<PAGE>
As filed with the Securities and Exchange Commission on March 22, 1999
Registration Statement No. 333-67573
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
(Amendment No. 2)
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------------
Fonix Corporation
(Exact name of registrant as specified in its charter)
----------------------
DELAWARE 22-2994719
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
60 East South Temple Street
Salt Lake City, Utah 84111
(801) 328-8700
(Address, including zip code, and
telephone number, including area code,
of registrant's principal
executive offices)
----------------------
THOMAS A. MURDOCK
PRESIDENT
Fonix Corporation
60 East South Temple Street
Salt Lake City, Utah 84111
(801) 328-8700
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
COPY TO:
JEFFREY M. JONES, ESQ.
DURHAM JONES & PINEGAR, P.C.
50 SOUTH MAIN STREET, SUITE 850
SALT LAKE CITY, UTAH 84144
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: from time to
time after the effective date of this Registration Statement as determined by
market conditions.
----------------------
-i-
<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________.
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Amount Aggregate Aggregate Amount of
Title of Class of Securities To be Price Offering Registration
to be Registered Registered Per Share Price Fee
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 48,113,912 shares (1) $ 1.515625 (2) $ 72,922,648 (2) $ 20,272 (2)
$.0001 par value per share
Common Stock, 806,667 shares (3) $ 1.515625 (4) $ 1,222,605 (4) $ 340 (4)
$.0001 par value per share
Common Stock, 9,577,805 shares (5) $ 1.515625 (2) $ 14,516,360 (2) $ 4,036 (2)
$.0001 par value per share
Common Stock, 125,058 shares (6) $ 1.515625 (4) $ 189,541 (4) $ 53 (4)
$.0001 par value per share
================= ============ ========
Totals 58,623,442 shares $ 88,851,154 $ 24,701
</TABLE>
- --------------------------------------------------------------------------------
(1) Includes (i) 45,286,580 shares, representing 200% of the shares issuable
upon a hypothetical conversion of $20,166,680 stated principal amount of
1,008,334 shares of Series D 4% Convertible Preferred Stock (the "Series D
Preferred"), assuming such a conversion occurred on November 17, 1998, and
(ii) up to 2,827,332 shares issuable upon payment of accrued dividends on
the Series D Preferred in common stock. All included amounts estimated
solely for purposes of calculation of the fee. The actual number of shares
of common stock issuable upon conversion of all or a portion of the Series
D Preferred or of payment of a stock dividend thereon may be more or less
than such estimate based on a variety of factors, including the date of
conversion and the price of the common stock on such date or the period
preceding such date.
-ii-
<PAGE>
(2) The fee is estimated pursuant to Rule 457(c) under the Act on the basis of
the average of the bid and asked price of Fonix's common stock as reported
on the Nasdaq SmallCap Market on November 2, 1998.
(3) Represents shares issuable upon exercise of warrants to purchase up to an
aggregate amount of 806,667 shares of Fonix's common stock at an exercise
price that shall be 120% of the prevailing market price at the time of
exercise, expiring three years after the issue date thereof, which warrants
may be issued to the holders of the Series D Preferred.
(4) Fee calculated pursuant to Rule 457(g)(3).
(5) Includes (i) 2,103,646 shares issued as restricted stock upon the
conversion of 93,678 shares of Series E 4% Convertible Preferred Stock (the
"Series E Preferred") prior to the date hereof, (ii) 15,060 shares issued
as restricted stock as payment of dividends accrued on the Series E prior
to the date hereof, (iii) 7,020,778 shares, representing 200% of the shares
issuable upon a hypothetical conversion of $3,126,440 stated principal
amount of 156,322 shares of Series E Preferred, assuming such a conversion
occurred on November 17, 1998, and (iv) up to 438,321 shares issuable upon
payment of accrued dividends on the Series E Preferred in common stock.
All included amounts estimated solely for purposes of calculation of the
fee. The actual number of shares of common stock issuable upon conversion
of all or a portion of the Series E Preferred or of payment of a stock
dividend thereon may be more or less than such estimate based on a variety
of factors, including the date of conversion and the price of the common
stock on such date or the period preceding such date.
(6) Represents shares issuable upon exercise of warrants to purchase up to an
aggregate amount of 125,058 shares of Fonix's common stock at an exercise
price that shall be 120% of the prevailing market price at the time of
exercise, expiring three years after the issue date thereof, which warrants
may be issued to the holders of the Series E Preferred.
