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As filed with the Securities and Exchange Commission on April 22, 1997
Registration No. 333-17105
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AMENDMENT NO. 3
____________________
SPATIALIGHT, INC.
(Exact name of registrant as specified in its charter)
___________________
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<CAPTION>
<S> <C> <C>
NEW YORK 3998 16-1360382
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.
incorporation or organization) Classification Code Number)
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WILLIAM E. HOLLIS, PRESIDENT
SPATIALIGHT, INC.
8-C COMMERCIAL BOULEVARD
NOVATO, CALIFORNIA 94949
(415) 883-3693
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices and name, address and telephone number
of agent for service)
________________
Copies to:
Bradley J. Rock, Esq.
Scott M. Stanton, Esq.
Gray Cary Ware & Freidenrich
A Professional Corporation
400 Hamilton Avenue
Palo Alto, CA 94301
(415) 328-6561
_____________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: After the
effective date of this Registration Statement as determined by market
conditions
_______________
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 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/
[cover page continues]
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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. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL FILE A
FURTHER AMENDMENT THAT 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.
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PROSPECTUS
SPATIALIGHT, INC.
2,135,000 Shares of Common Stock
1,585,000 Shares of Common Stock
issuable upon exercise of Warrants
There are hereby offered 2,135,000 shares of common stock, $.01 par value
per share ("Common Stock") of Spatialight, Inc. (formerly known as Sayett Group,
Inc.)(the "Company") and 1,585,000 shares of Common Stock issuable upon exercise
of certain outstanding Warrants of the Company. The Common Stock offered by
means of this Prospectus is sometimes hereinafter collectively referred to as
the "Securities." The Company will receive the proceeds of exercise of the
Warrants, if any, and will use such proceeds, if any, for working capital.
The Warrants are exercisable at a price of $1.00 per share through July 15,
1997, $1.25 through July 15, 1999, and $1.50 through July 15, 2001.
All of the 3,720,000 shares of Common Stock are being offered by selling
shareholders (the "Selling Shareholders"). See "SELLING SHAREHOLDERS." The
Company will not receive any of the proceeds from the sale of the shares being
offered by the Selling Shareholders. Such sales may be made in any one or more
transactions (which may involve block transactions) in the over-the-counter
market, on NASDAQ, and any exchange on which the Common Shares may then be
listed, or otherwise in negotiated transactions or a combination of such methods
of sale, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Selling Shareholders
may effect such transactions by selling Shares to or through broker-dealers, and
such broker-dealers may sell the shares as agent or may purchase such Shares as
principal and resell them for their own account pursuant to this Prospectus.
Any such participating broker-dealers may be deemed to be "underwriters" under
the Securities Act. Such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Shareholders
and/or purchasers of Shares from whom they may act as agent (which compensation
may be in excess of customary commission).
____________________
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED
ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK
FACTORS" COMMENCING AT PAGE 4 HEREIN.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
__________________________
The date of this Prospectus is ___________, 1997
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AVAILABLE INFORMATION
The Company is a reporting company under the Securities Exchange Act of
1934. The reports and other information filed by the Company may be inspected
and copied at the public reference facilities of the Securities Exchange
Commission in Washington, D.C., and copies of such material can be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549 at
prescribed rates. The Commission also maintains a Web site that contains
reports, proxy and information statements and other information regarding
issuers (including the Company) that file electronically with the Commission.
The address of the Commission's Web site is http://www.sec.gov.
The Company's common stock is listed on the Nasdaq SmallCap Market;
reports and other information concerning the Company can be inspected at the
offices of The National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Commission file number with respect to its Exchange Act
reports is 000-19828. The following documents filed with the Commission by the
Company are incorporated as of their respective dates in the Prospectus by
reference:
(a) The Company's Annual Report on Form 10-KSB/A for the
fiscal year ended December 31, 1996, filed April 22, 1997;
(b) All other reports, if any, filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year
ended December 31, 1996; and
(c) The description of the Company's Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission on
February 5, 1992, effective on February 7, 1992, under Section 12 of
the Exchange Act, including any amendment or description filed for the
purpose of updating such description.
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All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of the initial registration
statement and prior to the effectiveness of the registration statement as
well as those filed prior to the termination of the offering of the shares
offered hereby, shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
The Company will provide without charge to each person, including any
beneficial owner, to whom as copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all documents
incorporated herein by reference (not including the exhibits to such documents
unless such exhibits are incorporated by reference in such documents).
Written or telephone requests for such copies should be directed to William
E. Hollis, President, Spatialight, Inc., 8-C Commercial Boulevard, Novato, CA
94949, (415) 883-3693.
