AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 10, 1996
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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INFINITE MACHINES CORP.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 52-1490422
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification
Organization) Number)
923 Incline Way, #9, P. O. Box 8219
Incline Village, Nevada 89452
(702) 831-4680
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Executive Offices)
-----------------------------
Carle C. Conway
Chairman of the Board and Chief Executive Officer
923 Incline Way, #9, P. O. Box 8219
Incline Village, Nevada 89452
(702) 831-4680
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
<PAGE>
Please send copies of all correspondence to:
Kenneth S. Rose, Esq.
Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, New York 10022-2605
Telephone No. (212) 838-5030
Fax No. (212) 838-9190
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement
becomes effective.
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If the only securities being registered on this Form are to be 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|.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Title of Each Amount to be Proposed Proposed Amount of
Class of Registered Maximum Maximum Registration Fee
Securities Offering Price Aggregate Offering
to be Registered Per Share (1) Price (1)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$.001 par value 189,437 shares $5.25 $994,544 $342.95
- ------------------------------------------------------------------------------------------------
</TABLE>
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- -----------
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457. Pursuant to Rule 457(c), based upon the average of the high
and low sales prices of the Common Stock on the NASDAQ Small-Cap System on
June 7, 1996 of $5.25.
================================================================================
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, as amended, or until this 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>
SUBJECT TO COMPLETION, DATED JUNE 10, 1996.
PROSPECTUS
189,437 SHARES OF COMMON STOCK, $.001 PAR VALUE
INFINITE MACHINES CORP.
This Prospectus relates to the public offering of shares of common stock
(the "Shares") of Infinite Machines Corp. (the "Company") which may be offered
by certain shareholders (the "Selling Shareholders"). The Shares were issued by
the Company upon conversion by the Selling Shareholders of the Company's 7%
convertible subordinated debentures. The Shares be offered from time to time in
transactions in the over-the-counter market, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices relating to prevailing
market prices or at negotiated prices. The Selling Shareholders may effect such
transactions by selling the Shares to or through broker/dealers, and such
broker/dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom such broker/dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker/dealer might
be in excess of customary commissions). To the extent required information
regarding the specific Shares to be offered to and sold, the names of the
Selling Shareholders, the public offering price, the names of any such agent,
dealer or underwriter and any applicable commissions or discount with respect to
any particular offer is set forth herein or will be set forth in an accompanying
Prospectus supplement. See "Plan of Distribution."
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by the Company.
---------------------------------
THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
See "Risk Factors" at page 12.
----------------------------------
The Shares are traded over-the-counter and are quoted through the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") on the
Small Cap Market System under the symbols "IMCI". On June 7, 1996 the last sales
price of the Shares on the NASDAQ Small Cap System was $5.375.
--------------------------------------
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The Selling Shareholders and any broker/dealers, agents or underwriters
that participate with the Selling Shareholders in the distribution of the shares
may be deemed to be "underwriters" within the meaning of Section 2(ii) of the
Securities Act of 1933 as amended (the "Securities Act") and any commissions
received by them and any profit on the resale of the Shares purchased by them
may be deemed to be underwriting commissions or discounts under the Securities
Act.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is _____________ __, 1996.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR BY ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY THE SHARES TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION MAY NOT LAWFULLY BE MADE.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed with the Commission by the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at its principal offices at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of these materials can also be obtained at prescribed rates from the
Public Reference Section of the Commission at its principal offices in
Washington, D.C., set forth above. Additional information with respect to this
offering may be provided in the future by means of supplements or "stickers" to
the Prospectus.
The Company has filed a Registration Statement on Form S-3 (including all
amendments and supplements thereto, the "Registration Statement") with the
Commission under the Securities Act with respect to the Shares offered hereby.
