26
As filed with the Securities and Exchange Commission on
November 4, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
ACCENT COLOR SCIENCES, INC.
(Exact Name of Registrant as Specified in its Charter)
---------------------------
CONNECTICUT 06-1380314
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
800 Connecticut Boulevard
East Hartford, Connecticut, 06108
(860) 610-4000
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrant's Principal Executive Offices)
---------------------------
Charles E. Buchheit
President and Chief Executive Officer
Accent Color Sciences, Inc.
800 Connecticut Boulevard
East Hartford, Connecticut 06108
(860) 610-4000
(Name, Address, including Zip Code, and Telephone Number, including Area C
ode, of Agent for Service)
---------------------------
Copy to:
Willard F. Pinney, Jr.
Murtha, Cullina, Richter and Pinney LLP
Cityplace I
185 Asylum Street, 29th Floor
Hartford, Connecticut 06103-3469
(860) 240-6000
---------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the
following box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
class of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered per unit (1) offering price fee
Common Stock
no par value 511,250 shares(2) $ 1.00 $ 511,250 $ 150.82
(1) Estimated solely for the purpose of computing the amount of
the registration fee pursuant to Rule 457(c) under the Securities
Act of 1933, on the basis of the average of the high and low sale
prices reported on the Nasdaq National Market Automated Quotation
System on October 30, 1998.
(2) Pursuant to Rule 416, the number of shares of Common Stock to
be registered hereunder also includes an indeterminate number of
shares which may become issuable upon the exercise of the warrants
to prevent dilution resulting from stock splits, stock dividends or
similar transactions.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Prospectus
511,250 shares
Accent Color Sciences, Inc.
Common Stock
---------------------------------------------------------
The shareholders of Accent Color Sciences, Inc. named in this
Prospectus are offering and selling up to 511,250 shares of
Common Stock, no par value, under this Prospectus. These
shares are issuable upon the exercise of 511,250 Common Stock
Warrants held by the selling shareholders.
Of the total Warrants, 500,000 were issued to International
Business Machines Corporation on July 21, 1998 pursuant to a
Loan Agreement between Accent Color and IBM. The remaining
Warrants were issued to various shareholders in connection with
other arrangements between the Company and such shareholders.
We anticipate that the selling shareholders will offer shares
of Common Stock for public or private sale on the Nasdaq
National Market at the prevailing market prices on the date of
sale or at privately negotiated prices. The Company will not
receive any part of the proceeds from such sales.
--------------------------
Our Common Stock is traded on the Nasdaq National Market under
the symbol "ACLR." On October 30, 1998, the closing price of
our Common Stock was $1.00 per share as reported by the Nasdaq
Automated Quotation System.
--------------------------
Any investment in the Common Stock offered under this
Prospectus involves a high degree of risk. See "Risk Factors"
commencing on page 3.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined that this Prospectus is accurate or
complete. Any representation to the contrary is a criminal
offense.
The date of this Prospectus is _________, 1998.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the SEC's public reference rooms at 450 Fifth
Street N.W. Washington, D.C. 20549. Please call the SEC at 1-800-
SEC-0330 for further information on the public reference rooms.
The SEC maintains an internet site that contains reports, proxy
and information statements and other information regarding
issuers that file electronically with the SEC. Our SEC filings
are available to the public from the SEC's web site at
"http://www.sec.gov." In addition, we maintain a web site on the
internet at "http://www.accentcolor.com."
The SEC allows us to "incorporate by reference" the information
we file with them, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is considered to be part of
this Prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We
incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until the selling
shareholders sell all of the shares under this Prospectus:
1. Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
2. Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1998 and June 30, 1998;
3. Current Reports on Form 8-K dated January 9, 1998 and April
15, 1998; and
4. Form 8-A which became effective on December 23, 1996 and
contains the description of our Common Stock.
You may request a copy of these filings, at no cost, by writing
or telephoning our Vice President and Chief Financial Officer at
the following address:
Accent Color Sciences, Inc.
800 Connecticut Boulevard
East Hartford, Connecticut 06108
(860) 610-4000
This Prospectus is part of a registration statement we filed with
the SEC. You should rely only on the information or
representations provided in this Prospectus. We have not
authorized anyone else to provide you with different information.
The selling shareholders may not make an offer of these
securities in any state where the offer is not permitted. You
should not assume that the information in this Prospectus is
accurate as of any date other than the date on the front of the
document.
THE COMPANY
Accent Color Sciences, Inc. designs, manufactures and sells
innovative, high-speed, spot color printing systems ("Truecolor
Systems") for integration with digital, high-speed,
black-on-white printers. Spot color printing involves the use of
color to enhance traditional black-on-white documents by
accenting critical information, such as a balance due on a
billing statement, or by printing graphics, such as a company
logo. Truecolor Systems are designed to print spot color in
high-speed, high-volume applications at a low incremental cost
per page without diminishing the speed or performance of the
high-speed, black-on-white host printer or affecting the end
user's existing operational methods. They are capable of
printing up to 480 pages per minute, simultaneously using up to
eight different colors, including custom colors, to print or
highlight fixed or variable data.
Truecolor Systems combine our proprietary paper handling
technology with patented ink jet technology from Spectra, Inc.
Under an agreement with Spectra, we hold an exclusive right to
supply products including Spectra printheads, which print color
on the black-on-white output from specified high-speed printers
from IBM, Groupe SET, Xerox, Oce and certain other manufacturers
through the year 2002. We also hold a right to extend the
agreement with Spectra for an additional seven years.
We also sell consumables comprised of standard and custom color
wax-based inks, as well as spare parts used with Truecolor
Systems. We expect that consumables will generate recurring
revenue, which we believe will increase as the installed base and
usage of Truecolor Systems increase.
Industries that would benefit from our product offerings include
insurance, banking, financial institutions, securities,
utilities, telecommunications and retail. Our strategy is to
penetrate these industries through agreements with Original
Equipment Manufacturers ("OEM's"), such as IBM.
Accent Color Sciences, Inc. was incorporated under the laws of
Connecticut in May 1993. Our principal offices are located at
800 Connecticut Boulevard, East Hartford, Connecticut, 06108 and
our telephone number is (860) 610-4000.
RISK FACTORS
An investment in our Common Stock involves a high degree of risk.
Before you invest in our stock, you should be aware of the
various risks set forth in the documents incorporated by
reference as well as those risks described below. You should
carefully consider these risk factors together with all of the
other information included in this Prospectus before you decide
to purchase shares of our Common Stock.
