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As Filed With the Securities and Exchange Commission on December 3, 1999
Registration No. 333-91225
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SPATIALIGHT, INC.
(Exact name of registrant as specified in its charter)
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NEW YORK 16-1363082
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
9 COMMERCIAL BOULEVARD, SUITE 200
NOVATO, CALIFORNIA 94949
(415) 883-1693
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
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MICHAEL H. BURNEY
CHIEF EXECUTIVE OFFICER
SPATIALIGHT, INC.
9 COMMERCIAL BOULEVARD, SUITE 200
NOVATO, CALIFORNIA 94949
(415) 883-1693
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Kevin Coyle, Esq.
Gray Cary Ware & Freidenrich LLP
400 Capitol Mall, Suite 2100
Sacramento, California 95814
(916) 930-3200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time as described in the Prospectus 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. [ ]
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. [ ]
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 SUCH SECTION 8(a),
MAY DETERMINE.
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SPATIALIGHT, INC.
COMMON STOCK
814,015 Shares Issuable Upon Exercise of Warrants
This prospectus relates to the offer and sale of up to 814,015 shares of
our common stock issuable upon exercise of warrants, with exercise prices of
$2.8125 per share, issued to investors on August 5, 1999 and September 15, 1999.
Our common stock is not traded on a national securities exchange or the
Nasdaq Stock Market but is listed on the over-the-counter bulletin board under
the symbol "HDTV." On November 30, 1999, the last sale price of the common stock
as reported on the over-the-counter bulletin board was $4.125.
Our principal executive offices are located at 9 Commercial Boulevard,
Suite 200, Novato, California 94949, and our telephone number is (415) 883-1693.
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AN INVESTMENT IN SPATIALIGHT COMMON STOCK INVOLVES A HIGH DEGREE OF
RISK. PLEASE CAREFULLY CONSIDER THE INFORMATION UNDER THE HEADING "RISK FACTORS"
BEGINNING ON PAGE 3.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THESE SECURITIES HAVE NOT BEEN QUALIFIED UNDER THE LAWS OF ANY STATE.
BEFORE MAKING ANY OFFER OR SALE OF THESE SECURITIES, HOLDERS OF THESE SECURITIES
SHOULD CONFIRM THAT SUCH OFFER OR SALE COMPLIES WITH ALL APPLICABLE STATE
SECURITIES LAWS. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT
IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
The date of this prospectus is December 2, 1999.
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TABLE OF CONTENTS
<TABLE>
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Page
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RISK FACTORS ............................................................ 3
ABOUT SPATIALIGHT.......................................................... 10
USE OF PROCEEDS............................................................ 12
PLAN OF DISTRIBUTION....................................................... 13
LEGAL MATTERS.............................................................. 15
EXPERTS.................................................................... 15
WHERE TO FIND MORE INFORMATION............................................. 16
DOCUMENTS INCORPORATED BY REFERENCE........................................ 16
</TABLE>
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RISK FACTORS
You should carefully consider the following risk factors, together with
the other information contained or incorporated by reference in this prospectus,
in evaluating whether to purchase shares of our common stock.
WE ARE SUBJECT TO LENGTHY DEVELOPMENT PERIODS AND PRODUCT ACCEPTANCE
CYCLES.
Our business model requires us to develop microdisplays that perform
better than existing technologies, contract with one or more third-party
manufacturers to manufacture our prototypes in bulk, and sell the resulting
displays to original equipment manufacturers that will then incorporate it into
their products. OEMs make the determination during their product development
programs whether or not to incorporate our display modules in their products.
This requires us to invest significant amounts of time and capital in designing
display modules well before our customers introduce their products incorporating
these displays and before we can be sure that we will generate any significant
sales to our customers or even recover our investment. Even if a product is
successful for a short period, competition from other sellers could limit the
length of time it is successful.
WE ARE INCURRING SUBSTANTIAL RESEARCH AND DEVELOPMENT COSTS.
