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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 23, 1997
REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ESS TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
CALIFORNIA 94-2928582
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
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48401 FREMONT BLVD.
FREMONT, CALIFORNIA 94538
(510) 492-1088
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOHN H. BARNET
VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER
ESS TECHNOLOGY, INC.
48401 FREMONT BLVD.
FREMONT, CALIFORNIA 94538
(510) 492-1088
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
TAE HEA NAHM
VENTURE LAW GROUP
A PROFESSIONAL CORPORATION
2800 SAND HILL ROAD
MENLO PARK, CALIFORNIA 94025
(415) 854-4488
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------
Common Stock, no par value..... 869,951 shares $13.03 $11,335,462 $3,435
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(1) Estimated solely for the purpose of computing the amount of the registration
fee, based on the average of the high and low prices for the Company's
Common Stock as reported on The Nasdaq National Market on October 16, 1997
in accordance with Rule 457 under the Securities Act of 1933.
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 SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
PROSPECTUS
869,951 SHARES
ESS TECHNOLOGY, INC.
COMMON STOCK
------------------------
This Prospectus covers 869,951 shares of Common Stock, no par value (the
"Common Stock" or the "Shares"), of ESS Technology, Inc. ("ESS" or the
"Company"), which may be offered from time to time by one or all of the selling
shareholders named herein (the "Selling Shareholders"). The Company will receive
no part of the proceeds of such sales.
The Shares were issued to the Selling Shareholders in connection with the
acquisition of Platform Technologies, Inc., a California corporation, by the
Company on June 11, 1997 (the "Acquisition"). For additional information
concerning the Acquisition, see "Issuance of Common Stock to Selling
Shareholders." The Selling Shareholders intend to sell the shares offered hereby
from time to time in the over-the-counter market at prices prevailing therein,
in individually negotiated transactions at such prices as may be agreed upon or
a combination of such methods of sale, during a fourteen-day period immediately
following the effective date of this Prospectus. The Company will bear all
expenses with respect to the offering of the Common Stock (estimated to be
approximately $21,000) except any underwriting discounts, selling commissions,
stock transfer taxes, or fees and disbursements of counsel for the Selling
Shareholders. To the extent required, the specific shares of Common Stock to be
sold, the names of the Selling Shareholders, the public offering price, the
names of any agent dealer or underwriter and any applicable commission or
discount with respect to any particular offer is set forth herein or will be set
forth in an accompanying Prospectus Supplement. See "Selling Shareholders" and
"Plan of Distribution." Each Selling Shareholder has advised the Company that no
sale or distribution other than as disclosed herein will be effected until after
this Prospectus shall have been appropriately amended or supplemented, if
required, to set forth the terms thereof.
The Company's Common Stock is traded on The Nasdaq National Market under
the symbol ESST. The last reported sales price of the Common Stock on The Nasdaq
National Market on October 21, 1997 was $13.75 per share.
------------------------
SEE "RISK FACTORS," BEGINNING ON PAGE 5,
FOR INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
------------------------
The Selling Shareholders and any broker executing selling orders on behalf
of the Selling Shareholders may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
Commissions received by any such broker may be deemed to be underwriting
commissions under the Securities Act. See "Plan of Distribution" for information
relating to indemnification of the Selling Shareholders.
------------------------
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.
------------------------
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UNDERWRITING PROCEEDS TO
DISCOUNTS AND SELLING
PRICE TO PUBLIC COMMISSION STOCKHOLDERS
- -----------------------------------------------------------------------------------------------
Per Share.............................
Total................................. See Text Above See Text Above See Text Above
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THE DATE OF THIS PROSPECTUS IS OCTOBER , 1997
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No person is authorized in connection with any offering made hereby to give
any information or to make any representation not contained in this Prospectus,
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company or the Selling Shareholders. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any security other than the shares of Common Stock offered hereby, nor does
it constitute an offer to sell or a solicitation of an offer to buy any of the
shares offered hereby to any person in any jurisdiction in which it is unlawful
to make such an offer or solicitation. Neither the delivery of this Prospectus
nor any sale made hereunder shall under any circumstances create any implication
that the information contained herein is correct as of any time subsequent to
the date hereof.
ADDITIONAL INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the shares
of Common Stock offered hereby, reference is hereby made to the Registration
Statement. Statements contained herein concerning the provisions of any document
are not necessarily complete, and each such statement is qualified in its
entirety by reference to the copy of such document filed with the Commission.
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 and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, NW, Washington, D.C. 20549,
and at the following Regional Offices of the Commission: New York Regional
Office, Seven World Trade Center, New York, New York 10048, and Chicago Regional
Office, Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material can be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, NW, Washington, D.C. 20549 upon payment of
the prescribed fees. The Company is also required to file electronic versions of
these documents with the Commission through the Commission's Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR"). The Common Stock of the
Company is quoted on The Nasdaq National Market. Reports, proxy and information
statements and other information concerning the Company may be inspected at The
Nasdaq Stock Market at 1735 K Street, NW, Washington, D.C. 20006. In addition,
the Commission maintains a World Wide Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, filed on March 18, 1997 and amended on March
20, 1997 (Form 10-K/A);
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997;
(3) The Company's Current Report on Form 8-K filed June 24, 1997 and
amended on August 25, 1997; and
(4) The description of the Company's capital stock contained in its
Registration Statement on Form 8-A as filed with the Commission
under Section 12 of the Exchange Act of 1934, as amended (the
"Exchange Act") on October 5, 1995, including any amendment
thereto or report filed for the purpose of updating such
description.
