<PAGE>
As filed with the Securities and Exchange Commission on June 20, 1997.
Registration No. 333-_________.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
MIDISOFT CORPORATION
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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WASHINGTON 3679 91-1345532
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE) (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
</TABLE>
1605 N.W. SAMMAMISH ROAD, SUITE 205
ISSAQUAH, WASHINGTON 98027
TELEPHONE: 425/391-3610
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
MELINDA A. BRYDEN, CHIEF FINANCIAL OFFICER
1605 N.W. SAMMAMISH ROAD, SUITE 205
ISSAQUAH, WASHINGTON 98027
TELEPHONE: 425/391-3610
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPY TO:
DAVID C. ROOS, ESQ.
BERLINER ZISSER WALTER & GALLEGOS, P.C.
SUITE 4700
1700 LINCOLN STREET
DENVER, COLORADO 80203
TELEPHONE: 303/830-1700
_____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING PURSUANT
TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX AND LIST
THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE
REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c) UNDER
THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE
REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
CALCULATION OF REGISTRATION FEE
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APPROVED PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE MAXIMUM OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE (1) FEE
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Common Stock(2).................... 675,000 $ 1.50 $ 1,012,500 $ 306.82
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
(2) To be offered by certain selling shareholders.
_______________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 20, 1997
675,000 SHARES
MIDISOFT CORPORATION
COMMON STOCK
Midisoft Corporation (the "Company") has issued 650,000 shares of Common
Stock in connection with the settlement of a class action lawsuit (the "Class
Action") instituted against the Company and certain individual defendants by
certain purchasers of the Company's Common Stock (the "Class Members"). In
addition, Raymond Bily, the Company's former Chairman and an individual
defendant in the Class Action, has transferred 25,000 shares of Common Stock in
connection with settlement of the Class Action. The 675,000 shares of Common
Stock have been issued or transferred, as the case may be, to Steve W. Berman
(the "Custodian") in his capacity as custodian for the Class Members and their
legal counsel. (Class Members and their legal counsel are sometimes referred to
herein as the "Selling Shareholders.")
The Custodian will distribute the 675,000 shares of Common Stock to the
Selling Shareholders as soon as practicable following the date of this
Prospectus. Thereafter, Selling Shareholders may offer the shares of Common
Stock distributed to them for sale as principals for their own accounts at any
time, and from time to time, in the over-the-counter market at prices prevailing
at the time of sale, commencing on the date of this Prospectus. The Company has
undertaken to keep the registration statement of which this Prospectus forms a
part current until such time as the Selling Shareholders have sold their shares
of Common Stock. The registration statement of which this Prospectus forms a
part must be current at any time during which a Selling Shareholder sells shares
of Common Stock, and a current Prospectus must be delivered to a purchaser of
the Common Stock when a Selling Shareholder sells such securities. See "Selling
Shareholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of Common
Stock by the Selling Shareholders. The Company has agreed to pay the expenses
of registering the shares of Common Stock offered hereby. See "Selling
Shareholders."
On June 16, 1997, the closing bid price of the Common Stock was $1.50 per
share. The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "MIDI".
----------------------
SEE "RISK FACTORS" ON PAGE 4 FOR A DISCUSSION OF MATERIAL RISKS WHICH
PROSPECTIVE INVESTORS SHOULD CONSIDER.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION 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
<PAGE>
AVAILABLE INFORMATION
The Company's annual report on Form 10-KSB for the year ended December 31,
1996, proxy statement filed on April 30, 1997, quarterly report on Form 10-QSB
for the quarter ended March 31, 1997, filed by the Company with the Commission
pursuant to the Exchange Act are hereby incorporated by reference into this
Prospectus. All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold, or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded to the extent that a statement contained herein or in any other
document subsequently filed and incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, other than exhibits to such documents. Request for such
copies should be directed to Melinda A. Bryden, Chief Financial Officer,
Midisoft Corporation, 1605 N.W. Sammamish Road, Suite 205, Issaquah, Washington
98027, Telephone: (425) 391-3610.
ADDITIONAL INFORMATION
The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities act with respect to the
securities offered by this Prospectus. This Prospectus, which constitutes a
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement. 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 therewith, which may be
inspected without charge at the principal office of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of the material contained
therein may be obtained from the Commission upon payment of applicable copying
charges. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein are not necessarily complete, and
in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement.
The Company is subject to the reporting and other informational
requirements of the Exchange Act and in accordance therewith, files reports and
other information with the Commission. Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at the offices of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's regional offices at Northwest Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World
Trade Center, New York, New York 10048. The Commission also maintains a Web
site on the Internet that contains reports, proxy and information statements and
other information regarding issuers, including the Company, that file
electronically with the Commission. The address of such site is
http://www.sec.gov. Copies of such materials can also be obtained by written
request to the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
2
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. SEE "RISK FACTORS" FOR
IMPORTANT INFORMATION PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER.
THE COMPANY
Midisoft designs, develops and markets interactive audio software for the
control and use of sound on personal computers. The Company's products add
music, voice and other audio content to a variety of PC environments and link
musical instruments directly to personal computers. Since the Company's
inception in 1986, the market for the Company's products has expanded from a
small segment of the PCs used by computer hobbyists to virtually every computer
shipped by all systems manufacturers. The emergence of the Internet has
accelerated the growth of this market and has created the facility through which
sound, voice messages and music can be used to enhance communications sent
world-wide.