We currently have over ten engineers based in California working on
prototype microdisplays. This staffing creates significant research and
development costs that may not be recouped. We have sold our current prototypes
to a number of companies that have indicated they may be willing to incorporate
them into products if they could buy such displays in volume. As we begin the
process of working with third parties to manufacture our designs in volume, we
are continuing to use our engineers to develop subsequent generations of our
microdisplays. As a result, our overhead is expected to increase.
THE MICRODISPLAYS WE HAVE DEVELOPED MAY NOT BE MASS-PRODUCED EASILY.
We need to work closely with our manufacturing sources to commence
volume production of our current prototype. Problems in implementing volume
production or lower than expected manufacturing yields could significantly and
adversely affect us because delays could lead our potential customers to seek
other sources and because we will have incurred costs for the silicon the
company that assembles our displays uses in the microdisplay manufacturing
process.
We currently obtain silicon backplanes from the Far East. Some Asian
countries are subject to earthquakes and typhoons. Unless we obtain a second
source, any disruption or termination of our silicon manufacturing operations in
Taiwan or air transportation with the Far East could adversely affect our
operations.
We are negotiating a contract with a facility in Hong Kong to assemble
the silicon backplanes with electronic components to create microdisplays.
Because this relationship is new we anticipate that technical issues in the
manufacturing process will need to be resolved. The design and manufacture of
LCDs and display modules are highly complex processes that are sensitive to a
wide variety of factors, including the level of contaminants in the
manufacturing
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environment, impurities in the materials used, and the performance of personnel
and equipment. Contract manufacturers do not guarantee their manufacturing
yields. In addition, the complexity of manufacturing processes will increase
along with increases in the sophistication of our display modules. Low
manufacturing yields or delivery problems could adversely affect our operating
results.
A MARKET FOR OUR PRODUCTS MAY NOT DEVELOP.
Various target markets for our micro-displays, including projectors,
monitors, high-definition televisions, and portable micro-displays, are
uncertain, may be slow to develop, or could utilize competing technologies.
High-definition television has only recently become available to consumers, and
widespread market acceptance is uncertain. In addition, the commercial success
of the portable micro-display market is uncertain. Gaining acceptance in this
market may prove difficult because of the radically different approach of
micro-displays to the presentation of information. In order for us to succeed,
not only must we sell to those manufacturers that produce end-products
micro-displays that are better and cheaper than the alternatives they would
otherwise use, but also, the manufacturers themselves must develop products that
are successful commercially. Our failure to sell to manufacturers or the failure
of the ultimate target markets to develop as we expect will impede our
anticipated growth.
OUR DISPLAYS MAY NOT SUCCEED COMMERCIALLY.
Our microdisplays may not be accepted by a widespread market. Even if we
successfully mass-produce a display that is used in a retailed product, our
customers may determine not to introduce or may terminate products utilizing the
technology for a variety of reasons, including the following:
o superior technologies developed by our competitors;
o price considerations;
o lack of anticipated or actual market demand for the products; and
o difficulties in inducing companies to begin using our product.
WE DO NOT HAVE LONG-TERM PURCHASE COMMITMENTS FROM OUR PROSPECTIVE
CUSTOMERS.
Our prospective customers have not yet provided us with firm or
long-term volume purchase commitments. Although we have begun to negotiate with
our customers, we currently do not have any contracts with our customers.
Because we have no firm, long-term volume purchase commitments we do not have
clear order lead times or bases for inventory allocations. In addition, our
prospective customers can cancel purchase commitments or reduce or delay orders
at any time. The cancellation, delay, or reduction of customer commitments could
result in our holding excess and obsolete inventory or having unabsorbed
manufacturing overhead. Our sales to customers in the electronics industry,
which is subject to severe competitive pressures, rapid technological change,
and product obsolescence, increases our inventory and overhead risks.
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WE DEPEND ON THE MARKET ACCEPTANCE OF THE PRODUCTS OF OUR CUSTOMERS.
We do not sell any products to end-users. Instead, we design and
manufacture various product solutions that our customers incorporate into their
products. As a result, our success depends almost entirely upon the widespread
market acceptance of our customers' products. Any significant slowdown in the
demand for our customers' products would adversely affect our business.
