Registration Statement No. ______________
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 26, 2000
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SI DIAMOND TECHNOLOGY, INC.
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(Exact Name of small business issuer as specified in its charter)
State of Texas 76-0273345
--------------------------------- -----------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
Tracy Vaught
Chief Financial Officer
SI Diamond Technology, Inc. SI Diamond Technology, Inc.
3006 Longhorn Boulevard, Suite 107 3006 Longhorn Boulevard
Austin, Texas 78758 Austin, Texas 78758
(512) 339-5020 (512) 339-5020
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(Address, including zip code, and (Name, address, including zip
telephone number, including area code, and telephone number
code, of small business issuer's including area code, of agent for service)
principal executive offices)
--------------------
Copies To:
Donald T. Locke
Kilpatrick Stockton LLP
3737 Glenwood Avenue
Suite 400
Raleigh, North Carolina 27612
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement has been declared effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. |_|:
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|:
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
Title of Each Proposed Maximum Proposed Maximum Amount of
Class of Securities Amount to be Offering Price Aggregate Offering Registration Fee
to be Registered Registered Per Share <F2> Price <F2>
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common stock, par value $.001 per share... 6,288,271
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Common stock underlying warrants......... 10,080,000
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Total 16,368,271 $1.648 $26,974,910.608 $544.87<F1>
======================================================================================================================
<FN>
<F1> Amount represents an increase in the amount offered of 1,252,374 shares
for which the registration fee is calculated. All other shares subject to
this registration statement have previously been registered and the
registration fees paid for.
<F2> Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average of the high and low sales
prices per share of common stock as reported by the OTC Bulletin Board on
June 6, 2000.
</FN>
</TABLE>
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.
<PAGE>
EXPLANATORY NOTE
SI Diamond has previously filed Registration Statement Nos. 333-24801,
333-38941, 333-40711 and 333-78907 to register shares of its common stock, as
well as shares of its common stock underlying warrants held by certain selling
shareholders. This Registration Statement eliminates those selling shareholders
who have previously sold such shares pursuant to the previous registration
statements and also eliminates those selling shareholders to whom the Company no
longer has registration obligations. This Registration Statement also registers
an additional 1,252,374 shares of common stock or shares of common stock
underlying warrants which have not previously been registered.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 12, 2000
The information contained in this prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting any offer to buy
these securities in any state where the offer or sale is not permitted.
<PAGE>
PROSPECTUS
SI DIAMOND TECHNOLOGY, INC.
7,390,038 Shares of Common Stock
(Par Value $.001 Per Share)
10,080,000 Shares of Common Stock
Underlying Warrants
The shareholders of SI Diamond Technology, Inc. identified on pages 21
and 22 may offer and sell the shares covered by this Prospectus from time to
time. The shares offered for sale:
o are presently outstanding, or will be issued as a result of
existing agreements, or
o underlie certain existing warrants to purchase common stock.
This offering is not being underwritten. The selling shareholders will
pay all underwriting discounts and selling commissions, if any, applicable to
the sale of the shares.
SI Diamond will receive the proceeds from the exercise of the warrants
but will not receive any proceeds from the sale of the shares of common stock by
the selling shareholders. SI Diamond will pay substantially all of the expenses
of the registration of the sale of the shares. SI Diamond has agreed to
indemnify certain of the selling shareholders against certain civil liabilities,
including liabilities under the Securities Act of 1933.
See "Plan of Distribution and Selling Shareholders."
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN RISK
FACTORS WHICH YOU SHOULD CONSIDER. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE
MAKING AN INVESTMENT DECISION.
SI Diamond's common stock is traded and quoted on the OTC Bulletin
Board under the symbol "SIDT". On June 6, 2000, the closing price of the common
stock as reported on the OTC Bulletin Board was $1.625 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
The date of this Prospectus is June __, 2000.
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM
THIS DOCUMENT AND MAY NOT CONTAIN ALL THE INFORMATION IMPORTANT TO
YOU. YOU SHOULD READ CAREFULLY THIS ENTIRE DOCUMENT AND THE DOCUMENTS
TO WHICH WE HAVE REFERRED YOU. UNLESS THE CONTEXT OTHERWISE REQUIRES,
THE TERM "SI DIAMOND" REFERS TO SI DIAMOND TECHNOLOGY, INC. AND ITS
SUBSIDIARIES.
SI DIAMOND
The executive offices of SI Diamond are located at 3006 Longhorn
Boulevard, Suite 107, Austin, Texas 78758, and its telephone number is (512)
339-5020.
THE OFFERING
This prospectus relates to 16,368,271 shares of common stock, par value
$.001 per share, of SI Diamond Technology, Inc., a Texas corporation, which may
be offered for sale by certain shareholders of the Company from time to time.
The shares offered for sale:
o are presently outstanding, or will be issued as a result of
existing agreements, or
o underlie certain existing warrants to purchase common stock.
As of June 6, 2000 the Company had the following securities outstanding covered
by this Prospectus.
<TABLE>
<CAPTION>
Security Designation Amount Outstanding <F1>
-------------------- ----------------------
<S> <C>
Common stock 6,288,271
Common stock underlying warrants 10,080,000
-------------------
<FN>
<F1> This number represents either shares of common stock or the number of
shares of common stock into which the warrants are convertible as of
the date of this Prospectus.
</FN>
</TABLE>
See "Plan of Distribution and Selling Shareholders."
PLAN OF DISTRIBUTION
This offering is not being underwritten. The selling shareholders
directly, through agents designated by them from time to time or through dealers
or underwriters also to be designated, may sell the shares from time to time, in
or through privately negotiated transactions, or in one or more transactions,
including block transactions, on the OTC Bulletin Board or on any stock exchange
on which the shares may be listed in the future pursuant to and in accordance
with the applicable rules of such exchange or otherwise. The selling price of
the shares may be at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. To the extent
required, the specific shares to be sold, the names of the selling shareholders,
the respective purchase prices and public offering prices, the names of any such
agent, dealer or underwriter and any applicable commission or discounts with
2
<PAGE>
respect to a particular offer will be described in an accompanying prospectus.
In addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
prospectus. See "Plan of Distribution and Selling Shareholders."
SI Diamond will receive the proceeds from the exercise of the warrants,
but will not receive any proceeds from the sale of the shares by the selling
shareholders. SI Diamond has agreed to pay all of the expenses of the
registration of the shares. The selling shareholders must pay any commissions
and discounts of underwriters, dealers or agents. SI Diamond has agreed to
indemnify certain of the selling shareholders against certain civil liabilities
under the Securities Act. See "Plan of Distribution and Selling Shareholders."
SELLING SHAREHOLDERS AS UNDERWRITERS
The selling shareholders and any broker-dealers, agents or underwriters
that participate with the selling shareholders in the distribution of any of the
shares may be deemed to be "Underwriters" within the meaning of 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. See "Plan of Distribution and Selling
Shareholders."
RISK FACTORS
See "Risk Factors" beginning on page 4 of this prospectus for a
discussion of certain factors related to the Company and the common stock
offered in this prospectus.
3
<PAGE>
RISK FACTORS
The common stock being offered hereby involves a high degree of risk.
You should carefully consider the following risk factors in addition to other
information contained in this prospectus in deciding whether to invest in our
shares of common stock.
Our CFE product development is in its early stages and the outcome is uncertain
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Our Carbon Field Emission ("CFE") technology, and products that use this
technology, will require significant additional development, engineering,
testing and investment prior to commercialization. We have two leading potential
CFE products. The first is a Picture Element Tube, or PET, intended for use
initially in large indoor displays. If the PET is successful, we expect to
enhance it to allow it to be used in outdoor displays. The PET or displays may
not be successfully developed. We are also working on a product called the
HyFED, which combines what we believe to be the best properties of a cathode ray
tube ("CRT") and field emission display ("FED"). It is our intention to license
this technology to be used in the production of flat-screen TV applications that
are cost competitive with CRTs. If either of these products are developed, it
may not be possible for potential licensees to produce these products in
significant quantities at a price that is competitive with other similar
products.
We have no current royalty agreements
-------------------------------------
Our future strategy is dependent on licensing our technology to other companies
and obtaining royalties based on products that these licensees develop and sell.
We have no plans to manufacture and sell any CFE products ourselves, and as
such, we have no CFE product revenues. We signed a license agreement in 1999,
for a payment of approximately $5.6 million. We have no other license agreements
at the present time that will provide any future revenues. It is our intention
that all future license agreements will include a provision that requires the
payment of ongoing royalties.
