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As filed with the Securities and Exchange Commission on November 27, 2000
Registration Statement No. 333-
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SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GEOWORKS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 960 ATLANTIC AVENUE 94-2920371
(State or other jurisdiction of ALAMEDA, CALIFORNIA 94501 (IRS Employer
incorporation or organization) (510) 814-1660 Identification No.)
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(Address, including zip code, and telephone number including area code,
of registrant's principal executive office)
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DAVID L. GRANNAN
CHIEF EXECUTIVE OFFICER
GEOWORKS CORPORATION
960 ATLANTIC AVENUE
ALAMEDA, CALIFORNIA 94501
(510) 814-1660
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies of all communications to:
JAMES GIVEN, ESQ. RANDOLF W. KATZ, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL BRYAN CAVE LLP
GEOWORKS CORPORATION 2020 MAIN STREET, SUITE 600
960 ATLANTIC AVENUE IRVINE, CALIFORNIA 92614
ALAMEDA, CALIFORNIA 94501 (949) 223-7000
(510) 814-1600 FAX (949) 223-7100
FAX (510) 814-4250
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Approximate date of commencement of proposed sale to the public: At such
time or times after the effective date of this Registration Statement as the
selling stockholders shall determine.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please 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 of 1933, 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 of 1933, 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
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE* AGGREGATE OFFERING PRICE REGISTRATION FEE
------------------------------ ----------------- -------------------------- ------------------------- -------------------
<S> <C> <C> <C> <C>
common stock, par value $.001 3,377,437 shares $3.39 $11,449,511.43 $3,022.67
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*Estimated pursuant to Rule 457(c) solely for purposes of calculating
amount of registration fee, based upon the average of the high and low sales
prices reported on November 22, 2000, as reported on The Nasdaq National Market.
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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GEOWORKS CORPORATION
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501 (B) OF REGULATION S-K
REFERENCING ITEMS IN PART I OF FORM S-3 TO THE PROSPECTUS
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ITEM NO. AND CAPTION HEADING IN PROSPECTUS
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<S><C>
1. FOREPART OF THE REGISTRATION STATEMENT AND
OUTSIDE FRONT COVER PAGE OF PROSPECTUS...........Outside Front Cover Page of Prospectus
2. INSIDE FRONT AND OUTSIDE BACK COVER PAGES
OF PROSPECTUS....................................Inside Front Cover Page of Prospectus;
Outside Back Cover Page of Prospectus
3. SUMMARY INFORMATION, RISK FACTORS AND
RATIO OF EARNINGS TO FIXED CHARGES...............Risk Factors; Use of Proceeds
4. USE OF PROCEEDS..................................Use of Proceeds
5. DETERMINATION OF OFFERING PRICE..................Outside Front Cover Page of Prospectus;
Risk Factors; Plan of Distribution
6. DILUTION.........................................Use of Proceeds
7. SELLING SECURITY HOLDERS.........................Selling Stockholders
8. PLAN OF DISTRIBUTION.............................Outside Front Cover Page of Prospectus;
Inside Front Cover Page of Prospectus;
Plan of Distribution
9. DESCRIPTION OF SECURITIES TO BE REGISTERED.......Outside Front Cover Page of Prospectus;
Plan of Distribution
10. INTERESTS OF NAMED EXPERTS AND COUNSEL...........Not Applicable
11. MATERIAL CHANGES.................................Incorporation of Certain Documents by
Reference
12. INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE.....................................Incorporation of Certain Documents by
Reference
13. DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES...Indemnification of Our Officers and Directors
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THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 27, 2000
PRELIMINARY PROSPECTUS
GEOWORKS CORPORATION
3,377,437 SHARES OF COMMON STOCK
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This Prospectus relates to the public offering of 3,377,437 shares of our
common stock, par value $.001 per share, which are held by some of our current
stockholders. These shares may be offered and sold from time to time by the
selling stockholders named herein. We will not receive any of the proceeds from
the sale of the common shares. We will bear the costs relating to the
registration of these common shares.
The selling stockholders may offer their common shares through public or
private transactions, on or off The Nasdaq National Market, at prevailing market
prices, or at privately negotiated prices. The selling stockholders may include
pledgees, donees, transferees, or other successors in interest.
The common shares are traded on The Nasdaq National Market under the symbol
GWRX. The closing sales price of the common shares as reported on The Nasdaq
National Market on November 22, 2000 was $3.00 per share. The selling
stockholders will pay any sales commissions incurred in connection with the sale
of shares through this Prospectus.
