As filed with the Securities and Exchange Commission on July 15, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
CODA MUSIC TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1716250
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6210 Bury Drive
Eden Prairie, MN 55346-1718
(612) 937-9611
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
John W. Paulson
Chairman and Chief Executive Officer
Coda Music Technology, Inc.
6210 Bury Drive
Eden Prairie, MN 55346-1718
(612) 937-9611
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Timothy M. Heaney, Esq.
Fredrikson & Byron, P.A.
900 Second Avenue South
Minneapolis, Minnesota 55402
(612) 347-7000
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined by
market conditions and other factors.
<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being offered 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, please check the following box. [x]
If this Form is filed to register additional securities of 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, please 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: [ ]
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CALCULATION OF REGISTRATION FEE
================================= ---------------------- --------------------- ------------------------------ ---------------------
Title of Each Class Proposed Maximum
of Securities to be Amount to Offering Price Proposed Maximum Amount of Registration
Registered be Registered per Unit(1) Aggregate Offering Price(1) Fee
- ---------------------------------- ---------------------- ------------------- ------------------------------ ----------------------
<S> <C> <C> <C> <C>
Common Stock, without par value 2,809,054 shares (2) $1.625 $4,564,713 $1,383
- --------------------------------------- ------------------------------------- ------------------------------ ----------------------
======================================= ====================== ===================== ============================== ===============
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(1) For purposes of calculating the registration fee pursuant to Rule
457(c) under the Securities Act of 1933, such amount is based upon the
average of the high and low prices of the registrant's Common Stock on
July 8, 1997 (a date within five business days prior to the date of
filing).
(2) Includes 936,357 shares that may be issued upon exercise of outstanding
Warrants.
The registrant 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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to completion, dated July 15, 1997
PROSPECTUS
CODA MUSIC TECHNOLOGY, INC.
2,809,054 Shares of Common Stock
This Prospectus relates to the offer and sale of up to 2,809,054 shares of
Common Stock, without par value (the "Shares"), of Coda Music Technology, Inc.,
a Minnesota corporation ("Coda" or the "Company") by persons who are currently
shareholders of the Company and who may acquire additional shares of the
Company's Common Stock upon exercise of Warrants (the "Selling Shareholders").
See "Selling Shareholders." The Selling Shareholders may offer their Shares from
time to time to or through brokers or dealers in the over-the-counter market at
market prices prevailing at the time of sale or in one or more negotiated
transactions at prices acceptable to the Selling Shareholders. See "Plan of
Distribution." The Company will not receive any proceeds from the sale of Shares
by the Selling Shareholders.
The Company will bear all expenses of the offering (estimated to be
$20,000), including the fees and expenses of one counsel for the Selling
Shareholders, except that the Selling Shareholders will pay any applicable
underwriter's commissions and expenses, brokerage fees or transfer taxes. The
Company and the Selling Shareholders have agreed to indemnify each other against
certain liabilities, including liabilities arising under the Securities Act.
The Company's Common Stock is traded on the Nasdaq Small Cap MarketSM under
the symbol "COMT." The closing bid price of the Company's Common Stock on July
10, 1997, as reflected on the Nasdaq Small Cap MarketSM was $1.75 per share.
-----------------------
FOR INFORMATION CONCERNING CERTAIN RISKS RELATING
TO AN INVESTMENT IN THE COMPANY'S COMMON STOCK
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE>
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
Prospectus, in connection with the offering contemplated hereby, and, if given
or made, such information or representations must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities other than the
registered securities to which it relates. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained or incorporated by reference herein is
correct as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C., 20549, and at the Commission's regional offices in New York (7
World Trade Center, Suite 1300, New York, New York 10048) and Chicago (Suite
1400, Northwestern Atrium Center, 500 West Madison, Chicago, Illinois 60661).
Copies of such material can be obtained from the Public Reference Section of the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Registration Statement and the Company's Exchange Act
filings may also be accessed through the Commission's web site
(http://www.sec.gov).
DOCUMENTS INCORPORATED 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-KSB (Commission File No.
0-26192) for its 1996 fiscal year ended December 31, 1996.
2. The Company's quarterly report on Form 10-Q (Commission File No.
0-26192) for its fiscal quarter ended March 31, 1997.
