As Filed with the Securities and Exchange Commission on September 4, 1996.
Registration No. 333-___________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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ORYX TECHNOLOGY CORP.
(Exact name of registrant as specified in its charter)
Delaware 22-2115841
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
47341 Bayside Parkway
Fremont, California 94538
(510) 249-1144
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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Copies to:
Arvind Patel Jim Schneider, Esq.
Oryx Technology Corp. Atlas, Pearlman, Trop & Borkson, P.A.
47341 Bayside Parkway 200 East Las Olas Boulevard, Suite 1900
Fremont, California 94538 Fort Lauderdale, Florida 33301
(510) 249-1144 (954) 763-1200
(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 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 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 number of the earlier
effective registration statement for the offering. [ ]
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ] __________.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Shares to be to be Price Per Offering Registration
Registered Registered Share (1) Price (1) Fee
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<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 6,536,290 $2.88 $18,824,515 $6,491.00
Common Stock,
$.001 par value(2) 1,558,111 $2.88(2) $ 4,487,360 $1,547.00
Total $23,311,875 $8,038.00
=========== =========
==========================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) under the Securities Act
of 1933, as amended (the "Securities Act"), based on the average of the
high and low sale price for the Common Stock, $.001 par value per share
(the "Common Stock") as reported by the National Association of Securities
Dealers Automated Quotation System (SmallCap) ("NASDAQ") on August 29,
1996.
(2) Represents shares issuable upon the exercise of Common Stock Purchase
Warrants together with such additional indeterminate number of shares as
may be issued upon exercise of such warrants by reason of the
anti-dilution provisions contained therein.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
ii
<PAGE>
Subject to Completion, dated September 4, 1996
PROSPECTUS
8,094,401 Shares
ORYX TECHNOLOGY, CORP.
COMMON STOCK, PAR VALUE $.001 PER SHARE
This Prospectus (the "Prospectus") relates to the offer and sale of up to
8,094,401 shares (the "Shares") of Common Stock, $.001 par value (the "Common
Stock"), of Oryx Technology, Corp. (the "Company" or "Oryx") by certain Selling
Stockholders (the "Selling Security Holders"). Included among the Shares to be
sold by the Selling Security Holders are (i) 379,000 shares of Common Stock
issuable upon exercise of warrants at an exercise price of $2.00 per share, (ii)
322,551 shares of Common Stock issuable upon exercise of warrants at an exercise
price of $1.25 per share, (iii) 400,000 shares of Common Stock issuable upon
exercise of a warrant at an exercise price of $1.00 per share, (iv) 100,000
shares of Common Stock issuable upon exercise of a warrant at an exercise price
of $5.00 per share, (v) 100,000 shares of Common Stock issuable upon exercise of
a warrant at an exercise price of $1.31 per share and (vi) 256,560 shares of
Common Stock issuable upon exercise of a warrant at an exercise price of $1.375
per share (collectively the "Warrants"). The Shares and Warrants were issued in
various financings and transactions undertaken by the Company.
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.
THE SECURITIES OFFERED HEREBY INVOLVE A SIGNIFICANT DEGREE OF RISK. SEE "RISK
FACTORS" AT PAGES 5 TO 13.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The date of this Prospectus is September __, 1996.
[Front Cover Page Continues]
<PAGE>
The Selling Security Holders have advised the Company that they propose to
sell the Shares, from time to time, publicly through broker-dealers acting as
agents for others, or in private sales. See "Selling Security Holders" and "Plan
of Distribution." The Company will not receive any of the proceeds from the sale
of the Shares offered hereby by the Selling Security Holders.
UNTIL ___________, 1996 ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
The Company will pay all offering expenses for the offering, estimated at
approximately $24,000 including (i) the SEC registration fee ($8,038); (ii)
legal fees and expenses ($5,000.00); (iii) blue sky fees ($1,000.00); (iv)
accounting fees and expenses ($7,500.00); (v) printing expenses ($1,000.00); and
(vi) miscellaneous expenses ($1,462), but will not pay any discounts or
commissions incurred by the Selling Security Holders in connection with the sale
of their shares of Common Stock.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, 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 may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, New York, New York 10048. Copies
of such material may be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Commission also maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission at http://www.sec.gov.
This Prospectus, which constitutes part of a Registration Statement filed
by the Company with the Commission under the Securities Act of 1933, as amended
(the "Act"), omits certain information contained in the Registration Statement
in accordance with the rules and regulations of the Commission. Reference is
hereby made to the Registration Statement and to the exhibits relating thereto
for further information with respect to the Company and the securities offered
hereby.
2
<PAGE>
TABLE OF CONTENTS
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Page
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AVAILABLE INFORMATION ..................................................... 2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE ......................... 4
RISK FACTORS .............................................................. 5
THE COMPANY ............................................................... 13
USE OF PROCEEDS ........................................................... 14
SELLING SECURITY HOLDERS .................................................. 14
PLAN OF DISTRIBUTION ...................................................... 18
DESCRIPTION OF SECURITIES ................................................. 19
LEGAL MATTERS ............................................................. 23
EXPERTS ................................................................... 23
INDEMNIFICATION ........................................................... 24
The Company's Common Stock is quoted on the National Association of
Securities Dealers Automated Quotation System (Small Cap) ("NASDAQ") under the
symbol "ORYX", and on the Pacific Stock Exchange ("PSE") under the symbol "OXT".
On August 29, 1996, the closing price on NASDAQ for the Common Stock was $2.88.
There have been no recent reported trades on the PSE.
No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offer
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
or the Selling Security Holders.
The Company will not receive any proceeds from the sale of Common Stock
for the account of the Selling Security Holders. The Company has informed the
Selling Security Holders that the anti-manipulative rules under the Exchange Act
of 1934, Rules 10b-6 and 10b-7, may apply to their sales in the market and has
furnished the Selling Security Holders with a copy of these rules. The Company
has also informed the Selling Security Holders of the need for delivery of
copies of this Prospectus in connection with any sale of securities registered
hereunder.
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3
<PAGE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN
THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO
BUY, IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN
OFFER IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT
IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
------------
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission.
The Company has previously and intends to furnish its stockholders with
annual reports containing audited financial statements and may distribute
quarterly reports containing unaudited summary financial information for each of
the first three quarters of each fiscal year.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference:
(a) Annual Report of the Company on Form 10-KSB and as amended by Form
10-KSB/A1 for the fiscal year ended February 29, 1996.
(b) Quarterly Report of the Company on Form 10-QSB for the quarter ended
May 31, 1996.
All reports and documents filed by the Company pursuant to Section 13, 14
or 15(d) of the Exchange Act shall be deemed to be incorporated by reference
herein and to be a part hereof from the respective date of filing of such
documents. Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document, which
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed c/o Corporate Secretary, Oryx
Technology Corp. at the Company's principal executive office, 47341 Bayside
Parkway, Fremont, California 94538.
4
<PAGE>
RISK FACTORS
The securities offered hereby involve a high degree of risk. It is
impossible to foresee and describe all the risks and business, economic and
financial factors which may affect the Company. Prospective investors should
carefully consider the risk and speculative factors, as well as other matters
set forth elsewhere in this Prospectus, before making an investment in the
Company.
History of Unprofitability; Substantial Recent Operating Losses and Accumulated
Deficit
Since its initial public offering in April 1994, the Company has not been
profitable on a quarterly or annual basis except for its most recent quarter
ended May 31, 1996. At May 31, 1996, the Company had an accumulated deficit of
$8,000,000. During the fiscal year ended February 29, 1996, the Company
experienced significant delays and additional costs in the development of its
material analysis, electrostatic discharge testing and surge protection product
lines and experienced deterioration of gross margins in the power products
subsidiary, all of which have caused the Company's continuing losses. There can
be no assurance that the Company will be profitable for the fiscal year ending
February 28, 1997 or thereafter.