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference herein, to the extent required, and to be a part
hereof from the date of filing of such reports and documents. Any statement
incorporated herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all of
the foregoing documents incorporated herein by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
into such documents). Requests for such documents should be submitted in writing
to Stock Administrator, ESS Technology, Inc., 48401 Fremont Blvd., Fremont,
California 94538 or by telephone at (510) 492-1088.
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THE COMPANY
ESS Technology, Inc. ("ESS" or the "Company"), a California corporation,
designs, markets and supports highly integrated mixed-signal semiconductor and
software solutions for multimedia applications in the personal computer ("PC")
and consumer marketplaces. The Company offers comprehensive solutions for audio,
video and fax/modem applications. ESS has established itself as a leading
supplier of mixed-signal PC audio solutions that integrate all essential audio
components on a single chip. During 1996, ESS introduced a family of integrated
circuits that incorporate advanced compression technology for digital video
products and began marketing a line of highly integrated V.34bis modem
solutions.
ESS leverages a leadership position in PC audio and video technology, a
diverse customer base, recognized quality, and dependable on-time delivery to
provide high quality, cost effective, and highly integrated multimedia solutions
for the personal computer and consumer markets. The Company has three major
families of products: the AudioDRIVE family addressing its PC digital audio
device market; the VideoDRIVE family targeting MPEG1 and MPEG2
decompression-based consumer products such as Video Compact Disk ("VCD")
players, Digital Video Disk ("DVD") players and set-top boxes, and the TeleDRIVE
family focusing on the integrated audio-fax/modem applications, including
full-duplex speakerphone, digital simultaneous voice and data ("DVSD") and
videoconferencing.
ESS was incorporated in 1984 under the laws of California. The Company's
principal executive offices are located at 48401 Fremont Blvd., Fremont,
California 94538 and its telephone number is (510) 492-1088. As used in this
Prospectus, the "Company" and "ESS" refer to ESS Technology, Inc., a California
corporation, and its wholly-owned subsidiaries.
4
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RISK FACTORS
This Prospectus (including the documents incorporated by reference herein)
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,
including, without limitation, statements regarding the Company's expectations,
beliefs, intentions or future strategies. All forward looking statements
included in this document are based on information available to the Company on
the date hereof, and the Company assumes no obligation to update any such
forward looking statements. Actual results could differ materially from those
projected in the forward-looking statements as a result of the risk factors set
forth below and in the documents incorporated by reference herein. In evaluating
the Company's business, prospective investors should carefully consider the
following risk factors in addition to the other information set forth herein or
incorporated herein by reference.
Potential Fluctuations in Operating Results. The Company's operating
results are subject to quarterly and other fluctuations due to a variety of
factors, including the gain or loss of significant customers, increased
competitive pressures, changes in pricing policies by the Company, its
competitors or its suppliers, including decreases in unit average selling prices
("ASPs") of the Company's products, the timing of new product announcements and
introductions by the Company or its competitors and market acceptance of new or
enhanced versions of the Company's and its customers' products. Other factors
include seasonal customer demand, the availability of foundry capacity,
fluctuations in manufacturing yields, availability and cost of raw materials,
changes in the mix of products sold, the cyclical nature of both the
semiconductor industry and the market for PCs, the timing of significant orders
and significant increases in expenses associated with the expansion of
operations. The Company's operating results could also be adversely affected by
economic conditions generally in various geographic areas where the Company or
its customers do business, or order cancellations or rescheduling. These factors
are difficult to forecast, and these or other factors could materially affect
the Company's quarterly or annual operating results. There can be no assurance
as to the level of sales or earnings that may be attained by the Company in any
given period in the future.
Competition; Pricing Pressures. The markets in which the Company competes
are intensely competitive and are characterized by rapid technological change,
price declines and rapid product obsolescence. The Company currently competes
with add-in card suppliers and semiconductor manufacturers. The Company expects
competition to increase in the future from existing competitors and from other
companies that may enter the Company's existing or future markets with products
that may be at lower costs or provide higher levels of integration, higher
performance or additional features. The Company is unable to predict the timing
and nature of any such competitive product offerings. The announcement and
commercial shipment of competitive products could adversely affect sales of the
Company's products and may result in increased price competition that would
adversely affect the ASPs and margins of the Company's products. In general,
product prices in the semiconductor industry have decreased over the life of a
particular product. The markets for most of the applications for the Company's
products are characterized by intense price competition. The willingness of
prospective customers to design the Company's products into their products
depends to a significant extent upon the ability of the Company to sell its
products at a price that is cost-effective for such customers. As the markets
for the Company's products mature and competition increases, the Company
anticipates that prices for its products will continue to decline. If the
Company is unable to reduce its costs sufficiently to offset declines in product
prices or is unable to introduce more advanced products with higher product
prices, the Company's business, financial condition and results of operations
would be materially adversely affected.
The Company's existing and potential competitors consist principally of
large domestic and international companies that have substantially greater
financial, manufacturing, technical, marketing, distribution and other
resources, greater intellectual property rights, broader product lines and
longer-standing relationships with customers than the Company, as well as a
number of smaller and emerging companies. The Company's principal competitors
include C-Cube, Cirrus Logic, Creative Technology, LSI Logic, Lucent, Oak
Technology, OPTi, Rockwell, SGS Thompson, Texas Instruments, Winbond and Yamaha.