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YOU SHOULD CAREFULLY CONSIDER "RISK FACTORS" BEGINNING ON PAGE 3 FOR
IMPORTANT INFORMATION YOU SHOULD CONSIDER WHEN DETERMINING WHETHER TO INVEST IN
OUR COMMON STOCK.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is November ___, 2000
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EXPLANATORY NOTES
We are registering these shares for the selling stockholders in accordance
with prior commitments we made to them. One of the selling stockholders acquired
its shares in partial consideration for the sale of assets pursuant to an Asset
Purchase and Stock Sale Agreement in July of 2000. Other selling stockholders
acquired their shares pursuant to a Stock Purchase Agreement in September of
2000. In connection with both of these transactions, the Company entered into
Registration Rights Agreements, whereby the Company agreed to use its best
efforts to file a registration statement on Form S-3 covering the resale of the
shares sold to the selling stockholders. An additional selling stockholder
acquired his shares in connection with a service agreement for the provision of
consulting services to us.
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We have not authorized anyone to provide you with information or to
represent anything not contained in this Prospectus. You must not rely on any
unauthorized information or representations. The selling stockholders are
offering to sell, and seeking offers to buy, only the shares of common stock
covered by this Prospectus, and only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in this Prospectus is
current only as of its date, regardless of the time of delivery of this
Prospectus or of any sale of the shares. You should not assume that the
information in this Prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of the document.
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In this Prospectus, the words "Geoworks," "we," "our," "ours" and "us"
refer only to Geoworks and its subsidiaries (unless indicated otherwise), and
not to any of the selling stockholders. The following summary contains basic
information about this offering. It likely does not contain all of the
information that is important to you. You should read carefully this entire
Prospectus, including the financial information and related notes, as well as
the documents we have incorporated by reference into this Prospectus before
making an investment decision.
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TABLE OF CONTENTS
PAGE
Risk Factors..................................................................3
The Company..................................................................10
Use of Proceeds..............................................................11
Plan of Distribution.........................................................11
Selling Stockholders.........................................................14
Legal Matters................................................................14
Experts......................................................................14
Where You Can Find More Information..........................................15
Indemnification of Our Officers and Directors................................15
Incorporation of Certain Documents by Reference..............................16
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RISK FACTORS
BEFORE YOU INVEST IN OUR COMMON STOCK, YOU SHOULD BE AWARE THAT THERE ARE
VARIOUS RISKS, INCLUDING THOSE DESCRIBED BELOW. YOU SHOULD CAREFULLY CONSIDER
THESE RISK FACTORS TOGETHER WITH ALL OF THE OTHER INFORMATION INCLUDED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS BEFORE YOU DECIDE TO PURCHASE
SHARES OF OUR COMMON STOCK.
HISTORY OF OPERATING LOSSES; ANTICIPATED FUTURE LOSSES.
Since Geoworks was formed in 1983, our revenues have been limited, and we
have incurred significant losses, and suffered substantial negative operating
cash flow. As of September 30, 2000, we had an accumulated deficit of $97.8
million, and had incurred operating losses of $7.7 million in the six months
ended September 30, 2000 and approximately $5.2 million, $16.3 million, and
$16.0 million in the fiscal years ended March 31, 2000, 1999, and 1998,
respectively. We expect a substantial annual operating loss in the fiscal year
ending March 31, 2001, and it is unclear when, if ever, we will be profitable.
We will attempt to achieve profitability by managing operating expenses,
maximizing professional services consulting revenues, and focusing our resources
on the wireless data communication services and technologies. We will also
increase our focus on licensing our server technology, selling our Mobile
ASP(TM), Mobile Site(TM), AirBoss(TM), and AirForce(TM) products, and licensing
our patent portfolio. However, we cannot assure you that our efforts will be
successful.
ABILITY TO CAPITALIZE ON INTELLECTUAL PROPERTY RIGHTS AND PATENT PORTFOLIO.
On January 19, 2000, we announced to the WAP Forum and its members that we
hold essential Intellectual Property Rights (IPR) for the Wireless Application
Protocol and the Wireless Markup Language (WML) specification (collectively the
"WAP Specification"). We also announced that we believe our patents for flexible
user interface technology (U.S. Patent No. 5,327,529 and Japanese Patent No.
2,794,339) are potentially implicated by products and services based on the WAP
Specification and placed into the stream of commerce in the United States and
Japan. Simultaneously, we announced our comprehensive licensing program to make
our technology available to WAP Forum members, non-members, and other industry
participants. In February 2000 we clarified our licensing program. We have an
active program for communicating with new WAP Forum members and non-member
companies entering the wireless Internet and data communications markets.
