As filed with the Securities and Exchange Commission on June 12, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-------------------------------------
VIDEOLABS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1726281
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5960 Golden Hills Drive
Minneapolis, Minnesota 55416
(612) 542-0061
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Copies to:
Jill R. Larson Robert R. Ribeiro, Esq.
Vice President, Administration Hinshaw & Culbertson
VIDEOLABS, Inc. 3100 Piper Jaffray Tower
5960 Golden Hills Drive 222 South Ninth Street
Minneapolis, Minnesota 55416 Minneapolis, Minnesota 55402
(612) 542-0061 (612) 334-8025
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================
Proposed Proposed
Title of Each Amount Maximum Maximum Amount of
Class of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Share* Offering Price* Fee
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
($.01 par value) 2,419,601 $1.21875 $2,948,889 $870.00
=============================================================================================
</TABLE>
* Estimated solely for purposes of computing the registration fee and
based upon the average of the high and low sales prices for such Common
Stock on June 10, 1998, as reported on the Nasdaq market system.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion: dated June 12, 1998
PROSPECTUS
VIDEOLABS, INC.
---------------------
2,419,601 SHARES
OF
COMMON STOCK
($.01 PAR VALUE)
---------------------
This Prospectus relates to an aggregate of 2,419,601 shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of
VideoLabs, Inc., a Delaware corporation ("Videolabs" or the "Company"), that may
be sold from time to time by the shareholders named herein (the "Selling
Shareholders"). See "Selling Shareholders." The Company will not receive any
proceeds from the sale of the Shares. The Company has agreed to pay the expenses
of registration of the Shares, including certain legal and accounting fees. Of
the total 2,419,601 shares offered hereby, 706,026 shares were issued by the
Company upon exercise of warrants, 201,478 shares were issued pursuant to
contractual commitments, and 1,512,097 shares may be issued by the Company upon
exercise of outstanding warrants and nonemployee options.
Any or all of the Shares may be offered from time to time in
transactions on the over-the-counter market, in brokerage transactions at
prevailing market prices or in transactions at negotiated prices. See "Plan of
Distribution."
The Shares offered hereby have not been registered under the blue sky
or securities laws of any jurisdiction, and any broker or dealer should assure
the existence of an exemption from registration or effectuate such registration
in connection with the offer and sale of the Shares.
The Common Stock is traded in the over-the-counter market and is quoted
on the Nasdaq SmallCap Market System under the symbol "VLAB." On June 10, 1998,
the last reported sale price of the Common Stock as reported on the Nasdaq
SmallCap Market System was $1.21875 per share.
---------------------
FOR INFORMATION CONCERNING CERTAIN RISKS RELATED TO THIS
OFFERING, SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF
THIS PROSPECTUS.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offer contained herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, any securities offered hereby in any jurisdiction in which
it is not lawful or to any person to whom it is not lawful to make any such
offer or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that
information herein is correct as of any time subsequent to the date hereof.
The date of this Prospectus is ___________, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices at 7
World Trade Center, Suite 1300, New York, New York 10048 and CitiCorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission maintains a web site that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission. The address of the web site is http://www.sec.gov. In addition,
the Common Stock of the Company is quoted on the Nasdaq SmallCap Market System,
and reports, proxy statements and other information concerning the Company can
also be inspected at the offices of the National Association of Securities
Dealers, 1735 K. Street N.W., Washington, D.C. 20006. This Prospectus does not
contain all the information set forth in the Registration Statement and exhibits
thereto which the Company has filed with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"), and to which reference is hereby
made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company which have been filed with the
Commission are hereby incorporated by reference in this Prospectus:
(a) the Annual Report on Form 10-KSB for the year ended
December 31, 1997;
(b) the Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998;
(c) the description of the Company's Common Stock contained in the
Company's Registration Statement filed pursuant to Section 12
of the Exchange Act and any amendment or report filed for the
purpose of updating any such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Common Stock shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained herein or
in a document all or part of which is incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed
2
<PAGE>
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference (other
than certain exhibits to such documents). Requests for such copies should be
directed to Ms. Jill Larson, VideoLabs, Inc., 5960 Golden Hills Drive,
Minneapolis, Minnesota 55416, telephone number (612) 542-0061.