Midisoft provides an environment for creating, editing and controlling all
three audio formats specified for multimedia computers: MIDI, Wave audio and CD
audio. The Company markets its products to (i) distributors and resellers,
which directly supply the retail distribution channel, (ii) original equipment
manufacturers ("OEM"), which "bundle" one or more of Midisoft's products with
their own products and (iii) direct sales to end users, businesses and schools.
The Company believes that its core technologies and products provide a
foundation to address key aspects of the rapidly growing PC multimedia
marketplace.
THE OFFERING
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Common Stock offered by the Selling Shareholders. . . . . 675,000 shares
Common Stock to be outstanding after this offering(1) . . 5,957,550 shares
Use of proceeds . . . . . . . . . . . . . . . . . . . . . The shares of Common Stock are being offered by the
Selling Shareholders. The Company will not receive
any of the proceeds from the sale of
the shares of Common Stock offered hereby.
Nasdaq National Market symbol . . . . . . . . . . . . . . MIDI
__________
</TABLE>
(1) Does not give effect to (i) the exercise of currently outstanding options
and warrants to purchase up to 1,392,187 shares of Common Stock or (ii) the
conversion of 190 shares of Series A Convertible Preferred Stock which were
outstanding as of the date hereof. See "Description of
Securities-Preferred Stock."
SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
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(UNAUDITED)
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
---------------------------------------------- ----------------------------
1996 1995 1994 1997 1996
----------- ----------- ----------- ----------- ----------
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STATEMENTS OF OPERATIONS DATA:
Revenues. . . . . . . . . . . . . . . . $ 3,113 $ 5,420 $ 4,989 $537 $512
Gross profit. . . . . . . . . . . . . . 1,142 2,930 3,907 210 91
Operating income (loss) . . . . . . . . (5,834) (12,511) (12) (978) (1,370)
Net income (loss) . . . . . . . . . . . (5,716) (12,132) 118 (972) (1,325)
Net income (loss) per share . . . . . . $ (1.22) $ (2.60) $ .03 $ (.18) $ (.28)
Weighted average shares outstanding . . 4,687 4,665 3,850 5,535 4,663
DECEMBER 31, MARCH 31,
------------ ---------
1996 1997
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BALANCE SHEET DATA:
Working capital $ 1,399 $ 649
Total assets 4,091 2,634
Shareholders' equity 2,275 1,318
</TABLE>
The Company was incorporated in Washington in September 1986. Its
principal executive offices are located at 1605 North West Sammamish Road, Suite
205, Issaquah, Washington, and its telephone number is (425) 391-3610. Unless
the context otherwise requires, references in this Prospectus to the "Company"
and "Midisoft" refer to Midisoft Corporation.
3
<PAGE>
RISK FACTORS
IN EVALUATING THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD CONSIDER
CAREFULLY THE FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER INFORMATION
PRESENTED IN THIS PROSPECTUS.
VOLATILITY OF STOCK PRICE; RESTATEMENT OF FINANCIAL STATEMENTS
Since commencing trading on July 19, 1993, the Company's Common Stock has
experienced significant price fluctuations from a high closing bid price, as
reported by Nasdaq, of $17.50 during the fourth quarter of 1994 to a low closing
bid price of $1.13 during the second quarter of 1997. The Company believes that
the decline in the market price of the Common Stock reflects the public's
reaction to a variety of factors, including recent losses, the commencement of
the Class Action in March 1995, the Company's inability to exploit certain
technologies and assets which were acquired in 1995, and the Company's
announcement on July 24, 1995 that it would restate its financial statements for
fiscal year 1994 and the first quarter of 1995. The major component of the
restatement was the reversal of revenue recognized for products shipped to
resellers and distributors during 1994. Such revenues related to retail
products returned by distributors during 1995 and also to retail products held
at freight forwarders for shipment to distributors subsequent to December 31,
1994. After giving effect to the restatement, the Company had revenues of
$4,989,000 and net income of $118,000, or $.03 per share, for 1994, compared to
revenues of $5,800,000 and net income of $536,000, or $.14 per share, as
previously reported. Announcements concerning the development or distribution
of new products by the Company may also be a factor that causes price
fluctuations. Other factors that may cause the market price of the Common Stock
to fluctuate include quarterly fluctuations in results of operations, market
conditions specific to the interactive multimedia industry and market conditions
in general. In addition, in recent years the stock market in general has
experienced significant price and volume fluctuations. These fluctuations,
which are often unrelated to the operating performance of specific companies,
have had a substantial effect on the market price for many technology and small
capitalization companies such as the Company. Factors such as those cited
above, as well as other factors that may be unrelated to the operating
performance of the Company, may adversely affect the price of the Common Stock.
See "Price Range of Common Stock."
RECENT LOSSES AND RESTRUCTURING CHANGES
Although the Company generated net income of $48,000, $175,000 and $118,000
in 1992, 1993 and 1994, respectively, operating losses of $12,000, $12,511,000,
$5,834,000 and $978,000 were incurred during 1994, 1995, 1996 and the three
months ended March 31, 1997, respectively. The Company believes that these
recent losses are attributable to delays in its completing new products,
decreased orders of the Company's products by certain distributors, a
significant decline in OEM sales, increased amortization expenses associated
with the capitalization of its software and increased legal and accounting fees
arising out of the defense of a shareholder lawsuit filed against the Company in
March of 1995. The Company has substantially reorganized its operations and has
refocused its resources upon the Company's core competence in sound and music.
