<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1998.
REGISTRATION STATEMENT NO. 333-__
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------------
NETRIX CORPORATION
(Exact name of registrant as specified in its charter)
------------------------------------------------------
DELAWARE 54-1345159
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13595 DULLES TECHNOLOGY DRIVE
HERNDON, VIRGINIA 20171
(703) 742-6000
-----------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------------
LYNN C. CHAPMAN
13595 DULLES TECHNOLOGY DRIVE
HERNDON, VIRGINIA 20171
(703) 742-6000
------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
____________________________
COPY TO:
DAVID SYLVESTER, ESQ.
BRENT B. SILER, ESQ.
WILLIAM F. WINSLOW, ESQ.
HALE AND DORR LLP
1455 PENNSYLVANIA, N.W.
WASHINGTON, D.C. 20004
TELEPHONE: (202) 942-8400
TELECOPY: (202) 942-8484
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes
effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ______
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
______________________________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Each Maximum Maximum
Class of Amount Offering Aggregate Amount of
Securities to to be Price per Offering Registration
be Registered Registered Unit Price Fee(1)
- ----------------- ---------- --------- ------------- ---------------
<S> <C> <C> <C> <C>
Common Stock,
$.05 par value 1,890,000
per share shares $3.125 $5,906,250(1) $1,742
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) and based upon the average of the high and low
prices for the Common Stock on May 26, 1998 reported on the Nasdaq National
Market.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
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 THE 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 MAY 29, 1998
PROSPECTUS
1,890,000 Shares
NETRIX CORPORATION
Common Stock
_____________________
All of the shares of common stock, par value $.05 per share ("Common
Stock"), of Netrix Corporation (the "Company") offered hereby (the "Shares") are
being sold by certain stockholders of the Company (the "Selling Stockholders").
See "Selling Stockholders." The shares covered by this Prospectus were issued
to the Selling Stockholders in connection with a private placement whereby the
Company issued and sold 1,750,000 shares of Common Stock at a price of $1.25 per
share and issued a warrant to purchase an additional 140,000 shares of Common
Stock for $1.75 per share.
The Company will bear all expenses incurred in effecting the registration
of the Shares covered by this Prospectus, including all registration and filing
fees, listing fees and fees and expenses of counsel and accountants for the
Company but excluding (i) any brokerage fees, selling commissions or
underwriting discounts incurred by the Selling Stockholders in connection with a
sale under the Registration Statement of which this Prospectus is a part and
(ii) the fees and expenses of any counsel retained by the Selling Stockholders.
The Shares covered by this Prospectus may be sold from time to time by the
Selling Stockholders, or by their pledgees, donees, transferees or other
successors in interest, on the Nasdaq National Market, in the over the counter
market, through the writing of options on the Shares, in ordinary brokerage
transactions, in negotiated transactions, or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution".
The Selling Stockholders and intermediaries through whom the Shares are
sold may be deemed "underwriters" within the meaning of Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Shares offered, and any
profits realized or commissions received may be deemed underwriting
compensation. The Company and the Selling Stockholders have agreed to certain
indemnification arrangements with respect to the offering. See "Plan of
Distribution".
The Common Stock is traded on the Nasdaq National Market under the symbol
"NTRX". On May 26, 1998, the closing sale price of the Common Stock on the
Nasdaq National Market was $3.00 per share.