Our dependence on the success of the products of our customers exposes
us to a variety of risks, including our needs to do the following:
o maintain customer satisfaction with our design and
manufacturing services;
o match our design and manufacturing capacity with customer
demand and to maintain satisfactory delivery schedules;
o anticipate customer order patterns, changes in order mix,
and the level and timing of orders that we can meet; and
o adjust to the cyclical nature of the industries and
markets we serve.
Our failure to address these risks may cause us to lose sales or for
sales to decline.
WE FACE INTENSE COMPETITION.
We serve intensely competitive industries that are characterized by
price erosion, rapid technological change, and competition from major domestic
and international companies. This intense competition could result in pricing
pressures, lower sales, reduced margins, and lower market share. Some of our
competitors have greater market recognition, larger customer bases, and
substantially greater financial, technical, marketing, distribution and other
resources than we possess. As a result, they may be able to introduce new
products and respond to customer requirements more quickly than we can.
Our competitive position could suffer if one or more of our customers
decide to design and manufacture their own display modules, to contract with our
competitors, or to use alternative technologies. In addition, our customers
typically develop a second source. Second source suppliers may win an increasing
share of a program by competing primarily on price rather than on design.
Our ability to compete successfully depends on a number of factors, both
within and outside our control. These factors include the following:
o our success in designing and manufacturing new display
technologies;
o our ability to address the needs of customers;
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o the quality, performance, reliability, features, ease of use,
pricing, and diversity of our display products;
o foreign currency fluctuations, which may cause a foreign
competitor's products to be priced significantly lower than our
displays;
o the quality of our customer services;
o the efficiency of our production sources;
o the rate at which customers incorporate our displays into their
own products; and
o products or technologies introduced by our competitors.
THE ELECTRONICS INDUSTRY IS CYCLICAL.
The electronics industry has experienced significant economic downturns
at various times, characterized by diminished product demand, accelerated
erosion of average selling prices, and production over-capacity. In addition,
the electronics industry is cyclical in nature. We may experience substantial
period-to-period fluctuations in future operating results because of general
industry conditions or events occurring in the general economy.
WE MUST FINANCE THE GROWTH OF OUR BUSINESS AND THE DEVELOPMENT OF NEW
PRODUCTS.
To remain competitive, we must continue to make significant investments
in research and development, equipment and facilities. Our failure to generate
sales to offset our costs would adversely affect our ability to continue
operating.
We anticipate the need for additional equity or debt financing to
provide for the capital expenditures required to maintain our research and
development and to move to production. We cannot predict the timing or amount of
any such capital requirements at this time. If such financing is not available
on satisfactory terms, we may be unable to expand our business at the rate
desired and our operating results may suffer. Equity financing could result in
additional dilution to existing stockholders. Debt financing increases expenses,
must be repaid regardless of operating results, and is secured against our
assets, potentially leaving fewer resources available for the repayment of
equity holders.
OUR OPERATING RESULTS ARE NEGATIVE AND SUBJECT TO FLUCTUATIONS.
We have not achieved profits in the past five years and have experienced
cash shortages. As a result, our auditors have noted in past reports that there
is doubt about our ability to continue as a going concern. We will need to
achieve substantial sales to support our cost structure before we can begin to
recoup our operating losses and accumulated deficit. Any progress toward
profitability may not be steady and may be subject to significant periodic or
seasonal quarterly fluctuations due to factors including the following:
o introductions of displays and market acceptance of new or new
generations of displays;
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o timing of expenditures in anticipation of future orders;
o changes in our cost structure;
o availability of labor and components;
o pricing and availability of competitive products and services;
o the timing of orders;
o the volume of orders relative to the capacity we can contract to
produce;
o evolution in the life cycles of customers' products; and
o changes or anticipated changes in economic conditions.
Accordingly, you should not rely on the results of past periods as an
indication of our future performance. It is likely that in some future period,
our operating results may be below expectations of public market analysts or
investors. If this occurs, our stock price may drop.
THE MARKET PRICE OF OUR COMMON STOCK MAY BE VOLATILE.