PROSPECTUS SUMMARY
This summary is qualified in its entirety by the information included
elsewhere in this Prospectus and the detailed information and financial
statements incorporated by reference in this Prospectus.
THE COMPANY
Spatialight, Inc. (together with its subsidiaries, the "Company") is in
the business of designing, producing and commercializing miniature,
high resolution active matrix liquid crystal displays ("LCDs"),
also known as spatial light modulators ("SLMs"), for computer and video
display applications. The SLMs are designed in a manner that can potentially
provide high quality images at a significant reduction in costs over other
types of computer and video displays currently available in the market. The
SLMs are designed to be capable of handling computer and video output at very
high speeds, clarity and contrast. The Company's first SLM product is a .75"
diagonal, 704 X 512 pixel, two-dimensional array on 20 micron centers which
is manufactured domestically in very limited quantities. The Company has been
producing SLMs in small volumes, which to date have been sold only to
customers involved in the research and development of applications of this
technology, including computer monitors, head-mounted displays, optical
computing and other projection applications.
The Company has identified a number of potential applications and markets
for products based on its SLM technology, including light-weight computer
projection systems, large computer monitors and head-mounted displays for use
in defense and aerospace applications and for computer training and gaming
devices. In addition, the Company believes that its SLM devices may have
application in optical computing systems and in high-speed, large-capacity
optical data storage systems and holographic imaging systems.
The address and telephone number of the Company's principal executive
offices are 8-C Commercial Boulevard, Novato, California 94949; (415) 883-
1693. The Company was organized under the laws of the State of New York in 1989
under the name of "Sayett Acquisition Company, Inc."; it subsequently changed
its name to Sayett Group, Inc. and, in June 1996, changed its name again to
Spatialight, Inc.
RECENT DEVELOPMENTS
DELISTING FROM NASDAQ SMALLCAP MARKET
The National Association of Securities Dealers, Inc. (the "NASD") has
delisted the Company from the Nasdaq SmallCap Market because the Company does
not meet the $2,000,000 minimum total asset requirement for continued
listing. Trading in the Company's Common Stock since April 2, 1997 has been
conducted in the over-the-counter market in the so called "pink sheets" or
the NASD's "OTC Bulletin Board." See "Risk Factors -- Delisting from Nasdaq
SmallCap Market" and "-- Risks Relating to Investment in Low Priced Stocks."
INVESTOR SUIT
By letter dated January 13, 1997, counsel for Jalcanto, Ltd. and
Sabotini, Ltd. (the "Investors") notified the Company that these Investors
were electing to rescind the Share Purchase Agreements dated July 10, 1996,
as amended (the "Purchase Agreements"), under which the Investors purchased a
total of 2,135,000 shares of common stock in the Company, and were demanding
a refund by January 17, 1997 of the purchase price of such shares, or
$1,783,125, plus interest. The alleged ground for rescission is the fact
that this registration statement on Form S-3 pertaining to the resale of such
shares was not declared effective by the SEC on or before December 31, 1996.
Subsequently, by letter dated February 3, 1997, counsel for the Investors
notified the Company that Jalcanto, Ltd. had retracted its demand for
rescission, with reservation of all rights. The letter reiterated the
rescission demand on behalf of Sabotini, Ltd., and the request that the
Company return $891,562.50.
On February 5, 1997, the Company was served notice that it has been sued
by each of the Investors in the Superior Court of the State of California for
the County of Marin. Each Investor filed a complaint for breach of contract,
specific performance and indemnification relating to the alleged failure to
timely complete this registration statement. In addition, each complaint
requests that the court issue a preliminary and permanent injunction against
future issuances of shares of the Company's common stock or securities
convertible into common stock without the Investor's consent. The complaint
filed by Sabotini Ltd. also requests rescission and the return of the full
purchase price of its shares. Along with its complaint, Sabotini Ltd.
requested that the court immediately issue a writ to attach approximately
$920,000 of the Company's assets as security for the ability to enforce any
eventual judgement. A hearing on the application for a writ of attachment was
held on February 26, 1997, and the court subsequently issued an order denying
the writ of attachment, without prejudice. Although both lawsuits are still
pending, the next scheduled proceeding is an alternative dispute resolution
hearing in June 1997.
The Company intends to defend itself vigorously in both actions. The
Company may be required to expend substantial funds and management resources
in connection with the defense and any settlement or judgement, which could
have a material adverse effect on the Company's business and financial
position. See "Risk Factors -- Investor Suit."