Our success is dependent on our principal products and technologY
-----------------------------------------------------------------
Our CFE technology is an emerging technology. Our financial condition and
prospects are dependent upon our licensing the technology to others and upon
market acceptance of our Electronic Billboard and other electronic display
products. Additional R&D needs to be conducted on the CFE technology before
others can produce products using this technology. Market acceptance of our
products and products using our technology will be dependent upon the perception
within the electronics and instrumentation industries of the quality,
reliability, performance, efficiency, breadth of application and
cost-effectiveness of the products. There can be no assurance that we will be
able to gain commercial market acceptance for our products or develop other
products for commercial use.
We have technologies subject to licenses
----------------------------------------
As a licensee of certain research technologies through license and assignment
agreements with Microelectronics and Computer Technology Corporation, we have
acquired rights to develop and commercialize certain research technologies. In
certain cases, we are required to pay royalties on the sale of products
developed from the licensed technologies and fees on revenues from sublicensees.
We also have to pay for the costs of filing and prosecuting patent applications.
The agreement is subject to termination by either party, upon notice, in the
event of certain defaults by the other party. We expect any royalty payments to
be insignificant.
4
<PAGE>
We have a history of operating losses
-------------------------------------
We have a history of operating losses. Our first profitable year was 1999, based
on the strength of a license agreement of approximately $5.6 million signed in
March 1999. We have incurred operating losses as shown below:
Net Income
Year Ended December 31 (Loss)
---------------------- -------------
1992 ($ 1,630,978)
1993 ($ 7,527,677)
1994 ($ 7,255,420)
1995 ($14,389,856)
1996 ($13,709,006)
1997 ($ 6,320,901)
1998 ($ 3,557,548)
1999 $ 1,118,134
Although we expect to be profitable in the future, we may not be. Our
profitability in 2000 is dependent on the signing of additional license
agreements. We may, however, continue to incur additional operating losses for
an extended period of time as we continue to develop products. We do, however,
expect the magnitude of those losses, if they continue, to decrease.
WallaceSanders & Company, independent auditors of the Company, have expressed
uncertainty as to our ability to continue as a going concern based on our
accumulated losses from operations in prior years. See "Independent Auditors'
Report." We have funded our operations to date primarily through the proceeds
from the sale of our equity securities. In order to continue our transition from
a contract research and development organization to an organization with ongoing
operations, we anticipate that substantial product development expenditures will
continue to be incurred.
We are exposed to litigation liability
--------------------------------------
We were sued in 1996 by a former customer of Plasmatron for damages that the
former customer claimed that it incurred as a result of the alleged failure of
the machine provided by Plasmatron to perform as intended. That suit was settled
in January 2000. The majority of that settlement was paid by a bonding company
that had provided a bond on the original contract. Other guarantors on the
original bond that may now be subject to liability as a result of the bonding
company's payment have sued us for indemnification. We consider these claims to
be without merit and expect to have no liability in these suits; however, they
are still pending.
Various trade creditors have also filed suit to collect unpaid trade amounts
due. We expect these items to be resolved with no material impact on our
financial statements. If we were to become subject to a judgment that exceeds
our ability to pay, that judgment would have a material impact on our financial
condition and could affect our ability to continue in existence.
5
<PAGE>
We have future capital needs and the source of that funding is uncertain
------------------------------------------------------------------------
We expect to continue to incur substantial expenses for R&D, product testing,
production, manufacturing, product marketing, and administrative overhead. The
majority of R&D expenditures are for the development of our CFE technology and
our electronic billboard product. Our business model is based on our installing
electronic billboards at customer sites at our cost and then deriving
advertising revenues from the signs. This will require a significant capital
investment on our part. Our electronic billboard product is available now and we
are in the process of installing our first units. Some of our other proposed
products may not be available for commercial sale or routine use for a period of
up to two years. Commercialization of our existing and proposed products will
require additional capital in excess of our current capital. A shortage of
capital may prevent us from achieving profitability for an extended period of
time. Because the timing and receipt of revenues from the sale of products will
be tied to the achievement of certain product development, testing,
manufacturing and marketing objectives, which cannot be predicted with
certainty, there may be substantial fluctuations in our results of operations.
If revenues do not increase as rapidly as anticipated, or if product development
and testing and marketing require more funding than anticipated, we may be
required to curtail our expansion and/or seek additional financing from other
sources. We may seek additional financing through the offer of debt or equity or
any combination of the two at any time.
We have developed a plan to allow us to maintain operations until we are able to
sustain ourselves on our own revenue. However, we only have the existing
resources, including commitments, to allow us to survive for a period of
approximately three months from the date of this report at our current spending
levels. We have been operating in this manner for an extended period of time and
we believe that we have the ability to continue to raise short term funding, if
necessary, to enable us to continue operations until our plan can be completed.
Our plan is primarily dependent on raising funds through the licensing of our
technology, revenue generated from the installation of our electronic billboard
product, and through debt and equity offerings.
Our plan is based on current development plans, current operating plans, the
current regulatory environment, historical experience in the development of
electronic products and general economic conditions. Changes could occur which
would cause certain assumptions on which this plan is based to be no longer
valid. Our plan is primarily dependent on increasing revenues, licensing our
technology, and raising additional funds through additional debt and equity
offerings. If adequate funds are not available from operations or additional
sources of financing, we may have to eliminate, or reduce substantially,
expenditures for research and development, testing and production of our
products. We may have to obtain funds through arrangements with other entities
that may require us to relinquish rights to certain of our technologies or
products. These actions could materially and adversely affect us.
6
<PAGE>
Rapid technological change could render our products obsolete and we may not
remain competitive
--------------------------------------------------------------------------------
The display industry is highly competitive and is characterized by rapid
technological change. Our existing and proposed products will compete with other
existing products and may compete against other developing technologies.
Development by others of new or improved products, processes or technologies may
reduce the size of potential markets for our products. There is no assurance
that other products, processes or technologies will not render our proposed
products obsolete or less competitive. Many of our competitors have greater
financial, managerial, distribution, and technical resources than we do. We will
be required to devote substantial financial resources and effort to further R&D.
There can be no assurance that we will successfully differentiate our products
from our competitors' products, or that we will adapt to evolving markets and
technologies, develop new products, or achieve and maintain technological
advantages.
Our products may not be accepted by the market
----------------------------------------------
Since our inception, we have focused our product development and R&D efforts on
technologies that we believe will be a significant advancement over currently
available technologies. With any new technology, there is a risk that the market
may not appreciate the benefits or recognize the potential applications of the
technology. Market acceptance of our products and products using our technology
will depend, in part, on our ability to convince potential customers of the
advantages of such products as compared to competitive products. It will also
depend upon our ability to train manufacturers and others to use our products
We have limited manufacturing capacity and experience
-----------------------------------------------------
We have no established commercial manufacturing facilities in the area of CFE
technology in which we are conducting our principal research. At the present
time, we have no intention of establishing a manufacturing facility related to
our CFE technology. We are focusing our efforts on licensing our technology to
others for use in their manufacturing processes. The management team has
commercial manufacturing and marketing experience in other industries and with
other products in the display industry; however, we have no experience in
manufacturing our proposed CFE products.
In August 1999, we acquired the assets of Sign Builders of America, Inc.
("SBOA"). SBOA is a manufacturer of high quality signage and provided
significant assistance in the development of our electronic billboard product.
To the extent that any of our other products require manufacturing facilities,
we intend to contract with a qualified manufacturer.
We are dependent on the availability of materials and suppliers
---------------------------------------------------------------
The materials used in producing our current and future products are purchased
from outside vendors. In certain circumstances, we may be required to bear the
risk of material price fluctuations. We anticipate that the majority of raw
materials used in products to be developed by us will be readily available.
However, there is no assurance that the current availability of these materials
will continue in the future, or if available, will be procurable at favorable
prices.
7
<PAGE>
We may not be able to provide system integration
------------------------------------------------
In order to prove that our technologies work and will produce a complete
product, we must ordinarily integrate a number of highly technical and
complicated subsystems into a fully-integrated prototype. There is no assurance
that we will be able to successfully complete the development work on some of
our proposed products or ultimately develop any market for those products.
The loss of key personnel could adversely affect our business
-------------------------------------------------------------
Our future success will depend on our ability to attract and retain highly
qualified scientific, technical and managerial personnel. Competition for such
personnel is intense. We may not be able to attract and retain all personnel
necessary for the development of our business. In addition, much of the know-how
and processes developed by us reside in our key scientific and technical
personnel. The loss of the services of key scientific, technical and managerial
personnel could have a material adverse effect on us.