The market price of our common stock has been extremely volatile,
reflecting reported losses, receipt of additional financing and changes to
management. The trading price of our common stock in the future could continue
to be subject to wide fluctuations in response to various factors, including the
following:
o quarterly variations in our operating results;
o actual or anticipated announcements of technical innovations or
new product developments by us or our competitors;
o changes in analysts' estimates of our financial performance;
o general conditions in the electronics industry; and
o worldwide economic and financial conditions.
In addition the stock market has experienced extreme price and volume
fluctuations that have particularly affected the market prices for many
high-technology companies and that often have been unrelated to the operating
performance of these companies. These broad market fluctuations and other
factors may adversely affect the market price of our common stock.
OUR COMMON STOCK MAY NOT BE LIQUID.
We are currently traded on the over-the-counter bulletin board. Our stockholders
may find that it is more difficult to sell our capital stock than shares listed
on an exchange or a national market. State securities law qualification
exemptions that apply to shares listed on
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exchanges and national markets do not apply to shares of our stock. The trading
volume of our shares may be limited in part due to the marketability of our
stock. Any swing in the price of our stock may be magnified into a material
reduction in price because relatively few buyers may be available to purchase
our stock.
SALES OF LARGE NUMBERS OF SHARES COULD ADVERSELY AFFECT THE PRICE OF OUR
COMMON STOCK.
Many of our outstanding shares are freely tradeable without restrictions
or further registration. Sales of substantial amounts of common stock by our
stockholders, or even the potential for such sales, may affect the market price
of our common stock and could impair our ability to raise capital through the
sale of our equity securities.
WE DEPEND ON KEY PERSONNEL.
Our development and operations depend substantially on the efforts and
abilities of our senior management and technical personnel. The competition for
qualified management and technical personnel is intense. The loss of services of
one or more of our key employees or the inability to add key personnel could
have a material adverse affect on us. We do not have any fixed-term agreements
with, or key person life insurance covering, any officer or employee.
WE MUST PROTECT OUR INTELLECTUAL PROPERTY.
We believe that our continued success depends in part on protecting our
proprietary technology. Third parties could claim that we are infringing their
patents or other intellectual property rights. In the event that a third party
alleges that we are infringing its rights, we may not be able to obtain licenses
on commercially reasonable terms from the third party, if at all, or the third
party may commence litigation against us. The failure to obtain necessary
licenses or other rights or the institution of litigation arising out of such
claims could materially and adversely affect us.
We rely on a combination of patent law, trade secret law, attempts to
limit disclosure of our confidential information and contractual provisions to
protect our intellectual property. Trade secret laws and contractual provisions
afford only limited protection. We face risks associated with our intellectual
property, including the following:
o pending patent applications may not be issued;
o patents issued to us may be challenged, invalidated, or
circumvented;
o unauthorized parties may obtain and use information that we
regard as proprietary despite our efforts to protect our
proprietary rights;
o others may independently develop similar technology or design
around any patents issued to us;
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o intellectual property laws may not protect our intellectual
property;
o effective protection of intellectual property rights may be
limited or unavailable in some foreign countries, such as China,
in which we may operate.
WE FACE RISKS ASSOCIATED WITH INTERNATIONAL TRADE AND CURRENCY EXCHANGE.
Political and economic conditions abroad may adversely affect the
foreign manufacture and sale of our displays. Protectionist trade legislation in
either the United States or foreign countries, such as a change in the current
tariff structures, export or import compliance laws, or other trade policies,
could adversely affect our ability to manufacture or sell displays in foreign
markets and to purchase materials or equipment from foreign suppliers.
SHORTAGES OF COMPONENTS AND MATERIALS MAY DELAY OR REDUCE OUR SALES AND
INCREASE OUR COSTS.