The risks factors discussed below, as well as the documents
incorporated by reference, contain forward-looking statements
that involve risks and uncertainties. These statements discuss
future revenue and expenditure expectations in addition to
anticipated strategies and events. When considering such forward-
looking statements, you should keep in mind the risk factors and
other cautionary statements contained in this Prospectus. These
risk factors, among others, could cause our actual results to
differ materially from those results discussed in the forward-
looking statements.
Immediate and Future Capital Requirements
We have ongoing working capital, capital equipment and operations
loss-funding requirements in order to continue to operate and
grow. As a result, we have and will likely continue to seek
equity or debt financing to fund operating losses, future
improvements and expansion of our research and manufacturing
capabilities. We can give no assurance that such financing will
be available when needed, or that, if available, it will be on
satisfactory terms. If we fail to obtain financing, our ability
to make continued investments in capital equipment and expansion
would be hindered, which could materially adversely affect our
financial position and results of operations. Any such equity
financing would result in dilution to the then-existing
shareholders of Accent Color.
Volatility of Stock Price
Our stock price has been, and in the future is expected to be,
volatile. We expect to experience market fluctuation as a result
of a number of factors, including, but not limited to, current
and anticipated results of operations, our future product
offerings or those of our competitors and factors unrelated to
our operating performance. The trading price of our Common Stock
may also vary as a result of changes in our business, operations,
or financial results, the prospects of general market and
economic conditions and other factors.
Development Risks
Accent Color is a development stage company. We have products in
various stages of development and have recognized minimal revenue
from the sale of our products. We have developed and planned to
market new products and new applications of technology and,
accordingly, are subject to risks associated with such ventures.
We have delivered prototype, pre-production, production and an
enhanced version of the Truecolor System. You should consider
the probability of our success in light of the expenses and
delays frequently encountered in connection with the operation of
a new business and the development of practical production
techniques for new products.
Our first development priority is the enhancement of our present
products. Many of these enhancements are contemplated in our
contract with IBM, including our plan to devote substantial
resources to improve our technology in the areas of printhead
width and print resolution. In addition, our customers have
requested advanced paper handling functionality, particularly
duplex printing (the ability to print on both sides of a page).
We can give no assurance, however, that we will be successful in
developing enhancements for our products or that these
enhancements will prove to be desirable to end users or that we
will be able to obtain the necessary components for contemplated
product enhancements. If we fail to develop enhancements to our
existing products, particularly the enhancements contemplated by
our agreement with IBM, market acceptance of our products could
be materially adversely affected. As a result, any such failures
could have a material adverse effect on our business, financial
condition and results of operations. Further, the development of
product enhancements could render portions of our inventory
obsolete, which could have a material adverse effect on our
ability to sell such inventory profitably.
Limited History of Product Manufacturing
To date, we have manufactured only limited quantities of
Truecolor Systems. To be profitable, we must manufacture our
products in sufficient quantities at acceptable costs. To date,
manufacturing costs have exceeded average selling price. Future
production in sufficient quantities may pose technical and
financial challenges for us. Due to our limited manufacturing
history, we can give no assurance that we will be able to make a
successful transition to high-volume production. If we are
unable to make a successful transition and to manufacture our
products at a cost sufficiently below the selling price, our
business, financial condition and results of operations could be
materially adversely affected.
Limited Operating History; History of Losses; Uncertainty of
Future Financial Results;
Accent Color was formed in May 1993 and is a development stage
company with a limited operating history. We have incurred net
losses as follows:
Period from inception to December 31, 1993 $ 45,000
Year ended December 31, 1994 $ 1,154,000
Year ended December 31, 1995 $ 4,217,000
Year ended December 31, 1996 $ 13,739,000
Year ended December 31, 1997 $ 18,691,000
Six-month period ended June 30, 1998 $ 6,030,000
We experienced these losses primarily due to the substantial
research and development costs associated with the development of
Truecolor Systems, all of which costs were expensed as incurred.
From inception through June 30, 1998, we recognized $2,916,000 of
revenue from the sale of our products. As a result of the losses
incurred, we had an accumulated deficit of $43,875,000 and total
shareholders' equity of $5,205,000 as of June 30, 1998. We
expect that quarterly net losses will continue through at least
the fourth quarter of 1998. We can give no assurance that we
will be profitable thereafter or that profitability, if achieved,
will be sustained.
To support the anticipated growth of our business, we expect to
expand our manufacturing, marketing and sales capabilities,
technical and other customer support functions, and research and
product development activities. The anticipated increase in our
operating expenses caused by any expansion could have a material
adverse effect on our operating results if revenue does not
increase at an equal or greater rate. Also, our expenses for
these and other activities are based in significant part on our
expectations regarding future revenue and are fixed to a large
extent in the short term. We may be unable to adjust spending in
a timely manner to compensate for any unexpected revenue
shortfalls.
Risk of Delisting from Nasdaq Stock Market
Our stock is currently traded on the Nasdaq National Market.
However, as of September 30, 1998, we were not in compliance with
the net tangible asset requirement for continued listing on the
Nasdaq National Market. We are reviewing various strategies to
increase our net tangible assets and restore compliance with this
requirement. If our Common Stock cannot remain listed on the
Nasdaq National Market, we would seek to have it listed on the
Nasdaq Small Capitalization Market, although we give no assurance
that this will occur.
If our Common Stock was delisted from trading on the Nasdaq Stock
Market ("NASDAQ") altogether, trading, if any, would be conducted
in the over-the-counter market. It would be traded in the so-
called "pink sheets" or the "Electronic Bulletin Board" of the
National Association of Securities Dealers, Inc. and consequently
an investor will likely find it more difficult to dispose of, or
to obtain accurate quotations as to the price of our Common
Stock.
The Securities Enforcement and Penny Stock Reform Act of 1990
requires additional disclosure relating to the market for penny
stocks in connection with trades in any stock defined as a penny
stock. Regulations set forth by the Commission generally define
a penny stock to be an equity security that has a market price of
less than $5.00 per share, subject to certain exceptions. Such
exceptions include any equity security listed on NASDAQ or a
national securities exchange and any equity security issued by an
issuer that has (i) net tangible assets of at least $2,000,000,
if such issuer has been in continuous operation for three years,
(ii) net tangible assets of at least $5,000,000, if such issuer
has been in continuous operation for less than three years or
(iii) average annual revenue of at least $6,000,000, if such
issuer has been in continuous operation for less than three
years. Unless an exception is available, the regulations require
the delivery, prior to any transaction involving a penny stock,
of a disclosure schedule explaining the penny stock market and
the associated risks.