We may be unable to enforce or defend our ownership and use of proprietary
technology
--------------------------------------------------------------------------------
Our ability to compete effectively with other companies will depend on our
ability to maintain the proprietary nature of our technology. Although we have
been awarded patents, have filed applications for patents, or have licensed
technology under patents that we do not own, the degree of protection offered by
these patents or the likelihood that pending patents will be issued is
uncertain. Competitors in both the United States and foreign countries, many of
which have substantially greater resources and have made substantial investment
in competing technologies, may already have, or may apply for and obtain patents
that will prevent, limit or interfere with our ability to make and sell our
products. Competitors may also intentionally infringe on our patents. The
defense and prosecution of patent suits is both costly and time-consuming, even
if the outcome is favorable to us. In foreign countries, the expenses associated
with such proceedings can be prohibitive. In addition, there is an inherent
unpredictability in obtaining and enforcing patents in foreign countries. An
adverse outcome in the defense of a patent suit could subject us to significant
liabilities to third parties. Although third parties have not asserted
infringement claims against us, there is no assurance that third parties will
not assert such claims in the future.
We also rely on unpatented proprietary technology, and there is no assurance
that others will not independently develop the same or similar technology, or
otherwise obtain access to our proprietary technology. To protect our rights in
these areas, we require employees, consultants, advisors and collaborators to
enter into confidentiality agreements. These agreements may not provide
meaningful protection for our trade secrets, know-how, or other proprietary
information in the event of any unauthorized use, misappropriation or disclosure
of such trade secrets, know-how, or other proprietary information. While we have
attempted to protect proprietary technology that we develop or acquire and will
continue to attempt to protect future proprietary technology through patents,
copyrights and trade secrets, we believe that our success will depend upon
further innovation and technological expertise.
8
<PAGE>
Our revenues have been dependent on government contracts in the past
--------------------------------------------------------------------
In previous years, a significant part of our revenues were derived from
contracts with agencies of the United States government. Following is a summary
of those revenues in recent years:
Revenues from Percentage of
Year Ended December 31 Gov. Contracts Total Revenue
---------------------- --------------- -------------
1992 $ 930,000 99%
1993 $1,147,000 89%
1994 $ 820,000 41%
1995 $1,009,000 33%
1996 $2,869,000 24%
1998 $ 0 0%
1999 $ 0 0%
We currently have no significant commitment for any future government funding
and do not intend to seek any government funding unless it directly relates to
achievement of our strategic objectives.
Contracts involving the United States government are, or may be, subject to
various risks including, but not limited to, the following:
o Unilateral termination for the convenience of the government
o Reduction or modification in the event of changes in the government's
requirements or budgetary constraints
o Increased or unexpected costs causing losses or reduced profits under
fixed-price contracts or unallowable costs under cost reimbursement
contracts
o Potential disclosure of our confidential information to third parties
o The failure or inability of the prime contractor to perform its prime
contract in circumstances where we are a subcontractor
o The failure of the government to exercise options provided for in the
contracts
o The right of the government to obtain a non-exclusive, royalty free,
irrevocable world-wide license to technology developed under contracts
funded by the government if we fail to continue to develop the
technology
9
<PAGE>
The market for our common stock is volatile
-------------------------------------------
The market price of the shares of SI Diamond common stock, like that of
the common stock of many emerging technology companies, has fluctuated
significantly in recent years and will likely continue to fluctuate in the
future. The prices of such securities currently rise and are expected to
continue to rise rapidly in response to certain events, such as announcements
concerning product developments, licenses and patents, although the outcome of
such events may not be fully determined. Similarly, prices of such securities
may fall rapidly if unfavorable results are encountered in product development
or market acceptance. In the event that SI Diamond achieves earnings from the
sale of products, securities analysts may begin predicting quarterly earnings.
The failure of our earnings to meet analysts' expectations could result in a
significant rapid decline in the market price of our common stock. In addition,
the stock market has experienced and continues to experience extreme price and
volume fluctuations which have affected the market price of the equity
securities of many technology companies and which have often been unrelated to
the operating performance of those companies. Such broad market fluctuations, as
well as general economic and political conditions, may adversely affect the
market price of the common stock.
Shares of our common stock are eligible for future sale
-------------------------------------------------------
As of June 6, 2000, there were 56,631,840 shares of SI Diamond common
stock outstanding, of which 49,286,505 shares of such common stock were freely
tradable without restriction or further registration under the Securities Act by
persons other than "affiliates" of SI Diamond. As of that date, the remaining
shares of SI Diamond common stock were deemed "restricted securities," as
defined in Rule 144 under the Securities Act, and may not be resold in the
absence of registration under the Securities Act or pursuant to an exemption
from such registration, including exemptions provided by Rule 144 under the
Securities Act. Under Rule 144, persons who have held securities for a period of
at least one year may sell a limited amount of such securities without
registration under the Securities Act. Rule 144 also permits, under certain
circumstances, persons who are not affiliates of SI Diamond, to sell their
restricted securities without quantity limitations once they have completed a
two-year holding period.
The Registration Statement, of which this Prospectus is a part,
pertains to 6,288,271 shares of common stock which are currently "restricted
securities"; and 10,080,000 shares of common stock which underlie existing
warrants. SI Diamond is obligated to maintain the effectiveness of the
Registration Statement for varying periods of time, pursuant to separate
agreements with certain groups of the selling shareholders.
In addition to the shares of common stock which are outstanding as of
June 6, 2000, 7,463,926 shares of common stock have been reserved for issuance
pursuant to our stock option plans. Approximately 10,080,000 shares of common
stock have also been reserved for issuance upon the exercise of warrants that
have been issued by SI Diamond and 1,161,069 shares of common stock have been
reserved for issuance upon conversion of the Company's Series G preferred stock.
No prediction can be made as to the effect, if any, that future sales,
or the availability of shares of SI Diamond common stock for future sales, will
have on the market price prevailing from time to time. Sales of substantial
amounts of SI Diamond common stock by SI Diamond or by shareholders who hold
"restricted securities," or the perception that such sales may occur, could
adversely affect prevailing market prices for the common stock.
10
<PAGE>
Other classes of capital stock have prior and superior rights
-------------------------------------------------------------
The rights of holders of the common stock to receive dividends or other
payments with respect thereto are subject to any prior and superior rights of
holders of SI Diamond's preferred stock. As of June 6, 2000, SI Diamond had
issued and outstanding 900 shares of its Series G preferred stock, its only
series outstanding. Additionally, the holders of the Series G preferred stock
are entitled to a liquidation preference over the holders of the common stock.
The Board of Directors, however, has the authority to provide for the issuance
of additional shares of preferred stock in one or more additional series and
such shares may, in the Board's discretion, have prior and superior rights to
receive dividends or other payments with respect thereto. In light of its future
capital requirements, SI Diamond could issue shares of preferred stock at any
time having such prior and superior rights. See "Description of Capital Stock".
A possible adverse effect on the price of our common stock could result from
sales by selling shareholders in the market
--------------------------------------------------------------------------------
Sales of or offers to sell substantial blocks of common stock currently
held by certain shareholders, or the perception by investors, investment
professionals or securities analysts of the possibility that such sales may
occur could adversely affect the price of and market for the common stock.
Upon registration in accordance with its obligations, the selling
shareholders will be permitted to sell up to 16,368,271 shares of common stock,
of which 10,080,000 are shares of common stock subject to issuance upon the
exercise of certain warrants. The shares (assuming the exercise of all warrants
subject to the Registration Statement) represent approximately 24.53% of the
shares of common stock outstanding on the date hereof. We will not receive any
proceeds from sales of shares held by such selling shareholders. SI Diamond will
receive the proceeds from the exercise of any warrants to purchase shares of
common stock. SI Diamond is unable to predict how much it will receive from the
exercise of the warrants held by the Vision Mark Selling Shareholder since the
price of such warrants shall be established, if at all, upon the achievement of
certain milestones by C&A Services, L.L.C. See "Plan of Distribution and Selling
Shareholder-Vision Mark Selling Shareholder." The exercise prices of all other
warrants range from $1.00 to $2.15 per share of SI Diamond's common stock. It is
unlikely that significant amounts of the warrants will be exercised until the
trading price of the common stock exceeds the exercise price of the warrants, if
at all.
We have never paid dividends
----------------------------
SI Diamond has never paid cash dividends on its equity securities and
does not intend to pay cash dividends in the foreseeable future. To the extent
the Company has earnings in the future, the Company intends to reinvest such
earnings in the business operations of the Company.