Liquidity and Capital Resources
The Company's working capital was approximately $5,542,000 at May 31,
1996. On February 28, 1996, the Company's line of credit terminated and the
outstanding balance was repaid. The Company's operating losses, increasing
accounts payable, loss of its line of credit and inventory build-up continued or
occurred in the fiscal year ended February 29, 1996, and together with payments
made to Zenith Electronics Corporation ("Zenith") and required payments on
certain short term financings, have further exacerbated the Company's cash flow
needs. The Company is currently pursuing other credit arrangements and hopes to
establish a replacement facility by the end of its current fiscal year. Failure
to obtain a replacement line of credit facility or other financing could have an
adverse impact on the Company. In particular, failure by the Company to
establish a new credit facility could impact the Company's growth and liquidity.
Need for Additional Financing
The Company's current financial resources may not be sufficient to enable
it to satisfy all of its anticipated financing needs for the fiscal year ending
5
<PAGE>
February 28, 1997. In the event the Company requires additional equity or debt
financing, or attempts to raise capital through an asset sale, there can be no
assurance that such transactions can be effected in a timely manner to meet all
the Company's needs, or at all, or that any such transaction will be on terms
acceptable to the Company or in the interest of its stockholders.
Risks of New Phase of Development
The Company has invested substantially in the development of proprietary
technologies in surface analysis, electrostatic surge testing of integrated
circuits and surge protection. However, there can be no assurance that the
Company will be successful in commercializing these technologies or any other
products, or developing financially viable businesses based on these
technologies or products. Results of operations in the future will be influenced
by numerous factors, including technological developments by the Company, its
customers and competitors, increases in expenses associated with product
development and sales growth, market acceptance of the Company's products, the
ability of the Company to successfully control its costs of development,
overhead and other costs and manage its operations, the capacity of the Company
to develop and manage the introduction of new products, and by competition.
There can be no assurance that revenue growth will be sustained or profitability
on a quarterly or annual basis will be achieved. Accordingly, there can be no
assurance that the Company will be able to implement its business plan, expand
its operations and develop and sustain profitable operations.
Significant Customer Dependence
For the years ended February 29, 1996 and February 28, 1995, sales to
Pitney Bowes accounted for approximately 41% and 27% of consolidated revenues,
respectively. The Company expects that sales to Pitney Bowes will continue to
represent a significant percentage of the Company's sales through at least 1997.
The Company's operating results would be materially and adversely affected by
any loss of business from, the cancellation of orders by, or decreases in prices
of products sold to, Pitney Bowes. There can be no assurance that such customer
or any other customers will in the future continue to purchase products from the
Company at levels that equal or exceed those of prior periods, if at all. While
the Company actively pursues new customers, there can be no assurances that the
Company will be successful in its efforts, and any significant weakening in
customer demand would have a material adverse effect on the Company.
6
<PAGE>
Risks Associated with Management of Growth; Internal Control Deficiencies
The Company has recently experienced and may continue to experience
substantial growth in the number of employees and the scope of its operations,
resulting in increased responsibilities for management. To manage growth
effectively, the Company will need to continue to improve its operational,
financial and management information systems and to develop and maintain sound
internal controls. In connection with the Company's audit for the fiscal year
ended February 28, 1995, the Company's independent accountants identified a
reportable condition in the Company's internal controls with respect to its
inventory management systems as it relates to tracking the movement of costed
inventory which resulted in an adjustment to the fiscal 1995 financial
statements. Another reportable condition was identified with respect to the
Company's record keeping for equity financing and share issuance transactions.
In connection with the Company's audit for the fiscal year ended February 29,
1996, the Company's independent accountants identified a further reportable
condition relating to physical inventory procedures specifically with regard to
substantial adjustments that resulted from physical inventories taken during the
fiscal year ended February 29, 1996. The resulting adjustments were reflected in
the fiscal 1996 financial statements. A reportable condition indicates that a
material error or irregularity may occur in the Company's quarterly and year-end
financial statements and may not be detected on a timely basis by the Company's
employees, thereby possibly resulting in a misstatement of the Company's
financial statements. While the Board of Directors have instituted action to
correct the preceding conditions, there can be no assurance that the Company
will be able to effectively achieve or manage any future growth, or develop and
maintain strong internal controls. Such failure could result in a material
adverse effect on the Company's financial condition and results of operations
and could result in a misstatement of operating results.
Cost of Power Conversion Products
In July 1995, the Company's contract with Zenith, pursuant to which Zenith
manufactured certain power conversion products for the Company at a fixed price
per unit, expired in accordance with its terms. Since such time, the Company has
manufactured power conversion products at its facility in Reynosa, Mexico, while
purchasing components for such products from various third party manufacturers
and distributors. The Company has purchased many components for power conversion
products from distributors at prices which are higher than those offered
directly from manufacturers, and the current market prices of such components
are substantially higher than the prices of such components anticipated by the
Company at the time it entered into the Zenith contract. Accordingly, the
7
<PAGE>
Company has incurred higher costs in producing its power conversion products and
the Company's per unit profit margin on such products has decreased. There can
be no assurance that the Company will be able to produce such products at a
lower cost or negotiate more favorable, or even as favorable, terms for the
components thereof, in the future and, therefore, the Company's profit margin on
power products may be subject to further erosion, which would have a material
adverse effect on the Company.
Reliance on Third Party Manufacturers May Disrupt Operations
The Company relies on third-party manufacturers for the supply of
substantially all key components for all of its products. The Company's reliance
on outside manufacturers generally, and a sole manufacturer or a limited group
of manufacturers in particular, involves several risks, including without
limitation, a potential inability to obtain an adequate supply of required
components and reduced control over pricing, quality, cost, and timely delivery
of components. Any inability to obtain adequate deliveries or any other
circumstances that would require the Company to seek alternative sources of
supply or to manufacture such components internally could lead to disruption of
the operations of the Company, product deficiencies, unanticipated and
fluctuating expenses, unpredictable revenues, and sales and marketing
dislocations that are beyond the Company's control, and may have a material
adverse effect on the Company's business and operations.
Technological Changes Affecting Products and Product Development
Risks
The design and manufacture of technologically advanced components and
equipment continually undergo rapid and significant technological change. The
Company's success will depend upon its ability to maintain a competitive
position with respect to its proprietary and other enhanced technology and to
continue to attract and retain qualified personnel in all phases of its
operations. The Company's business is, to a large degree, dependent on the
enhancement of its current products and the development of new products.
Critical to the Company's success and future profitability will be its capacity
to develop new technologies for new product lines and product upgrades. Product
development and enhancement involve substantial research and development
expenditures and a high degree of risk, and there is no assurance that the
Company's product development efforts will be successful, will be accepted by
the market, or that such development efforts can be completed on a
cost-effective or timely basis. There can be no assurance that future
technological developments will not render existing or proposed products of the
Company uneconomical or obsolete or that the Company will not be adversely
affected by competition or by the future development of commercially viable
products by others.