This Prospectus, which forms a part of the Registration Statement, does not
contain all of the information set fourth in the Registration Statement and the
Exhibits filed therewith, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. Statements contained herein
concerning the provisions of such documents are not necessarily complete and, in
each instance, reference is made to the Registration Statement or to the copy of
such document filed as an Exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference. Copies of the Registration Statement and the Exhibits thereto
can be obtained upon payment of a fee prescribed by the Commission or may be
inspected free of charge at the public reference facilities and regional offices
referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference: (1) the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1995, as amended on Form
10-KSB/A, filed pursuant to Section 13 of the Exchange Act, (2) the Company's
Quarterly Report on Form 10-QSB for the fiscal quarter ended March 31, 1996
filed pursuant to Section 13 of the Exchange Act, (3) the Company's Proxy
Statement dated June 9, 1995 for the 1995 Annual Meeting of Stockholders of the
Company filed pursuant to Section 14 of the Exchange Act, and (4) the
description of the Company's Shares contained in its Registration Statement on
Form S-1 filed with the Commission on September 14, 1993.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the
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<PAGE>
offering of the Shares, shall be deemed to be incorporated by reference herein
and to be part hereof from the respective dates of the filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the Registration Statement of which it is a
part to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus or the Registration Statement of which
it is a part.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or
verbal request of such person, a copy of any or all of the documents
incorporated herein by reference, other than exhibits to such documents.
Requests should be addressed to: Secretary, Infinite Machines Corp., 923 Incline
Way, #9, P. O. Box 8219, Incline Village, Nevada 89452; telephone number (702)
831-4680.
THE COMPANY
Infinite Machines Corp. (the "Company" or "Infinite") achieved its first
sales in July 1994. Prior to that time, the Company was a development stage
enterprize from its inception in 1986, engaged exclusively in the development of
rotary engines primarily for marine applications. In October 1993, the Company
consummated its initial public offering. In July 1994, Infinite acquired HGG
Laser Fare, Inc. ("Laser Fare"), a Rhode Island corporation. Laser Fare is
engaged in two activities: contract laser materials processing and advanced
manufacturing technology.
The Company's contract laser materials processing consists of laser
machining, laser welding, laser drilling and laser engraving. Lasers excel at
applications which cannot be done with traditional machining processes. Lasers
are used to cut holes of dimensions and shapes of which mechanical drills are
incapable and in materials which mechanical cutting equipment cannot penetrate.
Lasers can also produce various shaped holes and can be programmed to cut
multiple holes in a cost efficient manner. Lasers can easily cut advanced
materials like carbon fiber or Kevlar composites or metal matrix composites. In
most instances, lasers are used when more conventional processes may not work or
are too costly.
Laser Fare was a pioneer in laser materials processing and it has developed
certain of the equipment and processes which it employs. Through its Advanced
Technology Group, Laser Fare provides research and development services, in the
laser and advanced manufacturing fields, to industrial customers. Laser Fare has
been awarded several Cooperative Research and Development Arrangements
("CRADAs") with governmental laboratories in which Laser Fare is the industrial
partner. These CRADAs are a key part
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<PAGE>
of the federal government's technology transfer program. The goal of the program
is to transfer and implement technology developed in Department of Defense and
in Department of Energy National Laboratories to industry for the purpose of
increasing the international competitiveness of the United States manufacturing
industry. The Company receives no cash compensation for participating in the
CRADAs but does receive ownership rights in the developed technology that can be
used internally, licensed to others, or developed further. The Company is
obligated pursuant to the CRADAs to contribute a combination of its labor and
facilities in fulfillment of its material obligations. At present, and on a
projected basis, the Company's participation in CRADA programs will not require
it to incur any large material incremental labor or facilities expense.
Currently, the Advanced Technology Group is focused on two major projects
in addition to its CRADA participation; one is to develop methods to reduce the
time required to develop new consumer products (involving rapid prototyping and
rapid tool fabrication). The second project relates to new technology approaches
for gas turbine ignition. Both of these projects will span a period of several
years and are funded on an ongoing basis by major U.S. industrial firms.