Our Restated Articles of Incorporation and Bylaws may inhibit a takeover
------------------------------------------------------------------------
SI Diamond's Restated Articles and Bylaws contain a number of
provisions which could make its acquisition by means of an unsolicited tender
offer, a proxy contest or otherwise, more difficult, including the following:
o the Board is authorized to issue series of preferred stock
that could, depending on the terms of such series, impede the
completion of a merger, tender offer or other takeover
attempt;
11
<PAGE>
o the Board of Directors is divided into three classes of
directors, with the result that approximately one-third of the
Board of Directors are elected each year; and
o except in limited circumstances, no shares of our preferred
stock may be issued or sold to any officer or director of SI
Diamond or any shareholder owning more than five percent (5%)
of SI Diamond's common stock without the affirmative vote of a
majority of its disinterested shareholders.
See "Description of Capital Stock - Certain Provisions of the Articles of
Incorporation, Bylaws and Texas Law."
Our Restated Articles and Bylaws limit our directors' liability and provide for
indemnification of directors and officers
--------------------------------------------------------------------------------
SI Diamond's Restated Articles provide that a director will only be
liable to SI Diamond for the following:
o breaches of his duty of loyalty to SI Diamond and its
shareholders,
o acts or omissions not in good faith or which constitute a
breach of duty of a director of SI Diamond or involves
intentional misconduct or a knowing violation of law,
o transactions from which a director receives an improper
benefit, whether or not the benefit resulted from an action
taken within the scope of the director's office,
o acts or omissions for which liability is specifically provided
by statute, and
o acts relating to unlawful stock purchases or payments of
dividends.
Thus, SI Diamond may be prevented from recovering damages for certain alleged
errors or omissions by its directors.
The Bylaws also provide that, under certain circumstances, SI Diamond
will indemnify its officers and directors for liabilities incurred in connection
with their good faith acts. Such an indemnification payment might deplete our
assets. While Texas law permits a shareholder to bring a derivative action on
behalf of a corporation, the law relating to the remedies available to corporate
shareholders is constantly changing. Shareholders who have questions concerning
the fiduciary obligations of the officers and directors of SI Diamond should
consult with independent legal counsel. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of SI Diamond pursuant to the foregoing
provisions, or otherwise, SI Diamond 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.
There are risks associated with forward looking statements
----------------------------------------------------------
This prospectus contains some forward-looking statements.
Forward-looking statements give our current expectations or forecasts of future
events. You can identify these statements by the fact that they do not relate
strictly to historical or current facts. They use words such as "anticipate",
"believe", "expect", "estimate", "project", "intend", "plan", and other words
12
<PAGE>
and terms of similar meaning in connection with any discussion of future
operating or financial performance. In particular, these include statements
relating to future actions, prospective products or product approvals, future
performance or results of current and anticipated products, sales efforts,
expenses, the outcome of contingencies such as legal proceedings, and financial
results. From time to time, we also may provide oral or written forward-looking
statements in other materials we release to the public.
Any or all of our forward-looking statements in this report and in any
other public statements we make may turn out to be wrong. They can be affected
by inaccurate assumptions we might make or by known or unknown risks or
uncertainties. Many factors mentioned in the following discussion - for example,
product development, competition, and the availability of funding - will be
important in determining future results. Consequently, no forward-looking
statement can be guaranteed. Actual future results may vary materially.
We undertake no obligation to publicly update any forward-looking
statements, whether as the result of new information, future events, or
otherwise. You are advised, however, to consult any further disclosures we make
on related subjects in our 10-QSB, 8-K, and 10-KSB reports to the SEC. Also note
that we have provided the above cautionary discussion of risks, uncertainties,
and possibly inaccurate assumptions relevant to our business. These are factors
that we think could cause our actual results to differ materially from expected
and historical results. Other factors besides those listed above could also
adversely affect the Company. This discussion is provided as permitted by the
Private Securities Litigation Reform Act of 1995.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a Registration Statement on Form S-3 that we
filed with the Commission. This prospectus does not contain all of the
information in the Registration Statement. The Registration Statement contains
more information than this prospectus regarding SI Diamond and its common stock,
including exhibits and schedules. You can get a copy of the Registration
Statement from the SEC at the address below or from its internet site.
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy the documents we file with
the SEC at the SEC's public reference room at 450 Fifth Street, N.A., Judiciary
Plaza, Washington, D.C. 20549 and at the Regional Offices of the Commission at
the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60606-2511 and Seven World Trade Center, New York, New York 10048. You
should call 1-800-SEC-0330 for more information on the public reference room.
You can request copies of these documents upon payment of a duplicating fee by
writing to the SEC at the public reference section at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a Web site that contains
information regarding registrants at http:\\www.sec.gov.
SI Diamond's common stock is included in the OTC Bulletin Board under
the symbol "SIDT". Reports, proxy and information statements and other
information concerning the Company can be inspected at the National Association
of Securities Dealers, Inc., 1735 K Street, 3rd Floor, Washington, D.C. 20006 or
obtained by calling the Nasdaq Public Reference Room Disclosure Group at
1-800-638-8241.
13
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate" into this prospectus
information we file with the Commission in other documents. This means we can
disclose important information to you by referring to other documents which we
have filed and contain that information. The following documents, which have
been filed by SI Diamond with the Commission pursuant to the Exchange Act (File
No. 1-11602), are incorporated by reference in this prospectus and shall be
deemed to be a part hereof:
(1) SI Diamond's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1999;
(2) SI Diamond's Quarterly Report on Form 10-QSB for the quarterly
period ended March 31, 2000;
(3) SI Diamond's Current Report on Form 8-K dated as of January
21, 2000;
(4) SI Diamond's Current Report on Form 8-K dated as of April 28,
2000; and
(5) The description of SI Diamond's common stock which is
contained in its Registration Statement on Form 8-A filed on
November 19, 1992, pursuant to Section 12 of the Securities
Exchange Act of 1934, including any amendment or report filed
for the purpose of updating such description.
We incorporate by reference all future documents we may file with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until we terminate the offering of these shares. The information
that we incorporate by reference may include documents filed after the date of
this Prospectus which update and supersede the information you read in this
Prospectus.
You may request a copy of the documents incorporated by reference at no
cost. Requests for copies should be directed in writing or by telephone to:
SI Diamond Technology, Inc.
3006 Longhorn Boulevard, Suite 107
Austin, Texas 78758
Attention: Corporate Secretary
(Telephone: (512) 339-5020)
14
<PAGE>
USE OF PROCEEDS
The selling shareholders will receive all of the net proceeds from the
sale of the shares of SI Diamond common stock sold. Pursuant to this prospectus,
SI Diamond will not receive any of the proceeds from the sale of the shares by
the selling shareholders. SI Diamond will receive the proceeds from the exercise
of the warrants, which proceeds will be used for working capital. SI Diamond is
unable to predict how much it will receive from its exercise of the warrants
held by the Vision Mark Selling Shareholder since the price of such warrants
shall be established, if at all, upon the achievement of certain milestones by
C&A Services, L.L.C. See "Plan of Distribution and Selling Shareholder - Vision
Mark Selling Shareholder." The exercise prices of all other warrants range from
$1.00 to $2.15 per share of SI Diamond's common stock. It is unlikely that
significant amounts of the warrants will be exercised until the trading price of
the common stock exceeds the exercise price of the warrants, if at all.
PLAN OF DISTRIBUTION AND SELLING SHAREHOLDERS
General
-------
SI Diamond is registering the shares on behalf of the Selling
Shareholders. As used herein, "Selling Shareholders" includes donees and
pledgees selling shares received from a named Selling Shareholder after the date
of this Prospectus. The Selling Shareholders hold shares of SI Diamond's common
stock which are (1) currently "restricted securities", or (2) issuable upon
exercise of certain outstanding warrants to purchase shares of SI Diamond's
common stock. All costs, expenses and fees in connection with the registration
of the shares offered hereby will be borne by SI Diamond. Brokerage commissions
and similar selling expenses, if any, attributable to the sale of shares will be
borne by the Selling Shareholders.
Sales of shares may be effected by Selling Shareholders from time to
time in one or more types of transactions (which may include block transactions)
on the OTC Bulletin Board or any stock exchange on which the shares may be
listed in the future pursuant to and in accordance with the applicable rules of
such exchange, in negotiated transactions, through put or call options
transactions relating to the shares, through short sales of shares, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, or at negotiated prices. Such transactions may or may not involve brokers
or dealers or underwriters. The Selling Shareholders have advised SI Diamond
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their securities,
nor is there an underwriter or coordinating broker acting in connection with the
proposed sale of shares by the Selling Shareholders.