3. The description of the Company's Common Stock, without par value,
which is contained in the Company's Registration Statement on Form
SB-2 (Commission File No. 33-92212C) filed under the Securities Act of
1933, as amended, including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Shares shall be deemed to be incorporated by
<PAGE>
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated by reference
or deemed to be incorporated by reference in this Prospectus shall be deemed to
be modified or superseded for all purposes of this Prospectus to the extent that
a statement contained herein, therein or in any subsequently filed document
which also is incorporated or deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated herein by reference (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Joan K. Berg, Chief
Financial Officer, Coda Music Technology, Inc., 6210 Bury Drive, Eden Prairie,
Minnesota 55346-1718; Telephone (612) 937-9611.
THE COMPANY
The Company develops and markets proprietary music technology products
designed to enhance music learning and composition, increase productivity and
make practicing and performing music fun. Since 1988, the Company and its
predecessor have marketed the award-winning Finale(R) music notation software
products which eliminate the restrictiveness and tedium of music notation and
have established the Company as a leader in this market. In June 1994, the
Company introduced the Vivace(R) system, an innovative musical accompaniment
system that responds to the playing of a musician or singing of a vocalist in
real-time. For students, educators, adult music hobbyists, professional
musicians and composers in the approximately $5 billion music products industry,
Coda's innovative products provide easy-to-use, efficient alternatives to
traditional practice, education and composition techniques.
In July 1997, the Company announced the expansion of the Vivace product to
a complete practice system available with Intelligent Accompaniment(R) software
on a compact disk which will be marketed at a suggested retail price of $199.
The software package, known as the Vivace Practice Studio(TM), consists of the
compact disk, a foot pedal, microphone and cartridge reader. It may be used on
many MacIntosh and IBM compatible computer systems currently being sold without
additional hardware. Older computers require the addition of a soundcard or the
Vivace modular system - a VCR-sized box which incorporates a high quality
synthesizer, converter of acoustic sounds into digital format, digital effects
signal processor, mixer and computer interface.
The Intelligent Accompaniment technology allows the user to start playing
at any point in the musical piece, repeat difficult-to-play segments, change
instrumentation and adjust the degree to which the accompaniment follows the
musician. In addition, the musician can control tempo and reverb, transpose the
music into any key, play with or without repeats and designate sections of the
music to be cut. The products also feature warm-up exercises for vocalists, the
ability to tap in tempo changes with variations in speed, and the ability to
insert breath marks and cues to wait for a particular tone. These "variables"
can be saved with the music, creating a personally customized version of the
accompaniment.
<PAGE>
The Company's Intelligent Accompaniment technology is available for vocal
applications and the 17 standard band instruments, such as flutes, clarinets,
saxophones, trumpets, trombones and tubas.
The sale of a single Vivace system has the ability to generate multiple and
ongoing sales of repertoire as musicians build their own library of music
accompaniments. The repertoire delivery system consists of a computer floppy
disk and a cartridge reader which plugs into the user's computer, similar to
popular computer game machines.
Coda has created a catalog of over 4,200 individual classical and jazz
accompaniments contained on over 500 cartridge products for its Vivace
Intelligent Accompaniment product, of which over 3,000 accompaniments on
approximately 440 cartridges are currently available for sale.
Initially, the Vivace system and repertoire (library of music
accompaniments) was marketed to schools through a network of retail music
dealers. Beginning in 1997, the Company intends to expand its target markets and
distribution methods to ensure broader introduction of this technology to
schools, students and homes.
Coda also markets the leading music notation software with its Finale
family of products for use with Macintosh and PC windows operating systems.
Music notation software enables a musician to enter musical data into a computer
using either the computer keyboard, a musical instrument digital interface
("MIDI") equipped electronic music keyboard or other MIDI equipped instrument
and contemporaneously display the data on a computer screen as a musical score.
The dramatic improvements in speed and flexibility provided by programs like
Finale and Finale Allegro software have made such software the dominant method
for composers, arrangers, publishers and music teachers to create printed music.
The Academic Edition of the Finale product is sold exclusively to schools,
school teachers and college students. This version has also been a key source of
revenue and registered user base growth for the Company and it represents a
market that is continually being replenished with new student users.
The Company introduced the Finale Allegro product, a less powerful music
notation software product, in 1993. The Finale Allegro music notation software
product contains a subset of the notation tools contained in the Finale product.