______________________
<PAGE>
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
______________________
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 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 May 29, 1998
<PAGE>
TABLE OF CONTENTS
Available Information..........................................................2
Incorporation of Certain Documents by Reference................................2
Special Note Regarding Forward-looking Information.............................3
The Company....................................................................3
Risk Factors...................................................................4
Use of Proceeds................................................................7
Selling Stockholders...........................................................8
Plan of Distribution...........................................................9
Legal Matters.................................................................10
Experts.......................................................................10
<PAGE>
AVAILABLE INFORMATION
Netrix Corporation (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials also may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Common Stock of the Company is traded on the
Nasdaq National Market. Reports and other information concerning the Company
may be inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 with respect to the Shares (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus does not contain
all of the information set forth in the Registration Statement and the exhibits
and schedules thereto, as certain items are omitted in accordance with the rules
and regulations of the Commission. For further information pertaining to the
Company and the Shares, reference is made to such Registration Statement and the
exhibits and schedules thereto, which may be inspected without charge at the
office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of which may be obtained from the Commission at prescribed rates. The
Commission also makes electronic filings publicly available on the Internet
within 24 hours of acceptance. The Commission's Internet address is
http://www.sec.gov. The Commission's Web site also contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER WOULD
BE UNLAWFUL. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
-2-
<PAGE>
(2) The Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1998;
(3) The Company's Amended Current Report on Form 8-K/A filed May 19, 1998;
(4) The Company's Registration Statement on Form 8-A filed August 5, 1992,
registering the Common Stock under Section 12(g) of the Exchange Act.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering of the Common Stock registered hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing 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 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 statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents incorporated by reference into this Prospectus
(without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). Requests for such copies should
be directed to Netrix Corporation, 13595 Dulles Technology Drive, Herndon,
Virginia 20171, telephone (703) 742-6000.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this Prospectus and in the documents incorporated
herein constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act and Section 2B of the Exchange Act. Without limiting the
foregoing, the words "believes", "anticipates", "plans", "expects" and similar
expressions are intended to identify a forward-looking statement. Any
statements contained herein or incorporated herein that are not statements of
historical fact may be deemed to be forward-looking statements. There are a
number of important factors that could cause the results of the Company to
differ materially from those indicated by such forward-looking statements.
These factors include those set forth under the heading "Risk Factors" herein.
THE COMPANY
The Company is a worldwide provider of voice and data networking products.
Netrix develops, manufactures, markets, and supports networking equipment for
voice, data, and image networks. Netrix products are designed to transport
voice over data networks to enable its customers to realize significant cost
savings.
The Company was incorporated in Virginia in October 1985, and was
reincorporated in Delaware in March, 1987. The Company's principal executive
offices are located at 13595 Dulles Technology Drive, Herndon, Virginia 20171;
and the telephone number is (703) 742-6000.
-3-
<PAGE>
RISK FACTORS
The shares offered hereby involve a high degree of risk. The following
risk factors should be considered carefully in addition to the other
information included or incorporated by a reference in this Prospectus before
purchasing the Shares offered hereby.
DEPENDENCE ON ABILITY TO GENERATE ADEQUATE CASH FOR OPERATIONS AND CAPITAL NEEDS
The success of the Company is dependent on its ability to generate adequate
cash for operations and capital needs. Its ability to generate adequate cash
for such needs is in part dependent on its success in increasing sales of its
products. The Company has developed a plan to increase revenues through sales
of its Network Exchange product line; however, due to market conditions and
other factors beyond its control, there can be no assurance the Company will be
able to adequately increase product sales. Therefore, the Company may have to
generate additional cash through the sales of assets including technologies or
the sale of debt or equity securities. Although the Company believes it has the
ability to generate additional cash through such sales, such sales may be
dilutive and there can be no assurance that adequate funds will be available or
available on terms that are reasonable or acceptable to the Company. If the
Company is unable to generate adequate cash, there could be a material and
adverse effect on the business and financial condition of the Company.
Therefore, the Company has also developed a plan to implement certain cost
control measures to mitigate its liquidity risk.
POTENTIAL FLUCTUATIONS IN OPERATING RESULTS
The Company's future operating results are difficult to predict and may be
affected by a number of factors including the timing of new product
announcements or introductions by the Company and its competitors, competitive
pricing pressures and economic conditions in the United States and international
markets. As a result of these and other factors, there can be no assurance that
the Company will not experience material fluctuations in future operating
results on a quarterly or annual basis.
DEPENDENCE ON MAJOR CUSTOMERS AND ORDERS
A limited number of relatively large customer orders has accounted for and
is likely to continue to account for a substantial portion of revenues in any
particular fiscal period. As a result, the timing of orders could significantly
affect the Company's operating results. In any period, the unexpected loss of
or decline in revenues from a major customer or the failure to generate
significant revenues from other customers, could have an adverse effect on the
business and operating results of the Company. Although the Company's expense
levels are based in part on its expectations as to future revenue, most expenses
are relatively fixed and cannot be adjusted in the short term. Accordingly if
revenue levels are below expectations, operating results could be adversely
affected. In addition, the Company's products often represent a significant
capital expenditure for its customers and, for that reason, the Company's
operating results may vary significantly depending upon general economic
conditions and customers' budgetary cycles.