The Selling Shareholders may effect such transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the Selling Shareholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
The Selling Shareholders and any broker-dealers that act in connection
with the sale of shares might be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act, and any commissions received by such
broker-dealers and any profit on the resale of the shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. SI Diamond has agreed to indemnify each Selling
Shareholder against certain liabilities, including liabilities arising under the
Securities Act. The Selling Shareholders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
shares against certain liabilities, including liabilities arising under the
Securities Act.
15
<PAGE>
Because Selling Shareholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Shareholders
will be subject to the prospectus delivery requirements of the Securities Act.
Resales and reoffers of the shares by the Selling Shareholders must also be
accompanied by the delivery of a copy of the prospectus. Copies of the
prospectus shall be delivered to each Selling Shareholder after the Registration
Statement, of which this prospectus is a part, is declared effective. To the
extent required by applicable law, the specific shares to be sold, the names of
the Selling Shareholders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter, and any applicable
commissions or discounts with respect to a particular offer will be set forth in
the accompanying prospectus. Each Selling Shareholder shall also be informed of
the anti-manipulative rules under Regulation M promulgated pursuant to the
Exchange Act.
Selling Shareholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
They may also pledge shares as collateral for margin accounts, which shares can
be resold pursuant to the terms of such accounts.
There can be no assurance that the Selling Shareholders will sell any
or all of the shares offered by them in this prospectus. SI Diamond has filed
the Registration Statement, of which this prospectus forms a part, to comply
with the exercise by certain Selling Shareholders of demand registration rights
granted to such Selling Shareholders, and to comply with certain "piggyback"
registration rights granted to other Selling Shareholders.
16
<PAGE>
Upon SI Diamond being notified by a Selling Shareholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the Act,
disclosing (i) the name of each such Selling Shareholder and of the
participating broker-dealer(s), (ii) the number of shares involved, (iii) the
price at which such shares were sold, (iv) the commissions paid or discounts or
concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus and (vi) other facts
material to the transaction. In addition, upon SI Diamond being notified by a
Selling Shareholder that a donee or pledgee intends to sell more than 500
shares, a supplement to this Prospectus will be filed.
1996 Note Warrant Selling Shareholders
--------------------------------------
On October 31, 1996, Diamond Tech One, Inc. ("DTO"), a wholly owned
subsidiary of the Company, borrowed a total of $1,000,000 from private
individuals and entities. All of the promissory notes made payable to the Note
Warrant Selling Shareholders were guaranteed by SI Diamond. In addition, we
granted warrants to each Note Warrant Selling Shareholder to purchase 50,000
shares of SI Diamond's Common Stock at $1.00 per share any time until June 1,
2000. These warrants were issued in an exempt transaction under Regulation D of
the Securities Act.
The Company also agreed to include these warrants on a registration
statement and to keep such registration statement effective until the expiration
date of the warrants. 50,000 of these warrants were extended until June 1, 2001.
Series G Selling Shareholders
-----------------------------
In June 1997, the Series G Selling Shareholders received warrants to
purchase an aggregate of 850,000 shares of SI Diamond's common stock at $1.00
per share. These warrants expire in August 2002. Of the warrants issued, 675,000
have been exercised and 175,000 remain outstanding.
SI Diamond agreed at the time of sale of the Series G preferred stock
to register pursuant to the Registration Statement the shares of common stock
issuable upon conversion of the Series G preferred stock and the associated
warrants and to keep such Registration Statement effective for one (1) year.
Additionally, SI Diamond agreed to pay all of the expenses incident to the
preparation and filing of the Registration Statement (other than commissions and
discounts of any underwriters, dealers or agents). SI Diamond also agreed to
indemnify the Series G selling shareholders and any underwriters they may
utilize against certain civil liabilities, including liabilities arising under
the Securities Act. In addition, each Series G selling shareholder agreed to
indemnify SI Diamond against civil liabilities, including liabilities under the
Securities Act, with respect to written information furnished by the Series G
selling shareholders to SI Diamond.
1998 and 1999 Note Selling Shareholders
---------------------------------------
During 1998, SI Diamond issued a total of $1,005,000 of notes payable
to investors that were convertible into shares of the Company's common stock at
the option of the lenders, primarily at a rate of $0.25 per share, which
approximated the market price at the time the loans were made. All of these
notes have been converted into SI Diamond common stock.
17
<PAGE>
In January and February 1999, SI Diamond borrowed a total of $200,000
from a shareholder for working capital purposes. These short-term loans bore
interest at a rate of 15%, were secured by all assets of SI Diamond, and were
convertible into its common stock at rates ranging from $0.30 to $0.40 per
share. These conversion rates approximated the market price of SI Diamond's
common stock at the times the loans were arranged. These notes were converted
into shares of SI Diamond's common stock in February 1999.
October 1998 Warrant Selling Shareholder
----------------------------------------
In 1998, SI Diamond issued $100,000 of 90-day notes which were payable
at a rate of 15% and secured by all assets of SI Diamond. These notes were
accompanied by warrants enabling the holders of these 90-day notes to purchase a
total of 400,000 shares of SI Diamond's common stock at $0.25 per share, which
approximated the market price of the common stock at the time of the loans.
Vision Mark Selling Shareholder
-------------------------------
On November 11, 1998, Electronic Billboard Technology, Inc. ("EBT"), a
wholly-owned subsidiary of SI Diamond entered into a Marketing Agent Agreement
with Vision Mark, L.L.C., a Texas limited liability company. Pursuant to the
marketing agreement, EBT appointed Vision Mark as a nonexclusive marketing
representative. In connection with the marketing agreement, SI Diamond entered
into a Consulting and Advisory Services Compensation Agreement with C&A
Services, L.L.C. ("C&A"). SI Diamond also agreed that at such time as EBT
entered into a letter of intent for the installation of certain of its operating
systems resulting from Vision Mark's representation of EBT, SI Diamond would
issue C&A 300,000 shares of its common stock. EBT entered into such an
arrangement with Eckerd Corporation in January 2000. Accordingly, SI Diamond
issued 300,000 shares of its common stock to C&A consulting in February 2000.
SI Diamond also issued warrants to purchase SI Diamond common stock to
C&A, which are exercisable upon the achievement of certain goals as described
below:
(1) Once EBT has received revenue from arrangements pursuant to the
Marketing Agent Agreement in the aggregate of $10,000,000, and for each
successive and cumulative $10,000,000 increment of revenue achieved pursuant to
the Marketing Agent Agreement, C&A may exercise warrants to purchase up to
250,000 shares of SI Diamond common stock at a purchase price equal to 50% of
the average closing price of SI Diamond common stock on the five business days
next preceding the date of the achievement of each $10,000,000 increment in
revenue from the Marketing Agent Agreement.
(2) Within 60 days following each annual anniversary of the Marketing
Agent Agreement, if the aggregate revenue from such agreement is at least equal
to $10,000,000 for each such annual period, C&A shall have the additional right
thereafter to exercise warrants to purchase shares of SI Diamond common stock
with respect to each such annual determination. If the amount of revenue
received pursuant to the Marketing Agent Agreement is equal to, but not less
than 25% of, the aggregate revenue of SI Diamond for each such annual period,
C&A may exercise warrants to purchase up to 100,000 shares of SI Diamond common
stock at a purchase price equal to 75% of the average closing price of SI
Diamond common stock on the five business days next preceding the last business
day of each such annual period. For each additional 1% above 25% that the
revenue received pursuant to the Marketing Agent Agreement contributed to the
aggregate SI Diamond annual revenue for such annual period, C&A may exercise
warrants to purchase up to 100,000 such additional shares of SI Diamond common
stock, in incremental amounts of 4,000 shares of SI Diamond common stock each
for each such additional 1% of revenue that the Marketing Agent Agreement
contributed to the aggregate revenue of SI Diamond for such annual period. These
warrants may be exercised at a purchase price equal to the average closing price
of SI Diamond common stock on the five business days next preceding the last
business day of such annual period, less a percentage equal to the sum of 25%
plus an additional 1% for each additional 1% over and above 25% (not to exceed,
in the aggregate, 50%) that the revenue achieved pursuant to the Marketing Agent
Agreement contributed to the aggregate SI Diamond revenue for such annual
period.
18
<PAGE>
(3) SI Diamond also issued warrants to C&A to purchase an additional
2,300,000 shares of SI Diamond's common stock upon the receipt by EBT of each of
$100,000,000 and $200,000,000, respectively, of cumulative revenue from the
Marketing Agent Agreement (for a maximum of 4,600,000 shares). The purchase
price for the shares subject to these warrants shall be equal to 50% of the
average closing price on the five business days next preceding the date on the
achievement of each of $100,000,000 and $200,000,000 of such cumulative revenue
by EBT.