PACKARD BELL RELATIONSHIP
On April 23, 1996, the Company received a purchase offer from Packard
Bell to produce a proof of concept engineering model for a computer monitor
utilizing the Company's LCD. The proof of concept device was completed on
December 18, 1996, and the Company is awaiting Packard Bell's evaluation
thereof. If approved by Packard Bell, the next step would be to design and
produce manufacturing prototypes to enable Packard Bell to analyze design
issues, costing estimates and market volume projections. If ultimately
accepted by Packard Bell for production, the Company would expect its ongoing
role to be volume purchase of LCD's produced to order by third party
manufacturers for delivery to and inclusion in the Packard Bell monitor
product.
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The Company has entered into employment agreements with its key employees,
William E. Hollis, has Dean Irwin and L. John Loomis. Mr. Hollis' contract
is for three years, and provides a base salary of $120,000, certain benefits,
and bonuses as declared by the Board of Directors. Mr. Irwin's contract is
for two years, and provides a base salary of $96,000, certain benefits and
bonuses as declared by the Board. Mr. Loomis' contract is for three years
and provides for a base salary of $175,000 and certain benefits and bonuses
as declared by the Board. All three contracts require the employee to
maintain confidentiality of Company information, turn all inventions over to
the Company and refrain from solicitation of customers for two years
following termination. Each contract is terminable if the Company ceases to
do business. All three executives may be terminated by the Company at any
time for cause.
RISK FACTORS
The purchase of the Securities offered hereby involves a high degree of
risk. Purchasers should carefully consider, among other information, the
information presented under the caption "RISK FACTORS" in this Prospectus,
including the Company's history of operating losses, negative cash flow
need to fund operations from financing activities, uncertainty of successful
commercialization of product, rapid technological change and dependence on
key personnel.
An investment in the Securities offered hereby involves a high degree of
risk and the Securities should not be purchased by persons who cannot afford the
loss of their entire investment. In addition to the other information contained
in this Prospectus, the following information should be considered carefully by
potential purchasers in evaluating the Company, its business and the shares of
Common Stock offered hereby.
FINANCIAL RISKS
HISTORY OF OPERATING LOSSES; ACCUMULATED DEFICIT; UNCERTAINTY OF FUTURE
FINANCIAL RESULTS. As of December 31, 1996, the Company had an accumulated
deficit of approximately $7,464,000. The Company has realized significant
losses in the past; for fiscal 1996, its operating losses were $993,907.
The Company anticipates that it will have quarterly and annual losses in the
future. The Company has generated limited revenues and no profits from
operations. The development, commercialization and marketing of the
Company's products will require substantial expenditures for the foreseeable
future. Consequently, the Company may continue to operate at a loss for the
foreseeable future and there can be no assurance that the Company's business
will operate on a profitable basis.
NEGATIVE CASH FLOW FROM OPERATING ACTIVITIES. The Company is experiencing
negative cash flow from operations resulting in the need to fund ongoing
operations from financing activities. The future existence and profitability of
the Company is dependent upon its ability to obtain additional funds
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to finance operations and expand operations in an effort to achieve
profitability from operations. No assurance can be given that the Company's
business will ultimately generate sufficient revenue to fund the Company's
operations on a continuing basis.
DEVELOPMENT STAGE OF PROTOTYPE PRODUCTS; NO COMMERCIALLY AVAILABLE
PRODUCTS INCORPORATING THE REGISTRANT'S SLM'S; UNCERTAINTY OF SUCCESSFUL
COMMERCIALIZATION. Most of the Company's revenue to date has been derived
from research and development contracts and limited sales of its SLM devices.
Although the Company has demonstrated SLM devices based on its core
technology, the Company has not yet produced any prototype SLM products with
quality and resolution sufficient to satisfy commercial end-use applications.
The Company recently entered into a contract to produce an engineering
prototype of a consumer product for mass production. However, further
development and testing will be necessary before this product or the
Company's other proposed products will be available for commercial end-use
applications. Delays in development may result in the Company's introduction
of its products later than anticipated, which may have an adverse effect on
both the Company's financial and competitive position. Moreover, there can
be no assurance that the Company will ever be successful in developing,
manufacturing or commercializing a commercially viable SLM device or any of
its proposed display products. In addition, there is no assurance that an
SLM device or any of the Company's display products will be technically or
commercially successful or that the Company will be able to manufacture or
obtain a supplier for adequate quantities of its SLM devices or any of its
display products at commercially acceptable cost levels or on a timely basis.