ADVERSE AFFECTS OF GOVERNMENTAL RESTRAINTS OR CHANGES IN GOVERNMENTAL POLICY
A portion of the Company's revenues results from sales to the United States
government, primarily through systems integrators. The revenues generated by
this government business, which is spread across numerous agencies and
departments, could be adversely affected by governmental budgetary or fiscal
restraints or changes in government policy.
-4-
<PAGE>
TECHNOLOGICAL CHANGE AND NEW PRODUCTS
The market for the Company's products is characterized by rapidly changing
technology, evolving industry standards and changes in telecommunications
services offered by public carriers. The introduction of products embodying new
technologies and the emergence of new industry standards or telecommunications
services may adversely affect the Company's ability to market its products.
This may require the Company to make substantial expenditures on research and
development in order to develop new products or to maintain the competitiveness
of its existing products. The Company's ability to anticipate changes in
technology and in industry standards, to anticipate changes in market
requirements and to successfully develop and introduce new and enhanced products
on a timely basis, will be a significant factor in the Company's ability to
remain competitive. If the Company is unable, for technological, financial or
other reasons, to develop, introduce and successfully market products in a
timely manner in response to changes in the industry, the Company's business
would be materially and adversely affected. In addition, the Company has
experienced delays in releasing certain of its products and there can be no
assurance that it will not encounter technical or other difficulties that could
delay the introduction or release of new products in the future.
The development and introduction of new and enhanced products requires a
significant investment of financial resources. To the extent that the Company's
existing financial resources are insufficient to fund the Company's activities,
additional funds will be required. There can be no assurance that additional
financing will be available on terms reasonable to the Company or at all.
COMPETITION
The market for networking systems is extremely competitive. Many of the
Company's competitors are more established, benefit from greater market
recognition and have greater financial, technological, production and marketing
resources than the Company. Competition could increase if new companies enter
the market or if existing competitors expand their product lines. An increase
in competition could have an adverse effect on the Company's business and
operating results. Maintaining the competitiveness of the Company's products
will require continued investment by the Company in research and development and
sales and marketing. There can be no assurance that the Company will have
sufficient resources to make such investment or that the Company will be able to
make the technological advances necessary to maintain the competitiveness of its
products.
RISKS ASSOCIATED WITH INTERNATIONAL SALES
A significant portion of the Company's total revenues has been derived from
international sales, and the Company expects that international business will
continue to represent an important element of its business. Substantially all
of the Company's international sales have been made through third-party
distributors, and in many cases the Company relies upon only one distributor for
a particular country. A reduction in the sales by some or all of these
distributors or a termination of their relationships with the Company could have
a material adverse effect on the Company's operations and financial performance.
In addition, the Company's international business may be adversely affected by
changes in demand for its products resulting from fluctuations in exchange
rates, as well as by risks such as trade and tariff regulations, political
instability, difficulties in obtaining export licenses, difficulties or delays
in collecting accounts receivable and difficulties in staffing and managing
international operations.
-5-
<PAGE>
DEPENDENCE UPON KEY EMPLOYEES
The Company's success depends to a significant extent upon the continued
service of its executive officers and other key personnel. None of the
Company's executive officers or key employees is subject to an employment or
non-competition agreement. The loss of the services of any of its executive
officers or other key employees could have a material adverse effect on the
Company. The Company's future success will depend in part upon its continuing
ability to attract and retain highly qualified personnel. There can be no
assurance that the Company will be successful in attracting and retaining such
personnel.
DEPENDENCE ON INDIRECT DISTRIBUTION CHANNELS
The Company relies on reseller channels, including distributors and systems
integrators, for a significant portion of its revenues. None of these resellers
are under the control of the Company and there can be no assurance that future
sales by resellers will continue at present levels or will not decline. The
loss of one or more significant resellers could adversely affect the Company's
business. In addition, the Company relies on resellers to provide certain
limited service and support to their customers, and any deficiencies in such
service and support could adversely affect the Company's business and operating
results.
COMPONENT SUPPLY
Certain components used in the Company's products are currently available
from only one source and others are available from only a limited number of
sources. Although the Company has generally been able to obtain adequate
supplies of components to date, the Company's inability to develop alternative
sources if and as required in the future, or to obtain sufficient sole-source or
limited-source components as required, could result in delays or reductions in
product shipments, which could adversely affect the Company's operating results.