In September 1995, the Company suspended operations of its rotary engine
business due to continuing delays in the EPA's implementation of proposed marine
engine emission regulations.
Furthermore, in December 1995, the Company disposed of its wholly-owned
subsidiary, FTD Infinite Limited, through a stock transaction.
HGG Laser Fare, Inc.
The Company acquired HGG Laser Fare, Inc. (Laser Fare) on July 1, 1994 for
520,000 shares of restricted Company Common Stock. During 1995 an additional
89,502 shares were issued based upon Laser Fare's results of operations during
1994. Up to an additional 160,000 shares may be issued based upon Laser Fare's
operating performance during the first six months of 1996.
General Description of the Business
Laser Fare is engaged in the activities of contract laser materials
processing and advanced manufacturing technology.
Laser Fare's contract laser materials group has 15 multi-axis laser
machining centers of various powers and capabilities, which are used to perform
a wide variety of manufacturing operations. Examples of operations performed are
welding and drilling of gas turbine airfoils, machining of combustion chamber
components for aircraft engines, welding of automotive transmission gears,
welding of disposable cutting devices used in arthroscopic surgery, cutting
special lenses for sunglasses and engraving on decorative, medical and
industrial components. In addition to laser processing, some assembly
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<PAGE>
operations are performed. Laser Fare is certified by all the major domestic
producers of gas turbines and is FAA certified for repairs of aircraft gas
turbine engines components. During 1995, four new laser machines were acquired
and several older machines were upgraded. Management believes that these
investments will improve productivity and expand capacity and capability.
Laser machining was first used in the advanced technology and automotive
segments of industry during the early 1980s. Since that time, practical
knowledge of the process has become more widespread. Today, lasers are commonly
used in the aerospace, medical, power generation, automotive, and many other
industries. These groups, aerospace, medical and power generation, represent
approximately 75% of Laser Fare's sales volume.
Acceptance of laser materials processing is growing rapidly as knowledge of
the process becomes more wide spread and as laser capabilities are increasingly
incorporated into production designs.
Advanced Technology
Laser Fare was a pioneer in the laser materials processing business and has
participated heavily in the growth of the industry. Key staff members and the
Company itself are well known and highly regarded within the industry. The
Company has built a technical business from these contacts and other
relationships. These agreements and working relationships have allowed the
Company to engage contractually with major U.S. corporations and National
Laboratories, such as Los Alamos and Lawrence Livermore Laboratory. Currently,
Laser Fare participates in two major industrial sponsored programs and in
several with the National Laboratories. The current industrial programs involve
development of rapid manufacturing systems and advanced jet engine ignition
techniques. These programs are funded through a variety of sources including,
Cooperative Research and Development Agreements (CRADA) with the Department of
Energy, through government contracts of other types and through contracts from
large corporate partners.
Sales and Marketing
Historically, Laser Fare has been strongly aligned with the aerospace
industry, with well over half of its work performed on jet engine parts. Since
Infinite's acquisition, a marketing effort has been undertaken to broaden the
customer base. In 1996, the medical equipment industry will be Laser Fare's
largest customer group, followed by the power generation industry, including jet
engines. Other customers are in the fields of electronics, automotive and
silverware. The Company's customers include such companies as General Electric
Corporation, United Technologies Corporation and Allied Signal Corporation.
9
<PAGE>
Laser Fare markets directly to customers and through independent sales
representatives. The bulk of sales have been generated in the northeastern,
southeast and midwest areas of the United States.
Competitive Factors
The laser contract materials processing industry consists of a fairly large
number of small, mostly privately owned companies which Laser Fare competes with
based upon its reputation for quality and timely performance and cost factors.
Infinite Engines Corp.
The Company has completed development of a 110 hp rotary engine. The engine
is compact, lightweight and, most importantly, produces low levels of exhaust
pollutants. Management believes that when strict exhaust emission regulations
become effective for boats and personal watercraft, a demand for engines of this
type will develop. The EPA has recently indicated that its proposed marine
engine emission regulations will not be issued until mid, 1996 at the earliest.