8
<PAGE>
Quarterly Fluctuations of Operating Results
The Company's quarterly operating results have in the past been, and will
in the future be, subject to fluctuation. The Company's operating results are
impacted by numerous factors, such as product introductions or modifications by
competitors, market acceptance of the Company's products and its customers'
products, product price changes, product mix, purchasing patterns of original
equipment manufacturers ("OEMs") and other customers, delays in, or failure to
receive, orders due to customer financial difficulties, and overall economic
trends. The Company plans to introduce product upgrades or new product lines
from time-to-time, which could generate short-term order fluctuations and have
an adverse impact on sales of certain existing products. In addition, customer
orders may involve competing capital budget considerations for the customer,
thus making the timing of customer orders difficult to predict and uneven. Any
delay or failure to receive anticipated orders, or any deferrals or cancellation
of existing orders, would adversely affect the Company's financial performance.
The Company's expense levels are based in part on its expectations as to future
revenues and, in particular, revenue growth, and the Company may be unable to
adjust spending in a timely manner to compensate for any revenue shortfall.
Accordingly, operating results in any one quarter could be materially adversely
affected by, among other factors, a failure to receive, ship or obtain customer
acceptance of sufficient orders in that quarter. Any weakening in demand for the
Company's products could have a material adverse effect on the Company's
operating results and the Company's ability to achieve profitability.
Backlog and Inventory
Oryx Power Products Corporation ("Power Products"), the Company's power
products subsidiary, operates with a substantial backlog due primarily to orders
from OEMs for custom power supplies, which generally comprise between 50% to 60%
of the Company's total revenues. However, the Company's backlog at the beginning
of a quarter typically does not include all sales required to achieve the
Company's sales objectives for Power Products for that quarter. Therefore,
Power Products' net sales and operating results for a quarter depend on the
Company shipping orders scheduled to be sold during that quarter and obtaining
additional orders for products to be sold during that same quarter. Moreover,
the terms of customer purchase orders generally provide that the customer may
cancel or reschedule all or a substantial portion of the order with limited
notice and with little or no penalty. The Company has experienced rescheduling
in the past and, to a lesser extent, cancellations, and expects that it will
experience such changes in the future. If the Company is unable to adjust its
parts orders to meet its actual product demand, the result may be that the
Company has a parts or product inventory which is substantially different from
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<PAGE>
the number and mix of products actually sold. Any such inventory imbalance could
result in inventory write downs or other unexpected charges, contributing to
significant fluctuations in operating results from quarter to quarter.
The Company's other subsidiaries operate with virtually no backlog.
Therefore, because the Company ships most of its current products within a short
period after receipt of an order, the Company's net sales and operating results
for a quarter depend on the Company's ability to obtain orders for and ship
products within the same quarter. There can be no assurances that the Company
will be able to obtain a sufficient level of orders to obtain annual
profitability.
Competition
The Company is engaged in certain highly competitive and rapidly changing
segments of the electronic components and systems manufacturing industry in
which technological advances, costs, consistency and reliability of supply are
critical to competitive position. In addition, the competition for recruitment
of personnel in the technologically-advanced manufacturing industry is
continuous and highly intense. The Company competes or may subsequently compete,
directly or indirectly, with a large number of companies which may provide
products or components comparable to those provided by the Company. In addition,
many present or prospective competitors are larger, better capitalized, more
established and have greater access to resources necessary to produce a
competitive advantage. In particular, there are a large number of competitors
producing power conversion products, many of which are larger and more
established technology oriented companies in the United States as well as low
cost manufacturers in the Far East who may be expected to introduce more
technologically advanced power conversion products in the future. There can be
no assurance that the Company will be able to compete effectively in some or all
of its markets.
No Assurances of Protection for Patents and Proprietary Rights; Reliance on
Trade Secrets
The Company relies on a combination of patent, copyright, trademark and
trade secret laws, non-disclosure agreements and other intellectual property
protection methods to protect its proprietary technology. There can be no
assurance that any existing or subsequently obtained patents will provide the
Company with substantial competitive advantages, or that challenges will not be
instituted against the validity or enforceability of any patents owned by the
Company, or if initiated, that such challenges will not be successful. To the
extent the Company wishes to assert its patent rights, there can be no assurance
that any claims of the Company's patents will be sufficient to protect the
Company's technology, and the cost of any litigation to uphold the validity of a
10
<PAGE>
patent and prevent infringement can be substantial even if the Company prevails.
In addition, there can be no assurance that others will not independently
develop similar technologies, duplicate the Company's technology, or
legitimately design around the patented aspects of the Company's technology.
Competitors or potential competitors may have filed applications for or received
patents, and may obtain additional patents and proprietary rights relating to
technology competitive with that of the Company. Furthermore, if additional
patents do not issue from present or future patent applications, the Company may
be subject to greater competition.
In certain cases, the Company also relies on trade secrets to protect
proprietary technology and processes which it has developed or may develop in
the future. There can be no assurance that secrecy obligations will be honored
or that others will not independently develop similar or superior technology.
The protection of proprietary technology through claims of trade secret status
has been the subject of increasing claims and litigation by various companies,
both in order to protect proprietary rights, and for competitive purposes, even
where proprietary claims are unsubstantiated. The prosecution of proprietary
claims or the defense of such claims is costly and uncertain given the rapid
development of the principles of law pertaining to this area.
No Dividends on Common Stock
The Company has not paid any cash dividends on its Common Stock since its
inception and does not anticipate paying cash dividends on its Common Stock in
the foreseeable future. Payment of dividends is likely to be restricted under
the terms of any new credit facility. The future payment of dividends is
directly dependent upon future earnings of the Company, its financial
requirements and other factors to be determined by the Company's Board of
Directors, as well as the possible consent of any of its prospective lenders.
For the foreseeable future, it is anticipated that any earnings which may be
generated from the Company's operations will be used to finance the growth of
the Company and will not be paid to holders of Common Stock.
Risk of Significant Dilution
As a result of various transactions previously undertaken by the Company,
there are convertible securities and warrants and options of the Company
currently outstanding for the conversion and purchase of up to approximately
6,400,000 shares of Common Stock, which represent significant additional
potential dilution for existing stockholders of the Company. These underlying
shares of Common Stock are not included in currently outstanding shares. In
addition, as a result of the anti-dilution provisions included in certain of
these derivative securities, there may be further dilution based on the price
that the Company issues other securities in the future.
11
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Volatility of Stock Price
There can be no assurance that the market price of the Common Stock will
not decline below the price at which such shares are being offered pursuant to
this Prospectus, particularly since the market price of the Company's Common
Stock has fluctuated substantially since the Company's initial public offering
in April 1994. The Company believes that a variety of factors could cause the
price of the Company's Common Stock to fluctuate substantially, including, for
example, the Company's ability to establish a credit facility to replace its
former facility with its bank, announcements of developments related to the
Company's business, liquidity and financial viability, fluctuations in the
Company's operating results and order levels, general conditions in the
Company's industries, the technology industry in general or the United States or
worldwide economy, announcements of technological innovations, new products or
product enhancements by the Company or its competitors, developments in patents
or other intellectual property rights, and developments in the Company's
relationships with its customers, distributors and suppliers. In addition, in
recent years, the stock market in general and the market for shares of small
capitalization stocks in particular has experienced extreme price fluctuations
which have often been unrelated to the operating performance of affected
companies. Such fluctuations could adversely affect the market price of the
Company's Common Stock and the Warrants and ability to obtain additional
financing.
Authorization of Preferred Stock
The Board of Directors is authorized to issue shares of preferred stock
and to fix the dividend, liquidation, conversion, redemption and the rights,
preferences and limitations of such shares without any further vote or action of
the stockholders. Accordingly, the Board of Directors is empowered, without
stockholder approval, to issue preferred stock with dividend, liquidation,
conversion, voting or other rights which could adversely affect the voting power
of other rights of the holders of the Company's Common Stock. In the event of
issuance, the preferred stock could be utilized, under certain circumstances, as
a method of discouraging and delaying or preventing a change of control of the
Company. Although the Company has no present intention to issue any additional
shares of its preferred stock, there can be no assurance that the Company will
not do so in the future.