Certain of the Company's current and potential competitors maintain their own
semiconductor foundries and may therefore benefit from certain capacity, cost
and technical advantages. The Company believes that its ability to compete
successfully depends on a number of factors, both within and outside of its
control, including the price, quality and performance of the Company's and its
competitors' products, the timing and success of new product
5
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introductions by the Company, its customers and its competitors, the emergence
of new multimedia standards, the development of technical innovations, the
ability to obtain adequate foundry capacity and sources of raw materials, the
efficiency of production, the rate at which the Company's customers design the
Company's products into their products, the number and nature of the Company's
competitors in a given market, the assertion of intellectual property rights and
general market and economic conditions. There can be no assurance that the
Company will be able to compete successfully in the future.
Each successive generation of microprocessors has provided increased
performance, which could in the future result in a microprocessor capable of
performing multimedia functions. In this regard, Intel Corporation has developed
native Signal Processing ("NSP") capability and an extended multimedia system
architecture ("MMX") for use in conjunction with its Pentium microprocessor, and
is promoting the processing power of the Pentium for data and signal intensive
functions such as graphics acceleration and other multimedia functions. There
can be no assurance that the increased capabilities of microprocessors will not
adversely affect demand for the Company's products.
Dependence on PC and consumer markets. In the third quarter of 1997, sales
of PC audio semiconductors accounted for a majority of the Company's net
revenues, and the Company expects that sales of audio semiconductors will
continue to account for a significant portion of its net revenues for the
foreseeable future. Similarly, the Company is receiving significant revenues
from VCD semiconductors in the consumer market. Any reduction in ASPs for
products or demand for the Company's semiconductors, whether because of a
reduction in demand for PCs or VCD's in general, increased competition or
otherwise, would have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company is currently engaged in the development and introduction of new
multimedia products for the PC and consumer markets that provide capabilities
such as audio, video and fax/modem/voice applications. There can be no assurance
that the Company will be able to identify market trends or new product
opportunities, develop and market new products, achieve design wins or respond
effectively to new technological changes or product announcements by others. A
failure in any of these areas would have a material adverse effect on the
Company's business, financial condition and results of operations.
Importance of New Products and Technological Change. The markets for the
Company's products are characterized by evolving industry standards, rapid
technological change and product obsolescence. The Company's success is highly
dependent upon the successful development and timely introduction of new
products at competitive price and performance levels. The success of new
products depends on a number of factors, including timely completion of product
development, market acceptance of the Company's and its customers' new products,
securing sufficient foundry capacity for volume manufacturing of wafers,
achievement of acceptable wafer fabrication yields by the Company's independent
foundries and the Company's ability to offer new products at competitive prices.
In order to succeed in having the Company's products incorporated into new
products being designed by desktop and notebook computer manufacturers, the
Company must anticipate market trends and performance and functionality
requirements of such manufacturers and must successfully develop and manufacture
products that meet these requirements. In addition, the Company must meet the
timing and price requirements of such manufacturers and must make such products
available in sufficient quantities. Accordingly, in selling to OEMs, the Company
can often incur significant expenditures prior to volume sales of new products,
if any. In order to help accomplish these goals, the Company has in the past and
will continue to consider in the future the acquisition of other companies or
the products and technologies of other companies. Such acquisitions carry
additional risks such as a lack of integration with existing products and
corporate culture, the potential for large write-offs and the diversion of
management attention. The Company is currently engaged in the development of new
PC audio products as well as new multimedia products that provide telephony
capabilities such as fax/modem/voice and video applications. There can be no
assurance that the Company will be able to identify market trends or new product
opportunities, develop and market new products, achieve design wins or respond
effectively to new technological changes or product announcements by others. A
failure in any of these areas would have a material adverse effect on the
Company's business, financial condition and results of operation.
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Dependence on TSMC and Other Third Parties. The Company relies on
independent foundries to manufacture all of its products. A substantial majority
of the Company's products are currently manufactured by Taiwan Semiconductor
Manufacturing Company, Ltd. ("TSMC"), which has manufactured certain of the
Company's products since 1989. The Company also has a foundry arrangement with
United Microelectronics Corporation ("UMC"), which has been manufacturing
certain of the Company's products since 1995. TSMC, in particular, provides the
Company with access to advanced process technology necessary for the manufacture
of the Company's products. These foundries fabricate products for other
companies and, with the exception of TSMC, manufacture products of their own
design. In November 1995, the Company entered into long-term agreements with
TSMC and UMC in which the Company has secured access to additional capacity and
to leading-edge technology. During the third quarter, the Company paid
approximately $16 million to TSMC in exchange for certain wafer capacity
commitments. If the Company is not able to use, assign, or sell the additional
wafer quantities, a portion of the deposits may be forfeited. In addition, the
Company expects to invest approximately $7.0 million in one installment over the
next two months in exchange for an equity ownership in a joint venture with UMC
to build a new foundry and for certain wafer capacity commitments.