In addition, if the Common Stock is not quoted on NASDAQ, or if
the Company does not meet the other exceptions to the penny stock
regulations cited above, trading in the Common Stock would be
covered by Rule 15g-9 set forth under the Exchange Act for non-
NASDAQ and non-national securities exchange listed securities.
Under such rule, broker/dealers who recommend such securities to
persons other than established customers and accredited investors
must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to a
transaction prior to sale. Securities also are exempt from this
rule if the market price is at least $5.00 per share.
If our Common Stock becomes subject to the regulations applicable
to penny stocks, the market liquidity for our Stock could be
adversely affected. In such event, the regulations on penny
stocks could limit the ability of broker/dealers to sell our
Common Stock and thus the ability of purchasers of our Stock to
sell their securities in the secondary market.
Potential for Dilution
In January 1998, we issued 4,500 shares of Series B Convertible
Preferred Stock pursuant to a private offering of securities.
Each share of Series B Stock is convertible into such number of
shares of Common Stock as is determined by dividing the stated
value ($1,000) of each share of Series B Stock (as such value is
increased by an annual premium of 6%) by the then current
conversion price of the Series B Stock. The conversion price is,
generally, 85% of the average of the closing market price of the
Common Stock during the five consecutive trading days immediately
preceding the date of determination.
As of October 30, 1998, 875 shares of the Series B Stock had been
converted into Common Stock resulting in 3,625 shares of Series B
Stock remaining issued and outstanding. Assuming conversion on
October 30, 1998, the remaining Series B Stock would be
convertible into 4,768,868 shares of Common Stock at a conversion
price of $.79688 per share. The actual number of shares issuable
upon conversion may be less than or greater than this number at
any given time, depending upon: (a) the market price of the
Common Stock at the time of conversion and (b) the Company's
ability to maintain its NASDAQ listing. In the event of a
decrease in the trading price of the Common Stock, holders of the
Series B Stock could convert their stock into more shares of
Common Stock and holders of the Common Stock would experience
commensurately greater dilution upon such conversion.
If the Common Stock is delisted from the NASDAQ, then the
conversion price is reduced to 83% of the average of the closing
market price of the Common Stock during the five consecutive
trading days immediately preceding the date of determination
resulting in greater dilution upon conversion.
Uncertainty of Market Development; Acceptance of Accent Color's
Products
The digital, high-speed printing market has traditionally relied
mainly on black-on-white print. We can give no assurance that a
market for high-speed, variable data color printing will develop
or achieve significant growth. If such a market does not develop
or achieve significant growth, our business, financial condition
and results of operations would be materially adversely affected.
Our products are currently designed for the digital, high-speed
production printing and production publishing market segments.
We can give no assurance that we will be successful in developing
or marketing our existing or future products or that, if any such
products achieve market acceptance, such acceptance will be
sustained. We also plan to further enhance our products and are
investing substantial capital and other resources in the
development of such enhancements. We plan to devote substantial
resources to improve technology in the area of higher resolution
ink jet printing. We can give no assurance that our Truecolor
Systems or enhancements will be a preferable alternative to
existing products or that they will not be rendered obsolete or
noncompetitive by products offered by other companies. Any
quality, durability or reliability problems with our products,
regardless of materiality, or any other actual or perceived
problems with any Company products, could have a material adverse
effect on market acceptance of such products. We can give no
assurance that such problems or perceived problems will not arise
or that, even in the absence of such problems, our products will
achieve market acceptance. If we fail to achieve market
acceptance for any of our products for any reason, our business,
financial condition and results of operations could be materially
adversely affected. In addition, the announcement by us or our
OEM customers or competitors of new products and technologies
could cause customers to defer purchases of our existing
products, which could have a material adverse effect on our
business, financial condition and results of operations.
Dependence on a Limited Number of Customers; Revenue
Concentration
We anticipate that sales of our Truecolor Systems and consumables
to a limited number of customers will account for substantially
all of our revenue. As of June 30, 1998, we had contracts with
two customers, IBM and Groupe SET. Generally, our customers
provide non-binding forecasts of future orders. We can give no
assurance that these customers will purchase a significant volume
of our products. If there were a substantial difference between
forecast orders and actual orders by any one of our customers, or
if our customers failed to purchase a significant volume of our
products, our business, financial condition and results of
operations could be materially adversely affected. We can give
no assurance that our OEM customers, including IBM, Groupe SET,
or other companies will not compete with us in the future.
Dependence on Third Party Marketing, Distribution and Support
A significant element of our marketing strategy is to form
alliances with third parties for the marketing and distribution
of our products. To this end, we are party to multi-year
agreements with IBM and Groupe SET for the marketing,
distribution and support of our products. Our contract with IBM,
entered into in April 1996, is for an initial term of three
years. Under the contract, IBM has the right to terminate its
contract in certain circumstances, such as a material breach of
the contract by Accent Color or our bankruptcy or insolvency. We
can give no assurance that (i) we will be successful in
maintaining such alliances or forming and maintaining other
alliances, (ii) we will be able to satisfy our contractual
obligations with our OEM customers or (iii) our OEM customers
will devote adequate resources to market and distribute our
products successfully. Any disruption in our relationships with
IBM or Groupe SET, or any future customer, may have a material
adverse effect on our business, financial condition or results of
operations.
As a result of our relationships with our OEM customers, our
ability to interact with end users of Truecolor Systems and
observe their experience with our products may be limited. We
also do not have control over the marketing, distribution and
support efforts of our OEM customers. This may result in a delay
by us in the recognition and correction of any problems
experienced by the OEM customers or the end users. If we fail to
respond to customer and end user preferences or experience with
our products, or if our OEM customers fail to market and support
our products successfully, our business, financial condition and
results of operations could be materially adversely affected. In
addition, our OEM customers will control the timing of the
introduction of our products, including our existing products.
Consequently, the timing of the introduction of our products may
be delayed for reasons unrelated to our products and us. Delays
in the introduction of our products could have a significant
adverse effect on our business, financial condition and results
of operations. Further, third party distribution provides us
with less information regarding the amount of inventory that is
in the process of distribution. This lack of information may
reduce our ability to predict fluctuations in revenue resulting
from a surplus or a shortage in our distribution channels and may
contribute to volatility in our financial results, cash flow and
inventory.
Dependence on Sole Source Supplier
We are dependent on Spectra, a wholly owned subsidiary of Markem,
Inc., as our sole source supplier of ink jet printheads and the
hot melt, wax-based inks used by Truecolor Systems. Spectra has
agreed to supply us with ink jet printheads and wax-based inks
under a supply agreement, subject to a number of conditions. Our
reliance on Spectra involves several risks, including a potential
inability to obtain an adequate supply of required printheads or
inks, and reduced control over the quality, pricing and timing of
delivery of these items. Because the production of printheads is
specialized and requires long lead times, we can give no
assurance that delays or shortages of printheads will not occur.