In addition, the EPA has indicated that the regulations as issued may not be as
restrictive as previously indicated in drafts circulated for comment.
The Company has not been able to obtain orders for the engine, and
management believes that the likelihood of receiving significant orders is
small, until the stricter emission regulations become effective. Therefore, in
September 1995 the Company decided to suspend operations of the Engine
subsidiary in order to reduce cash demands. Management believes there may be
future demand for an engine of the type the Company has been developing and
engine work may be reinstituted at an appropriate time in the future. In the
meantime, the Company intends to concentrate application of its resources to the
expansion of its laser manufacturing technology and laser application
businesses.
All development and manufacturing efforts relative to the Company's engines
have been stopped and the personnel have been laid off. Sales efforts relative
to the engine are continuing at the senior management level and primarily
involve ongoing monitoring of potential market demand. Costs of this sales
effort are minimal. Continuing engine related costs are restricted to those
associated with storage and preservation of the engine hardware and equipment
and for compliance with continuing leases.
In light of developments during the fourth quarter of fiscal 1995,
management determined that the most likely commercial transaction which it may
enter into in connection with its engines would be the licensing of
manufacturing rights to others and would not involve the Company's participation
in the manufacturing of engines. Accordingly, management has concluded that
significant doubt exists as to whether recovery of its investment in the engine
technologies and equipment will be fully realized.
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<PAGE>
As a consequence, the fourth quarter of fiscal 1995 operating results included a
pre-tax charge to write down the engine assets to their estimated net realizable
value.
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RISK FACTORS
An investment in the securities offered hereby is highly speculative and
subject to a high degree of risk and only those who can bear the risk of the
entire loss of their investment should participate. Prospective investors should
carefully consider the following factors, in analyzing this offering.
Accumulated Deficit; Working Capital Deficit; Independent Auditor's Report
Comments Regarding Company's Ability to Continue as a Going Concern; Need For
Additional Financing
At March 31, 1996, the Company had an accumulated deficit of $8,258,065 and
a working capital deficit of approximately $57,938 and losses from operations
are continuing. Further, the report of the Company's independent auditors in
connection with the Company's consolidated financial statements at December 31,
1995 contains an explanatory paragraph as to the Company's ability to continue
as a going concern. Among the factors cited by the independent auditors as
raising substantial doubt as to the Company's ability to continue as a going
concern are that the Company has suffered recurring losses and that its current
liabilities exceeded current assets. The Company's planned research and
development activities, is expected to result in substantial expenditures and
losses for the foreseeable future, and there can be no assurance that the
Company will ever have significant revenues or achieve profitable operations.
Development Stage Company; Possibility of Delays or Inability to Sell and
Deliver Initial Product and Proposed Products
The Company has been in the development stage since its formation in
October 1986. Potential investors should be aware of the problems, delays,
expenses and difficulties encountered by an enterprise in the Company's stage of
development, many of which may be beyond the Company's control. These include,
but are not limited to, unanticipated problems relating to product development,
testing, regulatory compliance, manufacturing delays and costs, the competitive
and regulatory environment in which the Company plans to operate, marketing
problems and additional costs and expenses that may exceed current estimates.
The Company has been engaged primarily in research and development activities
since its inception and has not yet demonstrated that it can sell, produce and
ship products in sufficient quantity or provide services in such amounts to be
profitable. There can be no assurance that the Company's products or services
will prove to be commercially viable or can be successfully marketed, or that
the Company will ever achieve significant revenues.
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Liquidity Problems; Additional Financing Requirements
The Company currently lacks the liquid assets to discharge its operating
expenses. In the past the Company has met its capital and operating requirements
through public and private sales of equity and through borrowings from a
shareholder and unaffiliated lenders. The Company's continued operations will
depend upon revenues, if any, from operations and the availability of equity or
debt financing. The Company has no commitments for additional financing.