Notwithstanding anything contained in the Consulting and Advisory
Services Compensation Agreement, the number of shares of SI Diamond common stock
received by C&A shall not exceed 10,000,000 shares, subject to adjustment in
certain circumstances.
Sign Builders Selling Shareholders
----------------------------------
On September 3, 1999, SI Diamond entered into an Asset Purchase
Agreement by and among itself; SIDT, Inc., one of its indirect wholly-owned
subsidiaries; Sign Builders of America, Inc. ("SBOA"); and Sign Builders, Inc.,
a subsidiary of SBOA. In the Asset Purchase Agreement, SIDT, Inc., purchased the
assets subject to such agreement. In return SIDT, Inc., paid $150,000 in cash to
Sign Builders and $300,000 in cash to Lance Adams, the sole shareholder of SBOA.
SIDT, Inc. also executed a promissory note, guaranteed by SI Diamond, for
$450,000 payable to SBOA. $225,000 in principal of this note, plus accrued and
unpaid interest, was payable on March 3, 2000, and the remaining $225,000 in
principal of this note, plus accrued and unpaid interest, is due and payable on
September 3, 2000. At SBOA's election, on each loan payment date it may convert,
in whole or in part, principal and accrued interest of the note at $2.127 per
share. However, if the combined gross sales of SBOA and SIDT, Inc. for the 1999
calendar year does not exceed $3,000,000, then the note will be reduced $1.00 in
principal amount for each $2.00 that the actual gross sales of SBOA and SIDT,
Inc. fall below $3,000,000.00.
SI Diamond also issued a total of 423,132 shares of its common stock to
SBOA and Mr. Adams in its transaction. As part of the Asset Purchase Agreement,
SI Diamond agreed to register these shares on a registration statement. SI
Diamond agreed to keep the registration statement effective until September 3,
2000
The note payable in the amount of $450,000 described above was reduced
to $250,000 as a result of the sales price adjustment also described above. The
noteholder elected to receive the principal payment of $125,000 and the related
accrued interest due March 3, 2000 in shares of common stock. Accordingly,
62,374 shares of SI Diamond common stock were issued in payment of this note.
These shares are registered on this registration statement.
19
<PAGE>
2000 Private Placements
-----------------------
From January through May 2000, in a series of four transactions with a
shareholder, SI Diamond issued a total of 700,000 shares of common stock in
exchange for a total of $1,000,000.
In February 2000, SI Diamond issued a total of 200,000 shares of its
restricted common stock to Nomura Holdings, Ltd. in exchange for Nomura's 5%
ownership in SI Diamond's FEPET subsidiary.
In May 2000, SI Diamond agreed to issue 250,000 shares of its common
stock to an individual in exchange for an exclusive world wide license to this
individual's patents.
Other Selling Shareholders
--------------------------
SI Diamond has agreed to give the shareholders listed herein as the
Other Selling Shareholders "piggyback" registration rights regarding shares
underlying certain warrants and shares held by these holders. Pursuant to these
"piggyback" rights, SI Diamond agreed to use its best efforts to have the common
stock and the common stock issuable upon the exercise of these warrants included
in the Registration Statement, of which this prospectus is a part.
Selling Shareholders
--------------------
This prospectus covers offers of the shares of common stock owned by
the Selling Shareholders. The following table lists the names of the selling
shareholders as well as (1) the number of shares of common stock, and (2) the
number of shares of common stock underlying existing warrants held as of June 6,
2000. Because SI Diamond does not know how many shares may be sold by the
selling shareholders pursuant to this prospectus, no estimate can be given as to
the number of the shares that will be held by the selling shareholders upon
termination of this offering.
20
<PAGE>
SELLING SHAREHOLDERS TABLE
<TABLE>
<CAPTION>
Number of Shares Number of Shares
of Common of Common
Stock Held and Stock Underlying Percentage of Interests
Offered Pursuant Warrants Offered Prior to Any Sales
to This Pursuant to This Made Pursuant to This
Shareholder Prospectus Prospectus Prospectus<F1>
----------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
1996 NOTE WARRANT SELLING SHAREHOLDERS
Pinnacle Fund, L.P...................... 50,000 <F2>
Valassis Enterprises, Inc............... 50,000 *
SERIES G SELLING SHAREHOLDERS
James G. Petroff........................ 25,000 *
Mark S. Wagner.......................... 25,000 *
Chris S. Lawson......................... 25,000 *
George Valassis......................... 100,000 *
1998 AND 1999 NOTE SELLING SHAREHOLDERS
Pinnacle Fund, L.P. .................... 1,221,021 <F2>
R.J. Berman............................. 202,792 *
Bill Clement............................ 202,507 *
Michael Denton, Jr...................... 305,014 *
MSB Family Trust........................ 830,904 <F3>
Gilbert Kitt............................ 210,000 *
Nick Martin Co.......................... 207,808 *
Nicholas Martin Living Trust............ 207,808 *
Dan Cafolla Profit Sharing Plan......... 105,301 *
Tom Hickey.............................. 389,795 *
OCTOBER 1998 WARRANT SELLING
SHAREHOLDER
Johnathon Drake......................... 27,000 *
VISION MARK SELLING
SHAREHOLDER
C&A Services, LLC....................... 200,000 9,700,000 <F4> 15.00%
Bill Clement............................ 100,000 *
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Number of Shares
of Common of Common
Stock Held and Stock Underlying Percentage of Interests
Offered Pursuant Warrants Offered Prior to Any Sales
to This Pursuant to This Made Pursuant to This
Shareholder Prospectus Prospectus Prospectus<F1>
----------- ---------- ---------- -------------
<S> <C> <C> <C>
SIGN BUILDERS SELLING
SHAREHOLDERS
Sign Builders of America, Inc........... 131,668 *
Lance Adams............................. 300,919 *
Mike Benaglio........................... 3,265 *
2000 PRIVATE PLACEMENTS
MSB Family Trust........................ 700,000 <F3>
Nomura Trading Company, Ltd............. 200,000 *
Teel Keesmann........................... 250,000 *
OTHER SELLING SHAREHOLDERS
Katherine D. Banks...................... 5,000 80,000 *
James N. Perkins........................ 20,000 *
H. Scott Phillips....................... 20,000 *
John E. Palmer.......................... 7,500 *
H. Marcia Smolens....................... 7,500 *
Pinnacle Fund, L.P...................... 388,979 <F2>
Sam Chawkin............................. 48,500 *
SFT Consulting.......................... 20,000 *
TOTAL............................... 7,390,038 10,080,000 26.41%
========== =========== ===========
--------------------
* Less than 1%
<FN>
<F1> This percentage was calculated including shares issuable upon the
exercise of warrants into shares of the Company's Common Stock.
<F2> All combined, Pinnacle Fund, L.P. owns 1,660,000 shares, which
represents 3.11% of the Company's outstanding Common Stock.
<F3> All combined, MSB Family Trust owns 1,530,904 shares, which represents
2.70% of the Company's outstanding Common Stock.
<F4> These warrants shall only be exercisable, if at all, upon the
achievement of certain milestones resulting from the representation of
SI Diamond by Vision Mark.
</FN>
</TABLE>
22
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of SI Diamond consists of 120,000,000
shares of common stock, par value $.001 per share, and 2,000,000 shares of
preferred stock, par value $1 per share. The preferred stock may be issued in
series and currently consists of the Series G preferred stock, of which 900
shares are issued and outstanding.
After giving effect to the conversion of all 10,080,000 warrants which
are subject to the prospectus, there would be 66,711,840 shares of common stock
issued and outstanding. Shares of common stock are reserved for issuance upon
exercise of 6,288,271 additional shares are reserved for issuance under SI
Diamond's stock option plans and 1,161,069 additional shares are reserved for
issuance upon the conversion of the Series G preferred stock.
Common stock
------------
The holders of common stock are entitled to one vote per share, voting
with the holders of any other class of stock entitled to vote, without regard to
class, on all matters to be voted on by the shareholders, including the election
of directors. All issued and outstanding shares of common stock are fully paid
and nonassessable. The common stock is currently listed on the OTC Bulletin
Board.
Subject to any prior and superior rights of the preferred stock, the
holders of common stock are entitled to receive dividends when, and if, declared
by the Board of Directors from funds legally available. Currently, no series of
preferred stock has rights that are prior and superior to the common stock with
respect to dividends.
In the event of any liquidation, dissolution or winding up of the
affairs of SI Diamond, the holders of the common stock are entitled to receive,
pro rata, any assets of the company remaining after payment has been made in
full to the holders of any series of preferred stock with a liquidation
preference. Currently, only the holders of the Series G preferred stock are
entitled to a liquidation preference.