In September 1995, the Company reduced its work force to decrease costs as its
initial step in reorganization. During the third and fourth quarter of 1995,
the Company recorded charges of $2.4 million and $1.5 million, respectively, for
restructuring associated with the Company's determination that certain software
assets were not compatible with the reorganized product strategy. The Company
has made significant steps to reduce the negative cash flow from operations by
decreasing total personnel by approximately 40%, subleasing a portion of its
facility, eliminating outside contractors and reducing its product line to allow
maximum effectiveness of sales personnel and marketing expenditures. There can
be no assurance that the Company's profitability will be restored or that, if
restored, such profitability will be maintained.
4
<PAGE>
ABILITY TO CONTINUE AS GOING CONCERN
The Company's independent auditor has included a paragraph in its report
accompanying the audited financial statements of the Company as of December 31,
1996, which states that the Company's losses from operations and negative cash
flows from operations raise substantial doubt about the Company's ability to
continue as a going concern. Management has taken a number of actions during
the current fiscal year to improve the Company's cash position and operating
results, which include obtaining a $400,000 line of credit and securing a number
of new OEM relationships which the Company expects will improve operating
results beginning in the second and third quarters of 1997. There can, however,
be no assurance that the Company will be profitable in the future or that
borrowings under the line of credit, together with any funds provided by
operations and presently available capital, will be sufficient to fund the
Company's ongoing operations.
AVAILABILITY OF ADDITIONAL CAPITAL
As of March 31, 1997, the Company had current assets of approximately $2.0
million, including cash and accounts receivable of approximately $677,000. Also
at March 31, 1997, the Company had current liabilities of approximately $1.3
million. Although the Company obtained a $400,000 line of credit during May
1997, the Company will be able to fund its continuing operations only if it is
successful in either raising additional capital or achieving positive cash flow
from operations. However, there can be no assurance that the Company will
realize cash flow from operations or secure additional capital on terms
acceptable to the Company.
LITIGATION
On May 9, 1997, Ask Me Multimedia Corporation ("AMM") served a Demand for
Arbitration (the "Arbitration") on the Company. The Arbitration was filed with
the American Arbitration Association in Seattle, Washington. The Arbitration
alleges that in connection with the Company's purchase of certain AMM assets in
early 1995, the Company breached certain of the representations, warranties and
covenants made to AMM. The Arbitration seeks damages in excess of $1.1 million
for, among other things, breach of contract. The Company intends to vigorously
defend the Arbitration and to assert all available counterclaims against AMM.
The Company believes it has certain valid defenses and counterclaims to the
Arbitration, however, the Company cannot predict the outcome of the Arbitration.
Given the Company's limited working capital, a significant damage award against
the Company could have a material adverse affect on future operations. In
addition, the existence of the Arbitration may adversely affect the Company's
ability to raise additional capital.
RISKS ASSOCIATED WITH DISTRIBUTION STRATEGY
The Company's sales and marketing efforts are currently focused on its
three channels of distribution: distributors and resellers, OEMs and direct
sales. Gross profit percentages generated from sales of products in each of
these channels vary significantly. To the extent the Company's sales become
concentrated in one or two of the channels of distribution, such concentration
could significantly affect the Company's revenues and profitability. OEM sales
generate higher gross profit percentages than sales through other channels since
there are minimal sales and manufacturing costs associated with OEM licenses.
Greater reliance on sales to distributors and resellers or direct sales could
therefore reduce the Company's overall gross profit percentages. OEM sales
accounted for approximately 35% of the Company's total revenues in 1993, 55% in
1994, 55% in 1995, 33% in 1996 and 50% for the first quarter of 1997. A
majority of the license agreements the Company currently has with OEMs are
relatively short-term (less than two years) and typically do not require the
OEMs to purchase a specific number of products from the Company. Should OEMs
with existing license agreements not renew such agreements or in the event the
Company is unable to expand the number of OEM licensees, the Company's revenues
and profitability would be materially adversely affected. The insolvency or
business failure of OEM licensees, or a material increase in uncollectible
receivables generated from sales to OEMs, could have a material adverse effect
on the Company's operating results.
5
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DEPENDENCE ON EXISTING PRODUCTS
The Company's growth and profitability are dependent on, among other
things, the Company's ability to improve the performance, and expand the market
share, of its existing products. Historically, a significant portion of the
Company's revenues has been generated from sales of its MIDI-based music
software product line. The introduction of competing software products
embodying new technologies or the emergence of new industry standards could
render the Company's existing products obsolete or unmarketable. The Company's
future success will depend upon its ability to enhance its current products to
keep pace with technological developments and to respond to evolving end-user
requirements. Should market acceptance of the Company's existing products
decline, the Company could be required to significantly alter its product lines,
which could have a material adverse effect on the Company's results of
operations. The development of competitive products by others could also place
price and profit margin pressure on the Company if new products or enhancements
are not introduced.
TECHNOLOGICAL CHANGE; RISKS ASSOCIATED WITH DEVELOPMENT OF NEW PRODUCTS
The markets for the Company's products are characterized by rapidly
changing technology and frequent new product introductions. Accordingly, the
Company believes its future prospects depend on its ability to develop and
introduce in a timely fashion new products that achieve market acceptance.
There can be no assurance that the Company will be able to identify, design,
develop, market or support new products successfully or that the Company will be
able to respond effectively to technological changes or product announcements by
competitors. In the past, the Company occasionally experienced delays in the
introduction of new products and product enhancements. Delays in new product
introductions or product enhancements could adversely affect the Company. There
can be no assurance that new products or product enhancements developed by the
Company will achieve market acceptance.