While the Company has entered into long-term agreements with two of its
foundries, the Company's reliance on these and other independent foundries
involves a number of risks, including the absence of adequate capacity, the
unavailability of, or interruption in access to, certain process technologies
and reduced control over delivery schedules, manufacturing yields and costs, and
the international risks more fully described below. The Company expects to rely
upon TSMC and UMC to manufacture substantially all of the Company's products for
the foreseeable future. In the event that TSMC and UMC are unable to continue to
manufacture the Company's key products in required volumes, the Company will
have to identify and secure additional foundry capacity. In such an event, the
Company may be unable to identify or secure additional foundry capacity from
another manufacturer, particularly at the levels that the Company currently
expects TSMC and UMC to provide. Even if such capacity is available from another
manufacturer, the qualification process could take six months or longer. The
loss of any of its foundries as a supplier, the inability of the Company to
acquire additional capacity at its current suppliers or qualify other wafer
manufacturers for additional foundry capacity should additional capacity be
necessary, or any other circumstances causing a significant interruption in the
supply of semiconductors to the Company would have a material adverse effect on
the Company's business, financial condition and results of operations.
To address potential foundry capacity constraints in the future, ESS will
continue to consider and may be required to enter into additional arrangements,
including equity investments in or loans to independent wafer manufacturers in
exchange for guaranteed production capacity, joint ventures to own and operate
foundries, or "take or pay" contracts that commit the Company to purchase
specified quantities of wafers over extended periods. Any such arrangements
could require the Company to commit substantial capital and grant licenses to
its technology. The need to commit substantial capital may require the Company
to obtain additional debt or equity financing, which could result in dilution to
the Company's shareholders. There can be no assurance that such additional
financing, if required, will be available when needed or, if available, will be
obtained on terms acceptable to the Company.
All of the Company's semiconductor products are assembled and tested by
third-party vendors, primarily Amkor ANAM in Korea, Advanced Semiconductor
Engineering in Taiwan, ASAT in Hong Kong, Astra Microtronics in Indonesia and
OSE in Taiwan. The Company has internally designed and developed its own test
software and certain test equipment which is provided to the Company's test
vendors. Shortages of raw materials or disruptions in the provision of services
by the Company's assembly vendors could lead to supply constraints or delays in
the delivery of the Company's products. Such constraints or delays might result
in the loss of customers, limitations or delays in the delivery of the Company's
revenues or other material adverse effects on the Company's business, financial
conditions and results of operations. The Company's reliance on third-party
assembly and testing vendors involves a number of other risks, including reduced
control over delivery schedules, quality assurance and costs. The inability of
such third parties to deliver products of acceptable quality and in a timely
manner could have a material adverse effect on the Company's business, financial
condition and results of operations.
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Customer Concentration. A limited number of customers have accounted for a
substantial portion of the Company's net revenues. The Company has expanded its
distribution activities to better address the China market. Sales to
distributors are generally subject to agreements allowing limited rights of
return and price protection with respect to unsold products. While the Company
has not experienced returns and allowances in excess of the Company's reserves,
returns and allowances in excess of reserves could have a material adverse
impact on the Company's business, financial condition and results of operation.
In addition, the Company has decided to defer revenue recognition to
distributors who resell into the China market. The Company expects that a
limited number of customers may account for a substantial portion of its net
revenues for the foreseeable future. The Company has experienced changes from
year to year in the composition of its major customer base and believes this
pattern may continue. The Company does not have long-term purchase agreements
with any of its customers. The reduction, delay or cancellation of orders from
one or more major customers for any reason or the loss of one or more of such
major customers could materially and adversely affect the Company's business,
financial condition and results of operation. In addition, since the Company's
products are often sole sourced to its customers, the Company's operating
results could be materially and adversely affected if one or more of its major
customers were to develop other sources of supply. There can be no assurance
that the Company's current customers will continue to place orders with the
Company, that orders by existing customers will not be canceled or will continue
at the levels of previous periods or that the Company will be able to obtain
orders from new customers. The Company currently places noncancelable orders to
purchase its products from independent foundries on an approximately three-month
rolling basis, while its customers generally place purchase orders with the
Company less than four weeks prior to delivery that may be canceled without
significant penalty. Consequently, if anticipated sales and shipments in any
quarter are canceled or do not occur as quickly as expected, expense and
inventory levels could be disproportionately high and the Company's business,
financial condition and results of operations could be materially adversely
affected.
Management Growth. The Company has recently experienced significant growth
in revenues and the addition of multiple product lines that require additional
management systems and processes. To manage its future operations and growth
effectively, the Company will need to continue to improve its operational,
financial and management information systems, implement additional systems and
controls, and hire, train, motivate, manage and retain its employees. There can
be no assurance that the Company will be able to manage such growth effectively,
and the failure to do so could have a material adverse effect on the Company's
business, financial condition and results of operations.
International Operations. In the third quarter of 1997, international
sales, accounted for substantially all of the Company's net revenues.