Preferred stock
---------------
The preferred stock may be issued from time to time in one or more
series as may be established and designated from time to time by the Board of
Directors by resolution. The voting powers, preferences and relative,
participating, optional and other special rights and the qualifications,
limitations or restrictions of any series of preferred stock shall be as stated
in the resolution or resolutions of the Board of Directors that provides for the
designation of such series. With the exception of shares issued pursuant to any
duly adopted stock option plan of SI Diamond, no shares of preferred stock may
be issued to any officer or director of SI Diamond or any shareholder who
directly or indirectly owns greater than five percent (5%) of the issued and
outstanding voting stock of SI Diamond or any affiliate of such persons, without
the affirmative vote of a majority in interest of the disinterested
shareholders. Under the Texas Business Corporation Act, each series of preferred
stock is entitled to vote as a class with respect to a proposed amendment to SI
Diamond's Restated Articles of Incorporation in certain circumstances. As of
June 6, 2000, the only preferred stock of SI Diamond outstanding was its Series
G preferred stock.
23
<PAGE>
Series G Preferred Stock
There are 3,000 shares of Series G preferred stock currently authorized
for issuance, of which 900 shares are issued and outstanding. Subject to
adjustment in certain circumstances, each share of Series G preferred stock is
convertible into that number of shares of common stock determined by dividing
the original issue price of the Series G preferred stock, plus an amount equal
to ten percent (10%) of the issue price per annum, by $1.00.
Except as provided by law, the holders of Series G preferred stock
shall be entitled to a number of votes equal to the number of shares of common
stock into which their respective shares of Series G preferred stock are then
convertible on the record date for the taking of such vote of shareholders.
Holders of Series G preferred stock shall be entitled to notice of all
shareholders meetings or written consents with respect to which they would be
entitled to vote.
In the event of any liquidation, dissolution or winding-up of SI
Diamond, either voluntary or involuntary, the holders of shares of the Series G
preferred stock then issued and outstanding shall be entitled to be paid out of
the assets of SI Diamond available for distribution to its shareholders, whether
from capital, surplus or earnings, before any payment shall be made to the
holders of shares of the common stock, an amount per share equal to the sum of
(i) the stated value and (ii) an amount equal to ten percent (10%) of the stated
value multiplied by the fraction N/365, where N equals the number of days
elapsed since the issue date of the Series G preferred stock. If, upon any
liquidation of SI Diamond, the assets available for distribution shall be
insufficient to pay the holders of shares of the Series G preferred stock and
the holders of any other series of preferred stock with a liquidation preference
equal to the liquidation preference of the Series G preferred stock the full
amounts to which they shall respectively be entitled, the holders of shares of
the Series G preferred stock and the holders of any other series of preferred
stock with liquidation preference equal to the liquidation preference of the
Series G preferred stock shall receive all of the assets of SI Diamond available
for distribution and each such holder of shares of the Series G preferred stock
and the holders of any other series of preferred stock with a liquidation
preference equal to the liquidation preference of the Series G preferred stock
shall share ratably in any distribution in accordance with the amounts due such
shareholders. After payment shall have been made to the holders of shares of the
Series G preferred stock of the full amount to which they shall be entitled, as
aforesaid, the holders of shares of the Series G preferred stock shall be
entitled to no further distributions thereon and the holders of shares of the
common stock and of shares of any other series of stock of SI Diamond shall be
entitled to share, according to their respective rights and preferences, in all
remaining assets of SI Diamond available for distribution to its shareholders.
Shares Eligible for Future Sale
-------------------------------
As of June 6, 2000, there were 56,631,840 shares of common stock
outstanding, of which 49,286,505 shares of common stock were freely tradable
without restriction or further registration under the Securities Act by persons
other than "affiliates" of the Company. As of that date, the remaining shares of
common stock were deemed "restricted securities," as defined in Rule 144 under
the Securities Act, and may not be resold in the absence of registration under
the Securities Act or pursuant to an exemption from such registration, including
exemptions provided by Rule 144 under the Securities Act. Under Rule 144,
persons who have held securities for a period of at least one year may sell a
limited amount of such securities without registration under the Securities Act.
Rule 144 also permits, under certain circumstances, persons who are not
24
<PAGE>
affiliates of SI Diamond, to sell their restricted securities without quantity
limitations once they have completed a two-year holding period.
The Registration Statement, of which this prospectus is a part, pertains to
o 6,288,271 shares of common stock which are currently
"restricted securities"; and
o 10,080,000 shares of common stock which underlie existing
warrants.
We are obligated to maintain the effectiveness of the Registration Statement for
varying periods of time, pursuant to separate agreements with certain groups of
the selling shareholders.
In addition to the shares of common stock which are outstanding as of
June 6, 2000, 7,463,926 shares of common stock have been reserved for issuance
pursuant to SI Diamond's stock option plans and 1,161,069 shares have been
reserved for issuance upon the conversion of the Series G preferred stock.
10,080,000 shares of common stock have also been reserved for issuance upon
exercise of warrants that have been issued by SI Diamond (all of which are
subject to this prospectus).
No prediction can be made as to the effect, if any, that future sales,
or the availability of shares of common stock for future sales, will have on the
market price prevailing from time to time. Sales of substantial amounts of
common stock by SI Diamond or by shareholders who hold "restricted securities,"
or the perception that such sales may occur, could adversely affect prevailing
market prices for the common stock.
Transfer Agent and Registrar
----------------------------
The transfer agent and registrar for the common stock is American
Securities Transfer, Incorporated, 12039 West Alameda Parkway, Suite Z-2,
Lakewood, Colorado 80228.
Certain Provisions of the Articles of Incorporation, Bylaws and Texas Law
-------------------------------------------------------------------------
SI Diamond's Restated Articles currently contain provisions which could
be considered to have anti-takeover effects. First, the authorized and unissued
shares of SI Diamond's preferred stock and common stock could be used by
incumbent management to make more difficult and thereby discourage an attempt to
acquire control of SI Diamond, even though some shareholders may deem such an
acquisition desirable. For example, the shares of unissued preferred stock and
unissued common stock could be privately placed with purchasers who might
support the Board of Directors in opposing a hostile takeover bid. The issuance
of the unissued preferred stock with voting rights and/or the unissued common
stock could also be used to dilute the stock ownership and voting power of a
third party seeking to remove directors, replace incumbent directors, accomplish
certain business combinations, or alter, amend, or replace provisions in SI
Diamond's Restated Articles. To the extent that it impedes any such attempt, the
unissued preferred stock and unissued common stock may serve to perpetuate
current management. From time to time, SI Diamond evaluates potential
transactions and acquisitions, which if consummated, may require the issuance of
the unissued preferred stock or unissued common stock.
25
<PAGE>
SI Diamond's Restated Articles require a classified Board of Directors
pursuant to which only one-third (1/3) of the Board of Directors is elected each
year for a term of three years. Therefore, even when a shareholder, or a group
of shareholders, has sufficient voting power to elect all of the directors to be
elected every year, SI Diamond's classified Board could have the effect of
requiring two successive annual meetings to replace a majority of the Board of
Directors and three annual meetings to replace the entire Board of Directors.
There is no cumulative voting with respect to the election of directors.
SI Diamond's Restated Articles also contain a provision which states
that with the sole exception of shares issued pursuant to the duly adopted stock
option plans, no shares of SI Diamond's preferred stock shall be issued or sold
to any officer or director of SI Diamond, or any shareholder who directly or
indirectly owns more than five percent (5%) of the issued and outstanding voting
stock of SI Diamond, or any affiliate of such a person, without the affirmative
vote of a majority in interest of the disinterested shareholders of SI Diamond.
SI Diamond shall not be obligated to deliver notices or offer voting
stock for sale pursuant to these provisions in respect of the following
issuances of voting stock: (a) pursuant to employee, director or consultant
stock option, purchase, bonus, exchange or other such plans or upon the exercise
of options or other rights granted thereunder, and (b) in connection with
transactions in which shares of voting stock are issued to security holders of a
company being acquired by SI Diamond or to a company some or all of whose assets
are being acquired by SI Diamond.
The Restated Articles limit the liability of directors of SI Diamond in
their capacity as directors. Specifically, the directors of SI Diamond will not
be liable to SI Diamond or its shareholders for monetary damages for an act or
omission in a director's capacity as a director, except for liability for the
following:
o for any breach of the director's duty of loyalty to SI Diamond
or its shareholders,
o for any act or omission not in good faith which constitutes a
breach of duty of the director to SI Diamond or acts or
omissions which involve intentional misconduct or a knowing
violation of the law,
o for transactions from which a director received an improper
benefit, whether or not the benefit resulted from an action
taken within the scope of the director's office,
o for an act or omission for which the liability of a director
is expressly provided for by an applicable statute, or
o for acts related to an unlawful stock repurchase or payment of
a dividend.