Certain products that are or may in the future be marketed with or incorporated
into the Company's products are supplied by or under development by third
parties. These third parties may be the sole suppliers of such products. The
Company also currently relies on a single contract manufacturer to assemble and
test most of the Company's products. Although a number of such contract
manufacturers exist, the interruption or termination of the Company's current
manufacturing relationship could have a short-term adverse effect on the
Company's business. The inability of any such third parties to supply, develop
or manufacture components or products in a timely manner or the termination of
the Company's relationship with any such third party could delay shipment of the
Company's products and could have a material adverse impact on the Company's
operating results.
Because of these and other factors, past financial performance should not
be considered an indicator of future performance. Investors should not use
historical trends to anticipate future results and should be aware that the
trading price of the Company's Common Stock may be subject to wide fluctuations
in response to quarter-to-quarter variations in operating results, general
conditions in the networking industry, changes in earnings estimates and
recommendations by analysts or other events.
ANTITAKEOVER EFFECT OF CERTAIN CHARTER, BY-LAW AND OTHER PROVISIONS; POSSIBLE
ISSUANCE OF PREFERRED STOCK
Certain provisions of the Company's Amended and Restated Certificate of
Incorporation ("Certificate of Incorporation") and Amended and Restated Bylaws
("Bylaws") may be deemed to have anti-takeover effects and may discourage, delay
or prevent a takeover attempt that might be considered to be in the best
interests of the stockholders of the Company. These provisions, among
-6-
<PAGE>
other things, (i) classify the Company's Board of Directors into three classes,
each of which serves for different three-year periods, (ii) provide that only a
majority of the Board of Directors, the Chairman or the President may call
special meetings of the stockholders, (iii) establish certain advance notice
procedures for nominations of candidates for election as directors and for
stockholder proposals to be considered at stockholders' meetings, (iv) provide
that directors may be removed with or without cause by a vote of greater than
2/3 of the stockholders entitled to vote and (v) require a vote of the holders
of more than two-thirds of the shares entitled to vote in order to amend the
foregoing and certain other provisions of the Certificate of Incorporation and
Bylaws. In addition, the Board of Directors, without further action of the
stockholders, is permitted to issue and fix the terms of preferred stock which
may have rights senior to those of the Common Stock. The Company is subject to
the "business combination" provisions of the Delaware General Corporation Law
which may be deemed to have anti-takeover effects and may discourage, delay or
prevent a takeover attempt that might be considered in the best interests of the
stockholders of the Company. The business combination provisions of the Delaware
General Corporation Law will, subject to certain exceptions, prohibit the
Company from engaging in certain "business combinations" with an "interested
stockholder," unless the business combination is approved in a prescribed
manner.
VOLATILITY OF MARKET PRICE
From time to time after this offering, there may be significant volatility
in the market price of the Common Stock. The Company believes that the current
market price of the Common Stock reflects expectations that the Company will be
able to continue to operate its programs profitably and to develop additional
and new programs at a significant rate and operate them profitably. If the
Company is unable to operate its programs profitably or develop programs at a
pace that reflects the expectations of the market, investors could sell shares
of Common Stock at or after the time that it becomes apparent that such
expectations may not be realized, resulting in a decrease in the market price of
the Common Stock. In addition to the operating results of the Company, changes
in earnings estimates by analysts, changes in general conditions in the economy
or the financial markets or other developments affecting the Company or the
educational services industry could cause the market price of the Common Stock
to fluctuate substantially. In recent years, the stock market prices of
securities issued by many companies have fluctuated for reasons unrelated to
their operating performance.
POSSIBLE LACK OF RESOURCES OF SELLING STOCKHOLDERS
The Selling Stockholders may be deemed to be "underwriters" pursuant to the
Securities Act, and in that regard may become liable to the purchasers of the
Common Stock offered hereby pursuant to the terms of the Securities Act if
certain provisions of the Securities Act are not complied with by them. There
can be no assurance that any of the Selling Stockholders have the financial
resources to discharge any such liability.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders or by their respective pledgees, donees, transferees or
other successors in interest.
-7-
<PAGE>
SELLING STOCKHOLDERS
All of the shares of Common Stock of the Company offered hereby are being
sold by the Selling Stockholders named below. None of the Selling Stockholders
beneficially owns 5% or more of the Company's outstanding Common Stock and none
of the Selling Stockholders has held any office or maintained any material
relationship with the Company or its predecessors or affiliates over the past
three years.