To date, Spectra has only produced a limited number of ink jet
printheads. Accordingly, we can give no assurance that Spectra
will be able to provide a stable source of supply of these
components. As we increase the production of Truecolor Systems,
we will become more reliant upon Spectra's ability to manufacture
and deliver ink jet printheads as required. Any interruption in
our ability to obtain Spectra printheads could have a material
adverse effect on our business, financial condition and results
of operations. Further, with the support of Spectra, we are
devoting substantial resources to improve technology in the areas
of ink jet printhead width. We can give no assurance that, if
such improvements are made, Spectra will be able to produce
printheads embodying such improvements for us in sufficient
quantities at an acceptable price, or at all. Any inability to
incorporate such improvements or produce printheads embodying
them could have a material adverse effect on our business,
financial condition and results of operations.
Spectra, itself, is also reliant upon licenses granted to it by
third parties. The Spectra agreement allows us, in certain
instances, to utilize Spectra's technology to either manufacture
wax-based inks or ink jet printheads or arrange for their
manufacture by third parties utilizing such technology. We can
give no assurance, however, that, if necessary, we would be able
to manufacture ink jet printheads and wax-based inks ourselves or
negotiate with third parties for the timely manufacture of such
products on acceptable terms or at all. Furthermore, the use of
Spectra's technology may require the consent of certain other
licensors to Spectra, and we can give no assurance that we will
be able to obtain any such consents on acceptable terms or at
all.
Spectra has granted us the exclusive right to supply products
including Spectra printheads in the worldwide market for printing
color on the output from specified high-speed, black-on-white
printers manufactured or marketed by Xerox, IBM, Oce and certain
other manufacturers through December 31, 2002. We also hold an
option to renew the contract for an additional seven years. To
maintain such exclusive rights, we are required to (i) purchase a
minimum number of ink jet printheads each year, (ii) continue to
purchase our wax-based ink requirements from Spectra and (iii)
make certain payments. We can give no assurance that we will be
able to meet the minimum purchase requirements or make these
payments. Any disruption in our relationship with Spectra, or in
Spectra's relationship with its licensors, may have a material
adverse effect on our business, financial condition and results
of operations.
Dependence on Major Subcontractors and Suppliers
Accent Color relies on subcontractors and suppliers to
manufacture sub-assemble and perform certain testing of some
modules and parts of Truecolor Systems. Currently, our ink jet
printheads are manufactured solely by Spectra. We currently
perform the final assembly and testing of various Truecolor
System components and of each complete Truecolor System. We plan
to outsource the manufacture of major components and complete
final assembly and testing of Truecolor Systems in house. The
inability to develop relationships with, or the loss of,
subcontractors or suppliers, or the failure of our subcontractors
or suppliers to meet our price, quality, quantity and delivery
requirements, could have a material adverse effect on our
business, financial condition and results of operations.
Significant Fluctuations in Quarterly Results
Our quarterly operating results are likely to vary significantly
in the future based upon a number of factors. Such factors
include, but are not limited to, the following:
- the volume, timing, delivery and acceptance of customer
orders;
- the introduction and market acceptance of new products
offered by us and our OEM customers or competitors;
- changes in our pricing policies or the pricing policies of
our OEM customers or competitors;
- the level of product and price competition;
- the relative proportion of printer and consumables sales;
- the timely availability of sufficient volume of sole source
components;
- fluctuations in research and development expenditures;
- the availability of financing arrangements for certain of
our customers; and
- general economic conditions, as well as other factors.
In addition, because the purchase of a printing system and
peripherals involves a significant capital commitment, the sales
cycle for our products is susceptible to delays and lengthy
acceptance procedures associated with large capital expenditures.
Historically, there has existed seasonality in the purchase of
major equipment such as our Truecolor Systems, with many
companies experiencing higher sales in the fourth calendar
quarter. We expect such seasonality to apply to the purchase of
our systems. Furthermore, due to our high average sales price and
low unit volume, a delay in the sale of, or the recognition of
revenue from the sale of a few units could have a material
adverse effect on our results of operations for a fiscal quarter.
A significant portion of our operating expenses is relatively
fixed in the short term, and planned expenditures are based on
sales forecasts. Sales forecasts by our customers are generally
not binding. If revenue levels are below expectations, operating
results may be disproportionately affected because only a small
portion of our expenses vary with revenue in the short term,
which could have a material adverse effect on our business,
financial condition and results of operations. We can give no
assurance that we will experience or sustain any revenue growth
or profitability.
Potential Need for Additional Funding for Operating and Capital
Requirements
Our currently anticipated levels of revenue and cash flow are
subject to many uncertainties and cannot be assured. Further,
our business plan may change, or unforeseen events may occur,
requiring us to raise additional funds. The amount of funds that
we will require depends on many factors. This includes the
extent and timing of the sale of Truecolor Systems, the timing
and cost associated with the expansion of our manufacturing,
development and engineering, sales and marketing and customer
support capabilities and our operating results. We can give no
assurance that, if and when needed, additional financing will be
available, or available on acceptable terms. If we are unable to
obtain additional financing or generate sufficient cash from
operations, we could be required to reduce or eliminate
expenditures for (i) research and development, (ii) production or
marketing of our products or (iii) curtail or discontinue
operations. Any of these events could have a material adverse
effect on our business, financial condition and results of
operations.
Product Warranty; Limit on Prices for Spare Parts
We warrant our Truecolor Systems to be free of defects in
workmanship and materials for 90 days from installation at the
location of the end user. Furthermore, under the IBM Agreement,
we have agreed to provide warranty parts for our products to IBM
at prices which will yield a monthly parts cost per Truecolor
System not to exceed a specified amount. We can give no
assurance that we will not experience warranty claims or parts
failure rates in excess of those which we have assumed in pricing
our products and spare parts. Any such excess warranty claims or
spare parts failure rates could have a material adverse effect
our business, financial condition or results of operations. We
currently have minimal experience with the volume or nature of
warranty claims relating to our products.
Dependence on a Single Product Line
We anticipate that we will derive substantially all of our
revenue in the foreseeable future from sales of Truecolor
Systems, related consumables and spare parts. If we are unable
to generate sufficient sales of Truecolor Systems due to market
conditions, manufacturing difficulties or other reasons, we may
not be able to continue our business. Similarly, if purchasers
of Truecolor Systems were to purchase wax-based ink or spare
parts from suppliers other than Accent Color then our business,
results of operations and financial condition could be materially
adversely affected. Dependence on a single product line makes us
particularly vulnerable to the successful introduction of
competitive products.