The Finale Allegro product allows the Company to offer an entry level product to
the retail customer.
<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus, the following risk
factors should be considered carefully by prospective investors evaluating the
Company and its business before purchasing the Shares.
Uncertainty of Market Acceptance
The Company's initial Vivace product was introduced in 1994, new Vivace
products were introduced in 1996 and further developments have been announced
for 1997. The Company thus has a limited operating history from which investors
might judge its ability to market at a profit its Vivace products. The success
of the Company will be highly dependent on market acceptance of these products,
its ability to adapt the Vivace product to technologies with lower costs and the
success of its distribution arrangements.
Operating Losses and Fluctuations in Operating Results
The Company has incurred losses from operations since inception and has an
accumulated deficit of $8,602,953 as of March 31, 1997. Results of operations
may fluctuate in part as a result of purchasing cycles in the education market
and do fluctuate as a result of the timing of releases of new Vivace and Finale
products and product upgrades. In the spring of 1996, the Company released new
configurations of the Vivace product at lower suggested retail prices together
with upgraded features. There has been no similar release in the second quarter
of 1997. As a result, second quarter 1997 Vivace revenues will be substantially
lower than second quarter 1996 Vivace revenues.
Additional Capital
The Company's management believes that its current cash, including net
proceeds in the amount of approximately $2 million from a private placement of
shares of Common Stock and warrants closed in May 1997, and its current line of
credit will be sufficient to fund the Company's capital requirements through
1998. Future capital requirements, however, will depend upon levels of revenues
and of product development and marketing expenditures. In the future, the
Company may seek additional capital through a new line of credit with a bank,
asset based lending or the sale of additional equity. No assurance can be given
that such capital would be available or available on terms favorable to the
Company. The sale of equity interests would dilute the ownership of current
shareholders.
New Product Development
The Company has announced its intention to release the Vivace Practice
Studio product as a software application in 1997. However, additional
development work is required for adaptation of the Vivace product to
technologies with lower costs and more practice tools, for the introduction of
Vivace products for the orchestral and MIDI equipped instrument markets and to
increase the breadth of the Company's repertoire for Vivace products. No
assurance can be given that the Company's timetable for these development plans
will be achieved, that sufficient development resources will be available or
that development efforts will be successful.
<PAGE>
Dependence on Repertoire Sales and Development
The Company's future success is highly dependent on its ability to obtain
significant ongoing repertoire sales. The Company has entered into license
agreements with leading music publishers, which provide the Company with access
to musical titles for repertoire development. While the Company believes that
its relationships with these publishers are good, there can be no assurance that
the Company will be able to maintain these relationships or make satisfactory
arrangements to receive access to additional styles of music in a timely manner.
Although the loss of a license arrangement with any one publisher would not
materially adversely affect the Company's operations, the lack of a sufficient
number and variety of musical arrangements would greatly limit the Company's
ability to market its Vivace products.
Dependence on Key Personnel
The Company is highly dependent on a limited number of key management and
technical personnel. The Company's future success will depend, in part, on its
ability to attract and retain highly qualified personnel. There can be no
assurance that the Company will be successful in hiring or retaining qualified
personnel. The loss of key personnel, or inability to hire and retain qualified
personnel, could have an adverse effect on the Company's business, financial
condition and results of operations. The Company does not have key-person life
insurance on any of its key personnel.
Dependence on Schools, Key Customers and Students
The sale of a substantial portion of the Company's Vivace products
initially will be directed toward schools and, increasingly, towards students.
Budget restrictions may delay or prohibit the purchase of the Company's products
by schools and certain other customers. The Company's success will depend in
part on its ability to sell its Vivace products to key schools which tend to
establish trends and standards in music education and band performance. The
Company's success in reaching students will depend upon its ability to adapt
Vivace to technologies with lower costs and to develop marketing and
distribution channels.
Competition
Although there are other musical accompaniment products, including a recent
introduction by a major musical instrument company (Roland Company) the Company
believes none have the capability to listen to and follow the musician like the
Company's Vivace products. There can be no assurance that others, such as large
electronics manufacturers, will not enter this market. Competition in the sale
of music notation products such as the Company's Finale products occurs
principally on the basis of price, features and ease of use. Some of the
companies with which the Company may compete have significantly greater
financial and other resources than the Company.