Further, there can be no assurance that the Company will be able to generate
levels of revenues and cash flows sufficient to fund operations or that the
Company will be able to obtain additional financing on satisfactory terms, if at
all. If such be the case the Company would be forced to curtail or even suspend
its remaining operations.
Suspension of Operations of Engines Subsidiary
The Company has been unable to obtain contracts for its low emission rotary
engine and based on indications that the United States Environmental Protection
Agency (the "EPA") may not issue its proposed stricter marine engine emissions
regulations until mid 1996 at the earliest (later than previously projected by
the EPA), in September 1995 the Company suspended operations of its Engines
subsidiary. Though work on the rotary engine may be reinstated if market
conditions change, the rotary engine represented the only product being
developed by the Company. The other businesses in which the Company is engaged
all involve the rendition of services and at the moment the fortunes of the
Company are dependent on the success of these other lines of business. By
becoming dependent on the continuing businesses, the Company is more vulnerable
to failure if any of the surviving lines do not produce as expected.
Vulnerability of Service Businesses
With the suspension of the Engines operations the Company's sole revenues
will be generated by the services offered by the Company's other divisions,
namely, laser contract material processing services and laser consulting
services. The Company has yet to establish itself as a recognized leader in
providing any of these services, most of which are being rendered under
short-term contracts which can be terminated or not renewed by the party or
parties receiving the services. In addition, the business of providing services
is always subject to interruptions by external factors which can further impair
revenues. For all of these reasons there can be no assurance that the Company's
revenues from its service businesses will improve or even that its existing
revenues will be maintained.
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Uncertainty of Laser Business
The Company's current laser business is subject to a number of risks
including the need for additional financing to fund acquisitions and expansion,
technical obsolescents of its processes and equipment, increased competition and
dependence upon, and need for, qualified personnel. There is no assurance that
the Company's current laser business will operate profitable in future periods.
Dependence Upon, and Need for, Key Personnel; Possible Adverse Effect if Key
Personnel Are Not Retained
The Company's success will depend, in large part, on its continued ability
to attract and retain highly qualified engineering, marketing and business
personnel. Competition for qualified personnel may be intense and the Company
will be required to compete for such personnel with companies having
substantially greater financial and other resources. The Company's inability to
attract and retain such personnel could have a material adverse effect upon its
business. Further, the Company is dependent on certain management personnel for
the operation and development of its business, particularly Carle C. Conway, the
Chairman of the Board, Chief Executive Officer, and a principal beneficial
shareholder of the Company and Clifford G. Brockmyre, the President, Chief
Operating Officer and a principal beneficial shareholder of the Company.
Although the Company has obtained key man insurance in the amount of $1,000,000
on the life of Mssrs. Conway and Brockmyre, the loss or a reduction in the time
devoted by Mr. Conway or Mr. Brockmyre to the Company's business could have a
material adverse effect on the Company's business.
Intense Competition and Rapid Technological Change
The Company is engaged in rapidly evolving and highly competitive fields.
Competition is intense and expected to increase. Most of the companies in
competition with the Company have substantially greater capital resources,
research and development staffs, facilities and experience in the furnishing of
services. These companies, or others, could undertake extensive research and
development in laser technology and related fields which could result in
technological changes not yet adopted by the Company. There can be no assurance
that the Company's competitors will not succeed in developing technologies in
these fields which will enable them to offer laser services more advanced and
less costly than any offered by the Company or which could render the Company's
technologies obsolete.
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Lack of Patent Protection; Patent Infringement
The Company holds no patents and has not filed any patent applications for
its technology or products. The Company employs various methods, including
confidentiality agreements with employees to protect its proprietary know-how.