RISK FACTORS
The following risk factors should be considered carefully in addition
to the other information contained in or incorporated by reference into this
Prospectus before purchasing the Common Stock offered hereby. This Prospectus,
including the information incorporated herein by reference, contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-
looking statements represent the Company's expectations or beliefs concerning
future events, including the following: any statements regarding future sales
and gross profit percentages, any statements regarding the continuation of
historical trends, any statements regarding the sufficiency of the Company's
cash balances and cash generated from operating and financing activities for the
Company's future liquidity and capital resource needs. The Company cautions that
these statements are further qualified by important factors that could cause
actual results to differ materially from those projected in the forward-looking
statements as a result, in part, of the risk factors set forth below. In
connection with the forward-looking statements which appear in this Prospectus,
including the information incorporated herein by reference, prospective
purchasers of VideoLabs Common Stock offered hereby should carefully review the
factors set forth below.
LIMITED HISTORY OF PROFITABILITY
The Company achieved its first year of four consecutive profitable
quarters, and its second profitable year, during the fiscal year ended December
31, 1997. There can be no assurance that profitable operations can be maintained
in the future. As of December 31, 1997, the Company had an accumulated deficit
of $2.3 million.
QUOTATION BY NASDAQ
The Company's Common Stock is currently traded in the national
over-the-counter market and quoted on the National Association of Securities
Dealers Automated Quotation System ("Nasdaq") SmallCap Market System. Nasdaq
rules require that companies quoted on the Nasdaq SmallCap Market System have
total assets of at least $2,000,000 and capital and surplus of at least
$1,000,000. As of March 31, 1998, the Company had total assets of $3,947,753 and
capital and surplus of $3,346,996. If the Company's Common Stock is not quoted
by Nasdaq in the
3
<PAGE>
future, it will be quoted in the local over-the-counter "pink sheets" and may
also be reported on the Nasdaq OTC Bulletin Board. However, in such event, the
public trading market for the Company's Common Stock could be adversely
affected. There can be no assurance that the Company will be able to meet the
applicable requirements for maintaining its Nasdaq SmallCap Market quotation in
the future.
COMPETITION
The electronic camera market is highly competitive. The Company
competes with a number of companies ranging from very small businesses to large
companies, some of which have substantially greater financial, manufacturing,
marketing and product development resources than the Company. Some of these
other companies manufacture and sell electronic cameras as well as video-capture
equipment, and some are distributors for these products. The Company believes
that it competes most directly with Sony, Toshiba, Panasonic, Ken A Vision,
Sharp Electronics and Elmo.
Because the Company manufactures its product lines through the assembly
of component parts which are readily available in the world marketplace, there
are few barriers which would prevent others from designing and assembling
products similar to those sold by the Company.
The Company competes for electronic camera sales primarily on the basis
of image quality, design, focus, costs, flexibility, delivery time, reputation,
reliability, the effectiveness of its sales and distribution channels and its
customer service. The Company believes that its products compete favorably on
these factors, although there can be no assurance that this will continue to be
true in the future.
TECHNOLOGICAL CHANGE
The markets for the Company's products are characterized by rapid
technological change and evolving industry standards and, further, are highly
competitive with respect to timely product innovation, the introduction of
profits embodying new technology and the emergence of new industry standards
which can render existing products obsolete and non-marketable. The Company's
success depends on its ability to anticipate changes in technology and industry
standards and thereby to develop and successfully introduce new and enhanced
products on a timely basis. If the Company is unable for technological or other
reasons to develop products in a timely manner in response to changes in the
marketplace or if products or product enhancements that the Company develops do
not achieve market acceptance, the Company's business will be materially and
adversely affected.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is dependent upon the services of Mr. James
Hansen, the Chairman, Chief Executive Officer and Treasurer of VideoLabs. On
June 1, 1997, the Company entered into a three year employment agreement with
Mr. Hansen which contains provisions
4
<PAGE>
prohibiting competition with the Company under certain conditions. The Company
does not maintain key-man life insurance on Mr. Hansen.