RISKS ASSOCIATED WITH ACQUISITIONS
During late 1994 and the first half of 1995, the Company aggressively
pursued development and acquisition of new software products with business,
education and entertainment applications which extended beyond the Company's
core expertise in sound and music. Significant resources were applied in
attempting to acquire, develop and market these new products, including the
software products acquired from AMM and Knowledge Engineering, Inc. ("KEI").
The Company's investments in AMM and KEI were written-off during 1995, and
management has returned the Company's focus to sound and music products.
Although it is not current management's strategy to aggressively pursue
acquisition of other companies, should the Company in the future again pursue
growth through acquisition, there can be no assurance that the acquired
companies, technologies and product lines will contribute to the Company's
profitability. Moreover, such acquisitions could involve a number of risks,
including the diversion of management's attention to the assimilation of the
acquired entities, adverse short-term effects on the Company's operating results
and the amortization of acquired intangible assets. Further, the Company may in
whole or in part fund acquisitions through the issuance of Common Stock or
Preferred Stock. Such issuances could result in substantial dilution of
shareholders' ownership interests in the Company. See "Risk Factors-Legal
Proceedings".
MANAGEMENT OF GROWTH
From 1991 through the second quarter of 1995, the Company experienced
significant growth that placed significant demands on the Company's
administrative, operational and financial resources. Managing the Company's
financial controls and systems has been a particular challenge for the Company,
and the Company has had to restate its financial statements in the past. From
1992 through the first two quarters of 1995, the Company significantly increased
its executive, marketing, technical and support staff. However in September
1995, the Company reduced total personnel by 40% and took other measures
calculated to maximize effectiveness of sales and marketing personnel and
decrease the Company's negative cash flow from operations. Failure to manage
growth and other changes in its business could have a material adverse impact on
the Company's results of operations and financial condition.
6
<PAGE>
COMPETITION
The computer software industry is intensely competitive and is
characterized by rapid technological advances, evolving industry standards and
technological obsolescence. The Company's products currently compete in the
interactive multimedia computer audio software markets. Many of the Company's
current competitors have longer operating histories and have greater financial,
technical, sales, marketing and other resources than the Company. In addition,
there exist a number of large, well-capitalized software companies that could,
should they choose to do so, market interactive multimedia audio software in
direct competition with the Company. The Company believes that the principal
competitive factors in the market for interactive multimedia software include
support for various multimedia standards, integration of multimedia audio with
other interactive media formats, ease of use, ease of installation and
reliability, as well as price, service and support, and market presence.
Although the Company believes that it competes favorably with respect to certain
of these factors, there can be no assurance that other present or potential
competitors will not develop additional products or alternative technologies
which make the Company's products obsolete. There can be no assurance the
Company will be able to compete successfully against its competitors or that the
competitive pressures faced by the Company will not adversely affect its
financial performance.
CUSTOMER CONCENTRATION
The Company's revenues and accounts receivable have historically been
attributable to a limited number of key customers, the identity of which may
vary from year to year. To the extent the Company continues to depend upon a
limited number of key customers for a material percentage of its revenues and
accounts receivable, the loss of one or more of such significant customers could
materially adversely affect the Company's results of operations. The Company
has extended more favorable credit terms to its key customers in the past and
may continue to do so in the future.
DEPENDENCE ON INTERNATIONAL SALES
The Company derived approximately 32%, 29%, 17% and 19% of its total
revenues from sales to various international customers during 1993, 1994, 1995
and 1996, respectively. The Company expects that international sales will
continue to represent a significant percentage of its total revenues. The
Company's international operations are subject to special risks, including
exposure to regulatory requirements, political and economic instability, trade
restrictions and, indirectly, currency fluctuations. A weakening in the value
of foreign currencies relative to the U.S. dollar could have an adverse impact
on the effective price of the Company's products in its international markets.
DEPENDENCE ON KEY PERSONNEL
The Company's success will depend to a significant extent on its executive
officers, including Larry Foster, Chairman of the Board, President and Chief
Executive Officer, and Melinda Bryden, Vice President of Finance and Chief
Financial Officer. The loss of either of these officers could have an adverse
effect on the Company. The success of the Company is also dependent upon its
ability to attract and retain highly qualified software developers and marketing
personnel. Competition for such personnel is intense and there can be no
assurance that the Company will be able to recruit and retain such personnel.
PROTECTION OF PROPRIETARY RIGHTS
Neither the Company nor any of its directors, officers or shareholders own
any patents or patent rights respecting products developed or marketed by the
Company or any aspect of the Company's development process. The Company relies
on a combination of copyright and trade secret protection, nondisclosure
agreements and licensing agreements to establish and protect its proprietary
rights. The Company will attempt to keep the results of its research and
development program proprietary, but may not be able to prevent others from
using some or all
7
<PAGE>
of such information or technology with or without compensation. Midisoft is
aware that unauthorized copying occurs within the software industry,
particularly outside the United States, and if a greater amount of unauthorized
copying of the Company's products were to occur, the Company's operating results
could be adversely affected. Should any competitor successfully copy the
Company's products, or successfully introduce and market products that perform
functions identical or similar to those performed by the Company's products, the
Company may lose some or all of any competitive advantage which it might
otherwise have had.
