful Large-Scale Manufacturing. The Company has
only manufactured limited quantities of SIMOX wafers on the Ibis 1000 oxygen
implanters for evaluation in commercial applications. To be successful, the
Company's products must be manufactured in commercial quantities, at acceptable
costs. Although to date the Company has produced its products successfully,
future production in commercial quantities may create technical and financial
challenges for the Company. The Company has limited manufacturing experience. No
assurance can be given that the Company will be able to make the transition to
volume commercial production successfully.
The Company has completed one Ibis 1000 oxygen implanter and the prototype
Ibis 1000 upon which it was based. The Company is currently constructing two
Ibis 1000s and plans to construct additional Ibis 1000s with the proceeds of its
April 1996 public offering. Any difficulty or delay in constructing additional
Ibis 1000s could have a material adverse effect on the Company's business and
results of operations.
Dependence on Manufacturing, Marketing and Distribution Partners. One
element of the Company's marketing strategy is to form alliances with strategic
partners for the manufacturing, marketing and distribution of its products, in
part to address possible customer concerns regarding Ibis being a sole source
supplier. The Company recently entered into a strategic business development
agreement with Motorola Corporation to fund capacity
- 5 -
<PAGE> 8
expansion. However, there can be no assurance that the Company will be
successful in maintaining such alliance or forming and maintaining other
alliances, including satisfying its contractual obligations with its strategic
partners, or that the Company's partners will devote adequate resources to
manufacture, market and distribute these products successfully or will not
attempt to compete with the Company. The limited number of reliable second
sources of supply may adversely affect or delay the integration of SIMOX wafers
in mainstream commercial applications.
Cyclical Nature of the Semiconductor Industry. The semiconductor industry
into which the Company sells its products is highly cyclical and has
historically experienced periodic downturns, which often have had a severe
effect on the semiconductor industry's demand for semiconductor materials. Prior
semiconductor industry downturns have resulted in negative effects on the
Company's net sales, gross margin and net income. The Company's operations as a
whole will continue to be dependent on the expenditures of semiconductor
manufacturers, which in turn will be largely dependent on the current and
anticipated market demand for integrated circuits and products utilizing
integrated circuits. Any future weakness in demand in the semiconductor industry
may have a material adverse effect on the Company's business and results of
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the 1995 Form 10-K and the March 31, 1996 Form 10-Q.
Limited Availability of Materials and Components. Due to the increasing
demand in the semiconductor industry for silicon wafers, there is no assurance
that the Company will be able to purchase an adequate supply of such silicon
wafers for manufacture of its products at or near current prices, if at all. Any
shortages in the availability of silicon wafers or a significant increase in the
price of silicon wafers could have a material adverse effect on the Company's
business and results of operations.
The Company manufactures its Ibis 1000 oxygen implanters from standard
components and from components manufactured in-house or by other vendors
according to the Company's design specifications. Although the Company has not
experienced significant production delays due to unavailability or delay in
procurement of component parts or raw materials to date, there can be no
assurance that a disruption or termination of certain of these vendors will not
occur and any such disruption or termination could have a material adverse
effect on the Company's business and results of operations.
Dependence on Key Personnel. The Company is dependent upon a number of key
scientific and management personnel, including its President and Chief Executive
Officer, Dr. Geoffrey Ryding. The Company maintains key-man life insurance on
Dr. Ryding, of which it is the sole beneficiary. The loss of the services of one
or more key individuals will have a material adverse impact on the Company. The
Company's success may also depend on its ability to attract and retain other
qualified scientific, marketing, manufacturing and other key management
personnel. The Company faces competition for such personnel and there can be no
assurance that the Company will be able to attract or retain such personnel.
Furthermore, although the Company has an employment agreement with Dr. Ryding
and its employees are subject to certain confidentiality and non-competition
obligations, there can be no assurance that the Company's key personnel will
remain with the Company or will not become employed by a competitor.
Dependence on Research and Development Funding. To date, a significant
portion of the Company's revenue has been derived from research and development
agreements with agencies of the U.S. government. During the six-month period
ended June 30, 1996, and the fiscal years ended 1993, 1994 and 1995, revenues
from government sponsored research and development contracts were approximately
$92,000, $1,331,000, $890,000 and $764,000, or 2%, 33%, 27% and 16% of the
Company's revenues, respectively. The research and development agreements are
subject to termination at the election of the relevant agency. Additionally,
these agreements are subject to negotiated overhead rates, and work performed
under these agreements is subject to audit and retroactive adjustments of
amounts paid to the Company. The Company is currently being audited by the
Defense Contract Audit Agency ("DCAA") in connection with the Company's 1990
through 1995 overhead and general and administrative rates, as well as incurred
costs for the same periods. The results of these audits are at the final stages
- 6 -
<PAGE> 9
and it has been determined that retroactive adjustments of amounts previously
paid to the Company are immaterial. The loss of revenue from the research and
development agreements could have a material adverse impact on the Company.
Dependence on Key Customers. During the six-month period ended June 30,
1996 and the fiscal years ended 1993, 1994 and 1995, revenues from Honeywell,
IBM, Motorola, and Texas Instruments accounted in the aggregate for
approximately $2,683,000, $1,576,000, $1,266,000, $2,554,000, or approximately
65%, 39%, 39% and 55% of the Company's revenues, respectively. The loss of one
or more of these major customers and the failure of the Company to obtain other
sources of revenue could have a material adverse impact on the Company.