Substantially all of the Company's international sales were to customers in Hong
Kong, Taiwan, Korea, Singapore and Japan. The Company expects that international
sales will continue to represent a significant portion of its net revenues for
the foreseeable future. In addition, substantially all of the company's products
are manufactured, assembled and tested by independent third parties in Asia. Due
to its reliance on international sales and foreign third-party manufacturing,
assembly and testing operations, the Company is subject to the risks of
conducting business outside of the Untied States. These risks include unexpected
changes in, or impositions of legislative or regulatory requirements, delays
resulting from difficulty in obtaining export licenses for certain technology,
tariffs, quotas and other trade barriers and restrictions, longer payment
cycles, greater difficulty in accounts receivable collection, potentially
adverse taxes, the burdens of complying with a variety of foreign laws and other
factors beyond the Company's control. The Company is also subject to general
geopolitical risks in connection with its international trade relationships. In
particular, Hong Kong, which represents a large market for the Company's
products, has recently been returned to mainland China. Should the transition
result in instability in Hong Kong, it is possible that sales to Hong Kong could
be affected. Such instability could also lead to disruption in the Company's
ability to trade with Taiwan, which represents a large portion of the Company's
sales and is the location of its major foundries and two test facilities. Should
such disruption occur, it is possible that purchases by Taiwanese customers will
decline and semiconductor manufacturing in Taiwan will be impeded, cutting off
the Company's main supply of guaranteed wafer production. This could lead to
capacity constraints at non-Taiwanese foundries. Although the Company has not to
date experienced any material adverse effect on its business, financial
condition or results of operations as a result of such regulatory, geopolitical
and other factors, there can be no assurance
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that such factors will not have a material adverse effect on the Company's
business, financial condition and results of operations in the future or require
the Company to modify its current business practices.
In addition, the laws of certain foreign countries in which the Company's
products are or may be manufactured or sold, including various countries in
Asia, may not protect the Company's products or intellectual property rights to
the same extent as do the laws of the United States and thus make the
possibility of piracy of the Company's technology and products more likely.
Currently, all of the Company's product sales and all of its arrangements with
foundries and assembly and test vendors, other than its foundry arrangement with
Sharp Corporation, provide for pricing and payment in U.S. dollars. To date,
although the effect of currency fluctuations have been insignificant, there can
be no assurance that fluctuations in currency exchange rates will not have a
material adverse effect on the Company's business, financial condition and
results of operations. In addition, to date the Company has not engaged in any
currency hedging activities, although the company may do so in the future.
Further, there can be no assurance that one or more of the foregoing factors
will not have a material adverse effect on the Company's business, financial
condition and results of operations or require the Company to modify its current
business practices.
Semiconductor Industry. The semiconductor industry has historically been
characterized by rapid technological change, cyclical market patterns,
significant price erosion, periods of over-capacity and production shortages,
variations in manufacturing costs and yields and significant expenditures for
capital equipment and product development. In addition, the industry has
experienced significant economic downturns at various times, characterized by
diminished product demand and accelerated erosion of product prices. Although
the semiconductor industry in recent periods has experienced increased demand,
it is uncertain how long these conditions will continue. The Company may
experience substantial period-to-period fluctuations in operating results due to
general semiconductor industry conditions.
Patents and Proprietary Rights. The Company relies on a combination of
patents, trademarks, copyrights, trade secret laws and confidentiality
procedures to protect its intellectual property rights. As of September 30,
1997, the Company had 9 patents granted in the United States, which expire over
time, commencing in 1999 and ending in 2013, and 10 corresponding foreign
patents. In addition, the Company intends to seek further United States and
international patents on its technology. There can be no assurance that patents
will be issued from any of the Company's pending applications or applications in
preparation or that any claims allowed from pending applications or applications
in preparation will be of sufficient scope or strength, or be issued in all
countries where the Company's products can be sold, to provide meaningful
protection or any commercial advantage to the Company. Also, competitors of the
Company may be able to design around the Company's patents. The laws of certain
foreign countries in which the Company's products are or may be manufactured or
sold, including various countries in Asia, may not protect the Company's
products or intellectual property rights to the same extent as do the laws of
the United States and thus make the possibility of piracy of the Company's
technology and products more likely. Although the Company is not aware of the
development, distribution or sales of any illegal copies of the Company's
hardware or software, any infringements of its patents, copyrights or
trademarks, or any violation of its trade secrets, confidentiality procedures or
licensing agreements to date, there can be no assurance that the steps taken by
the Company to protect its proprietary information will be adequate to prevent
misappropriation of its technology or that the Company's competitors will not
independently develop technologies that are substantially equivalent or superior
to the Company's technology.
The semiconductor industry is characterized by vigorous protection and
pursuit of intellectual property rights or positions, which have resulted in
significant and often protracted and expensive litigation. There is no pending
intellectual property litigation against the Company. However, the Company or
its foundries may from time to time receive notice of claims that the Company
has infringed patents or other intellectual property rights owned by others. The
Company may seek licenses under such patents or other intellectual property
rights. However, there can be no assurance that licenses will be offered or that
the terms of any offered licenses will be acceptable to the Company. The failure
to obtain a license from a third party for technology used by the Company could
cause the Company to incur substantial liabilities and to suspend the
manufacture of products or the use by the Company's foundries of processes
requiring the technology. Furthermore, the Company may initiate claims or
litigation against third parties for infringement of the
9
<PAGE> 11
Company's proprietary rights or to establish the validity of the Company's
proprietary rights. Litigation by or against the Company could result in
significant expense to the Company and divert the efforts of the Company's
technical and management personnel, whether or not such litigation results in a
favorable determination for the Company. In the event of an adverse result in
any such litigation, the Company could be required to pay substantial damages,
cease the manufacture, use and sale of infringing products, expend significant
resources to develop noninfringing technology, discontinue the use of certain
processes or obtain licenses for the infringing technology. There can be no
assurance that the Company would be successful in such development or that such
licenses would be available on reasonable terms, or at all, and any such
development or license could require expenditures by the Company of substantial
time and other resources. Although patent disputes in the semiconductor industry
have often been settled through crosslicensing arrangements, there can be no
assurance that, in the event that any third party makes a successful claim
against the Company or its customers, a cross-licensing arrangement could be
reached. In such a case, if a license is not made available to the Company on
commercially reasonable, terms, the Company's business, financial condition and
results of operations could be materially adversely affected.