<PAGE>
Dependence on Suppliers
The Company is dependent on certain suppliers for delivery of components
and assembly of its Vivace products. While the Company believes that alternative
suppliers are available, any interruption of supply from current vendors could
cause significant delays in the shipment of such products.
Proprietary Technology
The Company is dependent on proprietary technology. A number of patents
have been issued to or licensed by the Company and additional patents are
pending which cover various aspects of the Company's products. There can be no
assurance that the Company's proprietary technology will provide it with
significant competitive advantages, that other companies will not develop
substantially equivalent technology or that the Company will be able to protect
its patented and unpatented technologies. The Company could incur substantial
costs in seeking enforcement of its patents or in defending itself against
patent infringement claims by others. The Company is not aware of any patents
held by others that would prohibit the use of technology currently used by the
Company. Further, there can be no assurance that the Company will be able to
obtain or maintain patent protection in the international markets in which it
intends to offer products.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of any of the
Shares offered hereby.
SELLING SHAREHOLDERS
On May 29, 1997, the Selling Shareholders acquired, in connection with a
private placement by the Company, 1,872,697 Shares and Warrants to purchase
936,357 Shares (together referred to as the "Private Placement Shares"). The
following table sets forth, as of the date of the Prospectus, the number of
shares of Coda Common Stock beneficially owned by each Selling Shareholder
(including the Private Placement Shares), the number of Private Placement Shares
which may be offered hereby and the percentage of the outstanding Common Stock
to be owned if all of the Private Placement Shares are sold by the Selling
Shareholders. The Selling Shareholders are not obligated to sell any of their
Private Placement Shares.
<PAGE>
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Shares Beneficially
Owned Assuming All Shares Hereby
Shares Offered Are Sold
Beneficially Shares
Selling Shareholders Owned at Hereby Shares Percentage
Date of Offered
Prospectus(1)
<S> <C> <C> <C> <C>
J. M. Hixon Partners LLC 1,153,847 1,153,847 0 0
Dain Bosworth, Inc. FBO David A.
Henderson IRA 15,000(2) 15,000 0(2) 0
Founding Partners II Limited Partnership 167,026 30,000 137,026 2.2%
Cherry Tree Ventures IV, LP(3) 682,221 115,386 566,835 9.1%
Rollo M. Nesseth 52,616 34,616 18,000 *
Paul E. Grunder 42,000 30,000 12,000 *
John W. Clinton 32,847 28,847 4,000 *
Morrison Associates Limited Partnership 120,385 115,385 5,000 *
Angus T. Morrison and First Bank TTEES
Angus T. Morrison Trust U/A dtd 10/20/89 57,693 57,693 0 0
Sundet Investment Fund Partnership 54,616 34,616 20,000 *
Timothy M. Heaney 16,127 7,500 8,627 *
Joan K. Berg(4) 27,552 7,500 20,052 *
Venture Management Profit Sharing Plan 190,000 150,000 40,000 *
Bayport Corporation 33,847 28,847 5,000 *
Ben Reuben and Sophie Reuben Jt Ten 103,538 86,538 17,000 *
Timothy A. Thone 28,847 28,847 0 0
Allan Luehmann 35,347 28,847 6,500 *
Paul Mosby 57,693 57,693 0 0
Alan H. Rice and Gloria Rice Jt Ten 125,000 75,000 50,000 *
Man & Co. FBO Kenneth W. Brimmer IRA 48,847 28,847 20,000 *
Man & Co. FBO Jaye Marisa Snyder IRA 48,847 28,847 20,000 *
R. Nicholas Trane II 43,847 28,847 15,000 *
Kenneth L. Green 40,847 28,847 12,000 *
Paul B. Burke 28,847 28,847 0 0
Charles E. Underbrink 64,344 37,500 26,844 *
P. Oppenheimer Investment Partnership L.P. 118,885 115,385 3,500 *
CJR Associates L.P. 330,769 230,769 100,000 1.6%
Philip Isaacson 30,000 30,000 0 0
Anthony M. Frank 42,847 28,847 14,000 *
Clinton H. Morrison 33,847 28,847 5,000 *
Robert S. Spong 83,782 34,616 49,166 *
Dennis LaValle 33,000 15,000 18,000 *
Gilbert C. Williams 67,693 57,693 10,000 *
_________________________________
* less than 1%
(1) Includes shares and warrants purchased in the private placement as well
as any additional shares, exercisable options and/or exercisable warrants
owned by the Selling Shareholders. Shares not outstanding but deemed
beneficially owned by virtue of the individual's right to acquire them
as of the date of this Prospectus, or within 60 days of such date, are
treated as outstanding when determining the percent of the class owned
by such individual.