The following table sets forth information concerning the beneficial
ownership of shares of Common Stock by the Selling Stockholders as of May 29,
1998 and the number of such shares included for sale in this Prospectus,
assuming the sale of all Shares being offered by this Prospectus. If all of the
shares offered hereby are sold as described herein, no Selling Stockholder will
own more than 1% of the Common Stock of the Company
<TABLE>
<CAPTION>
Shares Owned Prior Shares Shares Owned
Selling Securityholders to Offering Offered Hereby After Offering
- ----------------------- ------------------ -------------- --------------
<S> <C> <C> <C>
Jonathan Eilian 32,000 32,000 -
Stephen Nodvin and
Edelpraud Elper-Nodvin 40,000 40,000 -
Kasper Terhorst 12,000 12,000 -
Galt Financial, Ltd. 40,000 40,000 -
John Theodoracopules 20,000 20,000 -
G-V Capital Corp. 40,000 40,000 -
Kevin Muzin 4,000 4,000 -
Adam Hershey 8,000 8,000 -
Jonathan Rothschild 20,000 20,000 -
Leonard Flomenhaft 14,000 14,000 -
UT Technology Partners LDC 320,000 320,000 -
Special Situation Fund Private
Equity Fund, L.P. 240,000 240,000 -
Special Situation Fund Technology
Fund, L.P. 240,000 240,000 -
Spear, Leeds & Kellogg 600,000 600,000 -
</TABLE>
-8-
<PAGE>
<TABLE>
<S> <C> <C> <C>
RL Capital Partners 49,600 49,600 -
Jack Polak 40,000 40,000 -
Domaco Venture Capital Fund 30,400 30,400 -
L. Flomenhaft & Co.(1) 140,000 (1) 140,000 (1) -
</TABLE>
(1) Shares shown represent 140,000 shares of Common Stock issuable upon
exercise of a warrant.
PLAN OF DISTRIBUTION
The Shares may be offered and sold from time to time by the Selling
Stockholders, or by their pledgees, donees, transferees or other successors in
interest. The Selling Stockholders will act independently of the Company in
making decisions with respect to the timing, manner and size of each sale. Such
sales may be made in the over-the-counter market or otherwise, at prices related
to the then current market price or in negotiated transactions, including
pursuant to one or more of the following methods: (a) purchase by a broker-
dealer as principal and resale by such broker or dealer for its account pursuant
to this Prospectus; (b) ordinary brokerage transactions and transactions in
which the broker solicits purchasers; and (c) block trades in which the broker-
dealer so engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction. The
Company has been advised by the Selling Stockholders that they have not made any
arrangements relating to the distribution of the Shares covered by this
Prospectus. In effecting sales, broker-dealers engaged by the Selling
Stockholders, or by their pledgees, donees, transferees or other successors in
interest, may arrange for other broker-dealers to participate. Broker-dealers
will receive commissions or discounts from the Selling Stockholders, or their
pledgees, donees transferees or other successors in interest, in amounts to be
negotiated immediately prior to the sale.
In offering the Shares, the Selling Stockholders and any broker-dealers and
any other participating broker-dealers who execute sales for the Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales, and any profits realized by the
Selling Stockholders and the compensation of such broker-dealer may be deemed to
be underwriting discounts and commissions. In addition, any of the Shares which
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus. None of the Shares presently qualify for sale
pursuant to Rule 144.
The Company has advised the Selling Stockholders that during such time as
they may be engaged in a distribution of Common Stock included herein, they are
required to comply with the Securities Act, any rule or regulation under the
Securities Act, and Regulation M under the Exchange Act.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities set forth in Section 7 of the Common Stock Purchase
Agreement, dated April 21, 1998, by and among the Company and the investors
named therein and in Section 7 of the Common Stock Purchase Agreement, dated
April 24, 1998, by and among the Company and the investors named therein
(collectively, the "Purchase Agreements") in connection with the offer and sale
of the Shares, including liabilities under the Securities Act. Each of the
Selling Stockholders has agreed to indemnify in certain circumstances the
Company and certain related persons against certain liabilities set forth in
Section 7 of both of the Purchase Agreements, including liabilities under the
Securities Act.