GOVERNMENT REGULATION
Products sold by the Company are subject to regulations of the U.S.
Government Federal Communication Commission and European product compliance
requirements. All products sold by the Company have met mandatory requirements
of both the FCC and CE regulations. The Company does not know of any pending
regulations which would affect its operations or products.
LIMITED PROPRIETARY PROTECTION
The Company attempts to protect the proprietary rights to its products
by use of patents, copyrights, trade secret law and internal non-disclosure
safeguards. The source code for the software contained in the Company's products
is considered proprietary and is not furnished to customers. The Company has
also entered into confidentiality and non-compete agreements with certain key
employees as well as outside consultants. Despite these restrictions, it may be
possible for competitors or users to copy aspects of the Company's products or
to obtain information that the Company regards as proprietary.
The Company has received a patent for the FlexCam and several of its
healthcare products and intends to vigorously defend these patents in the
marketplace.
FlexCam was originally engineered by outside consultants at the
direction of the Company. The Company has a royalty agreement with the original
design firm and pays two percent (2%) of revenues resulting from the first
36,000 electronic camera sales and one percent (1%) of the revenues from the
subsequent 20,000 unit sales and one-half percent (0.5%) of the next 20,000 unit
sales. The Company has shipped approximately 71,000 units under this agreement.
Because of the rapid pace of technological changes in the computer
industry, the Company believes that patent, trade secret and copyright
protection are less significant to its competitive position than are factors
such as the knowledge, ability and experience of the Company's personnel, the
Company's success at new product development and frequent product enhancements,
and the Company's name recognition and ongoing reliable product maintenance and
support.
NO CASH DIVIDENDS
The Company has never paid or declared any cash dividends on its Common
Stock and does not intend to pay dividends on its Common Stock in the
foreseeable future.
5
<PAGE>
LIMITATION OF DIRECTOR LIABILITY
The Company's Certificate of Incorporation and Bylaws provide for
indemnification of directors to the full extent permitted by the Delaware
Business Corporation Law and, to the extent permitted by such law, eliminate or
limit the personal liability of directors to the Company and its shareholders
for monetary damages for certain breaches of fiduciary duty. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed 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.
VIDEOLABS, INC.
GENERAL
VideoLabs, Inc. (the "Company") is a Delaware corporation which was
incorporated in 1992. The Company designs and manufactures image capture,
transmission and manipulation devices for use as components of systems for
identification, medical, desktop computer video applications,
video-teleconferencing and computer-based and non-computer based solutions.
The Company believes that there are opportunities for growth in the
application of the core technologies of the Company in several market segments.
The potential for increases in use of image capture devices in audio visual,
education and computer markets is increasing as computer markets is increasing
as computer processing power, speed and cost factors have all improved as has
higher capacity transmission utilities. The Company has also observed emerging
applications in the use of video image capture solutions in identification,
medical and other market segments that are primarily due to new, flexible, lower
cost digital applications that allow for unique solutions targeted at potential
niche markets.
The Company's short term strategy is to develop or acquire image
capture solutions for specific niche markets in education, audio visual,
identification and medical applications where it already has distribution
resources and can provide value-added solutions.
THE COMPANY STRATEGY
The Company's business strategy is to utilize its core competencies in
analog and digital image capture development and distribution to provide
solutions for individual and organizational customers and to earn an acceptable
return on equity for the Company's shareholders.
FOCUS ON PROFITABLE GROWTH
The Company is focused on internal growth in profitable niches in
professional image capture solutions for audio visual, education, identification
and medical markets where it
6
<PAGE>
currently has distribution system capabilities. The Company intends to become a
multiple product supplier in these markets through internal product development
and through product acquisitions. The Company is positioned to respond to growth
opportunities in the desktop video and computer videoconferencing markets as
profitable niches and internal resources become available.