In connection with our licensing program, we have posted on our web site
(www.geoworks.com) a white paper entitled "The Geoworks Wireless Internet
Patent: Invention and Innovation in Flexible User Interface Technology." The
white paper details many issues of interest to WAP Forum members and
non-members, including licensing details, legal issues and technical
information. The WAP Forum is an industry association devoted to developing a de
facto world standard for wireless information and telephony services on digital
mobile phones and other wireless terminals. We are a member of the WAP Forum.
Other member companies include Ericsson Mobile Communications AB, Microsoft,
Motorola, Nokia Mobile Phones, Openwave Systems Inc. ("Openwave," formerly known
as Phone.com Inc.), and QUALCOMM Inc., among more than 500 leading companies
around the world.
Prior to launching our licensing program, we met certain compliance
protocols outlined in the WAP Forum membership documents. In May of 1999, we
were one of the first WAP Forum members to register and declare that our
patented flexible user interface technology was essential IPR in the WAP
Specification. During the latter part of 1999, we obtained an independent
analysis of our flexible user interface patent, as well as of the WAP
Specification. We received multiple legal opinions indicating that of the WAP
Specification implicated our patented technology. The analysis, and our
licensing program, were prepared with the help of experts from distinguished law
firms recognized as leaders in patent law and licensing.
On April 25, 2000, Openwave filed a declaratory relief complaint alleging
that our flexible user interface patent is invalid and unenforceable. We believe
Openwave's claims are without merit. Our patent was awarded in 1994 after a
four-year interactive prosecution administered by the United States Patent &
Trademark Office. Under U.S. patent law the validity of a patent issued by the
United States Patent & Trademark Office is presumed valid. We do not believe the
Openwave litigation will overcome this legal presumption.
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On June 16, 2000, we announced that we had filed a countersuit in the
United States District Court in San Francisco against Openwave. The lawsuit,
which was served on Openwave on the previous day, seeks to demonstrate that the
activity of Openwave and its licensees utilizing Openwave's UP Server Suite
and UP Browser infringes on Geoworks Flexible User Interface patent.
On July 5, 2000, we announced that we had implemented new licensing terms
beginning July 1, 2000 for companies that use our Flexible User Interface
patent. We recognized by the number of requests we have received for additional
information that the licensing program is a complex matter. As a result, we
offered an extension of the previous licensing terms through September 1, 2000
to any company that contacted Geoworks by July 31, 2000. Companies negotiating
license terms will continue to receive the current introductory annual rate of
$20,000 and will not be held responsible for any past infringement of the patent
if the license was completed by September 1, 2000. Companies that did not become
licensees by September 1, 2000, will be offered a licensing fee of $100,000 for
a 3-year contract and may remain liable for any past infringement of our
flexible user interface patent. Certain server license rates will not be
changed. Applicable fees may also be waived for smaller companies.
On September 8, 2000, we filed a complaint against three companies with the
U.S. International Trade Commission, or ITC. This complaint was against
Openwave, Sanyo Electric Co., Ltd. of Japan and Sanyo North America seeking an
order to block importation into the U.S. of WAP cellular telephones containing
Openwave's microbrowsers. One month later, the ITC announced it had accepted
our complaint and initiated an investigation into this matter. We believe this
process will be resolved in a more timely fashion than the District Court
proceedings. The ITC has set a calendar for this matter. Under this schedule,
the ITC Judge will issue a final decision in this matter by June 11, 2001, with
the final Commission decision due by September 11, 2001. Potentially, the ITC
could issue exclusion orders that direct the U.S. Customs Service to stop all
further imports into the U.S. of Sanyo WAP cell phones containing Openwave's UP
Browser. In addition, the ITC can also issue cease and desist orders prohibiting
Sanyo and Openwave from selling their domestic inventories of imported WAP cell
phones and components that infringe upon our patent. However, no assurance of a
favorable outcome can be assumed.
On September 18, 2000, we announced that we had entered into a
cross-licensing arrangement with Ericsson, a world leader in mobile
communications, of several patents from both parties, including our flexible
user interface. With use of our patents, Ericsson will be furthering its
position in the development and marketing of Internet enabled terminals and
infrastructure equipment, while Geoworks will enhance its Mobile ASP product
offering and its newly acquired AirBoss Wireless Systems mobile data solutions.