Our inability to obtain sufficient quantities of components and other
materials necessary to produce our displays could result in reduced or delayed
sales or lost orders. Any delay in or loss of sales could adversely impact our
operating results. We obtain many of the materials we use in the manufacture of
our displays from a limited number of foreign suppliers, particularly suppliers
located in the Far East, and we do not have long-term supply contracts with any
of them. As a result, we are subject to economic instability and currency
fluctuations in these countries as well as to increased costs, supply
interruptions, and difficulties in obtaining materials. Our customers also may
encounter difficulties or increased costs in obtaining from others the materials
necessary to produce their products into which our product solutions are
incorporated.
WE MUST EFFECTIVELY MANAGE OUR GROWTH.
The failure to manage our growth effectively could adversely affect our
operations. Our ability to manage our planned growth effectively will require us
to:
o enhance our operational, financial, and management systems;
o expand our facilities and equipment; and
o successfully hire, train, and motivate additional employees,
including technical staff.
As we expand our overhead and selling expenses will increase. We also
may be required to increase staffing and purchase capital equipment. Customers,
however, generally do not commit to firm production schedules for more than a
short time in advance. Any increase in expenditures in anticipation of future
sales that do not materialize would adversely affect our profitability.
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OUR BUSINESS MAY BE AFFECTED BY "YEAR 2000" PROBLEMS.
Many existing computer programs and databases use only two digits to
identify a year in the date field. For example, 99 would represent 1999. These
programs and databases were designed and developed without considering the
impact of the upcoming millennium. Consequently, date sensitive computer
programs may interpret the date "00" as 1900 rather than 2000. If not corrected,
many computer systems could fail or create erroneous results in 2000. Failure of
our systems, or in the systems of our vendors or customers, could have a
significant adverse effect on our business.
WE COULD BE LIABLE IN CONNECTION WITH PRODUCT LIABILITY CLAIMS.
Product liability claims may be asserted against us in the event that
the use of our products, or products which incorporate our products, are alleged
to cause injury or other adverse effects. Our product liability insurance may
not be adequate to protect us against potential claims. As a result a successful
claim against us could materially affect our financial stability. In addition,
our reputation may be affected by product liability claims regardless of the
merit or eventual outcome of the claim.
WE DO NOT PAY CASH DIVIDENDS.
We have never paid any cash dividends on our common stock and do not
anticipate that we will pay cash dividends in the near term. Instead, we intend
to apply earnings to the expansion and development of our business.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements and information contained in this prospectus
concerning our future, proposed and anticipated activities; certain trends with
respect to our revenue, operating results, capital resources, and liquidity or
with respect to the markets in which we compete or the electronics industry in
general; and other statements contained in this prospectus regarding matters
that are not historical facts are forward-looking statements, as such term is
defined under applicable securities laws. Forward-looking statements, by their
very nature, include risks and uncertainties, many of which are beyond our
control. Accordingly, actual results may differ, perhaps materially, from those
expressed in or implied by such forward-looking statements. Factors that could
cause actual results to differ materially include those discussed under "Risk
Factors."
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ABOUT SPATIALIGHT
We design and seek to commercialize displays that can provide
high-resolution images suitable for computer, video and other applications but
that can be manufactured using existing processes for typical silicon and liquid
crystal displays. Our displays are miniature, high-resolution active matrix
liquid crystal displays, consisting of liquid crystals mounted directly on
silicon chips. These displays are also known as and commonly referred to as
Liquid Crystal Displays (LCD), Active Matrix Liquid Crystal Displays (AMLCD),
Liquid Crystal on Silicon (LCOS), and Spatial Light Modulators (SLM).
Our micro-displays, although smaller than 1" in diagonal, contain large
arrays of pixels and therefore can provide more content at a lower cost than
currently available displays. The tiny image on a micro-displays can be
projected onto a screen or other surface for individual or group viewing or used
in a portable application that is viewed through a magnifying device similar to
a viewfinder. Potential near-term micro-displays applications include use in
office projection equipment, rear projection high-definition televisions, and
computer monitors.
Our current technology is a fourth generation 0.9-inch diagonal display,
with a 1,024 x 768 array of pixels (a total of 786,432 pixels). This product is
now shipping in the form of developer kits, which are designed to assist other
companies to evaluate the display technology for inclusion in their products. To
date, we have only sold small quantities of our developer kits to customers who
are evaluating our displays for use in their products. We are currently
developing our fifth generation display, a 1280 x 1024 array of pixels (a total
of 1,310,720 pixels), although quantities are not yet available for evaluation.