Such methods may not afford complete protection, however, and there can be no
assurance that these agreements will not be breached, that the Company would
have adequate remedies for any breach or that the Company's trade secrets will
not otherwise become known to or independently developed by competitors. If
patent applications are filed by the Company, there can be no assurance that any
patents will be granted, or that if granted such patents would provide the
Company with meaningful protection from competition. In addition, there can be
no assurance that the application of the Company's technologies will not
infringe upon the patent rights of others. The Company has not conducted any
patent searches or obtained an opinion of patent counsel regarding its
technologies. The Company may be forced to expend substantial resources if it is
required to defend against any such infringement claims.
Control of the Company
The officers, directors and principal shareholders of the Company control
an aggregate of approximately 41.7% of the Company's outstanding Shares, and
thus are effectively able to elect all of the Company's directors and to control
the affairs of the Company.
Loss Carryforward
At December 31, 1995, the Company had approximately $9,819,000 in available
net operating losses for federal tax reporting purposes which may be carried
forward to offset future years taxable income subject to certain limitations.
Due to a greater than 50% change in stock ownership during 1993 the utilization
of net operating loss carryforward generated to the date of such change is
limited. Moreover, other shareholder changes including the possible issuance by
the Company of additional shares in one or more financings may further limit the
utilization of the operating loss carryforward.
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RECENT DEVELOPMENTS
Private Placement Financing.
During 1996 The Company issued $200,000 of Subordinated Convertible
Debentures in private placement transactions. The Debentures bear interest at
the rate of 7% per annum until maturity five years following issuance. The
Debentures are convertible into Shares at a conversion price equal to 80% of the
average closing bid price of the Shares on the ten trading days preceding
conversion. Through June 7, 1996, $100,000 of principal amount of such
debentures had been converted into 38,929 Shares.
SELLING SHAREHOLDERS
The following table shows the names of the Selling Shareholders, the Shares
owned beneficially by each of them, as of June 6, 1996, the number of Shares
that may be offered by each of them pursuant to this Prospectus and the number
of Shares and percentage of outstanding Shares to be owned by each of them after
the completion of this Offering, assuming all of the Shares being offered are
sold. None of the Selling Shareholders were an officer or director of the
Company or, to the knowledge of the Company, had any material relationship with
the Company within the past three years.
<TABLE>
<CAPTION>
Percentage
Number of of Shares
Shares Number of Number of Shares Beneficially
Beneficially Shares that Beneficially Owned Owned After
Selling Shareholders Owned May Be Sold After the Offering the Offering
- -------------------- ----- ----------- ------------------ ------------
<S> <C> <C> <C> <C>
Avarian Partners 47,222 47,170 52 *
Brad Butler 38,929 38,929 0 *
Thomas Chess 10,836 9,531 1,305 *
Glen Emig 18,197 7,943 10,254 *
Craig Fischer 18,417 18,417 0 *
David Lanter 13,641 9,137 4,504 *
Barry Shemaria 8,306 7,902 404 *
Reed Slatkin 31,447 31,447 0 *
Richard Sowers 18,961 18,961 0 *
</TABLE>
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* less than one-percent
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PLAN OF DISTRIBUTION
The Company will not receive any proceeds from this Offering. The Shares
may be offered from time to time in transactions in the over-the-counter market,
in negotiated transactions, or a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time of sale, at
prices relating to prevailing market prices or at negotiated prices. The Selling
Shareholders may effect such transactions by selling the Shares to or through
broker/dealers, and such broker/dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders and/or the
purchasers of the Shares for whom such broker/dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker/dealer might be in excess of customary commissions). The Selling
Shareholders and any underwriters, dealers or agents that may participate in the
distribution of the Shares may be deemed to be "underwriters" under the
Securities Act and any profit on the sale of the Shares by them and any
discounts, commissions or concessions received by any such underwriters, dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act.
At the time a particular offer of the Shares is made, to the extent
required, a Prospectus Supplement will be distributed which will set forth the
number of Shares being offered, the names of the Selling Shareholders, and the
terms of the offering, including the name or names of any underwriters, dealers
or agents, the purchase price paid; by any underwriter for Shares purchased from
the Selling Shareholders, any discounts, commissions or other items constituting
compensation received from the Selling Shareholders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers, and the
proposed selling price to the public.