(2) Does not include 75,274 shares owned by David A. Henderson or 122,026
shares and warrants to purchase 25,000 shares owned by Founding Partners II
Limited Partnership ("FPII"). Mr. Henderson is a general partner of the
general partner of FPII and thus shares voting and dispositive power over
the shares held by such entity. Mr. Henderson is a director of the
Company.
(3) Gordon F. Stofer, the Managing Gneral Partner of Cherry Tree Ventures
V, LP, is a director of the Company.
(4) Ms. Berg is the Chief Financial Officer of the Company.
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<PAGE>
PLAN OF DISTRIBUTION
All or a portion of the Shares offered by the Selling Shareholders hereby
may be sold from time to time by the Selling Shareholders or by pledgees,
donees, transferees or other successors in interest. 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 means: (a)
ordinary brokerage or market making transactions and transactions in which the
broker or dealer solicits purchasers; (b) block trades in which the broker or
dealer so engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction; and
(c) purchases by a broker or dealer as principal and resales by such broker or
dealer for its account pursuant to this Prospectus. In effecting sales, brokers
or dealers engaged by the Selling Shareholders may arrange for other brokers or
dealers to participate. Brokers or dealers will receive commissions or discounts
from the Selling Shareholders 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. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 under the Act may be sold
under Rule 144 rather than pursuant to this Prospectus.
The Company and the Selling Shareholders have agreed to indemnify each
other against certain liabilities, including liabilities arising under the
Securities Act.
TABLE OF CONTENTS
AVAILABLE INFORMATION.....................................................2
DOCUMENTS INCORPORATED BY REFERENCE.......................................2
THE COMPANY...............................................................3
RISK FACTORS..............................................................4
USE OF PROCEEDS...........................................................7
SELLING SHAREHOLDERS......................................................7
PLAN OF DISTRIBUTION......................................................9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following expenses will be paid by the Company in connection with the
distribution of the shares registered hereby. The Company is paying all of the
Selling Shareholders' expenses related to this offering, except the Selling
Shareholders will pay any applicable broker's commissions and expenses and
transfer taxes. All of such expenses, except for the SEC Registration Fee, are
estimated.
SEC Registration Fee ..............................................$1,383
NASD Fee ...............................................................0
Nasdaq listing fee .....................................................0
Legal Fees and Expenses ...........................................15,000
Underwriter's Accountable Expenses .....................................0
Accountants' Fees and Expenses .....................................1,500
Printing Expenses ....................................................100
Blue Sky Fees and Expenses .............................................0
Miscellaneous ......................................................2,017
Total ........................................................$20,000
Item 15. Indemnification of Directors and Officers.
Under Minnesota corporate law, a corporation shall, unless prohibited or
limited by its Articles of Incorporation or Bylaws, indemnify its directors,
officers, employees and agents against judgments, penalties, fines, settlements,
expenses and disbursements incurred by such person who was, or is threatened to
be, made a party to a proceeding by reason of the fact that the person is or was
a director, officer, employee or agent of the corporation if generally, with
respect to the acts or omissions of the person complained of in the proceeding,
the person: (i) has not been indemnified by another organization with respect to
the same acts or omissions; (ii) acted in good faith, (iii) received no improper
personal benefit; (iv) in the case of a criminal proceeding, had no reasonable
cause to believe the conduct was unlawful; and (v) reasonably believed the
conduct was in the best interests of the corporation or, in certain
circumstances, reasonably believed that the conduct was not opposed to the best
interests of the corporation. Minnesota corporate law also provides that a
corporation may purchase and maintain insurance on behalf of any indemnified
party against any liability asserted against such person, whether or not the
corporation would have been required to indemnify the person against liability
under the provisions of Minnesota corporate law. The Registrant's Articles of
Incorporation and Bylaws do not limit the Registrant's obligation to indemnify
such persons.