The Company currently licenses certain of the technology utilized by the
Company in its products, and expects to continue to do so in the future. The
Company has no current plans to grant licenses with respect to its products or
technology; however, it may become necessary for the Company to enter into
product licenses in the future in order, among other things, to secure foundry
capacity. Although the Company has in the past granted licenses to certain of
its technology, some of which have expired, such licenses have been limited and
the Company has not derived material revenues from such licenses in recent
periods.
Dependence on Key Personnel. The Company's success depends to a significant
degree upon the continued contributions of Fred S.L. Chan, the Company's
President, Chief Executive Officer and Chairman of the Board of Directors. As of
September 30, 1997, Mr. Chan, together with his spouse, Annie M.H. Chan, a
director of the Company and certain trusts for the benefit of the Chan's
children and certain charities beneficial owned, in the aggregate, approximately
38% of the Company's Common Stock. The future success of the Company depends on
its ability to continue to attract, retain and motivate qualified senior
management, sales and technical personnel, particularly highly skilled
semiconductor design personnel and software engineers, for whom competition is
intense. Recently, the Company has hired a number of key executives and
management personnel. The loss of Mr. Chan, other key executive officers, key
design personnel or software engineers or the inability to hire and retain
sufficient qualified personnel could have a material adverse effect on the
Company's business, financial condition and results of operations. There can be
no assurance that the Company will be able to retain these employees. The
Company currently does not maintain any key man life insurance on the life of
any of its key employees.
Control by Existing Shareholders. As of September 30, 1997, Fred S.L. Chan,
the Company's President, Chief Executive Officer and Chairman of the Board of
Directors, together with his spouse, Annie M.H. Chan, a director of the Company,
and certain other shareholders related to Mr. and Mrs. Chan owned, in the
aggregate, approximately 38% of the Company's outstanding Common Stock. As a
result, these shareholders, acting together, possess significant voting power
over the Company, giving them the ability among other things to influence
significantly the election of the Company's Board of Directors and approve
significant corporate transactions. Such control could delay, defer or prevent a
change in control of the Company, impede a merger, consolidation, takeover or
other business combination involving the Company, or discourage a potential
acquiror from making a tender offer or otherwise attempting to obtain control of
the Company.
Possible Volatility of Stock Price. The price of the Company's Common Stock
has in the past and may continue in the future to fluctuate widely. Future
announcements concerning the Company, its competitors or its principal
customers, including quarterly operating results, changes in earnings estimates
by analysts, technological innovations, new product introductions, governmental
regulations or litigation may cause the market price of the Common Stock to
continue to fluctuate substantially. Further, in recent years the stock market
has experienced extreme price and volume fluctuations that have particularly
affected the market prices of equity securities of many high technology
companies and that often have been unrelated or disproportionate to the
operating performance of such companies. These fluctuations, as well as general
10
<PAGE> 12
economic, political and market conditions such as recessions or international
currency fluctuations, may materially adversely affect the market price of the
Common Stock.
SELLING SHAREHOLDERS
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of October
17, 1997 by each Selling Shareholder.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
PRIOR TO THE OFFERING(1) AFTER THE OFFERING(2)
------------------------ SHARES -----------------------
SELLING SHAREHOLDERS SHARES PERCENT(3) OFFERED SHARES PERCENT(3)
- ---------------------------------- ------- ---------- ------- ------ ----------
<S> <C> <C> <C> <C> <C>
InveStar(4)....................... 699,075(5) 1.7 628,270(6) 70,805 *
Paul Tien......................... 276,146 * 200,000 76,146 *
Mark Tien......................... 32,681 * 32,681 -0- *
Hiroshi Ishii..................... 36,145 * 5,000 31,145 *
Prohubs International Corp........ 4,000 * 4,000 -0- *
Total................... 1,048,047 2.6 869,951 178,096 *
</TABLE>
- ---------------
* Less than one percent of the Company's outstanding Common Stock.
(1) Information with respect to beneficial ownership is based upon information
obtained from the Company's transfer agent and certain of the Selling
Shareholders.
(2) Assumes that each Selling Shareholder will sell all of the Shares set forth
above under "Shares Offered." There can be no assurance that the Selling
Shareholders will sell all or any of the Shares offered hereunder.
(3) Based on 40,444,639 shares outstanding at October 17, 1997.
(4) Includes InveStar Burgeon Venture Capital, Inc. ("InveStar Burgeon"),
InveStar Semiconductor Development Fund, Inc. ("InveStar Semiconductor"),
and SinoStar Technologies, Inc. ("SinoStar").
(5) Includes 342,538 shares held by InveStar Burgeon, 342,538 shares held by
InveStar Semiconductor and 13,999 shares held by SinoStar.
(6) Includes 308,285 shares offered by InveStar Burgeon, 308,285 shares offered
by InveStar Semiconductor and 11,700 shares offered by SinoStar.