In order to comply with the applicable securities laws of certain states,
if any, the Shares will be offered or sold through registered or licensed
brokers or dealers in those states. In addition, in certain states the Shares
may not be offered or sold unless they have been registered or qualified for
sale in such states or an exemption from such registration or qualification
requirement is available and such offering or sale is in compliance therewith.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of securities may not simultaneously engage in market
making activities with respect to such securities for a period of two business
days prior to the commencement of such distribution. In addition and without
limiting the foregoing, the Selling Shareholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Rules 10b-2, 10b-5, 10b-6 and 10b-7, in
connection with transactions in the Shares during the effectiveness of the
Registration Statement of which this Prospectus is a part. All of the foregoing
may affect the marketability of the Shares.
17
<PAGE>
The Company will pay all of the expenses, including, but not limited to,
fees and expenses of compliance with state securities or "blue sky" laws,
incident to the registration of the Shares other than underwriting discounts and
selling commissions, and fees or expenses, if any, of counsel or other advisors
retained by the Selling Shareholders. The expenses payable by the Company are
estimated to be $10,000.
TRANSFER AGENT
The Transfer Agent and Registrar for the Shares is American Stock Transfer
Company, 40 Wall Street, 46th Floor, New York, New York 10005.
REPORTS TO SHAREHOLDERS
The Company distributes annual reports to its shareholders, including
financial statements examined and reported on by independent auditors, and will
provide such other reports as management may deem necessary or appropriate to
keep shareholders informed of the Company's operations.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the
Company by Morse, Zelnick, Rose & Lander, LLP, 450 Park Avenue, New York, New
York 10022-2605.
EXPERTS
The 1995 financial statements of the Company appearing in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1995, as amended,
have been audited by Freed Maxick Sachs & Murphy PC, independent auditor, as set
forth in the report thereon (which contains an explanatory paragraph with
respect to the Company's ability to continue as a going concern as described in
Note 2 to the financial statements) incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of said firm as experts in accounting and
auditing.
18
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Expenses in connection with the issuance and distribution of the securities
being registered hereunder other than underwriting commissions and expenses, are
estimated below.
SEC Registration Fee ..................................... $ 342.95
Printing expenses ........................................ $ 2,500.00*
Accounting fees and expenses ............................. $ 1,000.00*
Legal fees and expenses .................................. $ 5,000.00*
Miscellaneous expenses ................................... $ 1,157.05*
Total ................................................ $ 10,000.00*
-----------
* estimated
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law grants to the Company
the power to indemnify the officers and directors of the Company, under certain
circumstances and subject to certain conditions and limitations as stated
therein, against all expenses and liabilities incurred by or imposed upon them
as a result of suits brought against them as such officers and directors if they
act in good faith and in a manner they reasonably believe to be in or not
opposed to the best interests of the Company and, with respect to any criminal
action or proceeding, have no reasonable cause to believe their conduct was
unlawful.
The Company's Certificate of Incorporation provides as follows:
"NINTH: A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) or any breach of the director's
duty of loyalty to the Corporation or its shareholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
TENTH: (a) Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by
II-1
<PAGE>
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer, of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that, except as provided in
paragraph (b) hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to indemnification conferred in
this Section shall be a contract right and shall include the right to be paid by
the Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such expenses incurred by a
director or officer (in his or her capacity as a director or officer and not in
any other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be made
only upon delivery to the Corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer, to repay all amounts so advanced if it
shall ultimately be determined that such director or officer is not entitled to
be indemnified under this Section or otherwise. The Corporation may, by action
of its Board of Directors, provide indemnification to employees and agents of
the Corporation with the same scope and effect as the foregoing indemnification
of directors and officers.