Centralization of Manufacturing Facilities. The Company manufactures all
of its products at its facility in Danvers, Massachusetts. Due to the
centralization of all of its manufacturing equipment in one location, the
Company is susceptible to business interruptions resulting from power outages,
natural disasters, equipment failures, and other localized conditions. Although
the Company maintains business interruption insurance, prolonged business
interruption could have a material adverse effect on the Company's business and
its results of operations.
Availability of Capital. The Company has invested, and intends to continue
to invest, in facilities and state-of-the-art equipment in order to increase its
research, development and manufacturing capabilities. In 1995, these capital
expenditures totaled approximately $1.7 million. The Company expects to use much
of the net proceeds it received from its April 1996 public offering to construct
additional Ibis 1000 oxygen implanters, expand its facilities and purchase
additional equipment. Changes in technology or sales growth beyond currently
established capabilities would require further investment. As a result, the
Company anticipates that it may be required to raise substantial additional
capital in the future in order to finance expansion of its manufacturing
capacity and its research and development programs. The Company has previously
financed its working capital requirements through debt and equity financings,
equipment lines of credit, a working line of credit, a term loan, sale-leaseback
arrangements and government contracts. There can be no assurance that additional
capital will be available on acceptable terms, if at all. If additional funds
are raised by issuing equity securities, further dilution to the Company's then
existing stockholders may result. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the 1995 Form 10-K and the
March 31, 1996 Form 10-Q and "Risk Factors--Dilution."
Rights to Implanters. Pursuant to a sale-leaseback arrangement, the Ibis
1000 implanter currently in production is owned by Financing for Science
International, Inc. ("FSI") and is leased to the Company, with the Company
having an option to purchase the Ibis 1000 at the expiration of the lease. In
addition, Motorola will have a security interest in the Ibis 1000 that is
currently being constructed and will be dedicated to Motorola's production
requirements. If the Company fails to meet certain contractual obligations under
its agreements with either FSI or Motorola, the Company could lose its ability
to use the implanter and FSI or Motorola, as the case may be, could sell the
implanter to a competitor of the Company, which would have an adverse effect on
the Company's operations. The Company is currently constructing an additional
Ibis 1000 implanter to be sold to a major semiconductor manufacturer. The
manufacturer has entered into an equipment purchase master agreement and has
issued a purchase order to the Company for the purchase of the implanter and has
made certain advance payments. Although the use of the implanter by this
manufacturer and its ability to sell SIMOX wafers will be subject to certain
restrictions, there can be no assurance that such manufacturer, which has
substantially greater financial, technical and other resources than the Company,
will not attempt to compete with the Company's business. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" in the 1995 Form 10-K, the March
31, 1996 Form 10-Q and the Company's Current Report on Form 8-K for the May 22,
1996 event.
Patents and Protection of Proprietary Technology. The Company's ability to
compete effectively with other companies will depend, in part, on the ability of
the Company to maintain the proprietary nature of its technology. Although the
Company has been awarded or has filed applications for a number of patents in
the United States and foreign countries, there can be no assurance as to the
degree of protection offered by these patents, or as to the
- 7 -
<PAGE> 10
likelihood that pending patents will be issued. There can be no assurance that
competitors in both the United States and foreign countries, many of which have
substantially greater resources and have made substantial investments in
competing technologies, do not have or will not obtain patents that will
prevent, limit or interfere with the Company's ability to make and sell its
products or intentionally infringe the Company's patents. The defense and
prosecution of patent suits is both costly and time-consuming, even if the
outcome is favorable to the Company. In addition, there is an inherent
unpredictability regarding obtaining and enforcing patents. An adverse outcome
in the defense of a patent suit could subject the Company to significant
liabilities to third parties, require disputed rights to be licensed from third
parties, or require the Company to cease selling its products. The Company also
relies in large part on unpatented proprietary technology and there can be no
assurance that others, including strategic partners, may not independently
develop the same or similar technology or otherwise obtain access to the
Company's proprietary technology. To protect its rights in these areas, the
Company currently requires all of its employees to enter into confidentiality
agreements. There can be no assurance, however, that these agreements will
provide meaningful protection for the Company's trade secrets, know-how or other
proprietary information in the event of any unauthorized use, misappropriation
or disclosure of such trade secrets, know-how or other proprietary information.
Public Market for Securities; Volatility of Price. There can be no
assurance that an active trading market for any of the Company's securities will
develop or be sustained. Additionally, there can be no assurance as to the
liquidity of any such markets. The market prices of the Company's securities
have been and may continue to be highly volatile and there can be no assurance
as to the market price of the Common Stock at any given time. Factors such as
quarter-to-quarter variations in the Company's revenues and earnings and
announcements or introductions of technological innovations, new products or new
prices by the Company or its competitors, customers or suppliers could cause the
market price of the Company's securities to fluctuate significantly. Sales of a
substantial number of shares of Common Stock by existing stockholders or the
exercise of Redeemable Warrants to purchase shares of Common Stock (the
"Redeemable Warrants") may also have an adverse effect on the market price of
the Common Stock. In addition, in recent years the stock market in general, and
the market prices for high technology companies in particular, have experienced
significant volatility, which often may have been unrelated to the operating
performance of the affected companies.