ABILITY TO ISSUE PREFERRED STOCK
The Company's Articles of Incorporation authorize the issuance of up to
2,500,000 shares of Preferred Stock, of which 2,498,900 shares are available for
issuance in the future. The Preferred Stock may be issued in series with the
material terms of any series determined by the Board of Directors. Such
material provisions would likely include dividend rights, conversion features,
voting rights, redemption rights and liquidation preferences which may be
superior to those of the Common Stock. Further, the Preferred Stock may be
issued with voting, conversion or other terms determined by the Board of
Directors which could be used to delay, discourage or prevent a change in
control of the Company. Such terms could include, among other things, dividend
payment requirements, redemption provisions, preferences as to dividends and
distributions and preferential voting rights. See "Description of Securities."
ABSENCE OF DIVIDENDS
The Company does not anticipate paying any cash dividends on its Common
Stock in the foreseeable future. The Company intends to retain profits, if any,
to fund growth and expansion. See "Dividend Policy."
SHARES ELIGIBLE FOR FUTURE SALE
Sales of a substantial number of restricted shares of the Company's Common
Stock in the public market could adversely affect the market price of the Common
Stock. All of the shares of Common Stock issued and outstanding (including the
shares offered by the Selling Shareholders) are either freely tradeable or are
eligible for sale in the public market, subject to compliance with Rule 144
under the Securities Act of 1933, as amended. Rule 144 generally provides that
beneficial owners of shares who have held such shares for two years may sell
within a three-month period a number of shares not exceeding the greater of 1%
of the total outstanding shares or the average trading volume of the shares
during the four calendar weeks preceding such sale.
LIMITATION OF LIABILITY AND INDEMNIFICATION
The Company's Articles of Incorporation provide that directors of the
Company shall not be personally liable for monetary damages to the Company or
its stockholders for a breach of fiduciary duty as a director, subject to
limited exceptions. The Articles of Incorporation also provide that officers
and directors shall be entitled to be indemnified by the Company with respect to
certain expenses or obligations which they may incur. Although such limitation
of liability does not affect the availability of equitable remedies such as
injunctive relief or rescission, the presence of these provisions in the
Articles of Incorporation could prevent the recovery of monetary damages against
directors of the Company. Since the Company's inception, a total of
approximately $498,000 has been paid by the Company pursuant to its obligation
to indemnify officers and directors against certain expenses and obligations.
RISKS RELATING TO FORWARD-LOOKING STATEMENTS
This Prospectus contains and incorporates by reference certain
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include the plans and
objectives of management for future operations, including plans and objectives
relating to (i) the development of new music and strategic software products,
(ii) the expansion of domestic and international marketing, sales and
distribution programs, (iii) the development and maintenance of software license
arrangements with hardware
8
<PAGE>
manufacturers, (iv) the continued protection of proprietary technologies and (v)
the ability to fund continued operations out of existing working capital,
additional capital infusion and cash flow from future operations. The
forward-looking statements included herein are based on current expectations
that involve a number of risks and uncertainties. These forward-looking
statements are based on assumptions that the Company will continue to develop
and introduce new music and strategic software products on a timely basis, that
rapid changes in technology will not make the Company's products obsolete or
otherwise reduce their ability to compete in the marketplace, that competitive
conditions within the industry will not change materially or adversely, that the
use of multimedia PCs in homes and small offices will continue to grow, that
management's decision to re-focus the Company's resources on music and sound
products will reduce certain expenses from the levels which were experienced in
1995 and 1996, and that there will be no material adverse change in the
Company's operations or business. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes that the assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate, and there can be no assurance that the forward-looking information
will prove to be accurate. In addition, as disclosed elsewhere under "Risk
Factors," the business and operations are subject to substantial risks that
increase the uncertainty inherent in such forward-looking statements. In light
of the significant uncertainties inherent in the forward-looking information
included herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives or plans
of the Company will be achieved.
9
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of Common
Stock offered hereby.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock was quoted on the Nasdaq SmallCap Market since
its initial public offering on July 19, 1993 through July 26, 1994, and
thereafter the Common Stock has been quoted on the Nasdaq National Market under
the symbol "MIDI". The following table sets forth the range of high and low
closing bid prices, as reported by Nasdaq, July 19, 1993 through March 31, 1997.
The prices set forth reflect interdealer quotations, without retail markups,
markdowns or commissions, and do not necessarily represent actual transactions.
HIGH LOW
---- ---
1993
----
Third quarter (commencing July 19, 1993) . . . $ 9 1/4 $ 4 1/2
Fourth quarter . . . . . . . . . . . . . . . . 16 8 1/2
1994
----
First quarter. . . . . . . . . . . . . . . . . 13 3/4 9 1/4
Second quarter . . . . . . . . . . . . . . . . 14 1/2 9
Third quarter. . . . . . . . . . . . . . . . . 16 1/2 10 5/8
Fourth quarter . . . . . . . . . . . . . . . . 17 1/2 7
1995
----
First quarter. . . . . . . . . . . . . . . . . 12 1/4 8
Second quarter . . . . . . . . . . . . . . . . 9 1/4 7 1/2
Third quarter. . . . . . . . . . . . . . . . . 8 1/4 4 1/2
Fourth quarter . . . . . . . . . . . . . . . . 5 1/2 2 1/4
1996
----
First quarter. . . . . . . . . . . . . . . . . 3 1/2 1 5/8
Second quarter . . . . . . . . . . . . . . . . 9 3/8 2 3/16
Third quarter. . . . . . . . . . . . . . . . . 5 1/8 3 1/4
Fourth quarter . . . . . . . . . . . . . . . . 5 1/8 2 1/8
1997
----
First quarter. . . . . . . . . . . . . . . . . 2 1/2 1 1/8
On June 16, 1997, the closing bid price of the Common Stock was $1.50.