(b) Right to Claimant to Bring Suit. If a claim under paragraph (a) of this
Section is not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation to
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<PAGE>
indemnify the claimant for the amount claimed but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard or conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
(c) Non-Exclusivity of Rights. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify against such expense, liability or loss under
the Delaware General Corporation Law."
Item 16. Exhibits
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Morse, Zelnick, Rose & Lander, LLP as to
legality of the securities being registered.*
23.1 Consent of Freed Maxick Sachs & Murphy, PC*
23.3 Consent of Morse, Zelnick, Rose & Lander, LLP
(included in Exhibit 5.1)
25.1 Power of Attorney*
- ----------
* Filed herewith.
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<PAGE>
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;
(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; and
(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) 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 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.
(4) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of a registration
statement in reliance upon Rule 430A and contained in the 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.
(5) For the purpose of determining any liability under the Securities, each
post-effective amendment that contains a form of prospectus shall be deemed to
be the initial bona find offering thereof.
B. 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 Commission such indemnification is
against public policy as expressed in the Securities
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<PAGE>
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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in Incline Village, Nevada
on the 7th day of June 1996.
INFINITE MACHINES CORP.
By:/s/Carle C. Conway
-----------------------------------
Carle C. Conway, Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Carle C. Conway, Kenneth S. Rose, or either one
of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all pre- or post-effective amendments to
this Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitutes, may lawfully do or cause to be done by virtue hereof.
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in he
capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/ Carle C. Conway Director, Chairman of the Board June 7, 1996
- --------------------------- and Chief Executive Officer
Carle C. Conway
/s/ Clifford G. Brockmyre Director, President June 7, 1996
- --------------------------- and Chief Operating Officer
Clifford G. Brockmyre
/s/ Daniel T. Landi Principal Financial June 7, 1996
- --------------------------- and Accounting Officer
Daniel T. Landi
/s/ Robert J. Sherwood Director June 7, 1996
- ---------------------------
Robert J. Sherwood
/s/ James R. Rowe. Director June 7, 1996
- ---------------------------
James R. Rowe
II-7
EXHIBIT 5.1
MORSE, ZELNICK, ROSE & LANDER
A LIMITED LIABILITY PARTNERSHIP
450 PARK AVENUE
NEW YORK, NEW YORK 10022-2605
212 838 1177
FAX 212 838 9190
June 10, 1996
Infinite Machines Corp.
Post Office Box 8219
923 Incline Way #9
Incline Village, Nevada 89452
Re: Registration Statement on Form S-3
Dear Sirs:
We have acted as counsel to Infinite Machines Corp., a Delaware corporation
(the "Company"), in connection with the preparation of a registration statement
on Form S-3 (the "Registration Statement") filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"), to
register the sale by certain selling stockholders of 189,437 shares of Common
Stock, par value $.001 per share (the "Common Stock"), of the Company.
In this regard, we have reviewed the Certificate of Incorporation of the
Company, as amended, resolutions adopted by the Company's Board of Directors,
resolutions adopted by the Company's Shareholders, the Registration Statement,
the other exhibits to the Registration Statement and such other records,
documents, statutes and decisions as we have deemed relevant in rendering this
opinion. Based upon the foregoing we are of the opinion that:
Each share of Common Stock included in the Registration Statement has been
duly and validly issued and is fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 5A to the
Registration Statement. In giving this opinion, we do not hereby admit that we
are acting within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the SEC thereunder.
Very truly yours,
/s/ Morse, Zelnick, Rose & Lander, LLP
--------------------------------------
Morse, Zelnick, Rose & Lander, LLP
EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report, dated March 8, 1996, which appears in the
annual report on Form 10-KSB of Infinite Machines Corp. for the year ended
December 31, 1995.
/s/ FREED, MAXICK, SACHS & MURPHY, PC
-------------------------------------
FREED, MAXICK, SACHS & MURPHY, PC
June 10, 1996
Buffalo, New York