The Company has instituted an ISO 9001 quality program and is working
with its suppliers to reduce cost of goods sold and inventory levels while
improving quality and customer response times. Furthermore the Company is
working on partnerships with its suppliers and distributors to reduce cost of
goods sold and selling expenses while shortening cycle times and putting the
Company closer to our customers in the selling channel. The Company also
believes that acquisition opportunities exist in markets with potential to
leverage existing technology, distribution systems or the administrative
infrastructure.
RECENT DEVELOPMENTS
In March 1998, certain warrantholders exercised a total of 594,691
warrants at an exercise price of $0.6875. The Company received a total of
$408,850 in proceeds from the exercise of these warrants into the Company's
common stock. Currently the Company has approximately 1.1 million warrants
remaining that have expiration dates extending over the period of July 31, 1998
to January 15, 1999 with potential proceeds of approximately $750,000 (assuming
the exercising of all outstanding warrants).
On April 6, 1998, the Company closed on an acquisition of assets and
intellectual property rights of Video Dynamics, Inc., a Florida corporation.
Video Dynamics is located in Sunrise, Florida and will be operating as a
division of the Company called VideoLabs' Healthcare Products Division. The
founders of Video Dynamics are now both employees of the Company. The total
purchase price consisted of a combination of Company stock and cash totaling
$500,000.
7
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information as to the maximum
number of Shares that may be sold by each of the Selling Shareholders pursuant
to this Prospectus.
<TABLE>
<CAPTION>
Percent of
Number of Number of Number of Common Stock
Shares Owned Shares Shares to be Owned After
Prior to the Offered Owned After Completion of
Name Offering Hereby the Offering (12) Offering
- ---- -------- ------ ----------------- --------
<S> <C> <C> <C> <C>
John Collins (1) 65,455 32,122(5) 33,333 *
Ward Johnson (2) 336,769 32,000(a) 304,769 7.8
Christian Johnson 20,000 20,000(a) 0 *
Margit Johnson 20,000 20,000(a) 0 *
Erik Johnson 20,000 20,000(a) 0 *
Andrew J. Porter Irrevocable
Trust U/A 7/25/90 81,816 81,816(6) 0 *
Kathleen Porter Irrevocable Trust
U/A 5/18/89 81,816 81,816(7) 0 *
Maria Porter Irrevocable
Trust U/A 7/25/87 81,816 81,816(8) 0 *
Michael Porter Irrevocable Trust
U/A 1/23/88 81,816 81,816(9) 0 *
James Hansen (3) 419,976 320,000(10) 99,976 2.6%
Timothy A. Gagner 72,722 72,722(b) 0 *
Richard F. Craven (4) 647,484 292,460(11) 355,024 9.1%
A. J. Porter 41,971 41,971(a) 0 *
Ann Johnson 29,091 29,091(a) 0 *
Ann Crowely 8,145 8,145(b) 0 *
William M. and Sandra K
Metcalf 58,183 58,183(b) 0 *
Kathleen Stroh 8,145 8,145(b) 0 *
David J. and Virginia E
Griswald 8,145 8,145(b) 0 *
Richard L. Robinson & F
Lee Robinson 40,727 40,727(b) 0 *
Marion & Louise Waters 8,145 8,145(b) 0 *
Howard V. O'Connell 34,618 34,618(b) 0 *
Alan C. Phillips 81,455 81,455(b) 0 *