Rapid Technological Change Requires Ongoing Product Development
Efforts
The high-speed printer industry is characterized by evolving
technology and changing market requirements. Our future success
will depend on a number of factors, including our ability to
continue to develop and manufacture new products and to enhance
existing products. Consequently, we consider the enhancement of
our products to be a development priority. In a new and evolving
market, customer preferences can change rapidly and new
technology could render existing technology and product inventory
obsolete. If Accent Color fails to respond adequately to changes
in our target market, to develop or acquire new technology or to
successfully conform to market preferences, there could be a
material adverse effect on our business, financial condition and
results of operations. In addition, if Accent Color is unable to
anticipate or respond adequately to competitive and technological
changes, there could be a material adverse effect on our
business, financial condition and results of operations.
Limited Protection of Proprietary Technology and Risks of
Third-party Claims
Our ability to compete effectively will depend, in part, on our
ability to maintain the proprietary nature of our technology. We
rely, in part, on proprietary technology, know-how and trade
secrets related to certain aspects of our principal products and
operations. We can give no assurance that others, including our
OEM customers, may not independently develop the same or similar
technology or obtain access to our proprietary technology. To
protect our rights in these areas, we generally require our OEM
customers, suppliers, employees and independent contractors to
enter into nondisclosure agreements. We can give no assurance,
however, that these agreements will provide meaningful protection
for our trade secrets, know-how or other proprietary information.
If we are unable to maintain the proprietary nature of our
products through nondisclosure agreements or other protection,
our business could be materially adversely affected.
The U.S. Patent and Trademark Office has granted (i) patent
number 5,602,624 related to our color printing apparatus, (ii)
patent number 5,729,817 related to our paper path and the
placement of print on a page and (iii) patent number 5,793,397
related to the mechanisms used in our spot color product to
provide precision control of high speed paper webs. We have
filed additional applications for patents related to certain
enhancements of the Truecolor Systems and have European patent
applications currently pending. We can give no assurance,
however, as to the likelihood that the pending patent
applications will be issued. Nor can we give any assurance that
potential competitors, many of which may have substantially
greater resources than Accent Color and may have made substantial
investments in competing technologies, do not currently have or
will not obtain patents that will prevent, limit or interfere
with our ability to make, use or sell our products or will not
intentionally infringe on our patents if and when issued.
Moreover, we can give no assurance that Accent Color's technology
does not conflict with existing enforceable patents. Although
patents may be issued to us as a result of patent applications we
have filed, our technology may fall within the scope of existing
enforceable patents. We can give no assurance that the steps
taken by us to protect our proprietary rights will be adequate to
prevent misappropriation of our technology or independent
development by others of similar technology. In addition, the
laws of some foreign countries do not protect our proprietary
rights to the same extent as do the laws of the U.S. We can give
no assurance that these protections will be adequate.
To the extent that wax-based inks and ink jet printheads
purchased from Spectra are covered under patents or licenses, we
rely on Spectra's rights under such patents and licenses and
Spectra's willingness and ability to enforce its patents and
maintain its licenses. We can give no assurance that Spectra
will be willing or able to enforce its patents and maintain its
licenses and any such unwillingness or inability could have a
material adverse effect on our business, financial condition and
results of operations.
Although we believe that our products and technology do not
infringe any existing proprietary rights of others, we can give
no assurance that third parties will not assert such claims
against Accent Color in the future or that such future claims
will not be successful. We could incur substantial costs and
diversion of management resources with respect to the defense of
any claims relating to proprietary rights, which could have a
material adverse effect on our business, financial condition and
results of operations. Furthermore, parties making such claims
could secure a judgment awarding substantial damages, as well as
injunctive or other equitable relief, which could effectively
block our ability to make, use, sell, distribute or market our
products and services in the U.S. or abroad. Such a judgment
could have a material adverse effect on our business, financial
condition and results of operations. In the event a claim
relating to proprietary technology or information is asserted
against Accent Color, we may seek licenses to such intellectual
property. We can give no assurance, however, that such a license
could be obtained on commercially reasonable terms, if at all, or
that the terms of any offered licenses will be acceptable to us.
If we fail to obtain the necessary licenses or other rights, the
sale, manufacture or distribution of our products could be
precluded, which could have a material adverse effect on our
business, financial condition and results of operations. The
cost of responding to any such claim may be material, whether or
not the assertion of such claim is valid.
Difficulties in Managing Rapid Growth
Since inception, Accent Color has experienced rapid growth, which
has placed a significant strain on our (i) administrative,
operational and financial personnel, (ii) management information
systems, (iii) manufacturing operations and (iv) other resources.
Our future development plans anticipate additional management,
operating and financial resources. For example, we intend to
significantly increase production capacity, create new marketing
programs, hire additional personnel and develop further
enhancements to our products. We can give no assurance that (i)
we will be able to successfully implement our business strategy,
(ii) operations will generate sufficient cash flow, (iii)
adequate financing will be available on acceptable terms to fund
continuing growth or (iv) management will successfully manage
continued growth. If we fail to manage growth effectively our
business, financial condition and results of operations may be
materially adversely affected.
Dependence on Key Personnel
The business of Accent Color is substantially dependent on the
capabilities and services of a number of key technical and
managerial personnel, including Richard J. Coburn, our Chairman,
Charles E. Buchheit, our President and Chief Executive Officer,
and Norman L. Milliard, our Vice Chairman and Chief Technology
Officer. Mr. Coburn has an employment agreement with the
Company, which has a term that expires at the end of 1998; Mr.
Buchheit has a three-year employment agreement with Accent Color
that expires in April 2001; and Mr. Milliard has a three-year
contract with Accent Color that expires in June 2001. Messrs.
Coburn, Buchheit and Milliard may terminate their employment
relationship with the Company at any time with no penalty other
than the loss of future compensation. The loss of the services
of Messrs. Coburn, Buchheit, or Milliard or other key personnel
could have a material adverse effect upon the business of Accent
Color. We currently have keyman life insurance on Messrs. Coburn
and Milliard in the amount of $1,000,000 each. We can give no
assurance, however, that we will continue such insurance coverage
or that such amount is sufficient. Our future success will
further depend on our ability to retain key personnel and attract
qualified personnel. Competition for qualified personnel is
intense, and we can give no assurance that we will be successful
in hiring or retaining them. If Accent Color is unable to retain
key personnel or attract qualified personnel, our business,
financial condition and results of operations may be materially
adversely affected.