ADDITIONAL FINANCING REQUIREMENTS. The Company currently has the
financial resources to fund planned operations for approximately 12 months;
it is currently depleting financial resources at the rate of approximately
$100,000 per month. There can be no assurance, however, that events outside
the Company's control, such as the Company's inability to successfully defend
the suit brought by certain Selling Shareholders or other events, will not
result in a significant increase in the Company's cash expenditures in the
near term. Any such increase in the rate of depletion of the Company's cash
resources could have a material adverse effect on the Company's ability to
continue its operations. The Company's products being developed and that may
be developed in the future will require the investment of substantial additional
time as well as financial and other resources in order to become commercially
successful. Following the research and development period, the Company's
products will require market development. The Company's operating revenues
and cash resources may not be sufficient over the next several years for the
commercialization by itself of any of the products currently in development.
Consequently, the Company may require additional financing. The Company has
begun discussions with several potential investors to raise an additional $2
to $4 million during 1997. There can be no assurance, however, that the
Company can conclude such commercial arrangements or obtain additional
capital when needed on acceptable terms, if at all. Furthermore, the Company
has no bank line or credit or other working capital financing source. In the
event that the Company is unable to secure additional financing, it may be
forced to seek one or more strategic partners to develop its products to sell
the products outright, or to shut down operations. Any one of these actions
could cause the Company's shareholders to lose their investment.
GOING CONCERN UNCERTAINTY. The Company's recurring operating losses and
the continuing decline in stockholders' equity raise substantial doubt about
the Company's ability to continue as a going concern. The Company's
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
POSSIBLE RESTRICTION ON ABILITY TO UTILIZE NET OPERATING LOSS CARRY
FORWARDS RESULTING FROM CHANGE IN EQUITY OWNERSHIP. At December 31, 1996, the
Company had net operating loss ("NOL")
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carry-forwards of approximately $4,700,000, available to offset United States
taxable income. The NOL carry-forwards will expire over a period of time
through 2010. The amount of these loss carry-forwards which can be used to
reduce future taxable income, if any, may be reduced by, among other things,
future changes in the ownership of the Company's Common Stock. Internal Revenue
Code Section 382 would limit the amount of future taxable income, if any, that
could be offset by the NOL carry forwards if, at any time, the percentage of the
stock of the Company owned by one or more 5 percent shareholder increases by
more than 50 percent over the lowest percent of the Company's stock owned by
such shareholder during the preceding three year period. In the event of a
significant change in ownership of the Company, the utilization of such net
operating loss carry-forwards could be substantially limited.
DISPOSITION OF DISCONTINUED OPERATIONS TO RELATED PARTIES. During 1995,
the Company disposed of its operating subsidiaries Surmotech, Inc. and Sayett
Technology, Inc. The assets of Surmotech were sold for cash to its manager;
the stock of Sayett Technology was sold to the former chief financial officer
of the Company and the former president of Sayett Technology for a promissory
note. Certain initial payments on the promissory note were made; the
subsequent poor performance of Sayett Technology has prevented additional
payments. In light of that performance, the Company wrote off the
value of the promissory note in 1996.
The Company divested itself of Surmotech and Sayett Technology because
each of these entities was suffering significant losses which were
dissipating the Company's financial capital and inhibiting its ability to
pursue the development of the WAH-III LCD. The divestiture stopped the
financial losses from these entities. However, these subsidiaries were also
the only significant revenue-producing units of the Company. Until the
Company can successfully develop and market its LCD, it will be dependent on
its existing financial resources and third-party financing.
INVESTOR SUIT. One of the Selling Shareholders has made claims for
rescission of the agreements pursuant to which it acquired the Securities.
Such Selling Shareholders have also filed suit against the Company alleging
breach of contract, specific performance and indemnification relating to the
alleged failure to provide an effective resale registration statement with
respect to the Securities. Although the Company intends to defend itself
vigorously, there can be no assurance that it will prevail in such disputes.
If the rescission claim is successful, the Company's entire cash resources
will be depleted, and it is likely that the Company would be forced to
dramatically curtail or cease its operations. Further, if the Company is
unsuccessful in defending itself against any of the claims of the Selling
Shareholders, the Company's business, financial condition and ability to
continue as a going concern will be materially adversely affected. See
"Recent Developments."
BUSINESS RISKS
LACK OF SALES, MARKETING AND DISTRIBUTION EXPERIENCE. The Company
currently employs no full-time sales or marketing specialists. The Company
intends to form alliances with corporate partners for the marketing and
distribution of certain of its anticipated display products. There can be no
assurance that the Company will be successful in forming and maintaining such
alliances or that the Company's partners will devote adequate resources to
successfully market and distribute these anticipated products. There can be no
assurance that the Company will be able to attract and retain qualified
marketing and sales personnel, that the Company will be able to enter into
satisfactory agreements with marketing partners or that the Company or its
marketing partners will be successful in gaining market acceptance for its
anticipated products.