THE COMPANY
Oryx Technology Corp. designs, manufactures and markets specialized
components, analytical equipment and instrumentation products for original
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<PAGE>
equipment manufacturers ("OEMs") in the information technology industry. This
industry includes office equipment, computers, telecommunications and consumer
electronics. The Company markets or has in product development, technologically-
advanced products which perform diagnostic and analytical functions and address
industry requirements for efficient power conversion, surge protection and
specialized materials technology. The Company has concentrated its product
development programs in critical areas where the larger manufacturers of office
equipment, computers, computer peripherals and other electronic and
telecommunications products depend upon complementary technology and product
support. The Company operates in three distinct market segments: (i) power
conversion products, (ii) electrical surge protection products, and (iii)
materials analysis and test equipment and specialized materials products.
In November 1995, the Company made a strategic decision to improve
business focus and execution by separating its core businesses and placing
assets for each core business into wholly-owned subsidiaries. Three new
subsidiaries were formed: Oryx Power Products Corporation ("Power Products"),
SurgX Corporation ("SurgX") and Oryx Instruments and Materials Corporation
("Instrument and Materials"). The subsidiaries are intended to provide
additional management and employee motivation to increase the value of each
business through potential equity ownership tied more closely to each business
unit, and to position the Company to be better able to seek financing or equity
investment at the subsidiary level in order to develop the Company's businesses.
Oryx' and its subsidiaries' customer base for their current product lines
includes the following OEMs: Cooper Industries, Pitney-Bowes Corp., Xerox
Corporation, IBM Corporation, Seagate Technology, Inc., Akashic Memories
Corporation, and Western Digital Media Corporation. The Company plans to market
its existing lines, and, possibly additional product lines to these and other
OEMs during fiscal 1997.
Oryx also derives revenues from sales of products based on its patented
IntrageneTM ceramic metallization and joining system and from the design and
fabrication of electromagnet systems. IntrageneTM is a proprietary metallurgical
technology developed by Oryx which affords the Company the capacity to
metallize, solder or braze a comprehensive range of difficult-to-join
engineering ceramics, graphite and refractory metals used in electronic and
structural applications.
The Company's predecessor, Advanced Technology, Inc. ("ATI"), was
incorporated on April 21, 1976 in New Jersey. On July 25, 1993, ATI formed the
Company as a wholly-owned Delaware subsidiary, and on September 29, 1993, ATI
merged into the Company.
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<PAGE>
The Company's offices are located at 47341 Bayside Parkway, Fremont,
California 94538, and its telephone number is (510) 249- 1144.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock
for the account of the Selling Security Holders. However, with respect to the
Warrants, the Company will only receive proceeds from the exercise of the
Warrants, the timing of which is at the discretion of the holders of the
Warrants. In the event all of the Warrants were to be exercised, the Company
would receive net proceeds of approximately $2,521,000, after payment of
offering expenses estimated to be approximately $24,000. No proceeds will be
obtained by the Company from the Warrants except upon the exercise of the
Warrants. It is anticipated that the net proceeds, if any, will be used by the
Company for expansion of operations and product lines and for working capital.
The actual allocation of proceeds realized from the exercise of the Warrants
will depend upon the amount and timing of such exercises, the Company's
operating revenues and cash position at such time and its working capital
requirements during the course of such exercise period. There can be no
assurances that any of the Warrants will be exercised.
While the intended use of proceeds is consistent with the Company's
current business plan objectives, the Company reserves the right to change the
use of proceeds depending on working capital requirements and opportunities
afforded to the Company. Pending utilization of the proceeds as described above,
the net proceeds of the offering will be deposited in interest bearing accounts
or invested in money market instruments, government obligations, certificates of
deposits or similar short-term investment grade interest bearing investments.
SELLING SECURITY HOLDERS
The following table sets forth the name of the Selling Security Holders,
the amount of shares of Common Stock held directly or indirectly or underlying
the Warrants and other derivative securites of the Company owned by the Selling
Security Holders on the date hereof, the amount of shares of Common Stock to be
offered by the Selling Security Holders, the amount to be owned by the Selling
Security Holders following sale of such shares of Common Stock and the
percentage of shares of Common Stock to be owned by the Selling Security Holders
following completion of such offering. As of May 31, 1996, there were issued and
outstanding 10,020,668 shares of Common Stock of the Company as to which the
percentages referred to below are based.
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<PAGE>
<TABLE>
<CAPTION>
Percentage
Percentage Shares to be to be Owned
Name of Selling Number of Shares to Owned Before Owned After After
Security Holder Shares Owned be Offered Offering Offering Offering
- --------------- ------------ ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Banque Hervet(1) 100,000 100,000 * -0- -
Caisse Centrale de 100,000 100,000 * -0- -
Banques Populaires(1)
Chase Manhattan 85,000 85,000 * -0- -
Trustees Ltd.(1)
Ivar S. Chhina(2) 8,000 8,000 * -0- -
Clarion Finanz AG(1) 690,000 690,000 6.9% -0- -
Alfred & Rosy Daniel(2)(3) 13,000 13,000 * -0- -
The Equitable Life 1,000,000 1,000,000 9.9% -0- -
Assurance Society(1)
Growth Trust(1) 500,000 500,000 4.9% -0- -
Goel Family 479,062 479,062 4.6% -0- -
Partnership(2)(4)
Global Stock Investment 80,000 80,000 * -0- -
Ltd.US Smaller
Companies Trust(1)
Govett American Smaller 435,000 435,000 4.3% -0- -
Companies Trust(1)
Shiv Grewal(2) 6,667 6,667 * -0- -
Jay Michael Haft(5) 144,600 104,600 1.4% 40,000 *
Gerald J. Josephson(2) 53,333 53,333 * -0- -
Thomas Landgraf(2) 24,691 24,691 * -0- -
John W. Larson(2) 213,333 213,333 2.1% -0- -
Paul Low(2) 33,333 33,333 * -0- -
Mehta & Co-Chhina(2) 5,333 5,333 * -0- -
Nitin T. Mehta(6) 507,049 477,049 4.9% 30,000 *
Mehta & Company(2) 213,333 213,333 2.1% -0- -
Morgan Fuller 140,222 140,222 1.4% -0- -
Holdings(7)
Northlea 529,183 321,789 5.2% 207,394 2.1%
Partners(2)(3)(4)(8)
Arvind Patel(2)(4)(9) 255,414 56,096 2.5% 199,318 2.0%
Pine Hill Ltd.(2) 50,000 50,000 * -0- -
Stephen Plous(2) 13,333 13,333 * -0- -
Howard Reisman(2) 32,000 32,000 * -0- -
Royal Bank of Scotland(1) 100,000 100,000 * -0- -
Rudyard Investments, 8,000 8,000 * -0- -
Ltd.(2)
Judith Schindler(10) 129,167 66,667 1.3% 62,500 *
Standard Bank Nominees 30,000 30,000 * -0- -
(Jersey) Ltd.(2)
Valeo Limited(1) 872,000 872,000 8.7% -0- -
Vernon Street Limited(3) 336,000 336,000 * -0- -
Weber Family Trust(2) 13,333 13,333 * -0- -
Andrew G. Wilson(2)(11) 47,219 10,000 * 37,219 *
Windstar Investments(2) 666,667 666,667 6.7% -0- -
Yorkton Securities(12) 256,560 256,560 2.5% -0- -
Zenith Electronics(13) 500,000 500,000 4.9% -0- -
TOTAL 8,094,401
- ----------------
* Represents less than 1%.