Effect of Shares Eligible for Future Sale on Market Price. Sales of
substantial amounts of the Company's Common Stock in the public markets could
have an adverse effect on the price of the Common Stock. As of June 30, 1996,
the Company had 5,165,175 shares of Common Stock outstanding. Of such shares,
3,591,314 shares are freely tradeable without restriction or further
registration under the Securities Act of 1933, as amended (the "Securities
Act"). Of the remaining 1,573,861 shares of Common Stock, approximately 585,050
shares were previously sold by certain stockholders of the Company under Rules
144, 144(k) or 701 of the Securities Act or pursuant to the Company's S-8
Registration Statement (the "S-8") and are now freely tradeable, and
approximately 988,811 shares are or will become eligible for sale under Rules
144 and 144(k) or pursuant to the S-8. The holders of up to approximately
751,000 shares of Common Stock, excluding 791,314 shares offered hereby, are
entitled to certain registration rights with respect to such shares. If such
holders, by exercising their registration rights, cause a large number of
shares to be registered and sold in the public market, such sales may have an
adverse effect on the price for the Common Stock.
Government Regulation. The Company is subject to a variety of federal,
state and local environmental regulations related to the storage, treatment,
discharge or disposal of chemicals used in its operations and exposure of its
personnel to occupational hazards. Although the Company believes that it has all
permits necessary to conduct its business, the failure to comply with present or
future regulations could result in fines being imposed on the Company,
suspension of production or a cessation of operations. The Company's future
activities may result in it being subject to additional regulation. Such
regulations could require the Company to acquire significant equipment
- 8 -
<PAGE> 11
or to incur other substantial expenses to comply with regulations. Any failure
by the Company to control the use of, or to restrict adequately the discharge
of, hazardous substances or properly control other occupational hazards could
subject it to substantial financial liabilities.
Impact of Warrants. An aggregate of 1,689,051 shares (subject to certain
adjustments) of Common Stock are authorized for issuance upon the exercise of
certain warrants (the "Warrants"), consisting of (i) 1,434,653 shares of Common
Stock authorized for issuance upon exercise of the Redeemable Warrants, (ii)
124,752 shares of Common Stock authorized for issuance upon exercise of warrants
originally issued to the underwriters of the company's initial public offering
(the "IPO Underwriter's Warrants") and (iii) 129,646 shares of Common Stock
authorized for issuance upon exercise of redeemable warrants underlying the IPO
Underwriter's Warrants (the "IPO Underwriter's Redeemable Warrants"). Initially,
each Redeemable Warrant was exercisable for one share of Common Stock at a price
equal to $8.40, each IPO Underwriter's Warrant was exercisable for one share of
Common Stock at a price equal to $8.40 and one IPO Underwriter's Redeemable
Warrant at a price equal to $0.24, and each IPO Underwriter's Redeemable Warrant
was exercisable for one share of Common Stock at a price equal to $10.08. The
exercise prices of the Warrants and the number of shares issuable upon exercise
thereof are subject to adjustment in certain circumstances, including upon the
issuance of certain securities by the Company having an issue price or exercise
price lower than the exercise price of the respective Warrants. As a result of
certain issuances and sales of Common Stock (and securities exercisable for
shares of Common Stock) by the Company below the exercise prices of the
Warrants, the exercise price of each Redeemable Warrant is $8.08 per share of
Common Stock. The exercise price of each IPO Underwriter's Warrant is $8.08 per
share of Common Stock and $.24 per IPO Underwriter's Redeemable Warrant, and the
exercise price of each IPO Underwriter's Redeemable Warrant is $9.33. Exercise
of the Warrants may have an adverse effect upon the trading price of and market
for the Common Stock and will result in dilution of the outstanding shares. It
is also possible that, as long as the Warrants remain outstanding, their
existence may place downward pressure on the price of Common Stock above certain
levels.
Dilution. Additional dilution is likely to occur upon exercise of the
Warrants and exercise of outstanding stock options and other warrants, and may
occur in connection with future financings to meet the Company's capital
requirements. Further, based upon the closing sale price of the Common Stock as
reported on the Nasdaq National Market on July 30, 1996, the offering price of
the Common Stock is substantially higher than the net book value per share of
Common Stock. Purchasers of shares of the Common Stock offered hereby will
therefore incur immediate and substantial dilution. See "Risk
Factors--Availability of Capital-Effect of Shares Eligible for Future Sale on
Market Price," and "Risk Factors--Impact of Warrants."
Certain Charter and By-Law Provisions; Possible Issuance of Preferred
Stock. The Company's Restated Articles of Organization and Restated By-Laws
contain certain provisions that may make it more difficult for a third party to
acquire, or discourage acquisition bids for, the Company. This could limit the
price that certain investors might be willing to pay in the future for shares of
the Company's Common Stock. In addition, shares of the Company's Preferred Stock
may be issued in the future without future stockholder approval and upon such
terms and conditions, and having such rights, privileges and preferences, as the
Board of Directors may determine. The rights of the holders of Common Stock will
be subject to, and may be adversely affected by, the rights of the holders of
any Preferred Stock that may be issued in the future. The issuance of Preferred
Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or discouraging a third party from
acquiring, a majority of the outstanding voting stock of the Company. The
Company has no present plans to issue any shares of Preferred Stock.
No Dividends. The Company has not paid dividends since its inception and
does not anticipate paying any dividends in the foreseeable future. Pursuant to
the terms of the Company's working capital line of credit, the Company is
prohibited from paying any dividends, other than dividends payable solely in
capital stock of the
- 9 -
<PAGE> 12
Company, without the prior written consent of the lender. The Company plans to
retain any earnings to finance the development and expansion of its business.