-9-
<PAGE>
The Company has agreed with the Selling Stockholders to keep the
Registration Statement of which this Prospectus is a part effective until such
time as the Company determines that the Selling Stockholders will be eligible to
sell all the Shares then owned by the Selling Stockholders without continued
registration of the Shares in the three month periods immediately preceding the
termination of the effectiveness of the registration statement. The Company
intends to de-register any of the Shares not sold by the Selling Stockholders
and any other shares remaining unsold at the end of such period. The Company
may, under specified circumstances set forth in Section 7.5 of the Purchase
Agreement, suspend the Registration Statement of which this Prospectus is a part
after effectiveness and require that sales of shares pursuant to such
Registration Statement cease immediately.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the
Company by Hale and Dorr LLP, Washington, D.C.
EXPERTS
The Audited Consolidated Financial Statements and Schedule incorporated by
reference in this Prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
-10-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than the
underwriting discounts and commissions. All these expenses will be paid by the
Company.
NATURE OF EXPENSE
- -----------------
<TABLE>
<S> <C>
SEC registration fee $ 1,742
Legal and accounting fees and expenses 10,000 *
Miscellaneous 5,000 *
-------
TOTAL $16,742 *
=======
</TABLE>
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 ("Section 145") of the Delaware General Corporation Law, as
amended, provides a detailed statutory framework covering indemnification of
officers and directors against liabilities and expenses arising out of legal
proceedings brought against them by reason of their being or having been
directors or officers. Section 145 generally provides that a director or
officer of a corporation (i) shall be indemnified by the corporation for all
expenses of such legal proceedings when he is successful on the merits, (ii) may
be indemnified by the corporation for expenses, judgments, fines and amounts
paid in settlement of such proceedings (other then a derivative suit), even if
he is not successful on the merits, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, and (iii) may be
indemnified by the corporation for the expenses of a derivative suit (a suit by
a stockholder alleging a breach by a director or officer of a duty owed to the
corporation), even if he is not successful on the merits, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. No indemnification may be made under clause (iii)
above, however, if the director or officer is adjudged liable for negligence or
misconduct in the performance of his duties to the corporation, unless a
corporation determines that, despite such adjudication, but in view of all the
circumstances, he is entitled to indemnification. The indemnification described
in clauses (ii) and (iii) above may be made only upon a determination that
indemnification is proper because the applicable standard of conduct has been
met. Such a determination may be made by a majority of a quorum of
disinterested directors, independent legal counsel, the stockholders or a court
of competent jurisdiction.
The indemnification of directors and officers is provided for by Article
SEVENTH of the Registrant's Amended and Restated Certificate of Incorporation,
which provides in substance that, to the fullest extent permitted by Delaware
law as it now exists or as amended, each director and officer shall be
indemnified against reasonable costs and expenses, including attorney's fees,
and any liabilities which he may incur in connection with any action to which he
may be a party by reason of his being or having been a director or officer of
the Registrant. The indemnification provided by the
II-1
<PAGE>
Registrant's Amended and Restated Certificate of Incorporation is not deemed
exclusive of or intended in any way to limit any other rights to which any
person seeking indemnification may be entitled.
Article NINTH of the Registrant's Amended and Restated Certificate of
Incorporation provides for the elimination of personal liability of a director
for breach of fiduciary duty, as permitted by Section 102(b)(7) of the Delaware
General Corporation Law.
ITEM 16. EXHIBITS.
See the Exhibit Index included immediately preceding the Exhibits to this
Registration Statement, which is incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement; provided,
however, that paragraphs (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Company pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") that are incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each 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 the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
II-2
<PAGE>
to Section 15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, 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 Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and
(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Herndon, Virginia, on this 29th day of May, 1998.
NETRIX CORPORATION
By: /s/ Lynn C. Chapman
-------------------------------------
Lynn C. Chapman
President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Netrix Corporation, hereby
severally constitute Lynn C. Chapman; David Sylvester and William F. Winslow and
any of them singly, our true and lawful attorneys with full power to them, and
each of them singly, to sign for us and in our names in the capacities indicated
below, the Registration Statement on Form S-3 filed herewith and any and all
subsequent amendments to said Registration Statement (including post-effective
amendments, exhibits thereto and other documents in connection therewith) and
any subsequent registration statement filed by the Registrant pursuant to Rule
462(b) of the Securities Act of 1933, as amended, which relates to this
Registration Statement, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
and generally to do all such things in our names and behalf in our capacities as
officers and directors to enable Netrix Corporation to comply with all
requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by said attorneys, or any of
them, to said Registration Statement and any and all amendments thereto.