Through October 2000, we have licensed our flexible user interface patent
to ten companies, including Toshiba and Ericsson. However, because of the
Openwave lawsuit, the relative immaturity of the WAP market, and the complex
legal and technical issues potential licensees must analyze in preparing to
enter a licensing agreement with us, we cannot predict the future revenue
impact. In addition, we do not know whether potential licensees will agree to
sign license agreements or whether it will be necessary for us to pursue
appropriate legal remedies. The expenses required to pursue legal remedies could
be significant. Although we believe we have adequate resources to support our
IPR licensing program, we cannot be certain of the outcome of related
litigation. Litigation, regardless of its outcome, could result in significant
expenses and be a diversion of our resources and could have a material adverse
effect on our operating results and financial condition.
ADEQUACY OF CAPITAL RESOURCES TO EXECUTE BUSINESS PLAN.
We believe our existing capital resources will be adequate to satisfy our
operating and capital requirements for at least the next twelve months. We
expect to incur additional losses for the fiscal year ending March 31, 2001, and
may require substantial additional capital beyond that time to successfully
execute our business plan. The amount of capital that we will need in the
long-term depends upon many factors, such as the amount of revenue we receive
from operations, working capital requirements, investment in product development
and sales and marketing activities, our legal expenses, our capital
expenditures, and potential strategic investments or acquisitions. Historically,
we have sold equity securities, obtained advance payments of license revenue and
professional fees, and obtained short-term loans as sources of funding. If we
need additional financing to execute our business plan, there can be no
assurance that it will be available or that, if available at all, the terms will
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be favorable to us or our stockholders without substantial dilution of ownership
and rights. If adequate funds are not available to satisfy either short-term or
long-term requirements, we may be required to curtail the scale of our
operations significantly, forego market or research opportunities, obtain funds
through arrangements with strategic partners or others on unfavorable terms, or
reduce our ability to enforce our proprietary technology rights.
COMPETITION IN WIRELESS DATA COMMUNICATION SERVICES AND TECHNOLOGIES.
We have experienced and expect more competition in the wireless data
communication services and technologies markets. Our competitors include service
providers, wireless ASPs and Internet content and transaction providers. These
companies have more cash available and greater technical and marketing resources
and name recognition and have or soon may have wireless data communication
services and technologies that may compete directly with our products and
services. These companies include Openwave, Infospace, Aether Systems, Puma
Technologies, i3 Mobile, 724 Solutions, Oracle, Microsoft, Yahoo, and other
Internet portals.
In February 2000, we introduced Mobile ASP (Application Service Provider),
as our first information service to businesses looking to reach their end user
customers through mobile devices. Mobile ASP is designed to provide companies
with a modular and scalable mobile communications platform they can use to
extend their operations, communications and customer service initiatives. Mobile
ASP clients select from modules that meet their customer requirements for mobile
data and service solutions. In Mobile ASP, we offer six modules including the
Mobile Server software, Secure Application Hosting, Wireless Network
Integration, Systems Integration, Application Development, and 7x24 Customer
Care.
In May 2000, we introduced Mobile Site(TM) to companies looking for a
mobile data solution with fewer features and quick implementation. The Mobile
Site service dynamically pulls data from any company's Web site and programs it
in a format suitable for transmission to WAP, HDML, SMS, Palm, iMode, and HTML
mobile devices. Mobile Site allows any business to mobilize its existing Web
content for any mobile device affordably and quickly. With Mobile Site, our
clients can rapidly deploy a mobile service to their customers in less than two
weeks.
In July 2000, we acquired substantially all of the assets of an
established, separate, and unincorporated division of Telcordia Technologies,
Inc. ("Telcordia"), an SAIC company. The acquired division consisted of
Telcordia's "AirBoss Business Unit" and "AirBoss Wireless Solutions Business
Unit," which operated a software and wireless technology services business
(collectively, "AirBoss"). AirBoss has developed a suite of patented software
products that allow mobile users to access corporate intranets and the Internet
remotely via wireless data communication networks. Using AirBoss software,
wireless devices users can seamlessly network with enterprise applications,
extending their corporate networks into mobile networks. The AirBoss solution
operates with leading commercial wireless networks, including CDPD, GSM,
CDMA/TDMA, MobiTex, ARDIS or satellite. The AirBoss products' solutions are
based on client-server architecture, operating both on the wireless mobile
devices and on special purpose AirBoss servers connected to corporate computer
networks. The AirBoss products support a full range of client device operating
systems including Windows 95, Windows 98, Windows NT, Windows CE, Palm OS, RIM
850 and 950 pagers, and embedded systems. This flexibility allows AirBoss users
to "mix and match" network components utilizing whichever wireless transmission
technology is most appropriate without changes in wireless data functionality or
performance.