Competition
We expect to encounter varying degrees of competition in the
markets in which we compete. We compete, in significant part, on
the basis of advanced proprietary technology in the areas of
paper handling, ink jet color printing and interface software
which allows our products to print variable data, in multiple
standard and custom colors at high speeds.
Competition to supply color printing is fragmented. The Xerox
4890 (a similar product is also marketed by Xerox as the DocuTech
390HC) is a spot color printer, which prints in black and one
color per job (out of a limited palette). It is capable of
printing 92 pages per minute but does not offer custom colors.
BESTE Bunch Systems markets a color-offset press used as a
downstream add-on to an Oce or IBM high-speed, black-on-white
printer. While providing color logos and fixed data, it does not
offer variable data, requires longer time to set up, and is more
labor intensive. It also requires additional processes of
negative production and plate making. There are production full
process color printers available which have relatively high per
page print costs and operate at much lower speeds than those
required by typical production printing, making them impractical
for high-speed print jobs. However, many of the companies that
may compete with us in the future have longer operating histories
and significantly greater financial, technical, sales, marketing
and other resources, as well as greater name recognition than
Accent Color.
In addition to direct competition from other firms utilizing
high-speed color technologies, potential direct competition
exists from firms improving technologies used in low-speed to
medium-speed color printers and indirect competition exists from
firms producing pre-printed forms.
Other companies could introduce products or product improvements
based on new technologies with little or no advance notice.
Manufacturers of high-speed, black-on-white printers may also, in
time, develop comparable or more effective color capability
within their own products, which may render our products
obsolete. We can give no assurance that we will be able to
compete against future competitors successfully or that
competitive pressures faced by us will not have a material
adverse effect upon our business, financial condition and results
of operations.
Risks Associated with International Operations
We intend to have our products marketed worldwide and therefore
may enter into contracts with foreign companies. International
sales are subject to certain inherent risks, including unexpected
changes in regulatory requirements, tariffs and other trade
barriers, fluctuations in exchange rates, credit risks,
government controls, political instability, longer payment
cycles, increased difficulties in collecting accounts receivable
and potentially adverse tax consequences. We can give no
assurance that these factors will not have a material adverse
effect on our business, financial condition and results of
operations.
Risks Associated with Year 2000
The Year 2000 date issue arises from the fact that many computer
programs use only two digits to identify a year in a date field.
We have reviewed our products and key financial operations
systems, and where required, have developed plans to ensure that
our products and computer systems continue to function properly.
If we fail to develop the necessary plans for the computer
systems to continue to function properly, our business, financial
condition and results of operations may be materially adversely
affected. The Year 2000 date issue could also adversely impact
our financial condition and results of operations if our
suppliers, customers and other businesses fail to address this
issue successfully. We continue to assess these risks in order
to reduce the impact on our financial condition and results of
operations.
Dividends
We have not declared or paid dividends on our Common Stock in the
past and do not anticipate declaring or paying any dividends in
the foreseeable future.
Environmental Regulation
We are subject to regulation under various federal, state and
local laws relating to the environment and to employee safety and
health. These environmental regulations relate to the
generation, storage, transportation, disposal and emission of
various substances into the environment. We cannot predict the
environmental legislation or regulations that may be enacted in
the future or how existing or future laws or regulations will be
administered or interpreted. Compliance with more stringent laws
or regulations, as well as more vigorous enforcement policies of
the regulatory agencies or stricter interpretation of existing
laws, may require additional expenditures by us, some or all of
which may be material.
Potential Adverse Impact of Anti-takeover Provisions on Market
Price of Shares
Our Restated Certificate of Incorporation contains provisions
that could discourage a proxy contest or make more difficult the
acquisition of a substantial block of our Common Stock. The
Restated Certificate of Incorporation provides for a classified
Board of Directors, and members of the Board of Directors may be
removed only upon the affirmative vote of holders of at least
two-thirds of the shares of capital stock of Accent Color issued
and outstanding and entitled to vote. In addition, the Board of
Directors is authorized to issue shares of Common Stock and
Preferred Stock which, if issued, could dilute and adversely
affect various rights of the holders of shares of Common Stock
and, in addition, could be used to discourage an unsolicited
attempt to acquire control of the Company.
We are subject to the Connecticut Business Corporation Act (the
"Connecticut Act"), some provisions of which prohibit a publicly
held Connecticut corporation from engaging in a "business
combination" (including the issuance of equity securities which
have an aggregate market value of 5% or more of the total market
value of the outstanding shares of the Company) with an
"interested shareholder" (as defined in the Connecticut Act) for
a period of five years from the date of the shareholder's
purchase of stock unless approved in a prescribed manner. The
application of this statute could prevent a change of control of
the Company. Generally, approval is required by the Board of
Directors and by a majority of the non-employee directors of
Accent Color and by 80% of the outstanding voting shares and
two-thirds of the voting power of the outstanding shares of the
voting stock other than shares held by the interested
shareholder. We can give no assurance that these provisions will
not prevent us from entering into a business combination that
otherwise would be beneficial to the Company.
Common Stock Eligible for Future Sale
Future sales of shares of Common Stock by existing stockholders
under Rule 144 of the Securities Act of 1933 or through (i) the
exercise of outstanding registration rights, (ii) the issuance of
shares of Common Stock upon conversion of the Series B Stock,
(iii) the exercise of the Warrants or (iv) the exercise of
options or other warrants to purchase Common Stock could
materially adversely affect the market price of the Common Stock
and could materially impair our future ability to raise capital
through an offering of equity securities. A substantial number
of shares of Common Stock are available for sale under Rule 144
in the public market and no predictions can be made as to the
effect, if any, that market sales of such shares or the
availability of such shares for future sale will have on the
prevailing market price of the Common Stock.
USE OF PROCEEDS
All net proceeds from the sale of Common Stock under this
Prospectus will go to the shareholders who offer and sell their
shares. Accordingly, the Company will not receive any proceeds
from such sales.
SELLING SHAREHOLDERS
Under various registration rights agreements entered into with
the selling shareholders, we agreed to register the Common Stock
issuable to the selling shareholders upon the exercise of the
warrants they hold. Our registration of the Common Stock does
not necessarily mean that the selling shareholders will sell all
or any of their shares.
The following table shows:
(i) the name of the selling shareholders;
(ii) the number of shares of Common Stock beneficially owned by
the selling shareholders;
(iii) the aggregate number of shares of Common Stock to be
sold by each shareholder from time to time under this
Prospectus; and
(iv) the number of shares beneficially owned after the sale of
all of the shares offered under this Prospectus.