</TABLE>
(1) Represents shares issued in the Company's Regulation S offering undertaken
between February and May 1996.
(2) Represents shares issued in the Company's private placement of Common
Stock completed in May 1995.
(3) Represents shares issuable upon exercise of warrants received in the
Company's private placement of warrants completed in November 1994. The
warrants are exercisable at $2.00 per share on or prior to October 1,
2004.
(4) Represents shares issuable upon exercise of warrants received in the
Company's bridge loan financing completed in February 1996. The warrants
are exercisable at $1.25 per share on or prior to January 29, 2001.
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<PAGE>
(5) Jay M. Haft is a Director of the Company. Includes 89,600 shares acquired
in connection with the Company's private placement completed in May 1995
and 15,000 shares issuable upon exercise of warrants received in the
Company's private placement of warrants completed in November 1994
exercisable at $2.00 per share on or prior to October 1, 2004, which
shares are being sold pursuant to this Prospectus. Also includes 40,000
shares subject to stock options.
(6) Nitin T. Mehta is a Director of the Company. Includes 573,334 shares
acquired by Mr. Mehta and a retirement account set up by Mehta & Co., Inc.
in connection with the Company's private placement completed in May 1995
and 117,049 shares issuable upon exercise of warrants received in
connection with the Company's bridge loan completed in February 1996,
exercisable at $1.25 per share on or prior to January 29, 2001, which
shares are being sold pursuant to this Prospectus. Also includes 40,000
shares subject to stock options.
(7) Includes 100,000 shares issuable upon exercise of a warrant in consider-
ation for investment banking services to be rendered to the Company. The
warrant is exercisable at $1.31 per share on or prior to March 31, 2001.
Also includes shares issuable upon exercise of warrants received in the
Company's bridge loan financing completed in February 1996. The warrants
are exercisable at $1.25 per share on or prior to January 29, 2001.
(8) Northlea Partners, Ltd. is a partnership whose general partner is Dr. John
H. Abeles, the Chairman of the Board of the Company. Includes 200,000
shares acquired in connection with the Company's private placement
completed in May 1995; 25,000 shares issuable upon exercise of warrants
received in the Company's private placement of warrants completed in
November 1994 exercisable at $2.00 per share on or prior to October 1,
2004; and 96,789 shares issuable upon exercise of warrants received in
connection with the Company's bridge loan completed in February 1996,
exercisable at $1.25 per share on or prior to January 29, 2001; which
shares are being sold pursuant to this Prospectus. Also includes 40,000
shares subject to stock options.
(9) Arvind Patel is the Company's President, Chief Executive Officer and
a Director. Includes 40,000 shares acquired by Mr. Patel for himself and
for his two children in connection with the Company's private placement
completed in May 1995 and 16,096 shares issuable upon exercise of warrants
acquired in connection with the Company's bridge loan completed in
February 1996 exercisable at $1.25 per share on or prior to January 29,
2001, which shares are being sold pursuant to this Prospectus. Also
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<PAGE>
includes 95,460 shares subject to stock options and 35,000 shares held as
custodian for Mr. Patel's minor children.
(10) Judith A. Schindler is the wife of Bruce L. Schindler, a current Director
of the Company. Includes 66,667 shares acquired in connection with the
Company's private placement completed in May 1995 which shares are being
sold pursuant to this Prospectus. Also includes 40,000 shares subject to
stock options.
(11) Andrew Wilson is the Company's Chief Financial Officer. Includes 10,000
shares acquired in connection with the Company's private placement
completed in May 1995, which shares are being sold pursuant to this
Prospectus. Also includes 37,219 shares subject to stock options.
(12) Represents shares issuable upon exercise of a warrant in consideration for
serving as placement agent for the Company's Regulation S offering to
institutional non-U.S. investment firms completed in May 1996. The
warrants are exercisable at $1.375 per share on or prior to May 3, 2001.
(13) Represents shares issuable upon exercise of warrant issued to Zenith
Electronics Corporation in connection with a settlement agreement
consummated in February 1996. Warrants to purchase 400,000 shares are
exercisable at $1.00 per share on or prior to March 15, 2001 and warrants
to purchase 100,000 shares are exercisable at $5.00 per share on or prior
to March 15, 2001.
In November 1994, the Company completed a warrant issuance which resulted
in the issuance of warrants to purchase approximately 379,000 shares of Common
Stock at a price of $2.00 per share producing proceeds to the Company of
approximately $280,000. Northlea Partners, Ltd., a partnership whose General
Partner is Dr. John H. Abeles, the Chairman of the Board of the Company,
acquired warrants with the right to purchase 25,000 shares of Common Stock for
$18,750. Mr. Jay M. Haft, a Director of the Company acquired warrants with the
right to purchase 15,000 shares of Common Stock for $11,250.
In May 1995, the Company completed a private placement consisting of
2,536,290 shares of Common Stock pursuant to which the Company received proceeds
of approximately $1,900,000. Northlea Partners, Ltd., acquired for a
consideration of $150,000, 200,000 shares of this private placement. Mr. Nitin
T. Mehta, a Director of the Company, acquired for himself and through his
retirement account set up by Mehta & Co., Inc., 573,334 shares of Common Stock
for a consideration of $430,000 principal amount. Mrs. Judith A. Schindler, wife
of Mr. Bruce L. Schindler, a current Director of the Company, acquired for a
consideration of $50,000, 66,667 common shares of this private placement. Mr.
17
<PAGE>
Jay M. Haft, acquired 89,600 shares of Common Stock for $67,200 consideration.
Andrew Wilson, the Company's Chief Financial Officer, acquired 10,000 shares for
$7,500 consideration. Arvind Patel, the Company's President, Chief Executive
Officer and a Director, acquired for himself and his two children a total of
40,000 shares for a consideration of $30,000.
In February 1996, the Company issued promissory notes in the principal
amount of $400,000 and warrants to purchase 322,551 shares of Common Stock
exercisable at a per share price of $1.25 in connection with a bridge loan made
to the Company which was subsequently repaid. Northlea Partners, Ltd. received
warrants to purchase 96,789 shares of Common Stock. Mr. Nitin Mehta received
warrants to purchase 117,049 shares of Common Stock and Mr. Arvind Patel
received warrants to purchase 16,096 shares of Common Stock relating to this
bridge loan.
In February 1996, the Company entered into a Settlement Agreement with
Zenith pursuant to which, among other things, the Company issued warrants to
purchase 400,000 shares of Common Stock of the Company exercisable at $1.00 per
share and warrants to purchase 100,000 shares of Common Stock of the Company
exercisable at $5.00 per share.
Between February and May, 1996, the Company issued 4,000,000 shares of
Common Stock of the Company to a limited group of institutional non-U.S.
investment firms pursuant to Regulation S of the Securities Act. In connection
with this offering, Yorkton Securities, Inc., a non-U.S. firm which served as
placement agent for this offering, received warrants to purchase 256,560 shares
of Common Stock of the Company at a per share exercise price of $1.375.
In April 1996, the Company issued a warrant to purchase 100,000 shares of
Common Stock at a per share price of $1.31 to Morgan Fuller Capital Group,
L.L.C. in exchange for investment banking services to be rendered to the
Company.