We plan to offer additional wireless data communication services and
technologies to business and consumer end users, but we do not know whether we
can market these services rapidly enough or whether the market will accept them.
The mobile e-commerce and information services marketplace is expected to evolve
rapidly. Our competitors may develop and market services and technologies that
are superior to ours and their offerings may achieve greater market acceptance.
DEPENDENCE ON DEVELOPMENT OF MOBILE DEVICE CONTENT AND SERVICES.
We believe our long-term financial success depends on our ability to profit
from the delivery of content and services for mobile communication devices. We
plan to generate revenue from sales of internally developed client and server
software, mobile information hosting and delivery services using the ASP revenue
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model (monthly subscription fees), transaction revenue from mobile e-commerce
services, and professional services for technology consulting, systems
integration and content applications development. However, we cannot assure you
that we will be able to derive significant revenue from any of these sources.
Many of our competitors have more widely deployed wireless server technology,
greater client development resources, and a larger market presence. We cannot
assure you that we will be able to develop better technology, market additional
products and services, or obtain greater distribution rights to third-party
products or content than our competitors, or that our services will achieve
greater acceptance in the market. Further, we have historically marketed
operating systems and applications, and we have limited experience marketing
server and mobile e-commerce and information services. Finally, practical and
effective distribution of content and services to mobile communication devices
is an unproven concept which depends on many factors for success, including the
size of the data and applications to be distributed and the presence of an
appropriate network infrastructure. We cannot assure you that mobile information
services will prove to be feasible or that our technology will be suitable for
the distribution infrastructure as it develops. If we cannot derive significant
revenue from one or more of the foregoing sources, there will be material
adverse impact to our long-term business, results of operations and financial
condition.
RISKS OF SOFTWARE PRODUCT DEVELOPMENT AND RISK OF DELAYS.
Our future success will depend on our ability to develop and release, on a
timely basis, new application software products and wireless data communication
services and technologies. It is critical that our current and future products
and services be widely accepted in new markets. We have made progress toward
these goals, but cannot guarantee that our products and services will be widely
accepted in the market.
Because of the short product life cycles and intense competition expected
in the mobile communicating device market, and the mobile e-commerce and
information services markets, the timeliness of new product and service
introductions and shipments can be critical. We cannot assure you that we will
be able to develop, introduce and ship new products or services rapidly enough.
Furthermore, from time to time, our competitors may announce new products,
features, technologies or services that have the potential to replace or shorten
the life cycle of our existing offerings. These announcements may cause our
customers to defer purchasing our products and services. Delays or difficulties
associated with developing or introducing new products or services could have a
material adverse effect on our business, operating results and financial
condition.
DEPENDENCE ON LIMITED NUMBER OF REVENUE GENERATING CUSTOMERS.
We have a history of dependence on a few key customers. In the six months
ended September 30, 2000, three customers accounted for 79% of our total net
revenues. Therefore, a termination or decline in these business relationships
with any of our existing customers could have a material adverse impact on our
business, financial condition, and results of operations, and we cannot assure
you that we will be able to sustain these relationships and derive comparable
revenues from them in the future.
Our mobile information services revenue depends on signing up new customers
with a large installed base of users. Our royalty revenue is critically
dependent upon the timely introduction and successful marketing and sale by a
limited number of consumer product companies of smart devices based on our
software. Our license and other revenue is dependent upon obtaining new
customers for the Mobile Server+, AirBoss, and AirForce software offerings. Our
professional services revenue depends on a limited number of customer contracts;
these revenues are also constrained by the number of chargeable current
employees and the rate at which new highly skilled technical employees can be
hired. We earn a substantial portion of our revenue from customers in Europe,
Japan, and South Africa and we view these regions as strategic to our business
objectives. Economic difficulties within Europe, Japan, and/or South Africa
could have a material adverse effect on our ability to generate revenue from our
customers in these regions and from customers who market their products within
Europe, Japan and South Africa.
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OUR ACQUISITION OF AIRBOSS AND ANY FUTURE ACQUISITIONS MAY BE DIFFICULT TO
INTEGRATE, DISRUPT OUR BUSINESS, DILUTE STOCKHOLDER VALUE OR DIVERT MANAGEMENT
ATTENTION.