James F. Pederson 8,145 8,145(b) 0 *
First Trust National Assoc,
FBO James V. Vessey IRA 1,000 1,000(a) 0 *
Robert S Spong 34,618 34,618(b) 0 *
John G. Kinnard & Co. 101,818 101,818(b) 0 *
Binford & Assoc. Profit Sharing 4,073 4,073(b) 0 *
Bright M. Dornblaser 8,145 8,145(b) 0 *
Byron Shaffer 162,909 162,909(b) 0 *
Charles McMunn 16,291 16,291(b) 0 *
Dave Olson 30,545 30,545(b) 0 *
Dorothy Trisko 7,270 7,270(b) 0 *
Gary T. Alkire 20,364 20,364(b) 0 *
George O. Johnson 8,145 8,145(b) 0 *
Karen Struve 8,145 8,145(b) 0 *
8
<PAGE>
Mary S. Binford 2,036 2,036(b) 0 *
Michael S. McGray 4,073 4,073(b) 0 *
Norman and Kahthryn Craven 2,036 2,036(b) 0 *
Sheldon and Ruth Gustafson 4,073 4,073(b) 0 *
Timothy and Susan Thompson 2,097 2,097(b) 0 *
Dirk D. Draayer 815 815(b) 0 *
Don and Alice Craven 8,145 8,145(b) 0 *
Glen and Margret Thompson 8,145 8,145(b) 0 *
Gregory D. Craven 4,073 4,073(b) 0 *
Gretchen M. Craven 4,073 4,073(b) 0 *
James E. Kopriva 2,036 2,036(b) 0 *
Jan Gniffke 815 815(b) 0 *
Larry F. Gehl 2,851 2,851(b) 0 *
Lisa Wing 815 815(b) 0 *
Michael P. Craven 1,018 1,018(b) 0 *
Rick Lalonde 815 815(b) 0 *
Robert A. and Karen J. Craven 4,073 4,073(b) 0 *
Scott C. Dunlop 2,036 2,036(b) 0 *
Todd R. Craven 4,073 4,073(b) 0 *
A. J. Kamps 40,727 40,727(b) 0 *
Charles H. Colby 20,364 20,364(b) 0 *
Jay Jackson 7,273 7,273(b) 0 *
David Krekelberg 60,000 60,000(b) 0 *
Frank Broghammer 2,500 2,500(b) 0 *
Ted Davies 10,000 10,000(b) 0 *
Gary Campbell 2,500 2,500(b) 0 *
Video Dynamics, Inc. 201,478 201,478(a) 0 *
b. warrant holdings 2,480 2,480(b) 0 *
Wayne Mills 3,400 3,400(b) 0 *
Dennis Hanish 4,500 4,500(b) 0 *
John Ryden 4,500 4,500(b) 0 *
Edward Higgins 5,000 5,000(b) 0 *
Richard B. Heise 65,060 65,060(b) 0 *
John E. Feltl 65,060 65,060(b) 0 *
---------- ----------- ---
TOTAL 3,202,703 2,419,601 793,102 *
========== ========= =======
</TABLE>
===============================================================================
(a) Denotes Shares issued and outstanding.
(b) Denotes Shares issuable upon exercise of outstanding warrants or options.
* Less than 1 percent.
(1) Mr. Collins is a director of the Company.
(2) Mr. Johnson is a director of the Company.
(3) Mr. Hansen is the Chairman, CEO and Treasurer of the Company. (4) Mr. Crave
is a director of the Company
(5) Reflects 12,122 issued and outstanding Shares and 20,000 Shares issuable
upon exercise of warrants or options.
(6) Reflects 52,900 issued and outstanding Shares and 28,916 Shares issuable
upon exercise of warrants or options.
(7) Reflects 52,900 issued and outstanding Shares and 28,916 Shares issuable
upon exercise of warrants or options.
(8) Reflects 52,900 issued and outstanding Shares and 28,916 Shares issuable
upon exercise of warrants or options.
(9) Reflects 52,900 issued and outstanding Shares and 28,916 Shares issuable
upon exercise of warrants or options.
(10) Reflects 170,000 issued and outstanding Shares and 150,000 Shares issuable
upon exercise of warrants or options.
(11) Reflects 188,969 issued and outstanding Shares and 103,471 Shares issuable
upon exercise of warrants or options.