Shares Shares to be Shares
Beneficially Sold Beneficially
Name of Selling Owned Prior in the Owned After
Shareholder to the Offering Offering the Offering (1)
- --------------- -------------- ------------- --------------
International
Business Machines
Corporation 500,000 500,000 0
Richard Hodgson 28,750 3,750 25,000
Arthur S. DeMoss
Foundation 7,500 7,500 0
(1) Assumes that all of the shares held by the selling
shareholders and being offered under this Prospectus are sold and
that the selling shareholders acquire no additional shares of
Common Stock before the completion of this offering.
PLAN OF DISTRIBUTION
Upon the exercise of their Common Stock Warrants, the selling
shareholders may offer their shares of Common Stock at various
times in one or more of the following transactions:
- ordinary brokers transactions, which may include long or
short sales;
- transactions involving cross or block trades on the Nasdaq
National Market;
- purchases by brokers, dealers or underwriters as principal
and resale by such purchasers for their own account pursuant to
this Prospectus;
- through market makers or in ways not involving market makers
or established trading markets;
- through transactions in options, swaps or other derivatives;
- through hedging or option transactions or with broker-
dealers; or
- in a combination of any of the above transactions.
The selling shareholders may sell their shares at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed
prices.
The selling shareholders may use broker-dealers to sell their
shares. If this happens, broker-dealers may receive discounts or
commissions from the selling shareholders, or they may receive
commissions from purchasers of shares for whom they acted as
agents. Usual and customary brokerage fees may be paid by the
selling shareholders. The Company does not have knowledge of any
existing arrangements between any selling shareholder and any
other shareholder, broker, dealer, underwriter or agent relating
to the sale or distribution of the shares of Common Stock.
We can give no assurance that the selling shareholders will sell
any or all of the shares of Common Stock offered by them pursuant
to this Prospectus.
LEGAL MATTERS
Our legal counsel, Murtha, Cullina, Richter and Pinney LLP, has
rendered an opinion to the effect that the Common Stock offered
for resale pursuant to this Prospectus is duly and validly
issued, fully paid and non-assessable. Willard F. Pinney, Jr., a
partner in such firm, is a stockholder of Accent Color as well as
Corporate Secretary and a Director.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
MATERIAL CHANGES
On September 21, 1998, in an effort to retain key personnel, the
Board of Directors approved an option modification for all active
employees and directors of Accent Color Sciences, Inc. Pursuant
to this modification, Accent Color re-priced those options
elected by employees and directors, all of which were outstanding
under the 1995 Stock Incentive Plan, to an exercise price of
$1.00 per share, the fair market value of the Common Stock as of
September 29, 1998. In return for a lower exercise price, the
vesting period for such options was extended for one year. The
weighted average exercise price of all options outstanding was
reduced from $2.90 per share at August 31, 1998 to $1.26 per
share after the re-pricing.
As of September 30, 1998, we were not in compliance with the net
tangible asset requirement for continued listing on the Nasdaq
National Market. We are reviewing various strategies to increase
our net tangible assets and restore compliance with this
requirement. If our Common Stock cannot remain listed on the
Nasdaq National Market, we would seek to have it listed on the
Nasdaq Small Capitalization Market, although we can give no
assurance that this will occur.
No one (including any salesman or broker) is authorized to
provide oral or written information about this offering that is
not included in this Prospectus.
- -----------------------------------------------------------------------
TABLE OF CONTENTS
Page
Where You Can Find More Information ............2
The Company ....................................3
Risk Factors ...................................3
Use of Proceeds ...............................16
Selling Shareholders ..........................16
Plan of Distribution ..........................17
Legal Matters .................................17
Experts .......................................17
Material Changes ..............................18
- ----------------------------------------------------------------------------
[Graphic Omitted]
Accent Color Sciences, Inc.
511,250 Shares
COMMON STOCK
no par value per share
(Issuable upon the exercise of Common Stock Warrants)
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses to be
borne by the Company in connection with the offering described
in this Registration Statement:
Securities and Exchange Commission Registration Fee. $ 150.82
Legal Fees and Expenses ............................ $ 5,000.00*
Accounting Fees and Expenses ....................... $ 3,000.00*
------------
Total Expenses ........................ $ 8,150.82
============
- --------------------
* Estimated.
The Company is to pay all reasonable legal and accounting fees
and filing and registration fees applicable to this Registration
Statement. The selling shareholder is to pay all commissions,
transfer taxes and those fees and expenses of counsel as
retained by the selling shareholder.
Item 15. Indemnification of Directors and Officers.
The Company is a Connecticut corporation. Sections 33-770
through 33-778 of the Connecticut Act provide that, unless
limited by its certificate of incorporation, a corporation shall
indemnify any director or officer of the corporation against
reasonable expenses incurred by him in connection with any
action, suit or proceeding in which he is made or is threatened
to be made a party by reason of having been a director or
officer of the corporation if he was wholly successful in the
action, on the merits or otherwise.
In addition, such sections of the Connecticut Act allow a
corporation by action of the Board of Directors to indemnify an
individual made a party to a proceeding because he was a
director or officer of the corporation if: (1) he conducted
himself in good faith, and (2) he reasonably believed (A) in the
case of conduct in his official capacity with the corporation,
his conduct was in the best interests of the corporation and (B)
in all other cases, that his conduct was at least not opposed to
the best interests of the corporation and (3) in the case of any
criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful. Section 33-771 also provides, however,
that a corporation may not indemnify a director or officer (1)
in connection with a proceeding by or in the right of the
corporation in which the director or officer was adjudged liable
to the corporation or (2) in connection with any other
proceeding charging improper personal benefit to the director or
officer in which he was adjudged liable on the basis that
personal benefit was improperly received by him, whether or not
the action involved was taken in his official capacity.
The Restated Certificate of Incorporation of the Company
includes a provision limiting the personal liability of a
director to the Company or its shareholders for monetary damages
for breach of duty as a director, to an amount equal to the
amount of compensation received by the Director for serving the
Company during the calendar year in which the violation
occurred, subject to a number of exceptions, including
violations involving a knowing and culpable violation of law, a
breach of duty which enables a director or an associate to
receive an improper personal gain, conduct showing a lack of
good faith and conscious disregard of duty to the Company, a
sustained and unexcused pattern of inattention, or the approval
of an illegal distribution of assets of the Company to its
shareholders. An associate of a director, in terms of improper
personal gains, is defined as (A) any corporation or
organization of which a Company director is an officer or
partner or is, directly or indirectly, the beneficial owner of
ten percent or more of any class of voting stock, (B) any trust
or other estate in which a Company director has at least ten
percent beneficial interest or as to which a Company director
serves as trustee or in a similar fiduciary capacity and (C) any
relative or spouse of a Company director, or any relative of
such spouse who has the same name as the Company director. In
addition, the Company also maintains a directors' and officers'
insurance and reimbursement policy.