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Lynn C. Chapman President Chief Executive ) May 21, 1998
- ------------------------ Officer and Director )
Lynn C. Chapman (Principal Executive )
Officer) )
)
/s/ Leslie Oleynik Vice President ) May 21, 1998
- ------------------------ and Chief Financial Officer )
Leslie Oleynik (Principal Financial Officer) )
)
)
)
/s/ Arthur J. Marks Director ) May 22, 1998
- ------------------------ )
Arthur J. Marks )
)
/s/ William T. Rooker Director ) May 26, 1998
- ------------------------ )
William T. Rooker )
)
/s/ Orville Wright Director ) May 29, 1998
- ------------------------ )
Orville Wright )
)
/s/ John Burton Director ) May 29, 1998
- ------------------------ )
John Burton )
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF EXHIBIT PAGE
- ------- ---------------------- ----
<S> <C> <C>
*4.1 -- Amended and Restated Certificate of
Incorporation (incorporated herein by
reference to Exhibit 3.1 to the Registrant's
registration on Form S-1 filed on
September 18, 1992, as amended
(File No. 33-50464) (the "1992 S-1").
*4.2 -- Amended and Restated By-Laws of the
Registrant (incorporated herein by reference to
Exhibit 3.2 of the 1992 S-1).
*4.3 -- Specimen Certificate of Common Stock of the
Registrant (incorporated herein by reference to
Exhibit 4.1 to the 1992 S-1).
*4.4 -- Common Stock Purchase Agreement, dated
April 21, 1998, by and among the
Company and the investors named therein
(incorporated herein by reference to Exhibit 10.18
to the Registrant's Quarterly Report on Form 10-Q
filed on May 15, 1998) (the "May 1998 10-Q").
*4.5 -- Common Stock Purchase Agreement, dated
April 24, 1998, by and among the Company and
the investors named therein (incorporated herein
by reference to Exhibit 10.19 to the May 1998 10-Q).
*4.6 -- Common Stock Purchase Warrant,
dated April 24, 1998, issued by the Company to
L. Flomenhaft & Co. (incorporated herein by
reference to Exhibit 10.20 to the May 1998 10-Q).
5 -- Opinion of Hale and Dorr LLP.
23.1 -- Consent of Hale and Dorr LLP (included in Exhibit 5).
23.2 -- Consent of Arthur Andersen LLP.
24.1 -- Power of Attorney (included in the signature
pages of this Registration Statement).
</TABLE>
_____________________________________
* Incorporated herein by reference.
<PAGE>
[LETTERHEAD OF HALE AND DORR LLP]
EXHIBIT 5
May 29, 1998
Netrix Corporation
13595 Dulles Technology Drive
Herndon, Virginia 20171
Ladies and Gentlemen:
We have assisted in the preparation of the Registration Statement on Form
S-3 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to the
registration of an aggregate of 1,890,000 shares of common stock, $.05 par value
per share (the "Shares"), of Netrix Corporation, a Delaware corporation (the
"Company"), held by certain stockholders of the Company.
We have examined the Amended and Restated Certificate of Incorporation and
Amended and Restated By-laws of the Company and all amendments thereto and have
examined and relied on the originals, or copies certified to our satisfaction,
of such records of meetings, written actions in lieu of meetings, or resolutions
adopted at meetings, of the directors of the Company and such other documents
and instruments as in our judgment are necessary or appropriate to enable us to
render the opinions expressed below.
In our examination of the foregoing documents, we have assumed (i) the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, (ii) the conformity to the originals of all documents submitted
to us as certified or photostatic copies, and (iii) the authenticity of the
originals of the latter documents.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly and validly authorized and when paid for in accordance
with the applicable purchase agreement or warrant will be duly and validly
issued and fully paid and non-assessable.
We hereby consent to the use of our name in the Registration Statement and
in the related Prospectus under the caption "Legal Matters" and to the filing of
this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Hale and Dorr LLP
---------------------
HALE AND DORR LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated February 27,
1998 included (or incorporated by reference) in Netrix Corporation's Form 10-K
for the year ended December 31, 1997 and to all references to our Firm included
in this registration statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Washington, D.C.
May 27, 1998