The Registrant's Articles of Incorporation limit the liability of its
directors to the full extent permitted by the Minnesota Business Corporation
Act. Specifically, directors of the Registrant will not be personally liable for
<PAGE>
monetary damages for breach of fiduciary duty as directors except liability for
(i) any breach of the duty of loyalty to the Registrant or its shareholders,
(ii) acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) dividends or other distributions of
corporate assets that are in contravention of certain statutory or contractual
restrictions, (iv) violations of certain Minnesota securities laws or (v) any
transaction from which the director derives an improper personal benefit.
The Company and Selling Shareholders listed herein have agreed to indemnify
each other, under certain conditions, against certain liabilities arising under
the Securities Act.
Item 16. Exhibits
See Exhibit Index on page following signatures.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represents a fundamental change in the
information set forth in the Registration Statement;
(iii) 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;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against 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 final
adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(d) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
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 Eden Prairie, State of Minnesota, on July 14, 1997.
CODA MUSIC TECHNOLOGY, INC.
By /s/ Ronald B. Raup
Ronald B. Raup, President
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 date stated.
Each person whose signature appears below constitutes and appoints JOHN W.
PAULSON and RONALD B. RAUP as true and lawful attorneys-in-fact and agents, each
acting alone, with full power of substitution and resubstituion, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
or all amendments to this Form S-3 Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all said attorneys-in-fact and agents,
each acting alone, or his substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.
Signature Title Date
/s/ John W. Paulson Chairman and Chief Executive July 14, 1997
John W. Paulson Officer and Director (principal
executive officer)
/s/ Ronald B. Raup President, Chief Operating July 14, 1997
Ronald B. Raup Officer and Director
/s/ Joan K. Berg Chief Financial Officer (principal July 14, 1997
Joan K. Berg financial and accounting officer)
/s/ David A. Henderson Director July 14, 1997
David A. Henderson
/s/ Gordon F. Stofer Director July 14, 1997
Gordon F. Stofer
/s/ Larry A. Pape Director July 14, 1997
Larry A. Pape
/s/ Karl T. Bruhn Director July 14, 1997
Karl T. Bruhn
/s/ Benson K. Whitney Director July 14, 1997
Benson K. Whitney
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
to
Form S-3 Registration Statement
Coda Music Technology, Inc.
INDEX
Exhibit
....5.1 Opinion and Consent of Fredrikson & Byron, P.A.
....23.1 Consent of Arthur Andersen LLP
....23.2 Consent of Fredrikson & Byron, P.A. (Included in Exhibit 5.1)
....24.1 Power of attorney (Included on Signature Page)
EXHIBIT 5.1
Fredrikson & Byron, P.A.
900 Second Avenue South
Minneapolis, MN 55402
Telephone: (612) 347-7019
Facsimile: (612) 347-7077
July 15, 1997
Coda Music Technology, Inc.
6210 Bury Drive
Eden Prairie, MN 55346-1718
Re: Registration Statement on Form S-3
Ladies/Gentlemen:
We are acting as corporate counsel to Coda Music Technology, Inc. (the
"Company") in connection with the preparation and filing of a Registration
Statement on Form S-3 (the "Registration Statement") relating to the
registration under the Securities Act of 1933, as amended (the "Act") of
2,809,054 shares of the Company's Common Stock (the "Shares") to be sold by
certain shareholders, including 936,357 shares which may be issued upon exercise
of outstanding warrants (the "Warrants").
In acting as such counsel and for the purpose of rendering this opinion, we
have reviewed copies of the following, as presented to us by the Company:
1. The Company's Articles of Incorporation, as amended.
2. The Company's Bylaws, as amended.
3. Certain corporate resolutions of the Company's Board of
Directors pertaining to the issuance by
the Company of the Shares.
4. The Registration Statement.
Based on, and subject to, the foregoing and upon representations and
information provided by the Company or its officers or directors, it is our
opinion as of this date that:
1. The Shares are validly authorized by the Company's Articles of
Incorporation, as amended.
2. The Shares have been duly authorized and are, or upon payment therefor
upon exercise of the Warrants will be, validly issued and outstanding, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" included in the Registration Statement and the related Prospectus.
Very truly yours,
FREDRIKSON & BYRON, P.A.
By /s/ Timothy M. Heaney
Timothy M. Heaney
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 14,
1997 incorporated by reference in Coda Music Technology, Inc.'s Form 10-KSB for
the year ended December 31, 1996 and to all references to our firm included in
this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
July 14, 1997