Item 16. Exhibits.
3 (i) Restated Certificate of Incorporation of the
Registrant *
3 (ii) Bylaws of the Registrant, as amended **
5 Opinion of Murtha, Cullina, Richter and Pinney LLP
23 (i) Consent of Murtha, Cullina, Richter and Pinney LLP
(included in the opinion under Exhibit 5)
23 (ii) Consent of PricewaterhouseCoopers LLP
24 Power of Attorney pursuant to which this Registration
Statement is signed by certain Directors
* incorporated by reference to Exhibit 3(ii) filed in connection
with the Current Report on Form 8-K dated January 9, 1998 and
filed with the Commission
** incorporated by reference to Exhibit 3(ii) filed in
connection with the Registration Statement on Form S-3 and filed
with the Commission on December 30, 1997, as amended (file no.
333-43467)
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, to the extent that the
information required to be included in the post-effective
amendment is not contained in periodic reports filed by the
Company with or furnished to the SEC pursuant to Section 13 or
Section 15(d)of the Securities Exchange Act of 1934 and
incorporated by reference herein;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement, to
the extent that the information required to be included in the
post-effective amendment is
not contained in periodic reports filed by the Company with or
furnished to the SEC pursuant to Section 13 or Section 15(d)of
the Securities Exchange Act of 1934 and incorporated by
reference herein; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
that remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated
by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that
in the opinion of the 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 Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant 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 East Hartford, State of Connecticut on this 4th day of
November 1998.
ACCENT COLOR SCIENCES, INC.
By: /s/ Charles E. Buchheit
---------------------------
Title: President, Chief
Executive Officer and
Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
President,
Chief Executive
/s/ Charles E. Buchheit Officer (Principal November 4, 1998
- ----------------------- Executive (Officer)
Charles E. Buchheit and Director
Chief Financial
/s/ Patrick J. Pedonti Officer and November 4, 1998
- ----------------------- Treasurer (Principal
Patrick J. Pedonti Financial and Accounting
Officer)
* Director - November 4, 1998
- ----------------------
Richard J. Coburn
* Director -
- ----------------------
Joseph T. Brophy
* Director -
- ----------------------
Richard Hodgson
* Director -
- ----------------------
Willard F. Pinney, Jr.
* Director -
- ----------------------
Robert H. Steele
- ---------------------- November 4, 1998
Charles E. Buchheit,
Attorney-in-Fact
* Signature by Attorney-in-Fact
EXHIBIT INDEX
Exhibit No. Description Page No.
- ---------- ------------------- ----------
3 (i) Restated Certificate of Incorporation of the
Registrant *
3 (ii) Bylaws of the Registrant, as amended **
5 Opinion of Murtha, Cullina, Richter and Pinney
LLP
23 (i) Consent of Murtha, Cullina, Richter and Pinney,
LLP (included in the opinion under Exhibit 5)
23 (ii) Consent of PricewaterhouseCoopers LLP
24 Power of Attorney pursuant to which this
Registration Statement is signed by Certain
Directors
* incorporated by reference to Exhibit 3(ii) filed in connection
with the Current Report on Form 8-K dated January 9, 1998 and
filed with the Commission
** incorporated by reference to Exhibit 3(ii) filed in
connection with the Registration Statement on Form S-3 and filed
with the Commission on December 30, 1997, as amended (file no.
333-43467)
282673v1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
does hereby appoint and constitute Charles E. Buchheit and Richard
J. Coburn and each of them as his agent and attorney-in-fact to
execute in his name, place and stead (whether on behalf of the
undersigned individually or as an officer or director of Accent
Color Sciences, Inc. or otherwise) a Registration Statement on Form
S-3 of Accent Color Sciences, Inc. respecting the registration of
shares of Common Stock of certain stockholders of Accent Color
Sciences, Inc. and to file such Registration Statement and any such
amendment thereto with the Securities and Exchange Commission.
Each of the said attorneys shall have the power to act hereunder
with or without the other.
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 10th day of August 1998.
/s/ Joseph T. Brophy /s/ Richard Hodgson
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Joseph T. Brophy Richard Hodgson
/s/ Charles E. Buchheit /s/ Willard F. Pinney, Jr.
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Charles E. Buchheit Willard F. Pinney, Jr.
/s/ Richard J. Coburn /s/ Robert H. Steele
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Richard J. Coburn Robert H. Steele
/s/ Norman L. Milliard
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Norman L. Milliard
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 March 12, 1998, appearing on page 14
of Accent Color Sciences, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 1997. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ PriceWaterhouseCoopers LLP
Hartford, CT
November 4, 1998
November 4, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Accent Color Sciences, Inc.
Ladies and Gentlemen:
We have acted as counsel for Accent Color Sciences, Inc., a
Connecticut corporation ("the Company"), in connection with the
registration by the Company of up to an aggregate of 511,250
shares of the Company's common stock, without par value (the
"Common Stock"), for the account of certain security holders of
the Company (the "Registration") as described in the Company's
Registration Statement on Form S-3 (the "Registration Statement")
being filed this date under the Securities Act of 1933, as
amended.
In connection with the following opinion, we have reviewed
the Registration Statement and are familiar with the action taken
by the Company to date with respect to the approval and
authorization of the Registration. We have examined originals,
or copies, certified or otherwise authenticated to our
satisfaction, of such corporate records of the Company,
agreements and other instruments, certificates of public
officials, officers and representatives of the Company and such
other documents as we have deemed necessary as a basis for the
opinion hereinafter expressed. We are furnishing this opinion in
connection with the filing of the Registration Statement.
Based upon the foregoing, we are of the opinion that, upon
the effectiveness of the Registration Statement, the shares of
Common Stock proposed to be registered by the Company under the
Registration Statement will be, when sold, validly issued, fully
paid and non-assessable.
We hereby consent to the inclusion of this opinion as an
exhibit to the Registration Statement and to the reference to our
firm under the caption "Legal Matters" in the prospectus
constituting a part of the Registration Statement.
Very truly yours,
MURTHA, CULLINA, RICHTER AND PINNEY, LLP
By /s/ Willard F. Pinney, Jr.
Willard F. Pinney, Jr.
A Partner