DIVIDEND POLICY
The Company has never paid any cash dividends on its Common Stock. It is
the current policy of the Company not to pay cash dividends on the Common Stock.
Any payment of cash dividends in the future will be dependent upon the Company's
financial condition, results of operations, current and anticipated cash
requirements, plans for expansion, as well as other factors that the Board of
Directors deems relevant. The Company is not permitted to pay dividends for so
long as shares of its Series A Convertible Stock is outstanding.
10
<PAGE>
SELLING SHAREHOLDERS
In connection with the settlement of the Class Action, a total of 675,000
shares of Common Stock have been issued or transferred, as the case may be, to
the Custodian. As soon as practicable following the date of this Prospectus,
the 675,000 shares of Common Stock will be distributed to the Class Members in
proportion to their recognized losses. In addition, a portion of the 675,000
shares of Common Stock will be distributed to legal counsel for the Class
Members. The Class Members and their legal counsel (collectively, the "Selling
Shareholders") may resell the shares of Common Stock in the manner described
herein. See "Plan of Distribution."
PLAN OF DISTRIBUTION
The 675,000 shares of Common Stock will be distributed to the Selling
Shareholders in an offering exempt from registration under the Securities Act of
1933 pursuant to Section 3(a)(10) thereof in settlement of the Class Action.
Thereafter, sale of Common Stock by the Selling Shareholders may be effected
from time to time in transactions (which may include block transactions by or
for the account of the Selling Shareholders) in the over-the-counter market or
in negotiated transactions or a combination of such methods of sale. The
Company will not receive any proceeds from the sale of Common Stock by the
Selling Shareholders. Sales may be made at fixed prices which may be changed,
at market prices prevailing at the time of sale or at negotiated prices. The
Selling Shareholders may effect such transactions by selling their securities
directly to purchasers, through broker-dealers acting as agents for the Selling
Shareholders or to broker-dealers who may purchase shares as principals and
thereafter sell the securities from time to time in the over-the-counter market
in negotiated transactions or otherwise. Such broker-dealers, if any, may
receive compensation in the form of discounts, concessions or commissions from
the Selling Shareholders or the purchasers for whom such broker-dealers may act
as agents or to whom they may sell as principals or otherwise (which
compensation as to a particular broker-dealer may exceed customary commissions).
The Registration Statement of which this Prospectus forms a part must be current
at any time during which a Selling Shareholder sells shares of Common Stock.
The Company has agreed that it shall maintain a current Registration Statement
for two years following the date of this Prospectus in order to allow Selling
Shareholders to sell their shares of Common Stock.
Pursuant to Regulation M under the Securities Exchange Act of 1934,
participants in a distribution of securities of a company may be prohibited or
restricted from engaging in certain market making activities with respect to any
securities of that company. Accordingly, the market making activities of any
broker-dealer participating in a distribution of the Common Stock owned by the
Selling Shareholders may be prohibited or restricted from making a market in the
Company's Common Stock until participation in the distribution has been
completed. The Selling Shareholders and broker-dealers, if any, acting in
connection with such sale might be deemed to be underwriters within the meaning
of Section 2(11) of the Act and any commission received by them and any profit
on the resale of the securities might be deemed to be underwriting discounts and
commissions under the Act.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 10,000,000 shares
of Common Stock, no par value per share, and 2,500,000 shares of Preferred
Stock, no par value per share. As of the date hereof, 5,957,550 shares of Common
Stock are issued and outstanding and 190 shares of Series A Preferred Stock are
issued and outstanding.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of shareholders. The Company's
Articles of Incorporation deny cumulative voting rights in the election of
directors. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Subject to preferences that may be applicable to any
outstanding Preferred Stock, holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available therefor. See "Dividend Policy." In the event of a
liquidation, dissolution or winding up of the Company, holders of Common Stock
are
11
<PAGE>
entitled to share ratably in the assets remaining after payment of liabilities
and the liquidation preference of any outstanding Preferred Stock. Holders of
Common Stock have no preemptive, conversion or redemption rights. All of the
outstanding shares of Common Stock are fully paid and non-assessable.
PREFERRED STOCK
The Board of Directors has the authority, without further shareholder
approval, to issue up to 2,500,000 shares of Preferred Stock from time to time
in one or more series, to establish the number of shares to be included in each
such series, and to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations or restrictions
thereof. The issuance of Preferred Stock may have the effect of delaying or
preventing a change in control of the Company. The issuance of Preferred Stock
could decrease the amount of earnings and assets available for distribution to
the holders of Common Stock or could adversely affect the rights and powers,
including voting rights, of the holders of the Common Stock. In certain
circumstances, such issuances could have the effect of decreasing the market
price of the Common Stock.
SERIES A PREFERRED STOCK. In September 1996, the Company designated 1,500
shares of Preferred Stock as Series A Convertible Preferred Stock (the "Series A
Preferred Stock"). The Company issued 1,100 shares of Series A Preferred Stock
in October 1996 at a price of $1,000 per share. The Series A Preferred Stock is
convertible at the holder's option into shares of Common Stock at a price which
is equal to the lesser of 85% of the closing bid of the Common Stock as of the
date of conversion or $4.25, which represents 100% of the closing bid price of
the Common Stock as of the date of issuance of the Series A Preferred Stock.