Our technology uses liquid crystals and silicon chips. An advantage of
these materials is that processes for working with them are already known, so we
may be able to move from prototypes to mass production more quickly than
competing technologies offering comparable quality. By using existing
manufacturing processes we believe we can obtain economies of scale and thereby
reduce costs.
We are a corporation organized under the laws of the State of New York.
Our executive offices are located at 9 Commercial Boulevard, Suite 200, Novato,
California 94949.
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USE OF PROCEEDS
The 814,015 shares offered by this prospectus consist of shares issuable
to institutional and individual accredited investors in connection with warrants
granted in two privately placed equity financings. A warrant was issued to
Jonathan Brooks on August 5, 1999 in connection with these financings. The
remaining warrants described in this prospectus were issued on September 15,
1999. The warrants issued to our investors on August 5, 1999 and September 15,
1999 for an aggregate of 814,015 shares have an aggregate exercise price of
$2,052,562.50, or $2.8125 per share.
If the warrants are exercised, we will receive proceeds in the form of
the exercise price. We expect to use such proceeds, if any, for working capital.
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PLAN OF DISTRIBUTION
The warrants being registered hereunder have already been issued.
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A provision contained in the warrants provided that we would file a
registration statement under the Securities Act covering the shares issuable
upon exercise of the warrants described above . In addition, the warrants
require Spatialight to use its best efforts to qualify the shares under such
state securities laws as warrantholders reasonably request and maintain
compliance with federal and state securities laws until all the shares issuable
upon exercise of the warrants have been sold. The effectiveness of the
registration statement of which this prospectus is a part addresses only federal
securities law obligations. We have not been requested to qualify the issuance
or sale of the shares in any state. However, as a result of Section 18(b)(4) of
the Securities Act, state law will not prohibit, limit, or impose conditions on
the offer or sale of these shares if the stockholder is not an underwriter.
Nonetheless, states may require notice filings under Section 18(c) of the
Securities Act. Stockholders selling their shares and any broker-dealers or
agents that participate with such stockholders in sales of the shares may be
deemed to be "underwriters" within the meaning of the Securities Act. In such
case investors selling their shares will be required to coordinate with
Spatialight to assure compliance with applicable state securities laws and
notice requirements. Commissions received by broker-dealers or agents and any
profit on the resale of shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
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LEGAL MATTERS
The legality of the shares offered by this prospectus is being passed
upon by Gray Cary Ware & Freidenrich LLP, Sacramento, California.
EXPERTS
Gray Cary Ware & Freidenrich LLP beneficially owns 8,161 shares and
warrants to purchase 20,000 shares of our common stock.
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WHERE TO FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. These reports, proxy statements and other
information filed with the SEC may be inspected and copied at the SEC Public
Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information about the operation of the SEC Public
Reference Room by calling 1-800-SEC-0330. You can also inspect this material
free of charge at a Web site maintained by the SEC at http://www.sec.gov.
Finally, you can also inspect reports and other information concerning
Spatialight at the offices of the National Association of Securities Dealers,
Inc., Market Listing Section, 1735 K Street, N.W., Washington, D.C. 20006.
Spatialight common stock is not traded on a national securities exchange or The
Nasdaq Stock Market but are listed on the over-the-counter bulletin board under
the symbol "HDTV." Spatialight's Internet web site is located at
http://www.spatialight.com.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with them which means that we can disclose important information to you by
referring you to these documents. The information incorporated by reference is
an important part of this prospectus and information we later file with the SEC
will automatically update and supersede this information. The following
documents filed by us with the SEC (File No.