(12) Assumes all shares being registered in this offering will be sold. However,
to the Company's knowledge, the holders of such securities have no
commitment to anyone to sell all or part of the securities being
registered.
9
<PAGE>
PLAN OF DISTRIBUTION
The Shares will be offered and sold by the Selling Shareholders for
their own accounts. The Company will not receive any proceeds from the sale of
the Shares pursuant to this Prospectus. The Company has agreed to pay the
expenses of registration of the Shares, including a certain amount of legal and
accounting fees.
The Selling Shareholders may offer and sell the Shares from time to
time in transactions on the over-the-counter market, in brokerage transactions
at prevailing market prices or in transactions at negotiated prices. Sales may
be made to or through brokers or dealers who may receive compensation in the
form of discounts, concessions or commissions from the Selling Shareholders or
the purchasers of Shares for whom such brokers or dealers may act as agent or to
whom they may sell as principal, or both. As of the date of this Prospectus, the
Company is not aware of any agreement, arrangement or understanding between any
broker or dealer and the Selling Shareholders.
The Selling Shareholders and any brokers or dealers acting in
connection with the sale of the Shares hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and any profit realized by them on the resale
of Shares as principals may be deemed underwriting compensation under the
Securities Act.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Boulay, Heutmaker, Zibell & Co. P.L.L.P., independent public accountants, as
indicated in their report with respect thereto, and incorporated herein by
reference in reliance upon the authority of such firm as experts in accounting
and auditing in giving said reports.
LEGAL MATTERS
The validity of the Shares offered hereby has been passed upon for the
Company by Hinshaw & Culbertson, 222 South Ninth Street, Minneapolis, Minnesota
55402.
10
<PAGE>
No dealer, salesperson or any other
person has been authorized to give any
information or to make any representations 2,419,601 Shares
other than those contained in this
Prospectus, and, if given or made, such
information or representations must not be
relied upon as having been authorized by the
Company, any Selling Shareholder or any
other person. This Prospectus does not
constitute an offer to sell or a VIDEOLABS, INC.
solicitation of any offer to buy to any
person in any jurisdiction in which such
offer or solicitation would be unlawful or
to any person to whom it is unlawful.
Neither the delivery of this Prospectus nor
any offer of sale made hereunder shall,
under any circumstances, create any
implication that there has been no change in
the affairs of the Company or that the
information contained herein is correct as
of any time subsequent to the date hereof.
-------------------- Common Stock
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION................... 2
--------------
INCORPORATION OF CERTAIN DOCUMENTS PROSPECTUS
BY REFERENCE............................ 2 --------------
RISK FACTORS............................ 3
VIDEOLABS, INC.......................... 6
SELLING SHAREHOLDERS.................... 8
PLAN OF DISTRIBUTION.................... 10
EXPERTS ............................... 10
LEGAL MATTERS........................... 10
________, 1998
=========================================== ==============================
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Registration Fee $ 870
Accounting Fees and Expenses 800
Legal Fees and Expenses 3,000
Miscellaneous 500
---
Total $ 5,170
All fees and expenses other than the SEC registration fee are
estimated. The expenses listed above will be paid by the Company.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under Delaware law, the directors and officers of the Company are
entitled, under certain circumstances, to be indemnified by it against all
expenses and liabilities incurred by or imposed upon them as a result of suits
brought against them as such directors and officers, if they act in good faith
and in a manner they reasonably believe to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, have no reasonable cause to believe their conduct was unlawful,
except that no indemnification shall be made against expenses in respect of any
claim, issue or matter as to which they shall have been adjudged to be liable
for negligence or misconduct in the performance of their duties to the Company,
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, they are fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper. Any such indemnification may be made by the Company only as authorized
in each specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable statutory standard of conduct. The Certificate of Incorporation and
Bylaws of VideoLabs provides that VideoLabs indemnify officers and directors to
the extent permitted by law as now enacted or hereafter amended.