ISSUANCE OF COMMON STOCK TO SELLING SHAREHOLDERS
On June 11, 1997, the Company acquired Platform pursuant to an Agreement
and Plan of Reorganization dated April 27, 1997 (the "Reorganization Agreement")
among the Company, Platform and a wholly-owned subsidiary of the Company (the
"Sub"). Pursuant to the Reorganization Agreement, the Sub merged with and into
Platform, and all outstanding shares of Platform capital stock and options to
purchase Platform capital stock were converted into shares of the Company's
Common Stock (the "Merger Shares") and options to purchase the Company's Common
Stock (the "Merger Options"), respectively. An aggregate of 2,540,000 Merger
Shares and Merger Options were issued pursuant to the terms of the
Reorganization Agreement. Under the terms of the Reorganization Agreement, the
Company is obligated to file a Registration Statement on Form S-3 covering the
Merger Shares once each fiscal quarter until the end of the one-year period
following the effective date of the acquisition.
11
<PAGE> 13
PLAN OF DISTRIBUTION
Shares of Common Stock covered hereby may be offered and sold from time to
time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Selling Shareholders may sell the Shares being
offered hereby: (i) on The Nasdaq National Market, or otherwise at prices and at
terms then prevailing or at prices related to the then current market price; or
(ii) in private sales at negotiated prices directly or through a broker or
brokers, who may act as agent or as principal or by a combination of such
methods of sale. The Selling Shareholders and any underwriter, dealer or agent
who participate in the distribution of such shares may be deemed to be
"underwriters" under the Securities Act, and any discount, commission or
concession received by such persons might be deemed to be an underwriting
discount or commission under the Securities Act. The Company has agreed to
indemnify the Selling Shareholders against certain liabilities arising under the
Securities Act.
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Shareholders (and, if acting as agent for the
purchaser of such shares, from such purchaser). Usual and customary brokerage
fees will be paid by the Selling Shareholders. Broker-dealers may agree with the
Selling Shareholders to sell a specified number of shares at a stipulated price
per share, and, to the extent such a broker-dealer is unable to do so acting as
agent for the Selling Shareholders, to purchase as principal any unsold shares
at the price required to fulfill the broker-dealer commitment to the Selling
Shareholders. Broker-dealers who acquire shares as principal may thereafter
resell such shares from time to time in transactions (which may involve crosses
and block transactions and which may involve sales to and through other
broker-dealers, including transactions of the nature described above) in the
over-the-counter market, in negotiated transactions or by a combination of such
methods of sale or otherwise at market prices prevailing at the time of sale or
at negotiated prices, and in connection with such resales may pay to or receive
from the purchasers of such shares commissions computed as described above.
The Company has advised the Selling Shareholders that the anti-manipulation
rules under the Exchange Act may apply to sales of Shares in the market and to
the activities of the Selling Shareholders and their affiliates. The Selling
Shareholders have advised the Company that during such time as the Selling
Shareholders may be engaged in the attempt to sell shares registered hereunder,
they will: (i) not engage in any stabilization activity in connection with any
of the Company's securities; (ii) cause to be furnished to each person to whom
Shares included herein may be offered, and to each broker-dealer, if any,
through whom Shares are offered, such copies of this Prospectus, as supplemented
or amended, as may be required by such person; (iii) not bid for or purchase any
of the Company's securities or any rights to acquire the Company's securities,
or attempt to induce any person to purchase any of the Company's securities or
rights to acquire the Company's securities other than as permitted under the
Exchange Act; and (iv) not effect any sale or distribution of the Shares until
after the Prospectus shall have been appropriately amended or supplemented, if
required, to set forth the terms thereof; and
The Selling Shareholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act. Any commissions paid or
any discounts or concessions allowed to any such broker-dealers, and any profits
received on the resale of such shares, may be deemed to be underwriting
discounts and commissions under the Securities Act if any such brokerdealers
purchase shares as principal.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states, the
Common Stock may not be sold unless such shares have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
The Company has agreed to maintain the effectiveness of this Registration
Statement until the earlier of the sale of all of the shares of Common Stock
offered hereunder or fourteen (14) days from the date of this Prospectus. No
sales may be made pursuant to this Prospectus after such data unless the Company
amends or supplements this Prospectus to indicate that it has agreed to extend
such period of effectiveness. There can be
12
<PAGE> 14
no assurance that the Selling Shareholders will sell all or any of the shares of
Common Stock offered hereunder.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon by Venture Law Group, A Professional Corporation, Menlo Park, California,
counsel to the Company.
EXPERTS
The consolidated financial statements and schedule of the Company appearing
in the Company's Annual Report (Form 10-K) for the year ended December 31, 1996,
have been audited by Price Waterhouse LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such reports given upon the authority of such firms
as experts in accounting and auditing.
13
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant will bear no expenses in connection with any sale or other
distribution by the Selling Shareholders of the shares being registered other
than the expenses of preparation and distribution of this Registration Statement
and the Prospectus included in this Registration Statement. Such expenses are
set forth in the following table. All of the amounts shown are estimates except
the Securities and Exchange Commission ("SEC") registration fee.
<TABLE>
<S> <C>
SEC registration fee............................... $ 3,435
Legal fees and expenses............................ 10,000
Accounting fees and expenses....................... 5,000
Miscellaneous expenses............................. 2,000
-------
Total.............................................. $20,435
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California Corporations Code allows for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Securities Act"). Article III of the
Registrant's Articles of Incorporation and Article VI of the Registrant's Bylaws
provides for indemnification of the Registrant's directors, officers, employees
and other agents to the extent and under the circumstances permitted by the
California Corporations Code. The Registrant has also entered into agreements
with its directors and officers that will require the Registrant, among other
things, to indemnify them against certain liabilities that may arise by reason
of their status or service as directors to the fullest extent not prohibited by
law.