Pursuant to Rule 416, there are also registered hereby such additional
indeterminate number of shares of such Common Stock as may become issuable as
dividends or to prevent dilution resulting from stock splits, stock dividends or
similar transactions.
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)
OF THE ACT, MAY DETERMINE.
==============================================================================
-iii-
<PAGE>
or converting and selling some of their convertible security position and
thereafter converting or exercising the rest or another significant portion of
their holding. In this way, individual holders of Series D and Series E
preferred stock could sell more than 4.999% of the outstanding Fonix common
stock in a relatively short time frame while never beneficially owning more than
4.999% of the outstanding Fonix common stock at a time. For purposes of
calculating the number of shares of common stock issuable to each selling
stockholder assuming a full conversion of all the Series D and E preferred stock
held by it as set forth below, the effect of such 4.999% limitation has been
disregarded. The number of shares issuable to each of the selling shareholders
as described in the table below therefore exceeds the actual number of shares
such selling stockholders may be entitled to beneficially own upon conversion of
the preferred stock. The following information is not determinative of any
selling stockholder's beneficial ownership of Fonix common stock pursuant to
Rule 13d-3 or any other provision under the Securities Exchange Act of 1934, as
amended.
<TABLE>
<CAPTION>
Shares of Percentage of
Common Stock Common Stock
Owned by or Owned By or Number of
Issuable to Issuable to Number of Shares of Percentage of
Selling Selling Shares of Common Common Stock
Stockholders Stockholders Common Stock Stock Owned Beneficially
Prior to Prior to Offered After Owned After
Name of Selling Stockholders Offering Offering Hereby (1) Offering the Offering
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dominion Capital Fund, Ltd. 8,636,473 (2) 11.58% 7,959,223 (3) (3)
Sovereign Partners, LP 10,112,229 (4) 13.29% 9,209,229 (3) (3)
Canadian Advantage Limited Partnership 1,423,857 (5) 2.07% 1,423,857 (3) (3)
Endeavor Capital Fund, S.A 1,327,524 (6) 1.92% 1,327,524 (3) (3)
JNC Opportunity Fund Ltd. 10,890,219 (7) 13.84% 10,890,219 (3) (3)
Diversified Strategies Fund, L.P. 510,594 (8) 0.75% 510,594 (3) (3)
</TABLE>
_____________________
(1) The registration statement of which this prospectus is a part covers up to
58,623,442 shares of common stock issuable upon the conversion of the
Series D and E preferred stock, as payment in shares of Fonix common stock
payable as interest thereon, and issuable upon the exercise of warrants
that may be issued upon the conversion of the Series D and E preferred
stock, depending on the conversion formula selected by the converting
preferred stock holder. Because the specific circumstances of the
conversions of the Series D and E preferred stock is unascertainable at
this time, the precise total number of shares of Fonix common stock
offered by each Selling Stockholder cannot be fixed. The numbers set forth
below represent the number of shares of Fonix common stock that would be
issuable, and hence offered hereby, assuming the conversion of all of the
Series D and E preferred stock as of February 25, 1999. The actual number
of shares of Fonix common stock offered hereby may differ according to the
actual number of shares issued upon such conversions.
(2) Includes: 1,837,858 shares of common stock issued upon conversion of
80,000 shares of Series E preferred stock as of February 25, 1999;
25
<PAGE>
18,639 shares of common stock issued as payment of dividends accrued on
Series E preferred stock prior to February 25, 1999.
4,876,889 shares of common stock issuable upon a hypothetical conversion
of 197,514 shares of Series D preferred stock owned by the selling
stockholder as of February 25, 1999;
96,454 shares of common stock issuable as interest upon the conversion of
197,514 shares of Series D preferred stock, assuming such preferred stock
was converted in full as of February 25, 1999;
1,111,111 shares of common stock issuable upon a hypothetical conversion
of 45,000 shares of Series E preferred stock owned by the selling
stockholder as of February 25, 1999;
18,272 shares of common stock issuable as interest upon the conversion of
45,000 shares of Series E preferred stock, assuming such preferred stock
was converted in full as of February 25, 1999;
600,000 shares of common stock issuable upon the hypothetical conversion
of $750,000 principal amount of Fonix's Series C 5% Convertible Debentures
issued January 29, 1999, assuming such principal amount were converted in
full as of February 25, 1999;
2,250 shares of common stock issuable as interest upon the hypothetical
conversion of the entire principal amount of Series C Debentures owned by
the Selling Stockholder; and
75,000 shares of common stock issuable upon the hypothetical exercise
of5,000 shares of common stock issuable upon the hypothetical exercise of
a warrant issued in connection with the sale of the Series C Debentures.