NO ASSURANCES OF SUCCESSFUL MANUFACTURING. The Company has no experience
manufacturing SLM devices or display products. The Company's facility is
designed principally for research and development and small scale assembly and
inventory storage, and the Company currently engages outside manufacturers to
produce its SLM devices. The Company is negotiating with several manufacturers
for establishment of full-scale integrated manufacturing capacity for its SLM
devices and has reached an agreement with one manufacturer for fabrication of
silicon wafers. However, no decision has been made by any such manufacturer to
establish such a capability and there can be no
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assurance that any of them will do so. In the event any such manufacturer
establishes a full-scale integrated manufacturing capability, the Company could
become dependent on such manufacturer for the manufacture of SLM devices. The
termination or cancellation of the Company's agreement with the manufacturer
could adversely affect the Company's ability to manufacture its products. In
such event, the Company could be required to establish an alternative
manufacturing relationship or establish its own manufacturing capability. There
can be no assurance that the Company would be able to establish such a
relationship on acceptable terms or develop its own manufacturing capability;
in any event the time required to establish such a substitute relationship
or capability could substantially delay the commercialization of the
Company's SLM devices and display products, which, in turn, could have a
substantial adverse impact on the Company's results of operations and
financial condition.
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 technologies. Although
the Company has been awarded or has filed applications for several patents in
the United States, there can be no assurance as to the degree of protection
offered by these patents, or as to the likelihood that pending patents will be
issued. Furthermore, the Company has not yet applied for or obtained any
foreign patents. 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, will not seek
to apply for and 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. This is
particularly true in foreign countries. In addition, there is an inherent
unpredictability regarding obtaining and enforcing patents in foreign countries.
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 on unpatented proprietary technology and there can be no
assurance that others 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 requires all employees and
most consultants, advisors and collaborators 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.
To date, the Company has no experience in enforcing its confidentiality
agreements.
RAPID TECHNOLOGICAL CHANGE; COMPETITION. The electronic imaging display
industry has undergone rapid and significant technological change. The Company
expects the technology to continue to develop rapidly, and the Company's success
will depend significantly on its ability to maintain a competitive position.
Rapid technological development may result in actual and proposed products or
processes becoming obsolete before the Company recoups a significant portion of
related research and development, acquisition and commercialization costs. If
the Company is successful in the development of a commercially viable SLM device
and its proposed display and other products, the Company's ability to compete
will depend in part upon the consistency of product quality and delivery, as
well as pricing, technical capability and servicing, in addition to factors
within and outside its control, including the success and timing of product
introductions by the Company and its competitors, product performance and price,
product distribution and customer support. There can be no assurance that the
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Company's competitors will not succeed in developing technologies and products
that are equally or more effective than any which are being developed by the
Company or that will render the Company's technology, SLM devices or display
and other products obsolete and non-competitive. In addition, numerous
competitors have substantially greater financial, technical and other resources
than the Company. The Company may face an aggressive, well financed competitive
response that may include misappropriation of the Company's intellectual
property or predatory pricing.
The electronic imaging display industry has been characterized by rapid and
significant technological advances. There can be no assurance that the
Company's SLM devices and display products will be reflective of such advances
or that the Company will have sufficient funds to invest in new technologies or
products or processes. A number of companies in the United States assemble
workstation monitors using LCDs and cathode-ray tubes ("CRTs") purchased from
Japan. A number of Japanese companies build monitors around their LCDs and
CRTs. Korean companies are also entering the LCD and CRT monitor market.
Development of improved high-definition LCDs and CRTs continues to receive
significant attention by these and other companies. Although the Company
believes that its SLM products have the capability to improve LCD performance
beyond that of commercially available LCD- and CRT-based display products,
there is no assurance that manufacturers of LCDs or CRTs will not develop
further improvements of LCD or CRT technology that would eliminate or
diminish the Company's anticipated advantage.
PRODUCT LIABILITY. As a manufacturer and marketer of electronic equipment
and components, the Company may be subject to potential product liability
claims. There can be no assurance that the Company will carry sufficient
insurance to cover all possible liabilities. In the event of a successful suit
against the Company, such an insufficiency of insurance coverage could have a
material adverse impact on the financial condition of the Company. In addition,
the cost of defending or settling a product liability action and the negative
publicity arising therefrom could have a material adverse impact on the Company.
The Company is not aware of any current pending or threatened product liability
claim against it.