The Series A Preferred Stock is also subject to mandatory conversion two years
after its date of Issuance upon the foregoing conversion terms. Holders of the
Series A Preferred Stock are entitled to an 8% cumulative dividend payable in
Common Stock at the time of conversion. Upon liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, the holders of the
Series A Preferred Stock shall have preference and priority over the Common
Stock and any other class or series of stock ranking junior to the Series A
Preferred Stock upon liquidation, dissolution or winding up, for payment out of
the assets of the Company or proceeds thereof available for distribution to
shareholders of $1,000 per share plus all unpaid and accumulated dividends.
After such payment, the holders of Preferred Stock shall be entitled to no other
distributions. If, in the case of any such liquidation, dissolution or winding
up of the Company, the assets of the Company or proceeds thereof shall be
insufficient to make the full liquidation payment of $1,000 per share plus all
accumulated dividends on the Preferred Stock and full liquidation payments on
any other class or series of Preferred Stock ranking as to liquidation on a
parity with the Series A Preferred Stock, then such assets and proceeds shall be
distributed among the holders of the Series A Preferred Stock and any such other
Preferred Stock ratably. The Company may not reissue any share of Series A
Preferred Stock following its conversion into Common Stock or redemption. As of
May 21, 1997, a total of 910 shares of Series A Preferred Stock had been
converted into an aggregate of 591,639 shares of Common Stock, and 190 shares of
Series A Preferred Stock were issued and outstanding.
LEGAL MATTERS
The validity of the securities offered will be passed upon for the Company
by Berliner Zisser Walter & Gallegos, P.C., Denver, Colorado.
EXPERTS
The financial statements of Midisoft Corporation appearing in Midisoft
Corporation's Annual Report on Form 10-KSB for the year ended December 31, 1996,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon (which contained an explanatory paragraph with respect to
substantial doubt about the Company's ability to continue as a going concern)
included therein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in auditing and accounting.
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-KSB, as amended, of Midisoft Corporation as of
December 31, 1995 and for the year then ended have been incorporated in reliance
on the report of Price Waterhouse, LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
12
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE.
--------------------
TABLE OF CONTENTS
--------------------
PAGE
----
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents
by Reference. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Prospectus Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Price Range of Common Stock . . . . . . . . . . . . . . . . . . . . . . . 10
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Selling Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . 11
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
675,000 SHARES
MIDISOFT CORPORATION
COMMON STOCK
-----------------
PROSPECTUS
-----------------
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Other expenses in connection with this offering which will be paid by
Midisoft Corporation (hereinafter in this Part II, the "Company") are estimated
to be substantially as follows:
AMOUNT
PAYABLE
BY THE
ITEM COMPANY*
- ---- --------
S.E.C. Registration Fees . . . . . . . . . . . . . . . . . . $ 306.82
State Securities Laws (Blue Sky) Legal Fees. . . . . . . . . 2,000.00*
Printing and Engraving . . . . . . . . . . . . . . . . . . . 3,000.00*
Legal Fees . . . . . . . . . . . . . . . . . . . . . . . . . 5,000.00*
Accounting Fees and Expenses . . . . . . . . . . . . . . . . 3,000.00*
Transfer Agent's Fees and Cost of Certificates . . . . . . . 500.00*
Miscellaneous Expenses . . . . . . . . . . . . . . . . . . . 1,193.18
----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000.00*
-----------
-----------
____________________
* Estimated for the purpose of this filing.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation, as amended, require the Company to
indemnify and hold harmless to the greatest extent permissible by Washington law
any officer or director of the Company who is made a party to any proceeding as
a result of that person's service to the Company as an officer or director.
(Reference is made to the Articles of Incorporation filed as Exhibits 3.1.1,
3.1.2 and 3.1.3 to this Registration Statement.) The Washington Business
Corporation Act permits a corporation to provide such indemnity except where the
proceeding arises from (i) acts or omissions of the person which involve
intentional misconduct or a knowing violation of law, (ii) unlawful payment of
dividends and certain other distributions, or (iii) a transaction from which the
officer or director personally received a benefit in money, property, or
services to which the director was not legally entitled.
Apart from rights afforded by the Company's Articles of Incorporation, an
officer or director may be indemnified against judgments, penalties, fines,
settlements and reasonable expenses actually incurred if the officer or director
conducted himself in good faith and either (i) reasonably believed his conduct
to be in the corporation's best interest, or (ii) reasonably believed the
conduct to be at least not opposed to the corporation's best interest. In the
case of a criminal proceeding, the officer or director must have had no
reasonable cause to believe the conduct was unlawful.
The Washington Business Corporation Act also requires that a corporation
indemnify a director who is wholly successful, on the merits or otherwise, in
the defense of any proceeding to which the director was a party because of being
a director of the corporation, against reasonable expenses incurred by the
director in connection with the proceeding.
Indemnification may also be granted pursuant to the terms of agreements
which may be entered into in the future pursuant to a vote of shareholders or
directors. The statutory provisions cited above and the Articles of
Incorporation also grant the power to the Company to purchase and maintain
insurance which
II-1
<PAGE>
protects its officers and directors against any liabilities incurred in
connection with their services in such positions, and such a policy may be
obtained by the Company in the future.
ITEM 16. EXHIBITS.
The following is a complete list of Exhibits filed as part of this
Registration Statement and which are incorporated herein.
EXHIBIT NO.
- -----------
< 4.1 Form of specimen certificate for Common Stock of the Company.