(3) There is no assurance that the selling stockholders will sell any or all
of the Fonix Shares offered hereby.
(4) Includes:
1,813,520 shares of common stock issued upon conversion of 80,000 shares
of Series E preferred stock as of February 25, 1999;
16,499 shares of common stock issued as payment of dividends accrued
on Series E preferred stock prior to February 25, 1999.
6,128,617 shares of common stock issuable upon a hypothetical conversion
of 248,209 shares of Series D preferred stock owned by the selling
stockholder as of February 25, 1999;
121,210 shares of common stock issuable as interest upon the conversion of
248,209 shares of Series D preferred stock, assuming such preferred stock
was converted in full as of February 25, 1999;
1,111,111 shares of common stock issuable upon a hypothetical conversion
of 45,000 shares of Series E preferred stock owned by the selling
stockholder as of February 25, 1999;
18,272 shares of common stock issuable as interest upon the conversion of
45,000 shares of Series E preferred stock, assuming such preferred stock
was converted in full as of February 25, 1999;
800,000 shares of common stock issuable upon the hypothetical conversion
of $1,000,000 principal amount of Fonix's Series C 5% Convertible
Debentures issued January 29, 1999, assuming such principal amount were
converted in full as of February 25, 1999;
3,000 shares of common stock issuable as interest upon the hypothetical
conversion of the entire principal amount of Series C Debentures owned by
the selling stockholder; and
100,000 shares of common stock issuable upon the hypothetical exercise
of a warrant issued in connection with the sale of the Series C
Debentures.
(5) Includes:
419,475 shares of common stock issued upon conversion of 17,500 shares of
Series D preferred stock as of February 25, 1999;
6,989 shares of common stock issued as payment of dividends accrued on
Series D preferred stock prior to February 25, 1999.
978,049 shares of common stock issuable upon a hypothetical conversion of
39,611 shares of Series D preferred stock owned by the selling stockholder
as of February 25, 1999; and
19,344 shares of common stock issuable as interest upon the conversion of
39,611 shares of Series D preferred stock, assuming such preferred stock
was converted in full as of February 25, 1999.
(6) Includes:
1,301,778 shares of common stock issuable upon a hypothetical conversion
of 52,722 shares of Series D preferred stock owned by the selling
stockholder as of February 25, 1999; and
26
<PAGE>
25,746 shares of common stock issuable as interest upon the conversion of
52,722 shares of Series D preferred stock, assuming such preferred stock
was converted in full as of February 25, 1999.
(7) Includes:
10,679,012 shares of common stock issuable upon a hypothetical conversion
of 432,500 shares of Series D preferred stock owned by the selling
stockholder as of February 25, 1999; and
211,207 shares of common stock issuable as interest upon the conversion of
197,514 shares of Series D preferred stock, assuming such preferred stock
was converted in full as of February 25, 1999.
(8) Includes:
500,691 shares of common stock issuable upon a hypothetical conversion of
20,278 shares of Series D preferred stock owned by the selling stockholder
as of February 25, 1999; and
9,903 shares of common stock issuable as interest upon the conversion of
20,278 shares of Series D preferred stock, assuming such preferred stock
was converted in full as of February 25, 1999.
The following table lists the natural persons who control each of the selling
stockholders.
<TABLE>
<CAPTION>
Selling Stockholder Name of Natural Person Who Controls
- -------------------------------------------------------------------------------
<S> <C>
Dominion Capital Fund, Ltd. Nina Ray and Carl O'Connell
Sovereign Partners, LP Steven M. Hicks and Daniel Pickett
Canadian Advantage Limited Partnership Mark Valentine and Ian McKinnon
Endeavor Capital Fund, S.A Shmuli Margulies
JNC Opportunity Fund Ltd. Neil T. Chau and James Q. Chau
Diversified Strategies Fund, L.P. Neil T. Chau and James Q. Chau
</TABLE>
Plan of distribution
The Fonix Shares covered by this prospectus may be offered and sold from time
to time by the selling stockholders or their pledgees, donees, transferees or
successors in interest. Such sales may be made on the NASDAQ SmallCap Market,
in the over-the-counter market or otherwise, at prices and under terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Fonix Shares may be sold by any means permitted
under law, including one or more of the following:
o a block trade in which a broker-dealer engaged by the selling
stockholder will attempt to sell the Fonix Shares as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction;
o purchases by a broker-dealer as principal and resale by such broker-dealer
for its account pursuant to this prospectus;
o an over-the-counter distribution in accordance with the rules of the
NASDAQ SmallCap Market;
o ordinary brokerage transactions in which the broker solicits purchasers;
and
o privately negotiated transactions.