DEPENDENCE ON KEY PERSONNEL. The Company is dependent upon its key
scientific and management personnel, including its Chief Executive Officer,
William Hollis, and its Vice President, Dean Irwin. The Company does not
maintain key-man life insurance on Messrs. Hollis or Irwin. In 1996, the
Company entered into a three-year employment agreement with Mr. Hollis and a
two-year employment agreement with Mr. Irwin. The loss of the services of one
or more key individuals may have a material adverse impact on the Company. The
Company's success will also depend on its ability to attract and retain other
highly 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.
DEPENDENCE ON THIRD PARTIES TO DEVELOP PRODUCTS INCORPORATING SLM. The
Company intends to develop its SLM devices to be a component for
incorporation into finished products to be developed, manufactured and
marketed by third parties. The Company does not plan, nor does it have the
financial resources, to develop or market any such end products itself.
Therefore, the Company will be completely dependent upon independent third
parties for the development, manufacturing and marketing of such products.
No such products exist today, and the Company does not have commitments from
any third party for such development, manufacturing or marketing. There can
be no assurance that any
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third party will develop or market a product incorporating the Company's SLM's.
If not, there will be no market for the Company's SLM's.
DEPENDENCE ON FEW CUSTOMERS. All of the Company's sales in 1995 were to two
customers. The Company continues to be dependent on a few customers for its
sales. Loss of any one customer could have a material adverse impact on the
Company.
MARKET RISKS
RECENT DECLINE IN SHARE PRICE. The market price of the Company's shares
since its initial public offering in 1992 has been volatile, and has generally
declined in the two years prior to this offering. Factors such as announcements
of technological innovations or new commercial products by the Company or its
competitors, patent or proprietary rights, development, de-listing by NASDAQ or
other matters may have a significant impact on the market price of the Common
Stock.
LACK OF DIVIDENDS. The Company has not paid dividends on its Common Stock
since its inception and does not intend to pay any dividends on its Common Stock
in the foreseeable future.
DELISTING FROM NASDAQ SMALL CAP MARKET. Effective April 2, 1997, the
Company's common stock was removed from trading on the Nasdaq SmallCap Market
because the Company does not meet the $2,000,000 minimum total asset
requirement for continued listing. As a result of its delisting from the
Nasdaq SmallCap Market, trading, if any, in the Company's Common Stock is
conducted in the over-the-counter market in the so-called "pink sheets" or
the NASD's "OTC Bulletin Board." Consequently, the liquidity of the
Company's securites could be impaired, not only in the numbers of securities
which could be bought and sold, but also through delays in the timing of
transaction, reduction in security analysts' and news media's coverage of the
Company, and lower prices for the Company's securities than might otherwise
be obtained.
RISKS RELATING TO INVESTMENT IN LOW PRICED STOCKS. The Company's common
stock may be classified as a "penny stock" under the Penny Stock Reform Act
and Exchange Act Rules 15g-1 through 15g-8. The Penny Stock Reform Act
contains a number of stringent rules relating to trading in stocks which are
classified as "penny stocks." The Commission has adopted regulations which
define a "penny stock" to be any equity security that has a market price (as
therein defined) less than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions. For any transaction
involving a penny stock, unless exempt, the rules require delivery, prior to
any transaction in a penny stock, of a disclosure schedule prepared by the
Commission relating to the penny stock market. Disclosure is also required
to be made about current quotations for the securities and about commissions
payable to both the broker-dealer and the registered representative.
Finally, broker-dealers must send monthly statements to purchasers of penny
stocks disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks. These rules
were promulgated to restrict the ability of inappropriate dealers to sell
speculative or high risk stocks to unsuspecting investors. These rules
generally make it more difficult to trade such stocks; they may have the
effect of "chilling" the participation of reputable brokers and dealers in
the market for such stocks. Therefore, their application to the Company's
stock could result in a restricted trading market for the Company's stock,
and could have a material adverse effect on the price and the marketability
of the Company's stock.
USE OF PROCEEDS
All of the shares being offered hereunder are being offered by the Selling
Shareholders. The Company will incur certain expenses in connection with this
offering; however, it will not receive any
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of the proceeds hereof. All proceeds will go to the Selling Shareholders to be
used for their own purposes.
In the event that the holders of the Warrants exercise the Warrants, the
proceeds of the exercise would go to the Company. If all 1,585,000 Warrants are
exercised, the Company will receive $1,585,000 if exercised before July 15,
1997, $1,981,250 if exercised through July 15, 1999, and $2,377.500 if exercised
thereafter. Should the Company receive any such funds, it currently plans to
utilize those proceeds to further its technology development efforts and for
working capital.