- 10 -
<PAGE> 13
THE COMPANY
Ibis Technology Corporation ("Ibis" or the "Company") is an advanced
materials company and the leading supplier of SIMOX (Separation by IMplantation
of OXygen) wafers to the semiconductor industry. SIMOX wafers are
state-of-the-art silicon-on-insulator ("SOI") wafers which enable the production
of integrated circuits with significant advantages over circuits constructed on
conventional bulk silicon or epitaxial wafers. These advantages include
substantially reduced power consumption, more efficient low-voltage operation,
significantly improved speed, and reduced integrated circuit manufacturing
costs. These characteristics make SIMOX wafers well-suited for many commercial
applications, including cellular phones, wireless communications devices,
portable and desktop computers, automotive electronics, and microwave systems.
SIMOX wafers are created by implanting oxygen atoms below the surface of a
silicon wafer in sufficient quantity to transform a layer of the silicon to
silicon dioxide, while maintaining a thin layer of circuit quality single
crystal silicon at the surface.
The Company began its operations in 1988, producing four, five and six
inch SIMOX wafers, mainly for military applications, on an NV-200 implanter
manufactured by Eaton Corporation ("Eaton"). Since 1989, the Company has spent
in excess of $10 million for the development of its proprietary oxygen implanter
(the Ibis 1000) and advanced proprietary processing technologies which enable
the production of SIMOX wafers capable of meeting the requirements of high
volume commercial applications, including the production of eight inch wafers.
The Ibis 1000 prototype with proprietary beam scanning technology became
operational in 1993, permitting the Company to begin producing wafers of this
size. The first fully-automated production version of the Ibis 1000 implanter
was completed in May 1995, enabling volume production of high-quality SIMOX
wafers. The Company believes that its demonstrated ability to supply high
quality, competitively-priced wafers and its increased wafer production
capacity, together with substantial progress in customers' development programs,
are accelerating the acceptance of Ibis-produced SIMOX wafers for mainstream
commercial applications.
Over the past several years, the semiconductor industry and consequent
wafer sales have been growing rapidly. In 1994, approximately 85 million six
inch bulk silicon wafer equivalents were purchased by semiconductor
manufacturers, generating approximately $4.4 billion of revenue. This represents
a significant increase from $1.8 billion in 1989, a five-year 19.6% compounded
annual growth rate. Historically, semiconductor manufacturers have demonstrated
a willingness to adopt new materials and technologies, even at a cost premium,
if sufficient performance advantages can be realized. For example, epitaxial
wafers provide significantly improved circuit reliability relative to bulk
silicon substrates, which are the base starting material for most semiconductor
production. Revenues from sales of epitaxial wafers have grown at a compounded
annual growth rate of 39%, from approximately 20% of total wafer revenue in
1989, to approximately 43% of total wafer revenue in 1994, despite a cost per
wafer that is 2 to 3 times that of bulk silicon wafers.
Integrated circuit technology is rapidly approaching the fundamental
limitations of both bulk and epitaxial silicon, forcing the semiconductor
industry to actively explore more advanced technologies and materials to meet
the increasing demands of next generation integrated circuits. SIMOX wafers
overcome many of these fundamental limitations and provide substantial
performance advantages over bulk and epitaxial silicon as demonstrated in
research laboratories, existing and emerging commercial applications and mature
production-volume military applications.
In recent years, the Company has focused on integrating SIMOX wafers into
commercial applications, which have substantially higher volume potential than
military applications, the Company's initial target market. Unit sales of SIMOX
wafers for commercial applications have expanded from approximately 26% of the
company's total wafers sold in 1991 to approximately 83% of its wafers sold in
1995.
Ibis has sold SIMOX wafers to most of the world's leading commercial
semiconductor manufacturers, including Advanced Micro Devices, Digital Equipment
Corporation, Fujitsu, Honeywell, IBM, Intel, Mitsubishi Electric, Motorola,
National Semiconductor, NEC, Philips, Samsung, Sharp, Texas Instruments, and
Toshiba.
- 11 -
<PAGE> 14
These commercial shipments have been used principally for evaluation purposes in
products, including ASICs (application specific integrated circuits), memories
(DRAMs, SRAMs, etc.), and cellular and mobile radio components. In addition, the
Company supplies SIMOX wafers to military-oriented semiconductor manufacturers
such as Allied-Signal Aerospace and Honeywell for use in production
applications.
The Company believes that strategic alliances will play an important role
in developing a worldwide commercial market for SIMOX wafers. In September 1995,
the Company and Motorola entered into an agreement for Motorola to provide
funding to the Company to substantially expand the Company's current SIMOX wafer
production capacity to meet requirements of Motorola for its commercial
programs. Also, it is expected that the two companies will work closely to
advance the processing and testing of SIMOX material in conjunction with
Motorola's rigorous quality standards. The Company has also entered into a
strategic alliance with Mitsubishi Materials, under which Mitsubishi markets and
sells in Japan SIMOX wafers manufactured by Ibis. The Company and Mitsubishi are
collaborating on joint research and development focused on commercial deployment
of SIMOX technology with the ultimate objective of establishing SIMOX
manufacturing capability in Japan to service this marketplace. In May 1996, the
Company entered into an agreement with a major semiconductor manufacturer with
respect to the purchase of an oxygen implanter and possible purchases of
additional implanters.
The Company's objective is to make its SIMOX wafers the preferred advanced
materials substrate for mainstream commercial applications. The Company's
strategy for attaining this objective is to capitalize on the technology
embodied in the Ibis 1000 by building additional high current oxygen implanters
to increase available capacity, further advancing its process technology,
increasing throughput and reducing production costs, and to form strategic
marketing, manufacturing and distribution alliances. The Company believes that
this strategy will enable it to become the predominant supplier of SIMOX wafers
with the quality, cost, and size required for mainstream commercial
applications.