In effecting sales, broker-dealers engaged by the selling stockholders may
arrange for other broker-dealers to participate in the resales.
27
<PAGE>
In connection with distributions of the Fonix Shares or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Fonix Shares covered by this prospectus in the course of hedging the
positions they assume with the selling stockholders. The selling stockholders
may also sell the Fonix Shares short and redeliver the Fonix Shares to close out
such short positions. The selling stockholders may also enter into option or
other transactions with broker-dealers which require the delivery to the broker-
dealer of the Fonix Shares, which the broker-dealer may resell or otherwise
transfer pursuant to this prospectus. The selling stockholders may also loan or
pledge the Fonix Shares registered hereunder to a broker-dealer and the broker-
dealer may sell the shares so loaned or upon a default the broker-dealer may
effect sales of the pledged shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of commissions,
discounts or concessions from the selling stockholders in amounts to be
negotiated in connection with the sale. Such broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act, in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.
Fonix has advised the selling stockholders that the anti-manipulation rules
under the Securities Exchange Act of 1934 may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, Fonix will make copies of this prospectus available to the selling
stockholders and has informed them of the need for delivery of copies of this
prospectus to purchasers at or prior to the time of any sale of the shares
offered hereby.
All costs, expenses and fees in connection with the registration of the shares
will be borne by Fonix. Commissions and discounts, if any, attributable to the
sales of the Fonix Shares will be borne by the selling stockholders. The
selling stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the Fonix Shares against certain
liabilities, including liabilities arising under the Securities Act of 1933.
Fonix will not receive any proceeds from the sale of the Fonix Shares.
Fonix has agreed with the selling stockholders to keep the registration
statement of which this prospectus constitutes a part effective for a period of
3 years. Trading of any unsold shares after the expiration of such period will
be subject to compliance with all applicable securities laws, including Rule
144.
The selling stockholders are not obligated to sell any or all of the Fonix
Shares covered by this prospectus.
In order to comply with the securities laws of certain states, the Fonix
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, the sale and issuance of Fonix Shares may be
subject to the notice filing requirements of certain states.
Legal matters
The validity of the Shares offered hereby will be passed upon for Fonix by
Durham Jones & Pinegar, P.C., 50 South Main Street, Suite 800, Salt Lake City,
Utah 84144.
28
<PAGE>
29
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Summary about Fonix and this offering............... 2
Recent developments................................. 4
Important information incorporated by reference..... 5
Where to get additional information................. 6
Explanation about forward-looking information....... 7
Risk factors........................................ 7
Use of proceeds..................................... 16
Selling stockholders................................ 17
Plan of distribution................................ 22
Legal matters....................................... 23
</TABLE>
____________________
Fonix Corporation
58,623,442
SHARES
COMMON STOCK
____________________
PROSPECTUS
___________________
March 16, 1999
30
<PAGE>
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 Amendment No. 2 to
the Registration Statement (File No. 333-67573) to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Salt Lake City, State
of Utah, on this 18th day of March, 1999.
Fonix Corporation
By: /s/ Thomas A. Murdock
---------------------------
Thomas A. Murdock
President, Chief Executive
Officer
II-5
<PAGE>
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
date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------ ---------------------- ------
<S> <C> <C>
/s/ Thomas A. Murdock* Chairman of the Board of Directors March 16, 1999
- --------------------------
Stephen M. Studdert
/s/ Thomas A. Murdock Chief Executive Officer, President March 16, 1999
- ------------------------ Director
Thomas A. Murdock (Principal Executive Officer)
/s/ Thomas A. Murdock* Executive Vice President Finance March 16, 1999
- ------------------------ and Director
Roger D. Dudley (Principal Financial Officer)
/s/ Thomas A. Murdock* Chief Financial Officer (Principal March 16, 1999
- ------------------------ Accounting Officer)
Douglas L. Rex
/s/ Thomas A. Murdock* Director March 16, 1999
- --------------------------
Joseph Verner Reed
/s/ Thomas A. Murdock* Director March 16, 1999
- --------------------------
John A. Oberteuffer, Ph.D.
/s/ Thomas A. Murdock* Director March 16, 1999
- --------------------------
Rick D. Nydegger
/s/ Thomas A. Murdock* Director March 16, 1999
- --------------------------
Reginald K. Brack
</TABLE>
* As attorney-in-fact
II-6