SELLING SECURITY HOLDERS
All 3,720,000 shares of Common Stock offered hereunder are being offered by
Sabotini, Ltd., c/o Wychwood Trust Limited, 3 Castle Street, Castletown, Isle of
Man IM91LF, British Isles and Jalcanto, Ltd., c/o Wychwood Trust Limited, 3
Castle Street, Castletown, Isle of Man IM91LF, British Isles, and Michael Todd
McMahon, and Heidi Lyn McMahon, c/o McMahon & Associates, P.O. Box 1807,
Danville, CA 96520. Sabotini, Ltd. and Jalcanto, Ltd. each currently owns
1,067,500 shares of Common Stock; Sabotini, Ltd. currently owns Warrants to
acquire an additional 792,500 shares. Jalcanto, Ltd. has transferred the
Warrants to purchase 792,500 shares which it obtained at closing to Michael Todd
McMahon (396,250 Warrants) and Heidi Lyn McMahon (396,250 Warrants). Prior to
their purchase of the Company Common Stock which is the subject of this
offering, on July 11, 1996, and November 11, 1996 none of the Selling
Shareholders had any relationship to the Company, except that Michael Todd
McMahon served as a finder for the investment by the Selling Shareholders and
was paid a fee therefor by the Company. Following the offering, and assuming
that all shares offered hereunder are sold, the Selling Shareholders will own no
shares of the Company's Common Stock.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders or by
pledgees, donees, transferees or other successors in interest. Such sales may
be made in any one or more transactions (which may involve block transactions)
in the over-the-counter market, on NASDAQ, and any exchange in which the Common
Shares may then be listed, or otherwise in negotiated transactions or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Shareholders may effect such transactions by selling Shares
to or through broker-dealers, and such broker-dealers may sell the shares as
agent or may purchase such Shares as principal and resell them for their own
account pursuant to this Prospectus. Any such participating broker-dealers may
be deemed to be "underwriters" under the Securities Act. Such broker-dealers
may receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders and/or purchasers of Shares from whom
they may act as agent (which compensation may be in excess of customary
commission).
The Company has informed the Selling Shareholders that the
anti-manipulative rules under the Securities Exchange Act of 1934 (Regulation
M) may apply to their sales of Shares in the Market. Also, the Company has
informed the Selling Shareholders of the need for delivery of copies of the
Prospectus in connection with any sale of securities registered hereunder in
accordance with applicable prospectus delivery requirements.
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In connection with such sales, the Selling Shareholders and any
participating brokers and dealers may be deemed to be "underwriters" as defined
in the Securities Act. In addition, any of the Shares that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
Prospectus.
In order to comply with certain state securities laws, if applicable, the
Common Shares will not be sold in a particular state unless such securities have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and complied with.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from the Company's Annual Report on Form 10-KSB/A for the year ended
December 31, 1996 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report (which report expresses an unqualified
opinion and includes an explanatory paragraph relating to the Company's
recurring operating losses and accumulated deficit which raise substantial
doubt about the Company's ability to continue as a going concern), which are
incorporated herein by reference, and has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission,
Washington, DC 20549, a Registration Statement on Form S-3 under the Act, with
respect to the securities offered hereby. This Prospectus, filed as a part of
the Registration Statement, does not contain certain information set forth in or
annexed as exhibits to the Registration Statement, as permitted by the Rules and
Regulations of the Commission. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement and to the Exhibits filed as part thereof, which may be inspected at
the office of the Securities and Exchange Commission without charge, or copies
thereof may be obtained therefrom upon payment of a fee prescribed by the
Securities and Exchange Commission.
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===============================================================================
No dealer, salesman or any other person has been authorized in connection
with this offering to give any information or to make any representations other
than those contained in this Prospectus. This Prospectus does not constitute an
offer or a solicitation in any jurisdiction to any person to whom it is unlawful
to make such an offer or solicitation. Neither the delivery of this Prospectus
nor any sale made hereunder shall under any circumstances, create an implication
that there has been no change in the circumstances of the Company or the Facts
herein set forth since the date hereof.
_______________
SPATIALIGHT, INC.
2,135,000 Shares of Common Stock
1,585,000 Share of Common Stock Issuable
upon Exercise of Certain Outstanding Warrants
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than selling
commissions, payable by the Registrant in connection with the sale of the shares
being registered. All of the amounts shown are estimates, except for the
registration fee and NASD filing fee.