The Company has agreed to pay for all costs and expenses incident to the
issuance, offer, sale and delivery of the Shares, including, but not limited to,
all expenses and fees of preparing, filing and printing the Registration
Statement and Prospectus and related exhibits, amendments and supplements
thereto and mailing of such items. The Company will not pay selling commissions
and expenses associated with any such sales by the Selling Security Holders. The
Company has agreed to indemnify the Selling Security Holders against civil
liabilities including liabilities under the Securities Act of 1933. The Selling
Security Holders have advised the Company that sales of the Shares may be made
from time to time by or for the account of the Selling Security Holders in one
or more transactions in the over-the-counter market, in negotiated transactions
or otherwise, at prices related to the prevailing market prices or at negotiated
prices.
18
<PAGE>
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Security Holders.
Such sales may be made in the over-the-counter market or otherwise at prices and
at terms then prevailing or at prices related to the then current market price,
or in negotiated transactions. The Shares may be sold by one or more of the
following methods: (i) a block trade in which the broker or dealer so engaged
will attempt to sell the Shares as agent for the Selling Security Holder; (ii)
ordinary brokerage transactions; (iii) transactions in which the broker solicits
purchasers and (iv) privately negotiated transactions. In effecting sales,
brokers or dealers engaged by the Selling Security Holders may arrange for other
brokers or dealers to participate. Brokers or dealers may receive commissions
from the Selling Security Holders in amounts to be negotiated immediately prior
to the sale. Such brokers or dealers and any other participating brokers or
dealers may be deemed to be "underwriters" within the meaning of the Securities
Act in connection with such sales.
DESCRIPTION OF SECURITIES
The Company is currently authorized to issue up to 25,000,000 shares of
Common Stock par value $.001 per share, of which 10,364,907 shares were
outstanding as of August 15, 1996. The Company is also authorized to issue up to
3,000,000 shares of Preferred Stock, par value $.001 per share, of which 7,500
shares of Series A Preferred Stock were outstanding as of August 15, 1996.
Common Stock
Each share of Common Stock entitles the holders thereof to one vote.
Holders of Common Stock do not have cumulative voting rights which means that
the holders of more than 50% of the shares voting for the election of directors
can elect all of the directors if they choose to do so, and in such event, the
holders of the remaining shares will not be able to elect any directors. The
ByLaws of the Company require that only a majority of the issued and outstanding
shares of Common Stock of the Company need be represented to constitute a quorum
and to transact business at a stockholders' meeting.
Subject to the dividend rights of the holders of any outstanding shares of
Preferred Stock, holders of shares of Common Stock are entitled to share, on a
ratable basis, such dividends as may be declared by the Board of Directors out
of funds legally available therefor. Upon liquidation, dissolution or winding up
of the Company, after payment to creditors and holders of any outstanding shares
of preferred stock, the assets of the Company will be divided pro rata on a per
share basis among the holders of the Common Stock. The Common Stock has no
preemptive, subscription or conversion rights and is not redeemable by the
19
<PAGE>
Company. The Shares of the Company's Common Stock which may be issued upon
exercise of the Company's publicly traded warrants (the "Public Warrants"), the
Underwriters' warrants issued in the Company's previous public offering and
other warrants and options issued by the Company when issued in accordance with
the terms thereof, will be duly authorized, validly issued, fully paid and
non-assessable.
Common Stock Purchase Warrants
The Public Warrants were issued in registered form pursuant to an
Agreement, dated April 6, 1994 (the "Warrant Agreement"), between the Company
and North American Transfer Co., as Warrant Agent (the "Warrant Agent"). The
following discussion of certain terms and provisions of the Public Warrants is
qualified in its entirety by reference to the detailed provisions of the
Statement of Rights, Terms and Conditions for the Public Warrants which forms a
part of the Warrant Agreement.
Each of the Public Warrants currently entitles the registered holder to
purchase 1.9 shares of Common Stock. The Public Warrants are exercisable at
$3.50 per Warrant which is the equivalent of $1.84 per share of Common Stock,
subject to certain further adjustments. The Public Warrants are entitled to the
benefit of adjustments in their exercise prices and in the number of shares of
Common Stock or other securities deliverable upon the exercise thereof in the
event of a stock dividend, stock split, reclassification, reorganization,
consolidation or merger.
The Public Warrants may be exercised at any time commencing October 6,
1994 and continuing thereafter until April 6, 1999, unless such period is
extended by the Company. After the expiration date, Public Warrant holders shall
have no further rights. Public Warrants may be exercised by surrendering the
certificate evidencing such Public Warrant, with the form of election to
purchase on the reverse side of such certificate properly completed and
executed, together with payment of the exercise price and any transfer tax, to
the Warrant Agent. If less than all of the Public Warrants evidenced by a
warrant certificate are exercised, a new certificate will be issued for the
remaining number of Public Warrants. Payment of the exercise price may be made
by cash, bank draft or official bank or certified check equal to the exercise
price.
Public Warrant holders do not have any voting or any other rights as
stockholders of the Company. The Company has the right at any time beginning
October 6, 1994 to repurchase the Public Warrants, at a price of $.05 per Public
Warrant, by written notice to the registered holders thereof, mailed 30 days
prior to the repurchase date. The Company may exercise this right only if the
closing bid price for the Common Stock for 20 trading days during a 30
consecutive trading day period ending no more than 10 days prior to the date
that the notice of repurchase is given, equals or exceeds $4.50 [129% of the
20
<PAGE>
offering price per share attributing no value to the Public Warrants] (subject
to adjustment) during the exercise period commencing October 6, 1994 through
October 6, 1996, and equals or exceeds $5.10 per share [146% of the offering
price per share, attributing no value to the Public Warrants] (subject to
adjustment) thereafter. Any such repurchase shall be for all outstanding Public
Warrants. If the Company exercises its right to call Public Warrants for
repurchase, such Public Warrants may still be exercised until the close of
business on the day immediately preceding the date fixed for repurchase. If any
Public Warrant called for repurchase is not exercised by such time, it will
cease to be exercisable, and the holder thereof will be entitled only to the
repurchase price. Notice of repurchase will be mailed to all holders of Public
Warrants of record at least thirty (30) days, but not more than sixty (60) days,
before the repurchase date. The foregoing notwithstanding, the Company may not
call the Public Warrants at any time that a current registration statement under
the Act is not then in effect.
The Warrant Agreement permits the Company and the Warrant Agent, without
the consent of Public Warrant holders, to supplement or amend the Warrant
Agreement in order to cure any ambiguity, manifest error or other mistake, or to
address other matters or questions arising thereunder that the Company and the
Warrant Agent deem necessary or desirable and that do not adversely affect the
interest of any Public Warrant holder. The Company and the Warrant Agent may
also supplement or amend the Warrant Agreement in any other respect with the
written consent of holders of not less than a majority in the number of the
Public Warrants then outstanding; however, no such supplement or amendment may
(i) make any modification of the terms upon which the Public Warrants are
exercisable or may be redeemed; or (ii) reduce the percentage interest of the
holders of the Public Warrants without the consent of each Public Warrant holder
affected thereby.
In order for the holder to exercise a Public Warrant, there must be an
effective registration statement, with a current prospectus, on file with the
Securities and Exchange Commission covering the shares of Common Stock
underlying the Public Warrant, and the issuance of such shares to the holder
must be registered, qualified or exempt under the laws of the state in which the
holder resides. If required, the Company will file a new registration statement
with the Commission with respect to the securities underlying the Public
Warrants prior to the exercise of such Public Warrants and will deliver a
prospectus with respect to such securities to all holders thereof as required by
Section 10(a)(3) of the Securities Act of 1933.