000-19828) are incorporated in this prospectus by reference:
o Annual Report on Form 10-KSB for the year ended December 31,
1998, filed on March 31, 1999;
o Quarterly Report on Form 10-QSB for the quarter ended March 31,
1999, filed on May 17, 1999;
o Current Report on Form 8-K, filed on May 21, 1999;
o Current Report on Form 8-K, filed on June 14, 1999;
o Quarterly Report on Form 10-QSB for the quarter ended June 30,
1999, filed on August 16, 1999;
o Quarterly Report on Form 10-QSB for the quarter ended September
30, 1999, filed on November 12, 1999;
o The description of Spatialight's Common Stock contained in
Spatialight's 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
report filed for the purpose of updating that description.
We also incorporate by reference all documents and reports filed by us
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this
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prospectus. We will provide free of charge to each person, including any
beneficial owner, to whom this prospectus is delivered, upon written or oral
request, a copy of any or all of the documents incorporated by reference in this
prospectus. Please direct such requests to Investor Relations, Spatialight,
Inc., 9 Commercial Boulevard, Suite 200, Novato, California 94949. Our telephone
number is (415) 883-1693.
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WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. YOU
SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. THE
INFORMATION IN THIS PROSPECTUS IS CORRECT AS OF THE DATE OF THIS PROSPECTUS.
DELIVERY OF THIS PROSPECTUS AFTER THE DATE INDICATED BELOW DOES NOT MEAN THAT
THE INFORMATION IS STILL CORRECT.
SPATIALIGHT, INC.
COMMON STOCK
814,015 SHARES SUBJECT TO WARRANTS
PROSPECTUS
December 2, 1999
- --------------------------------------------------------------------------------
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses in connection with
the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration fees and Nasdaq
filing fee.
<TABLE>
<CAPTION>
To be Paid
By The
Registrant
----------
<S> <C>
SEC Registration Fee $ 636.46
Accounting fees and expenses $ 7,000
Legal fees and expenses $ 11,000
Miscellaneous expenses $ 2,000
-----------
Total.............................................. $ 20,636.46
===========
</TABLE>
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 New York Business Corporations Law (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.
II-1
<PAGE> 21
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. 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.
See also the undertakings set out in response to Item 17 herein.
II-2
<PAGE> 22
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<S> <C>
3.1* Amended and Restated Certificate of Incorporation
3.2* Bylaws
5.1 Opinion of Gray Cary Ware & Freidenrich LLP
10.1* 1991 Employee Stock Option Plan and Form of Stock Option Agreement
thereunder
10.2* 1993 Nonstatutory Employee Stock Option Plan and Form of Stock Option
Agreement thereunder
10.3* 1993 Nonstatutory Directors Stock Option Plan
10.4* 1999 Stock Option Plan
10.5* Form of Convertible Secured Loan Agreement, dated as of
November 1998, between Spatialight and the eighteen lenders
listed on Exhibit A to such form
10.6* Form of Security Agreement, dated as of November 1998,
between Spatialight and the eighteen lenders listed on
Exhibit A to such form
10.7* Form of Intercreditor Agreement, dated as of November 1998, among
Spatialight, Argyle Capital Management Corporation, Jerry Whitlock, Mansour
Rasnavad, Network Finance Incorporated, Farhad Azima and the eighteen
lenders listed on Exhibit A to such form
10.8* Form of Registration Rights Agreement, dated as of November
1998, between Spatialight and the eighteen lenders listed on
Exhibit A to such form
10.14* Standard Office Lease, dated February 22, 1999, between Dennis A. and Susan
Johann Gilardi and SpatiaLight, Inc.
23.1 Consent of Deloitte & Touche LLP, independent auditors
23.2 Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1)
24.1* Power of Attorney (included in the Signature Page contained in Part II of
the Registration Statement)
27* Financial Data Schedule
</TABLE>
* previously filed
II-3
<PAGE> 23
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933 (the "Securities 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 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) 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 (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained
in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
II-4
<PAGE> 24
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of
the 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.
C. The undersigned Registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus
is sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are
not set forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
D. Insofar as indemnification for liabilities arising under the
Securities 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
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the 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 Securities Act and will be governed by the final
adjudication of such issue.
E. The undersigned Registrant hereby undertakes that:
(1) For the purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Novato, State of California on December 2, 1999.
SPATIALIGHT, INC.