Ibis was incorporated in Massachusetts on October 7, 1987 and commenced
operations in January 1988. Ibis' executive officers are located at 32 Cherry
Hill Drive, Danvers, Massachusetts 01923. Its telephone number is (508)
777-4247.
- 12 -
<PAGE> 15
SELLING STOCKHOLDERS
<TABLE>
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock as of June 30, 1996, and as adjusted to
reflect the sale of the Common Stock offered hereby by each Selling Stockholder.
<CAPTION>
Shares Shares
Beneficially Number of Beneficially
Owned Prior to Shares Being Owned After
Selling Stockholder Offering(1)(2) Offered Offering(1)(3)
- ------------------- -------------- ------- --------------
Number Percent Number Percent Number Percent
------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Aegis Select
Limited Partnership(4) 135,644 2.7% 135,644 2.7% -- *
Aegis II Limited
Partnership(4) 135,646 2.7% 135,646 2.7% -- *
Allen & Company Incorporated 143,000 2.8% 143,000 2.8% -- *
Jonathan Bean 2,000 * 2,000 * -- *
Steven Berrard 25,000 * 25,000 * -- *
Robert Dean 2,000 * 2,000 * -- *
Delaware Charter Guarantee &
Trust Co., Custodian for
Mark S. Howells -- SEP/IRA 27,000 * 27,000 * -- *
EPICEA 71,285 1.4% 71,285 1.4% -- *
Rosemary Fitzgerald 1,000 * 1,000 * -- *
Michael Gilfillan 1,000 * 1,000 * -- *
Wayne Huizenga 100,000 1.9% 100,000 1.9% -- *
John P. Kehoe 2,785 * 2,785 * -- *
Dara Khosrowshahi 2,000 * 2,000 * -- *
Kaveh Khosrowshahi 2,000 * 2,000 * -- *
LeRoy Kim 2,000 * 2,000 * -- *
Bill Leimkuhler 3,000 * 3,000 * -- *
</TABLE>
- 13 -
<PAGE> 16
<TABLE>
<CAPTION>
Shares Shares
Beneficially Number of Beneficially
Owned Prior to Shares Being Owned After
Selling Stockholder Offering(1)(2) Offered Offering(1)(3)
- ------------------- -------------- ------- --------------
Number Percent Number Percent Number Percent
------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey Logan 10,000 * 10,000 * -- *
Brian Murphy 5,000 * 5,000 * -- *
Luis Mustacchio 2,000 * 2,000 * -- *
Van Negris 1,392 * 1,392 * -- *
Patrick Perry 1,000 * 1,000 * -- *
Annette Puglisi 35,000 * 35,000 * -- *
Richard Rochon 25,000 * 25,000 * -- *
Enrique Senior 30,000 * 30,000 * -- *
Robin G. Senior 11,000 * 11,000 * -- *
Senior Family Trust 9,000 * 9,000 * -- *
Denise and Jeffrey Silver 1,562 * 1,562 * -- *
Ian Smith 2,000 * 2,000 * -- *
William vanden Heuvel 3,000 * 3,000 * -- *
- ----------
<FN>
* Represents beneficial ownership of less than 1% of the outstanding Common
Stock.
(1) The Company believes that the persons named in this table have sole voting
and investment control with respect to all shares of Common Stock shown as
beneficially owned by them, subject to the information contained in the
footnotes to this table.
(2) Percentage of ownership is based on 5,165,175 shares of Common Stock
outstanding on June 30, 1996.
(3) Assumes the sale of all shares offered hereby to unaffiliated third
parties.
(4) Dr. Ted Dintersmith, a director of the Company, is a general partner of
Aegis II and is a general partner of Select GP Limited Partnership, the
general partner of Aegis Select Limited Partnership. Dr. Dintersmith
shares voting and investment power with respect to the shares held by
Aegis II and Aegis Select and may be deemed to be the beneficial owner of
such shares. Dr. Dintersmith disclaims beneficial ownership of the shares
held by Aegis II and Aegis Select.
</TABLE>
- 14 -
<PAGE> 17
PLAN OF DISTRIBUTION
The 791,314 Shares offered hereby may be offered and sold from time to
time by the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest. Such offers and sales may be made from time to time on
one or more exchanges or in the over-the-counter market, or otherwise, at prices
and on terms then prevailing or at prices related to the then-current market
price, or in negotiated transactions. The Shares may be sold by one or more of
the following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account; (c) an
exchange distribution in accordance with the rules of such exchange; (d)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (e) privately negotiated transactions; and (f) a combination of any
such methods of sale. In effecting sales, brokers or dealers engaged by the
Selling Stockholders may arrange for other brokers or dealers to participate.
Brokers or dealers may receive commissions or discounts from Selling
Stockholders or from the purchasers in amounts to be negotiated immediately
prior to the sale. The Selling Stockholders may also sell such shares in
accordance with Rule 144 under the 1933 Act.
The Company has agreed to use its best efforts to maintain the
effectiveness of the registration of the shares being offered hereunder for a
period of not less than ninety (90) days from the effective date hereof.
The Selling Stockholders and any brokers participating in such sales may
be deemed to be underwriters within the meaning of the 1933 Act. There can be no
assurance that the Selling Stockholders will sell any or all of the shares of
Common Stock offered hereunder.
All proceeds from any such sales will be the property of the Selling
Stockholders who will bear the expense of underwriting discounts and selling
commissions, if any, and their own legal fees.
LEGALITY OF COMMON STOCK
The validity of the issuance of the shares of Common Stock offered hereby
is being passed upon for the Company by Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., Boston, Massachusetts. Members of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C. own an aggregate of approximately 600 shares of Common
Stock and 600 Redeemable Warrants to acquire shares of Common Stock. Richard A.