Preferred Stock
The Company is authorized to issue 3,000,000 shares of Preferred Stock,
par value $.001 per share, issuable in such series and bearing such voting,
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<PAGE>
dividend, conversion, liquidation and other rights and preferences as the Board
of Directors may determine. Of such shares, 45,000 shares were designated Series
A $25 2% Convertible Cumulative Preferred Stock (the "Series A Preferred
Stock"), and 7,500 shares were outstanding as of August 15, 1996.
Shares of Series A Preferred Stock accrue cumulative preferred cash
dividends at the annual rate of 2% or $0.50 per share, payable semi-annually
commencing November 1, 1993. The holders of the Series A Preferred Stock have no
right to have the Company redeem such shares, and the Company is not obligated
to redeem such shares under any circumstances. The holders of Series A Preferred
Stock are entitled to receive, upon a voluntary or involuntary dissolution,
liquidation or winding up of the Company, $25.00 per share plus an amount equal
to all accrued and unpaid dividends, if any.
At the election of the holder thereof, each share of Series A Preferred
Stock is convertible into 11.6666 shares of Common Stock, subject to certain
adjustments. If all 7,500 shares of outstanding Series A Preferred Stock were
converted, there would be issued approximately 87,500 shares of Common Stock of
the Company. Holders of Series A Preferred Stock have one vote per share on all
matters submitted to the stockholders of the Company. In addition, the
affirmative vote of at least a majority of the outstanding Series A Preferred
Stock is required to approve any adverse change in the preferences, rights or
limitations with respect to the Series A Preferred Stock.
Interim Financing Securities
In March 1994, the Company issued $150,000 principal amount of 9%
Promissory Notes (the "Interim Notes") and bridge warrants to purchase 37,500
shares of Common Stock. The Interim Notes were retired from the proceeds of the
Company's public offering in April 1994.
Each bridge warrant entitles the holder to purchase one share of Common
Stock at an exercise price of $2.28 per share on or prior to March 31, 1999. The
resale of the shares of Common Stock issuable upon exercise of the bridge
warrants has been registered in a separate public offering, and the Company has
agreed to maintain an effective registration statement and current prospectus
concerning the issuance of the shares upon exercise of the bridge warrants
during their term.
The Company has also issued warrants in various private offerings and
commercial transactions as described under "Selling Security Holders."
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<PAGE>
Capitalization of Subsidiaries
In November 1995, the Company restructured its operations and organized
three wholly-owned subsidiaries into which the Company placed its core
businesses and related assets. The three subsidiaries formed were Oryx Power
Products Corporation, SurgX Corporation and Oryx Instruments and Materials
Corporation (collectively the "Subsidiaries"). Each of the Subsidiaries was
organized under the laws of Delaware with authorized capitalization of
20,000,000 shares of Class A Common Stock, 5,000,000 shares of Class B Common
Stock and 5,000,000 shares of Preferred Stock for all subsidiaries except SurgX
Corporation. The Class B Common Stock will be used to fulfill options granted to
members of management and other key employees of the Subsidiaries. The Class A
Common Stock was issued to the Company in exchange for all assets and
liabilities including intellectual property associated with the respective
businesses. The Class A Common Stock and Class B Common Stock are identical
except that the Class A Common Stock possesses a liquidation preference. As of
the date hereof, each of the Subsidiaries has 10,000,000 shares of Class A
Common Stock issued and outstanding and held by the Company. No shares of Class
B Common Stock or Preferred Stock has been issued. However, Power Products has
granted options to purchase 992,000 shares of its Class B Common Stock,
Instruments and Materials have granted options to purchase 920,000 shares of its
Class B Common Stock and SurgX has granted options to purchase 280,000 shares of
its Class B Common Stock to management and key employees which will vest ratably
over a period of five years.
Transfer Agent
The transfer agent for the shares of Common Stock is North American
Transfer Co., 147 West Merrick Road, Freeport, New York 11520.
LEGAL MATTERS
Certain legal matters in connection with the Shares being offered hereby
will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson, P.A.,
200 East Las Olas Boulevard, Suite 1900, Fort Lauderdale, Florida 33301.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-KSB/A1 for the year ended February 29, 1996, have
been so incorporated in reliance on the report (which contains an explanatory
paragraph relating to the Company's ability to continue as a going concern as
described in Note 1 to the financial statements) of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
23
<PAGE>
INDEMNIFICATION
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction the Company is incorporated, empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise. A corporation may indemnify against
expenses (including attorneys' fees) and, other than in respect of an action by
or in the right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person indemnified acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification of expenses may
be made in respect to any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action was brought shall
determine that, despite the adjudication of liability, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Section 145 of the General Corporation Law of Delaware further provides
that to the extent a director, officer, employee or agent of the corporation has
been successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he or she shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
The By-laws of the Company require the Company to indemnify its directors
and officers to the fullest extent permitted by the General Corporation Law of
the State of Delaware.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended maybe permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company 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 such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
24
<PAGE>
Company 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 Company 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.
25
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
--------------------------------------------
The following table sets forth the estimated expenses, all of which are
being paid by the Company, in connection with this offering.
Registration fee ............................... $ 8,038.00
Legal fees and expenses ........................ 5,000.00*
Blue sky qualification fees
and expenses ................................ 1,000.00*
Accounting fees and expenses ................... 7,500.00*
Printing expenses .............................. 1,000.00*
Miscellaneous .................................. 1,462,00*
----------
Total .................................... $ 24,000.00*
==========
*Estimated
Item 15. Indemnification of Directors and Officers.
-----------------------------------------
Section 145 of the General Corporation Law of Delaware, under which
jurisdiction the Company is incorporated, empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise. A corporation may indemnify against
expenses (including attorneys' fees) and, other than in respect of an action by
or in the right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person indemnified acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification of expenses may
be made in respect to any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action was brought shall
determine that, despite the adjudication of liability, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Section 145 of the General Corporation Law of Delaware further provides
i
<PAGE>
that to the extent a director, officer, employee or agent of the corporation has
been successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter therein, he or she shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
The Company's Bylaws provide that the Company has the power to indemnify
its directors and executive officers and may indemnify its other officers,
employees and other agents to the fullest extent permitted by Delaware law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended maybe permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company 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 such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company 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 Company 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.
ii
<PAGE>
Item 16. Exhibits.