By: /s/ Michael H. Burney
----------------------------------
Michael H. Burney
Chief Executive Officer,
Treasurer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Michael H. Burney Chief Executive Officer, December 2, 1999
- -------------------------------- Treasurer and Director
Michael H. Burney (Principal Executive, Financial
and Accounting Officer)
/s/ Fred R. Hammett* President December 2, 1999
- --------------------------------
Fred R. Hammett
/s/ Robert A. Olins* Director December 2, 1999
- --------------------------------
Robert A. Olins
</TABLE>
II-6
<PAGE> 26
<TABLE>
<S> <C> <C>
/s/ Lawrence J. Matteson* Director December 2, 1999
- --------------------------------
Lawrence J. Matteson
/s/ Steven F. Tripp* Director December 2, 1999
- --------------------------------
Steven F. Tripp
*By: /s/ Michael H. Burrey
----------------------------
Michael H. Burrey
Attorney-in-Fact
</TABLE>
II-7
<PAGE> 27
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<S> <C>
3.1* Amended and Restated Certificate of Incorporation
3.2* Bylaws
5.1 Opinion of Gray Cary Ware & Freidenrich LLP
10.1* 1991 Employee Stock Option Plan and Form of Stock Option Agreement
thereunder
10.2* 1993 Nonstatutory Employee Stock Option Plan and Form of Stock Option
Agreement thereunder
10.3* 1993 Nonstatutory Directors Stock Option Plan
10.4* 1999 Stock Option Plan
10.5* Form of Convertible Secured Loan Agreement, dated as of
November 1998, between Spatialight and the eighteen lenders
listed on Exhibit A to such form
10.6* Form of Security Agreement, dated as of November 1998,
between Spatialight and the eighteen lenders listed on
Exhibit A to such form
10.7* Form of Intercreditor Agreement, dated as of November 1998, among
Spatialight, Argyle Capital Management Corporation, Jerry Whitlock, Mansour
Rasnavad, Network Finance Incorporated, Farhad Azima and the eighteen
lenders listed on Exhibit A to such form
10.8* Form of Registration Rights Agreement, dated as of November
1998, between Spatialight and the eighteen lenders listed on
Exhibit A to such form
10.14* Standard Office Lease, dated February 22, 1999, between Dennis A. and Susan
Johann Gilardi and SpatiaLight, Inc.
23.1 Consent of Deloitte & Touche LLP, independent auditors
23.2 Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1)
24.1* Power of Attorney (included in the Signature Page contained in Part II of
the Registration Statement)
27* Financial Data Schedule
</TABLE>
* previously filed
<PAGE> 1
EXHIBIT 5.1
December 2, 1999
Securities and Exchange Commission
450 Fifth Street, N.W
Washington, D.C. 20549
RE: SPATIALIGHT, INC.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
As legal counsel for Spatialight, Inc., a New York corporation (the "Company"),
we are rendering this opinion in connection with the preparation and filing of a
registration statement on Form S-3 (the "Registration Statement") relating to
the registration under the Securities Act of 1933, as amended, of 814,015 shares
of Common Stock (the "Shares") issuable upon exercise of warrants issued by the
Company on August 5, 1999 and September 15, 1999.
We have examined such instruments, documents and records as we deemed relevant
and necessary for the basis of our opinion herein after expressed. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the 814,015 Shares
issuable upon exercise of the warrants, when issued in accordance with the terms
of the warrants, will be, duly authorized, validly issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and the use of our name wherever it
appears in said Registration Statement.
This opinion is to be used only in connection with the issuance of the Shares
while the Registration Statement is in effect.
Respectfully submitted,
/s/ GRAY CARY WARE & FREIDENRICH LLP
GRAY CARY WARE & FREIDENRICH LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement of Spatialight, Inc. on Form S-3 (Registration No.
333-91225) of our report dated March 24, 1999 (which expresses an unqualified
opinion and includes an explanatory paragraph relating to a going concern
issue), appearing in the Annual Report on Form 10-KSB of Spatialight, Inc. for
the year ended December 31, 1998.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
December 2, 1999