Goldman, Esq., a member of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
is the Assistant Clerk of the Company.
EXPERTS
The balance sheets of the Company as of December 31, 1995 and 1994 and the
statements of operations, stockholders' equity (deficit) and cash flows for each
of the three years in the period ended December 31, 1995, and related schedule,
incorporated by reference in this Prospectus and Registration Statement have
been incorporated herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, given upon the authority of that firm
as experts in accounting and auditing.
In October 1995, The Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation," which established financial
accounting and reporting standards for stock-based employee compensation plans.
Companies are encouraged, rather than required, to adopt a new method that
accounts for stock compensation awards based on their fair value using an option
pricing model. Companies that do not adopt this new method will be required to
make pro forma footnote disclosure of net income as if the fair value-based
method of accounting required by SFAS No. 123 has been applied. The Company is
required to adopt SFAS No. 123 beginning in 1996. Adoption of this pronouncement
is not expected to have a material impact on the
- 15 -
<PAGE> 18
Company's financial position or results of operations because the Company
intends to make pro forma footnote disclosure instead of adopting the new
accounting method.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, filed pursuant to Section 13 or 15(d) of the 1934 Act (File
Number 0-23668).
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996, filed pursuant to Section 13 or 15(d) of the 1934 Act
(File No. 0-23668).
(c) The Company's Current Report on Form 8-K for the December 19, 1995
event.
(d) The Company's Current Report on Form 8-K for the March 14, 1996 event.
(e) The Company's Current Report on Form 8-K for the May 22, 1996 event.
(f) The description of the Company's capital stock contained in the
Company's Registration Statement on Form 8-A (File No. 0-23668) filed with the
Commission on May 6, 1994, including amendments or reports filed for the purpose
of updating such description.
All reports and other documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act,
prior to the filing of a post-effective amendment which indicates that all
securities covered by this Prospectus have been sold or which deregisters all
such securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
- 16 -
<PAGE> 19
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 14. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
<TABLE>
The following expenses incurred in connection with the sale of the
securities being registered will be borne by the Registrant. Other than the
registration fee, the amounts stated are estimates.
<S> <C>
Registration Fees $ 1,842
Legal Fees and Expenses 15,000
Accounting Fees and Expenses 2,500
Miscellaneous 658
-------
TOTAL $20,000
=======
</TABLE>
The Selling Stockholders will bear the expense of their own legal counsel and
miscellaneous fees and expenses, if any.
Item 15. Indemnification of Officers and Directors
- ---------------------------------------------------
The Company's Restated Articles of Organization and its Restated By-Laws
provide for indemnification of all persons permitted by the Massachusetts
Business Corporation Law to the maximum extent permitted thereby. In addition,
the Company's Restated Articles of Organization limit the liability of directors
to the maximum extent permitted by the Massachusetts Business Corporation Law.
Massachusetts law permits a corporation's articles of organization to provide
that the directors of a Massachusetts corporation will not be personally liable
to such corporation or its stockholders for monetary damages for breach of their
fiduciary duties as directors, except for liability (i) for any breach of their
duty of loyalty to the corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) for unlawful payments of dividends or unlawful stock
repurchases or redemptions, or for certain loans to officers and directors of
the corporation that are not repaid, as provided in Section 61 and Section 62,
respectively, of the Massachusetts Business Corporation Law; or (iv) for any
transaction from which the director derives an improper personal benefit.
The indemnification provisions relating to officers and directors of the
Registrant are as follows:
Article 6B of the Registrant's Amended and Restated Charter provides as
follows:
B. Limitation of Liability of Directors
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director notwithstanding any provision of law imposing such liability;
provided, however, that this Article shall not eliminate or limit any liability
of a director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 61 or 62 of the Massachusetts Business Corporation Law, or (iv) with
respect to any transaction from which the director derived an improper personal
benefit.
The provisions of this Article shall not eliminate or limit the liability
of a director of this Corporation for any act or omission occurring prior to the
date on which this Article became effective, provided, however, that neither any
provision of this Article nor the adoption of this Article shall affect the
effectiveness of any predecessor provision of these Restated Articles of
Organization pertaining to the elimination or limitation of the liability of a
director of this Corporation for any act or omission occurring prior to the date
on which this Article shall adversely
II-1
<PAGE> 20
affect the rights and protection afforded to a director of this Corporation
under this Article for acts or omissions occurring prior to such amendment or
repeal.
If the Massachusetts Business Corporation Law is subsequently amended to
further eliminate or limit the personal liability of directors or to authorize
corporation action to further eliminate or limit such liability, then the
liability of the directors of this Corporation shall, without any further action
of the Board of Directors or the stockholders of this Corporation, be eliminated
or limited to the fullest extent permitted by the Massachusetts Business
Corporation Law as so amended.
ARTICLE V, Section 9 of the Registrant's Restated By-Laws provides as
follows:
(a) Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director or an officer of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee, agent, partner or trustee of
another corporation, including, without limitation, any corporation or other
entity of which a majority of any class of equity security is owned directly or
indirectly, by the Corporation (a "Subsidiary") or any Affiliate of the
Corporation as such term is defined in Rule 12b-2 of the General Rules and
Regulations under the 1934 Act or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee, agent, partner
or trustee or in any other capacity while serving as a director, officer,
employee, agent, partner or trustee shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Massachusetts Business
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including, without limitations, attorneys fees, judgments,
fines, ERISA excise taxes or penalties, costs of investigation and preparation
of defense and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
expect as provided in Section (c) hereof with respect to proceedings to enforce
rights of indemnification, the Corporation shall indemnify any such indemnitee
in connection with a proceeding (or part thereof) initiated by such indemnitee
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation.