+ 4.2 Certificate of Designation of the Rights and Preferences of the
Series A Convertible Preferred Stock
* 5. Opinion of Berliner Zisser Walter & Gallegos, P.C., regarding
legality of the securities covered by this Registration
Statement.
* 23.1 The consent of Berliner Zisser Walter & Gallegos, P.C., to the
use of its opinion with respect to the legality of the securities
covered by this Registration Statement and to the references to
such firm in the Prospectus filed as part of this Registration
Statement will be included in Exhibit 5.
* 23.2 Consent of Ernst & Young, LLP, independent certified public
accountants for the Company.
* 23.3 Consent of Price Waterhouse, LLP.
* 24. The Power of Attorney is included in the signature page of this
Registration Statement.
_______________________
* Filed herewith.
< Incorporated by reference from the Company's Registration Statement on
Form SB-2 (S.E.C. File No. 33-62468-S).
+ Incorporated by reference from the Company's Form 10-QSB filed November
14, 1996 (S.E.C. File No. 000-22172).
________________________
ITEM 17. UNDERTAKINGS.
(a) RULE 415.
The undersigned small business issuer hereby undertakes that it will:
(1) File, during any period in which offers or sales are
being made, a post-effective amendment to this 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.
(2) For the purpose of determining any liability under the
Securities Act of 1933, treat each such post-effective amendment as 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-2
<PAGE>
(3) File a post-effective amendment to remove from registration any
of the securities being registered which remain unsold at the termination
of the offering.
(e) INDEMNIFICATION.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act, and is
therefore unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(i) RULE 430A.
The undersigned Registrant hereby undertakes that it will:
(i) For determining any liability under the Securities Act of
1933, treat 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 under Rule
424(b)(1) or (4) or 497(h) under the Securities Act as part of this
Registration Statement as of the time the Commission declared it
effective.
(ii) For determining any liability under the Securities Act of
1933, treat each post-effective amendment that contains a form of
Prospectus as a new registration statement, and that offering of the
securities at that time as the initial bona fide offering of those
securities.
II-3
<PAGE>
SIGNATURES
In accordance with 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 authorized this Registration
Statement or Amendment to be signed on its behalf by the undersigned in the City
of Issaquah, State of Washington, on June 17, 1997.
MIDISOFT CORPORATION
By: /s/ LARRY FOSTER
----------------------------------------
Larry Foster, Chairman of the Board,
President and Chief Executive Officer
Each person whose signature appears below constitutes and appoints Larry
Foster, his attorney-in-fact, with the power of substitution, for him in any and
all capacities, to sign any amendments to this Registration Statement, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorney-in-fact, or his substitute or substitutes, may
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment was signed by the following persons in the
capacities and on the dates stated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ LARRY FOSTER Chairman of the Board, President June 17, 1997
- ------------------------ and Chief Executive Officer
Larry Foster
/s/ MELINDA A. BRYDEN Vice President-Finance and June 17, 1997
- ------------------------ Chief Financial Officer
Melinda A. Bryden (Principal Accounting Officer)
/s/ JOHN BAUER Director June 17, 1997
- ------------------------
John Bauer
/s/ MARSHA MURRY Director June 17, 1997
- ------------------------
Marsha Murry
/s/ A. PETER PARSONS Director June 17, 1997
- ------------------------
A. Peter Parsons
/s/ STEPHEN SEDMAK Director June 17, 1997
- ------------------------
Stephen Sedmak
II-4
<PAGE>
[Letterhead]
June 19, 1997
Midisoft Corporation
1605 N.W. Sammarnish Rd., Suite 205
Issaquah, Washington 98027
Re: Registration Statement on Form S-3
(S.E.C. File No. 333-______) Covering
Public Offering of 675,000 Shares of
Midisoft Corporation Common Stock by
Certain Selling Shareholders
-------------------------------------
Gentlemen:
We have acted as counsel to Midisoft Corporation, a Washington
corporation (the "Company"), in connection with the proposed public
offering of 675,000 shares of Common Stock (the "Shares") to be offered
and sold by certain selling securityholders, all in accordance with the
registration provisions of the Securities Act of 1933, as amended.
In such capacity, we have examined, among other documents, the
Registration Statement on Form S-3 (File No. 333-_______) filed by the
Company with the Securities and Exchange Commission on or about the date
hereof (as the same may be further amended from time to time, the
"Registration Statement"), covering the public offering of the
above-described securities.
Based on the foregoing and on such further examination as we have
deemed relevant and necessary, we are of the opinion that:
<PAGE>
Midisoft Corporation
June 19, 1997
Page 2
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Washington.
2. The Shares have been legally and validly authorized under the
Articles of Incorporation of the Company, as amended, and are duly and
validly issued, outstanding, and fully paid and nonassessable securities
of the Company.
We hereby consent to the use of our name and to the references to
our firm beneath the caption "LEGAL MATTERS" in the Prospectus forming a
part of the Registration Statement, and to the filing of a copy of this
opinion as Exhibit No. 5 thereto.
Very truly yours,
<PAGE>
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Midisoft
Corporation for the registration of 675,000 shares of its common stock and to
the incorporation by reference therein of our report dated March 13, 1997,
with respect to the financial statements of Midisoft Corporation included in
its Annual Report (Form 10-KSB) for the year ended December 31, 1996, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Seattle, Washington
June 17, 1997
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated March 27, 1996 appearing on page 16 of Midisoft Corporation's Annual
Report on Form 10-KSB/A for the year ended December 31, 1996. We also consent
to the references to us under the headings "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Seattle, Washington
June 18, 1997