26
<PAGE>
The overall effect of the provisions in SI Diamond's current Restated
Articles described above would be to make more difficult or discourage a merger,
tender, offer or proxy contest, even if such transaction or occurrence generally
is favorable to the interests of the shareholders, or they may delay or
frustrate the assumption of control by a holder of a large block of SI Diamond's
securities and the removal of incumbent management, even if such removal may be
beneficial to the shareholders.
EXPERTS
The consolidated balance sheets as of December 31, 1999 and 1998 and
the consolidated statements of operations, stockholders' equity (deficit) and
cash flows for the years then ended, incorporated by reference in this
prospectus, have been incorporated herein in reliance on the report, which
includes an explanatory paragraph regarding SI Diamond's ability to continue as
a going concern, of WallaceSanders & Company, independent accountants, given on
the authority of that firm as experts in accounting and auditing.
LEGAL OPINIONS
Certain legal matters in connection with the common stock offered
hereby have been passed upon for the Company by Kilpatrick Stockton LLP.
27
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================
<S> <C>
SI DIAMOND
TECHNOLOGY,
INC.
You should rely only on the information [LOGO APPEARS HERE]
contained in this prospectus. We have not
authorized anyone to give you information 6,288,271 Shares of
different from that contained in this Common Stock
prospectus. The selling shareholders are (Par Value $.001 Per Share)
offering to sell, and seeking offers to buy,
shares of SI Diamond common stock only in 10,080,000 Shares of
jurisdictions where offers and sales are Common Stock
permitted. The information contained in this Underlying Warrants
prospectus is accurate only as of the date of
this prospectus, regardless of the time of the
delivery of this prospectus or of any sale of the ----------
shares.
PROSPECTUS
----------
------------------- June __, 2000
Table of Contents
Page
----
Risk factors.......................................4
Where you can find more information...............13
Documents incorporated by reference...............14
Use of proceeds...................................15
Plan of distribution and selling shareholders.....15
Selling Shareholders table........................21
Description of capital stock......................23
Experts...........................................27
Legal Opinions....................................27
===================================================================================================================
</TABLE>
28
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated fees and expenses payable in connection with this
offering, all of which are payable by SI Diamond, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee..................................$ 544.87
Printing and engraving expenses......................................................$ 2,000.00
Legal fees and expenses..............................................................$ 3,000.00
Accounting fees and expenses.........................................................$ 3,000.00
Miscellaneous .......................................................................$ 2,000.00
----------
Total..........................................................................$10,544.87
==========
</TABLE>
Item 15. Indemnification of Directors and Officers
Article 2.02A(16) and Article 2.01-1 of the Texas Business Corporation
Act and Article VIII of SI Diamond's Bylaws provide it with broad powers and
authority to indemnify its directors and officers and to purchase and maintain
insurance for such purposes. Pursuant to such statutory and Bylaw provisions, SI
Diamond has purchased insurance against certain costs of indemnification that
may be incurred by it and its officers and directors. See "Item 17.
Undertakings" for a description of the Securities and Exchange Commission's
position regarding such indemnification provisions.
Additionally, Article Seven(C) of the Restated Articles, provides that
a director of SI Diamond is not liable to the company or its shareholders for
monetary damages for any act or omission in the director's capacity as director,
except that Article Seven(C) does not eliminate or limit the liability of a
director for:
o breaches of his duty of loyalty to SI Diamond and its
shareholders;
o acts or omissions not in good faith or which constitute a
breach of duty of a director or involve intentional misconduct
or a knowing violation of law;
o transactions from which a director receives an improper
benefit, whether or not the benefit resulted from an action
taken within the scope of the director's office;
o acts or omissions for which liability is specifically provided
by statute; and
o acts relating to unlawful stock purchases or payments of
dividends.
Article Seven(C) also provides that any subsequent amendments to Texas
statutes that further limit the liability of directors will inure to the benefit
of the directors, without any further action by shareholders. Any repeal or
modification of Article Seven(C) shall not adversely affect any right of
protection of a director existing at the time of the repeal or modification.
The foregoing discussion is not intended to be exhaustive and is
qualified in its entirety by each of such documents and such statutes.
II-2
<PAGE>
ITem 16. Exhibits
See Index to Exhibits on page II - 6 for a descriptive response to this
item.
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 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 of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 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 of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on behalf of the undersigned, thereunto duly authorized,
in the City of Austin, State of Texas, on June 12, 2000.
SI DIAMOND TECHNOLOGY, INC.
By /s/ Marc W. Eller
--------------------------------------
Marc W. Eller
Chairman and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Marc W. Eller and Tracy Vaught, and each
or either 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 amendments (including
post-effective amendments) to this Registration Statement and any subsequent
registration statements relating to the offering to which this Registration
Statement relates, 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 and
necessary to be done in and about the premises, as fully and 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 or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the Requirements of the Securities Act of 1933, This
Registration Statement has Been Signed by the Following Persons in the
Capacities and On the Dates Indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <S> <C>
/s/ Marc W. Eller Chairman of the Board of June 12, 2000
-------------------------------------------- Directors and
Marc W. Eller Chief Executive Officer
(Principal Executive Officer)
/s/ Dr. Zvi Yaniv President and June 12, 2000
-------------------------------------------- Chief Operating Officer
Dr. Zvi Yaniv and Director
/s/ Tracy Vaught Vice President, June 12, 2000
-------------------------------------------- Chief Financial Officer
Tracy Vaught (Principal Financial and Accounting Officer)
/s/ Ronald J. Berman Director June 12, 2000
--------------------------------------------
Ronald J. Berman
/s/ Philip C. Shaffer Director June 12, 2000
--------------------------------------------
Philip C. Shaffer
II-4
<PAGE>
/s/ David R. Sincox Director June 12, 2000
--------------------------------------------
David R. Sincox
/s/ Nicholas Martin, Jr. Director June 12, 2000
--------------------------------------------
Nicholas Martin, Jr.
/s/ Charles C. Bailey Director June 12, 2000
--------------------------------------------
Charles C. Bailey
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
The exhibits indicated by an asterisk (*) are incorporated by reference
from previous filings with the Commission.
Exhibit
Number Description of Exhibit
------ ---------------------
4.1* Form of Certificate for shares of the Company's common stock
(Exhibit 4.1 to the Company's Registration Statement on Form
SB-2 (No. 33-51466-FW) dated January 7, 1993).
4.2* Form of warrant issued to Swartz Investments, Inc. (Exhibit
4.5 to the Company's Current Report on Form 8-K dated as of
January 19, 1996 (File No. 1-11602)
4.3* Regulation D Subscription Agreement dated as of November 11,
1998, by and between the Company and C&A Services, L.L.C., for
the issuance of warrants to purchase shares of Common Stock of
the Company (Exhibit 4.1 to the Company's Current Report on
Form 8-K dated as of December 7, 1998).
4.4* Consulting and Advisory Services Agreement by and between the
Company and C&A Services, L.L.C. dated as of November 11, 1998
(Exhibit 10.1 to the Company's Current Report on Form 8-K
dated as of December 7, 1998.)
4.5* Marketing Agent Agreement by and between Electronic Billboard
Technology, Inc. And Vision Mark, L.L.C. dated as of November
11, 1998. (Exhibit 10.2 to the Company's Current Report on
Form 8-K dated as of December 7, 1998.)
4.6* Asset Purchase Agreement by and among SI Diamond Technology,
Inc., SIDT, Inc., Sign Builders of America, Inc. and Lance
Adams dated as of August 31, 1999. (Exhibit 2.1 to the
Company's Current Report on Form 8-K dated as of September 3,
1999.)
4.7* Secured Promissory Note dated as of September 3, 1999 by SIDT,
Inc. as Maker and Sign Builders of America, Inc. and Sign
Builders, Inc., collectively as Payee. (Exhibit 4.1 to the
Company's Current Report on Form 8-K dated as of September 3,
1999.)
II-6
<PAGE>
5.1 Opinion of Kilpatrick Stockton LLP, as to certain legal
aspects of the offering.
23.1 Consent of Kilpatrick Stockton LLP (included in Exhibit 5.1).
23.2 Consent of WallaceSanders & Company. (to be filed by
amendment)
24 Powers of Attorney (set forth on the signature page of this
Registration Statement).