VideoLabs also maintains an insurance policy or policies to assist in
funding indemnification of directors and officers for certain liabilities.
II-1
<PAGE>
ITEM 16. LIST OF EXHIBITS
5 Opinion of Hinshaw & Culbertson regarding legality.
23.1 Consent of Boulay, Heutmaker, Zibell & Co. P.L.L.P.
23.2 Consent of Hinshaw & Culbertson (included in Exhibit 5 to this
Registration Statement).
24 Power of Attorney.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof which,
individually or in the aggregate, represent a fundamental
change to such information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change in the
information set forth in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
II-2
<PAGE>
(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.
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 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.
Insofar as indemnification for liabilities arising Under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Minneapolis, State of
Minnesota, on June 11, 1998.
VIDEOLABS, INC.
By /s/ James Hansen
-------------------------------------
James Hansen
Chairman and Chief Executive Officer
II-3
<PAGE>
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.
By /s/ James Hansen
---------------------------------------- Dated: June 11, 1998
James Hansen
Chairman and Chief Executive Officer
(principal executive officer)
By /s/ James Hansen
---------------------------------------- Dated: June 11, 1998
James Hansen
Treasurer
(principal financial officer)
(principal accounting officer)
By * Dated: June 11, 1998
----------------------------------------
Ward Johnson
Director
By * Dated: June 11, 1998
----------------------------------------
Richard Craven
Director
By * Dated: June 11, 1998
----------------------------------------
John Collins
Director
*By /s/ James Hansen Dated: June 11, 1998
----------------------------------------
James Hansen
As Attorney-in-Fact
II-4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
5 Opinion of Hinshaw & Culbertson regarding legality..
23.1 Consent of Boulay, Heutmaker, Zibell & Co. P.L.L.P..
24 Power of Attorney...................................
Exhibit 5
(Hinshaw & Culbertson Letterhead]
June 11, 1998
VideoLabs
5960 Golden Hills Drive
Minneapolis, Minnesota 55416
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to VideoLabs, Inc., a Delaware corporation
(the "Company") in connection with a Registration Statement on Form S-3 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to the sale of
up to 2,419,601 shares of common stock of the Company, par value $.01 per share
("Common Stock"), of which all such shares will be sold from time to time by the
Selling Shareholders named in the Registration Statement, on the
over-the-counter market or otherwise, directly or through underwriters, brokers
or dealers.
We have examined such documents and have reviewed such questions of law
as we have considered necessary and appropriate for the purposes of our opinions
set forth below. In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Company, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
upon certificates of officers of the Company and of public officials.
Based on the foregoing, we are of the opinion that the shares of Common
Stock to be sold by the Selling Shareholders pursuant to the Registration
Statement have been duly authorized by all requisite corporate action and are
validly issued, fully paid and nonassessable or, upon issuance, will be validly
issued, fully paid and nonassessable.
Our opinions expressed above are limited to the laws of the State of
Minnesota and the General Corporation Law of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the Prospectus constituting part of the Registration Statement.
Very truly yours,
/s/ Hinshaw & Culbertson
Hinshaw & Culbertson
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
VideoLabs, Inc.:
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
Boulay, Heutmaker, Zibell & Co. P.L.L.P.
Minneapolis, Minnesota
June 11, 1998
Exhibit 24
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James Hansen, his or her true and lawful
attorney-in-fact and agent with full power of substitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign the
Registration Statement on Form S-3 of VideoLabs, Inc. (the "Company") relating
to an aggregate of 2,419,601 shares of Company Common Stock that may be sold
from time to time by certain shareholders of the Company, and any or all
amendments or post-effective amendments thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and to file the same with such state
commissions and other agencies as necessary, granting unto each such
attorney-in-fact and agent 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 to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that each such attorney-in-fact fund
agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed on this 11th
day of June, 1998, by the following persons.
/s/ Ward Johnson
-----------------------------------
/s/ Richard Crave
-----------------------------------
s/ John Collins
-----------------------------------