(b) Advance of Expenses. The right to indemnification conferred in Section
(a) of this Section 9 shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"); provided, however, that
an advancement of expenses incurred by an indemnitee shall be made only upon
delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section 9 or otherwise. The rights to indemnification and to the advancement of
expenses conferred in Sections (a) and (b) of this Section 9 shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
director or officer and shall inure to the benefit of the indemnitee's heirs,
executors and administrators.
(c) Right of Indemnitee to Bring Suit. If a claim under Section (a) or (b)
of this Section 9 is not paid in full by the Corporation within sixty days after
a written claim has been received by the Corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period shall
be thirty days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If the indemnitee is
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought by the
indemnitee to enforce a right to an
II-2
<PAGE> 21
advancement of expenses) it shall be a defense that, and (ii) in any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the Massachusetts Business Corporation Law. Neither
the failure of the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the Massachusetts Business Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the indemnitee
has not met the applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Section 9 or otherwise shall be on the Corporation.
(d) Rights Not Exclusive. The rights to indemnification and to the
advancement of expenses conferred in this Section 9 shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, the Corporation's Articles of Organization, these By-Laws, or any
agreement, vote of stockholders or disinterested directors or otherwise.
(e) Insurance. The Corporation may purchase and maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise, including, without limitation, any Subsidiary or Affiliate or any
employee benefit plan, against any expense, liability or loss, whether or not
the Corporation would have the power to indemnity such person against expense,
liability or loss under the Massachusetts Business Corporation Law. The
Corporation's obligation to provide indemnification under this Section 9 shall
be offset to the extent of any other source of indemnification or any otherwise
applicable insurance coverage under a policy maintained by the Corporation or
any other person.
(f) Employees and Agents. The Corporation may, to the extent authorized
from time to time by the Board of Directors, grant rights to indemnification and
to the advancement of expenses to any employee or agent of the Corporation or
any Subsidiary or Affiliate to the fullest extent of the provisions of this
Section 9 with respect to the indemnification of the advancement of expenses to
directors and officers of the Corporation.
(g) Agreements. The Corporation may, to the extent authorized from time to
time by the Board of Directors, enter into agreements with any director,
officer, employee or agent of the Corporation or any Subsidiary or Affiliate to
the fullest extent of the provisions of this Section 9 with respect to the
indemnification of and advancement of expenses to such person.
(h) Amendment. Without the consent of a person entitled to the
indemnification and other rights provided in this Section 9 (unless otherwise
required by the Massachusetts Business Corporation Law), no amendment modifying
or terminating such rights shall adversely affect such person's rights under
this Section 9 with respect to the period prior to such amendment.
(i) Savings Clause. If this Section 9 or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnity each indemnitee as to any liabilities
and expenses with respect to any proceeding to the fullest extent permitted by
any applicable portion of this Section 9 that shall not have been invalidated
and to the fullest extent permitted by applicable law.
II-3
<PAGE> 22
The Registrant has obtained insurance which insures the officers and
directors of the Registrant against certain losses and which insures the
Registrant against certain of its obligations to indemnity such officers and
directors.
The Amended and Restated Shareholders Agreement dated as of August 17,
1989, as amended, the form of which was previously filed with the Commission and
is incorporated herein by reference pursuant to Exhibit 4.3 hereto, contains
provisions for indemnification by selling stockholders of the Registrant
exercising their registration rights thereunder of the Registrant and its
officers, directors and controlling stockholders against certain liabilities
under the Securities Act.
Item 16. Exhibits.
- -------------------
Exhibit
Number Description
- ------- -----------
4.1 Article 4 of the Form of Restated Articles of Organization
(previously filed as Exhibit 4.1 to the Registrant's Registration
Statement on Form S-1, No. 33-78440, and incorporated herein by
reference)
4.2 Form of Common Stock Certificate (previously filed as Exhibit 4.2 to
the Registrant's Registration Statement on Form S-1, No. 33-78440,
and incorporated herein by reference)
4.3 Amended and Restated Shareholders Agreement dated as of August 17,
1989, as amended, among the Registrant, certain holders of Common
Stock and the holders of Preferred Stock (previously filed as
Exhibit 4.4 to the Registrant's Registration Statement on Form S-1,
No. 33-78440, and incorporated herein by reference)
5 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with
respect to the legality of the securities being registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (see
Exhibit 5)
24 Power of Attorney (filed in Part II of this Registration Statement)
Item 17. Undertakings.
- -----------------------
A. Rule 415 Offering
-----------------
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
1933 Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
II-4
<PAGE> 23
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) ([Section] 230.424(b) of this chapter)
if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective 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 (1)(i) and (1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and 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 1934 Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the 1933 Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. Filings Incorporating Subsequent Exchange Act Documents by Reference
--------------------------------------------------------------------
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the 1934 Act) that is incorporated by reference in
the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Request for Acceleration of Effective Date or Filing of Registration
--------------------------------------------------------------------
Statement on Form S-8
---------------------
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or 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 1933 Act
and will be governed by the final adjudication of such issue.
II-5
<PAGE> 24
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 of the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in Danvers, Massachusetts on
July 31, 1996.