Registration............................................... $563.63
NASD filing................................................ $7,500
Blue Sky fees and expenses................................. $5,000
Legal fees and expenses.................................... $20,000
Accounting fees and expenses............................... $30,000
Miscellaneous.............................................. $1,000
TOTAL...................................................... $64,063.63
___________________
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of the Registrant, filed November
6, 1991 (the "Restated Certificate"), provides in relevant part at paragraph 7,
that
The directors of the corporation shall not be personally liable to the
corporation or its shareholders for damages for any breach of duty in such
capacity occurring after the adoption of the provisions authorized in this
certificate of incorporation, provided, however, that the provisions
contained herein shall not eliminate such directors' liability if a
judgment or other final adjudication adverse to the director establishes
that (i) the director's acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of the law; (ii) that the
director personally gained a financial profit or other advantage to which
the director was not legally entitled; or (iii) that the directors' acts
violated the provisions of Section 719 of the New York Business Corporation
Law.
Sections 721 through 726 of the Business Corporation Law of the State of
New York (the "BCL") provide the statutory basis for the indemnification by a
corporation of its officers and directors when such officers and directors have
acted in good faith, for a purpose reasonably believed to be in the best
interests of the corporation, and subject to specified limitations set forth in
the BCL.
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The BCL was also amended in 1986 to allow corporations to provide for
indemnification of corporate directors and officers on a broader basis than had
previously been permissible. Pursuant to this statutory authority, and as
authorized by Article V of the Registrant's By-Laws, directors and officers of
the Registrant, and certain Registrant employees, have been availed of the
broadest scope of permissible indemnification coverage consistent with the BCL
changes.
Article V of the Registrant's By-Laws provide as follows:
5.1 INDEMNIFICATION. The Corporation shall indemnify (a) any person
made or threatened to be made a party to any action or proceeding by reason
of the fact that he, his testator or intestate, is or was a director or
officer of the Corporation and (b) any director or officer of the
Corporation who served any other company in any capacity at the request of
the Corporation, in the manner and to the maximum extent permitted by the
Business Corporation Law of New York, as amended from time to time; and
the Corporation may, in the discretion of the Board of Directors, indemnify
all other corporate personnel to the extent permitted by laws.
5.2 AUTHORIZATION. The provisions for indemnification set forth in
Section 5.1 hereof shall not be deemed to be exclusive. The Corporation is
hereby authorized to further indemnify its directors or officers in the
manner and to the extent set forth in (i) a resolution of the shareholders,
(ii) a resolution of the directors, or (iii) an agreement providing for
such indemnification, so long as such indemnification shall not be
expressly prohibited by the provisions of the Business Corporation Law of
New York.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
(a) THE FOLLOWING EXHIBITS ARE FILED AS PART OF THIS REGISTRATION
STATEMENT:
EXHIBIT NUMBER
4.1* Specimen Common Stock Certificate incorporated by reference from the
Company's registration statement on Form S-1 filed with the Commission
on November 27, 1991 and declared effective February 5, 1992
4.2* Form of Warrant incorporated by reference from the Company's Form
8-K/A filed September 24, 1996.
23.1 Independent Auditors' Consent - Deloitte & Touche LLP
24.1* Power of Attorney.
- -------------------
* Previously filed
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The remaining schedules have been omitted, either because they are not
applicable to the Registrant or because the information required has been shown
in the Financial Statements or in the notes thereto without making such
statement unclear or confusing.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 14 or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, unit 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 by the Act and will be governed by the final adjudication of
such issue.
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 material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Spatialight, Inc., a corporation organized and existing under the laws of the
State of New York 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 to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Novato, State of
California, on the 22nd day of April, 1997.
SPATIALIGHT, INC.
By: /s/ William E. Hollis
-------------------------------------
William E. Hollis
President, Chief Executive Officer,
Chief Financial Officer and
Chief Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Lawrence J. Matteson* Chairman of the Board April 22, 1997
- ------------------------
Lawrence J. Matteson
/s/ William E. Hollis President & CEO, April 22, 1997
- ------------------------ Chief Financial Officer,
William E. Hollis Chief Accounting Officer,
and Director
Director April __, 1997
- ------------------------
Edward J. Kelly
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Thomas D. Stahl* Director April 22, 1997
- ------------------------
Thomas D. Stahl
Michael H. Burney* Director April 22, 1997
- ------------------------
Michael H. Burney
* By: /s/ William Hollis
----------------------------------
William Hollis, Attorney-in-Fact
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 3 to
Registration Statement No. 333-17105 of Spatialight, Inc. on Form S-3 of our
report dated March 21, 1997, which report expresses an unqualified opinion and
includes an explanatory paragraph relating to the Company's recurring
operating losses and accumulated deficit which raise substantial doubt about the
Company's ability to continue as a going concern, appearing in the Annual
Report on Form 10-KSB/A of Spatialight, Inc. for the year ended December 31,
1996 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
San Francisco, California
April 18, 1997