Exhibits
Exhibit No. Description of Exhibits
3.1 Certificate of Incorporation of the Registrant dated July 26,
1993(1)
3.2 Bylaws of the Registrant dated July 26, 1993(1)
3.3 Certificate of Amendment to Certificate of Incorporation dated
July 23, 1993(1)
3.3A Certificate of Amendment of Certificate of Incorporation dated
February 7, 1996(4)
4.1 Specimen Common Stock Certificate(1)
4.2 Specimen Common Stock Purchase Warrant(1)
4.3 Warrant Agency Agreement including Statement of Rights, Terms
and Conditions for Callable Stock Purchase Warrants(2)
4.4 Incentive and Nonqualified Stock Option Plan, as Amended(1)
4.4A 1995 Directors Stock Option Plan(4)
4.5 Form of Promissory Note issued to Series A Preferred Stock
investors(1)
4.6 Unit Purchase Warrant(1)
4.7 Form of Common Stock Purchase Agreement executed by each
investor in private placement consummated on May 26, 1995(2)
4.8 Form of Registration Rights Agreement executed by each
investor in private placement dated February 29 and May 13,
1996(2)
4.9 Form of Warrant issued to various investors in February 1996
Bridge Financing(4)
4.10 Form of Warrants issued to Yorkton Securities, Inc. in
February 1996 and May 1996(4)
5.1 Opinion of Atlas, Pearlman, Trop & Borkson, P.A. as to the
validity of the securities being registered.*
10.1 Lease Agreement with Renco Investment Company re: Fremont,
California office, a laboratory and manufacturing facility(1)
10.2 Lease Agreement with FINSA re: Reynosa, Mexico, manufacturing
facility(3)
10.3 Lease Agreement with Greer Enterprises re: Fremont, California
manufacturing facility(3)
10.4 Lease Agreement with Hospitak/Meditron re: McAllen, Texas,
warehouse facility(3)
10.5 Lease Agreement with Security Capital Industrial Trust re:
Fremont, California manufacturing facility(4)
10.6 Lease Agreement with OTR, State Teachers Retirement System of
Ohio re: Mt. Prospect, Illinois office(4)
10.7 Consulting Agreement with Bruce L. Schindler(1)
iii
<PAGE>
10.8 Financial Consulting Agreement with J. W. Charles/CSG(1)
10.9 Letter of Employment and Non-Competition Agreement with Arvind
Patel(1)
10.10 Letter of Employment and Non-Competition Agreement with Andrew
Intrater(1)
10.11 Agreement for the Purchase and Sale of Stock with Intek
Diversified Corporation(1)
10.12 Asset Purchase Agreement with Zenith Electronics Corp-
oration(1)
10.13 Promissory Notes issued in interim debt financing(1)
10.14 Common Stock Purchase Warrants issued in interim debt fin-
ancing(3)
10.15 Placement Agency Agreement between the Company and Yorkton
Securities, Inc. dated February 8, 1996, as amended April 22,
1996(4)
10.16 Form of Subscription Agreement between the Company and various
investors in Yorkton Private Placement dated February 29, 1996
and May 13, 1996(4)
10.17 Offering Memorandum dated February 8, 1996 and Supplement
thereto dated April 22, 1996, relating to Yorkton private
placement(4)
10.18 Settlement Agreement between the Company and Zenith Elec-
tronics Corporation dated February 29, 1996, as amended April
16, 1996(4)
21 Subsidiaries of the Registrant(4)
23.1 Consent of Independent Accountants*
23.2 Consent of Atlas, Pearlman, Trop & Borkson, P.A. (incorporated
in opinion included in Exhibit 5.1).
* Filed herewith.
1 Previously filed as an exhibit to the Company's Registration Statement on
Form SB-2 (Registration No. 33-72104) which became effective on April 6, 1994
and is incorporated herein by reference.
2 Previously filed as an exhibit to the Company's Current Report on Form 8-K
filed with the Commission on March 27, 1995.
3 Previously filed as an exhibit to the Company's Annual Report on Form 10-KSB
for the fiscal year ended February 28, 1995.
4 Previously filed on an exhibit to the Company's Annual Report on Form 10-KSB
(as Amended) for the fiscal year ended February 29, 1996.
iv
<PAGE>
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities 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 which,
individually or together, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any additional or changed material
information with respect to the plan of distribution.
(2) For determining any liability under the Securities Act of 1933,
as amended, treat each post-effective amendment as a new registration
statement relating to the securities offered, and the offering of the
securities at that time to be the initial bona fide offering.
(3) To file a post-effective amendment to remove any of the
securities that remain unsold at the end of the offering.
(b) The undersigned Registrant hereby undertakes to provide to the
Underwriter at the closing specified in the Underwriting Agreement certificates
in such denominations and registered in such names as required by the
Underwriter to permit prompt deliver to each purchaser.
(c) The undersigned Registrant hereby undertakes that:
(1) For determining any liability under the Securities Act of 1933,
as amended, treat the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as
amended, as part of this Registration Statement as of the time the
Commission declared it effective.
(2) For determining any liability under the Securities Act of 1933,
as amended, treat each post-effective amendment that contains a form of
prospectus as a new registration statement for the securities offered in
the Registration Statement, and that offering of the securities at that
time as the initial bona fide offering of these securities.
v
<PAGE>
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Act"), may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that, in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the 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 Act and
will be governed by the final adjudication of such issue.
(e) The undersigned Registrant hereby undertakes that:
(1) For determining any liability under the Securities Act, treat
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant under Rule 424(b)(1), or (4), or
497(h) under the Securities Act as part of this Registration Statement as
of the time the Commission declared it effective.
(2) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the Registration
Statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
vi
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company 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 September 3,
1996.
ORYX TECHNOLOGY CORP.
By: /s/ Arvind Patel
-----------------------------------------
Arvind Patel, President and
Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
Signature Title Date
- --------- ----- ----
/s/ Arvind Patel President, Principal
- ------------------------- Executive Officer
Arvind Patel and Director September 3, 1996
/s/ Andrew Intrater Secretary, Treasurer
- ------------------------- and Director September 3, 1996
Andrew Intrater
/s/ Andrew G. Wilson Principal Financial and
- ------------------------- Accounting Officer September 3, 1996
Andrew G. Wilson
/s/ John H. Abeles Chairman of the Board
- ------------------------- and Director September 3, 1996
John H. Abeles
/s/ Jay M. Haft Director September 3, 1996
- -------------------------
Jay M. Haft
vii
<PAGE>
/s/ Nitin T. Mehta Director September 3, 1996
- -------------------------
Nitin T. Mehta
/s/ Ted D. Morgan Director September 3, 1996
- -------------------------
Ted D. Morgan
/s/ Bruce L. Schindler Director September 3, 1996
- -------------------------
Bruce L. Schindler
viii
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
Direct Line: (954) 766-7858
August 30, 1996
Oryx Technology Corp.
47341 Bayside Parkway
Fremont, California 94538
Re: Registration Statement on Form S-3; Oryx Technology,
Corp. (the "Company"), 8,094,401 Shares of Common Stock
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission with respect to the registration by the
Company of the resale of 8,094,401 shares of Common Stock, par value $.001 per
share (the "Common Stock") to be sold by the Selling Security Holders designated
in the Registration Statement. The shares of Common Stock to be sold consist of
6,536,290 shares of Common Stock currently outstanding and 1,558,111 shares of
Common Stock underlying various warrants described in the Registration Statement
(the "Warrants").
In our capacity as counsel to the Company, we have examined the
original, certified, conformed, photostat or other copies of the Company's
Certificate of Incorporation (as Amended), By-Laws, instruments pertaining to
the related exhibits and corporate minutes provided to us by the Company. In all
such examinations, we have assumed the genuineness of all signatures on original
documents, and the conformity to originals or certified documents of all copies
submitted to us as conformed, photostat or other copies. In passing upon certain
corporate records and documents of the Company, we have necessarily assumed the
correctness and completeness of the statements made or included therein by the
Company, and we express no opinion thereon.
Based upon and in reliance of the foregoing, we are of the opinion that
the Common Stock to be resold by the Selling Security Holders presently
outstanding, and the Common Stock to be issued upon exercise of the Warrants
(when issued in accordance with the terms of the Warrants), are or will be
validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration
Statement on Form S-3 to be filed with the Commission.
Very truly yours,
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
/s/Atlas, Pearlman, Trop & Borkson, P.A.
----------------------------------------
JMS/bb
3550.07.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
May 13, 1996 appearing on page F-2 of Oryx Technology Corp.'s Annual Report on
Form 10-KSB/A1 for the year ended February 29, 1996. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
San Jose, California
August 29, 1996