IBIS TECHNOLOGY CORPORATION
By: /s/ Geoffrey Ryding
-----------------------------
Geoffrey Ryding, Ph.D
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Geoffrey Ryding, Ph.D or Timothy J. Burns, or any
of them, his attorney-in-fact, each with the power of substitution and
resubstitution, for him in his name, place and stead, and in any and all
capacities, to sign any and all amendments to this Registration Statement
(including post-effective amendments), or any other registration statement for
the same offering that is to be effective upon filing pursuant to Rule 462(b)
under the Securities Act of 1933, as amended, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby 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 requisite or necessary to be done in and about the
premises, as full to all intents and purposes 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 or his substitutes may lawfully 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 dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/ Richard Hodgson Chairman of the Board of Directors July 31, 1996
- ------------------------ and Director
Richard Hodgson
/s/ Geoffrey Ryding President, Chief Executive Officer July 31, 1996
- ------------------------ (principal executive officer)
Geoffrey Ryding, Ph.D. and Director
II-6
<PAGE> 25
Signatures Title Date
- ---------- ----- ----
/s/ Timothy J. Burns Chief Financial Officer, July 31, 1996
- ------------------------------ (principal financial officer)
Timothy J. Burns
/s/ Debra L. Carroll Treasurer, Controller and Clerk July 31, 1996
- ------------------------------ (principal accounting officer)
Debra L. Carroll
/s/ Peter H. Rose, Ph.D. Director July 31, 1996
- ------------------------------
Peter H. Rose, Ph.D.
/s/ Ted R. Dintersmith, Ph.D. Director July 31, 1996
- ------------------------------
Ted R. Dintersmith, Ph.D.
II-7
<PAGE> 26
IBIS TECHNOLOGY CORPORATION
INDEX TO EXHIBITS FILED WITH
FORM S-3 REGISTRATION STATEMENT
Exhibit
Number Description
------- -----------
4.1 Article 4 of the Form of Restated Articles of Organization
(previously filed as Exhibit 4.1 to the Registrant's
Registration Statement on Form S-1, No. 33-78440, and
incorporated herein by reference).
4.2 Form of Common Stock Certificate (previously filed as
Exhibit 4.2 to the Registrant's Registration Statement on
Form S-1, No. 33-78440, and incorporated herein by
reference).
4.3 Amended and Restated Shareholders Agreement dated as of
August 17, 1989, as amended, among the Registrant, certain
holders of Common Stock and the holders of Preferred Stock
(previously filed as Exhibit 4.4 to the Registrant's
Registration Statement on Form S-1, No. 33-78440, and
incorporated herein by reference).
5 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., with respect to the legality of the securities being
registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. (see Exhibit 5)
24 Power of Attorney (filed in Part II of this Registration
Statement)
T3/631465.1
II-8
<PAGE> 1
EXHIBIT 5
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
One Financial Center
Boston, Massachusetts 02111
701 Pennsylvania Avenue, N.W. Telephone: 617/542-6000
Washington, D.C. 20004 Fax: 617/542-2241
Telephone: 202/434-7300
Fax: 202/434-7400
July 31, 1996
Ibis Technology Corporation
32 Cherry Hill Drive
Danvers, Massachusetts 01923
Gentlemen:
We have acted as counsel to Ibis Technology Corporation, a Massachusetts
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission of a Registration Statement on Form S-3
(the "Registration Statement"), pursuant to which the Company is registering
under the Securities Act of 1933, as amended, a total of 791,314 shares (the
"Shares") of its common stock, $.008 par value per share (the "Common Stock"),
for resale to the public. The Shares are to be sold by the selling stockholders
identified in the Registration Statement (the "Selling Stockholders"). This
opinion is being rendered in connection with the filing of the Registration
Statement. All capitalized terms used herein and not otherwise defined shall
have the respective meanings given to them in the Registration Statement.
In connection with this opinion, we have examined the Company's Restated
Articles of Organization and Restated By-Laws, both as currently in effect; such
other records of the corporate proceedings of the Company and certificates of
the Company's officers as we have deemed relevant; and the Registration
Statement and the exhibits thereto.
Members of our firm own an aggregate of approximately six hundred (600)
shares of Common Stock and six hundred (600) Redeemable Warrants. Richard A.
Goldman, Assistant Clerk of the Company, is a member of our firm.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such copies.
Based upon the foregoing, and subject to the limitations set forth below,
we are of the opinion that (i) the Shares have been duly and validly authorized
by the Company and (ii) the Shares, when sold by the Selling Stockholders, will
have been duly and validly issued, fully paid and non-assessable shares of the
Common Stock.
Our opinion is limited to the laws of the Commonwealth of Massachusetts,
and we express no opinion with respect to the laws of any other jurisdiction. No
opinion is expressed herein with respect to the qualification of the Shares
under the securities or blue sky laws of any state or any foreign jurisdiction.
<PAGE> 2
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Ibis Technology Corporation
July 31, 1996
Page 2
We understand that you wish to file this opinion as an exhibit to the
Registration Statement, and we hereby consent thereto. We hereby further consent
to the reference to us under the caption "Legality of Common Stock" in the
prospectus included in the Registration Statement.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Ibis Technology Corporation:
We consent to incorporation by reference in this Registration Statement on
Form S-3 of Ibis Technology Corporation of our report dated January 19, 1996,
relating to the balance sheets of Ibis Technology Corporation as of
December 31, 1995 and 1994, and the related statements of operations,
stockholders' equity (deficit), and cash flows for each of the years in the
three-year period ended December 31, 1995, and related schedule, which report
appears in the annual report of Form 10-K of Ibis Technology Corporation, and
to the reference to our firm under the heading "Experts" in the Registration
Statement.
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts
July 29, 1996