In addition, the Registrant carries director and officer liability
insurance in the amount of $25 million.
In connection with this offering, the Selling Shareholders have agreed to
indemnify the Registrant, its directors and officers and each such person who
controls the Registrant, against any and all liability arising from inaccurate
information provided to the Registrant by the Selling Shareholders and contained
herein.
ITEM 16. EXHIBITS.
EXHIBITS.
<TABLE>
<S> <C>
2.1(1) First Amended and Restated Agreement and Plan of Reorganization, dated as of
April 27, 1997, among Registrant, EP Acquisition Corporation and Platform
Technologies, Inc.
4.1(2) Declaration of Registration Rights, Exhibit H to the First Amended and
Restated Agreement and Plan of Reorganization dated as of April 27, 1997
among Registrant, EP Acquisition Corporation and Platform Technologies, Inc.
5.1 Opinion of Venture Law Group, A Professional Corporation
23.1 Consent of Price Waterhouse LLP, Independent Auditors (included in Exhibit
23.1)
23.2 Consent of Venture Law Group, A Professional Corporation (included in
Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
</TABLE>
- ---------------
(1) Incorporated by reference to the identically numbered exhibit filed with the
Registrant's Form 8-K, filed on June 24, 1997.
(2) Incorporated by reference to the identically numbered exhibit filed with the
Registrant's Registration Statement on Form S-3 (333-31517) filed July 17,
1997.
II-1
<PAGE> 16
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 to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act,
each 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
this offering.
(4) That, for purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act 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
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 SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, ESS Technology,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fremont, State of California, on October 23, 1997.
ESS TECHNOLOGY, INC.
By: /s/ JOHN H. BARNET
------------------------------------
John H. Barnet
Vice President, Finance and Chief
Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Fred S.L. Chan and John H. Barnet,
jointly and severally, his or her true and lawful attorneys-in-fact, each with
full power of substitution, for him or her in any and all capacities, to sign
any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact or any
of them, or his or their substitute or substitutes, may lawfully do or cause to
be done or 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
- ------------------------------------ ------------------------------------ -----------------
<C> <C> <S>
/s/ FRED S.L. CHAN President, Chief Executive Officer October 23, 1997
- ------------------------------------ and Chairman of the Board of
Fred S.L. Chan Directors (Principal Executive
Officer)
/s/ JOHN H. BARNET Vice President, Finance and October 23, 1997
- ------------------------------------ Chief Financial Officer
John H. Barnet (Principal Financial Officer)
/s/ HOWARD N. HIDESHIMA Controller October 23, 1997
- ------------------------------------ (Principal Accounting Officer)
Howard N. Hideshima
/s/ ANNIE M.H. CHAN Director October 23, 1997
- ------------------------------------
Annie M.H. Chan
/s/ MICHAEL A. AYMAR Director October 23, 1997
- ------------------------------------
Michael A. Aymar
/s/ ILBOK LEE Director October 23, 1997
- ------------------------------------
Ilbok Lee
Director October , 1997
- ------------------------------------
Peter T. Mok
</TABLE>
II-3
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<S> <C>
2.1(1) First Amended and Restated Agreement and Plan of Reorganization, dated as of
April 27, 1997, among Registrant, EP Acquisition Corporation and Platform
Technologies, Inc.
4.1(2) Declaration of Registration Rights, Exhibit H to the First Amended and
Restated Agreement and Plan of Reorganization dated as of April 27, 1997
among Registrant, EP Acquisition Corporation and Platform Technologies, Inc.
5.1 Opinion of Venture Law Group, A Professional Corporation
23.1 Consent of Price Waterhouse LLP, Independent Auditors (included in Exhibit
23.1)
23.2 Consent of Venture Law Group, A Professional Corporation (included in
Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
</TABLE>
- ---------------
(1) Incorporated by reference to the identically numbered exhibit filed with the
Registrant's Form 8-K, filed on June 24, 1997.
(2) Incorporated by reference to the identically numbered exhibit filed with the
Registrant's Registration Statement on Form S-3 (333-31517) filed July 17,
1997.
<PAGE> 1
EXHIBIT 5.1
October 23, 1997
ESS Technology, Inc.
48401 Fremont Blvd.
Fremont, CA 94025
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by you with the Securities and Exchange
Commission (the "Commission") in connection with the registration under the
Securities Act of 1933, as amended, of a total of 869,951 shares of your Common
Stock (the "Shares") to be sold by selling shareholders of the Company. As your
counsel in connection with this transaction, we have examined the proceedings
taken and are familiar with the proceedings proposed to be taken by you in
connection with the sale and issuance of the Shares.
It is our opinion that, upon conclusion of the proceedings being taken
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares, and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states where required, the Shares, when issued and sold in the
manner described in the Registration Statement, will be legally and validly
issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and in any amendment thereto.
Very truly yours,
VENTURE LAW GROUP,
A Professional Corporation
THN
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of ESS Technology, Inc. on Form S-3 of our report dated January 17,
1997 incorporated by reference in the Annual Report on Form 10-K of ESS
Technology, Inc. for the year ended December 31, 1996.
We also consent to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
PRICE WATERHOUSE LLP
/s/ Price Waterhouse LLP
- -------------------------------
San Jose, California
October 20, 1997