As part of our business strategy, we have made and expect to continue to
make acquisitions of businesses that offer complementary products, services and
technologies. On July 24, 2000, we acquired AirBoss, a developer of a software
and wireless technology services business. We are in the initial stages of
integrating the products, services, technologies and personnel from the company
into Geoworks. Our acquisitions are and will be accompanied by the risks
commonly encountered in acquisitions of businesses. Such risks include, among
other things, the possibility that we pay much more than the acquired business
is worth, the difficulty of integrating the operations and personnel of the
acquired business into ours, the potential product liability associated with the
sale of the acquired business' products, the potential disruption of our ongoing
business, the distraction of management from our business, the inability of
management to maximize our financial and strategic position, and the impairment
of relationships with employees and customers. We have limited experience
acquiring businesses, and we cannot assure you that we will identify appropriate
targets, will acquire such businesses on favorable terms, or will be able to
integrate such organizations into our business successfully. Further, the
financial consequences of our acquisitions and investments may include
potentially dilutive issuances of equity securities, one-time write-offs,
amortization expenses related to goodwill and other intangible assets and the
incurrence of contingent liabilities. These risks could have a material adverse
effect on our business, financial condition and results of operations.
If we are unable to successfully integrate AirBoss or to create new or
enhanced services, we may not achieve the anticipated benefits from our
acquisition of AirBoss. If we fail to achieve the anticipated benefits from this
acquisition, we may incur increased expenses, experience a shortfall in our
anticipated revenues and we may not obtain a satisfactory return on our
investment. In addition, if any significant number of AirBoss employees fail to
remain employed with us, we may experience difficulties in achieving the
expected benefits of the acquisition.
As part of our business strategy, we may in the future seek to acquire or
invest in additional businesses, products or technologies that we believe could
complement or expand our business, augment our market coverage, enhance our
technical capabilities or that may otherwise offer growth opportunities. These
future acquisitions could pose the same risks to our business posed by the
AirBoss acquisition described above. In addition, with future acquisitions, we
could use substantial portions of our available cash as all or a portion of the
purchase price. We could also issue additional securities as consideration for
these acquisitions, which could cause our stockholders to suffer significant
dilution.
HISTORY OF DISAPPOINTING REVENUE FROM PREVIOUS GENERATION PRODUCTS.
Historically, we emphasized the licensing of our operating system software
to manufacturers of smart phones and non-communicating mobile devices, such as
personal digital assistants and handheld electronic organizers. The smart phone
market has emerged slower than anticipated and there is increasing competition
for the operating systems used in smart phones. Products that use our
technology, such as the Nokia 9110, Nokia 9000, Toshiba Dialo, Toshiba Genio,
Toshiba Camesse Petit, Seiko-Epson Locatio and Mitsubishi Moem-D, have had only
modest unit sales. With the exception of the Palm-branded handheld devices from
Palm, Inc. and the Visor handheld computer from Handspring, Inc. (neither of
which incorporates our software), products in the non-communicating device
categories have also experienced low adoption rates. We have failed to generate
significant royalty revenues in connection with our licensing efforts to date,
and our operating results have been adversely affected as a result. Several of
our previous licensees have canceled products prior to introduction or
discontinued them after experiencing disappointing sales. Collectively, these
third-party product cancellations, terminations, and disappointments have
resulted in lower-than-expected recurring license revenues in previous fiscal
years. In part we depend on the marketing efforts of our customers for their
products to be accepted by the market.
FLUCTUATIONS IN OPERATING RESULTS.
Our past operating results have been subject to significant fluctuations on
both a quarterly and annual basis. We expect that our future operating results
will also fluctuate as a result of all of the following: the timing and success
of the our efforts to introduce and sell the Mobile ASP, Mobile Site, AirBoss,
and AirForce products and services; the introduction and acceptance of our
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mobile e-commerce and information services; the extent to which we can negotiate
and subsequently earn fees for professional services, research and development
and maintenance fees from our customers; our ability to effectively manage our
costs; legal costs associated with technology licensing and defense of our
patent portfolio; and actions by our competitors.
To obtain license and service revenue from Mobile ASP, Mobile Site,
AirBoss, and AirForce customers, we will need to market and sell these new
services and our customers will need to successfully deploy and market these
services to their end users. We must also continue to develop new and compelling
services. Revenue from mobile e-commerce and information services will vary
based on the market success of the per-subscriber fee model and our ability to
derive transaction fees from mobile e-commerce services. Revenue from research
and development fees can vary considerably among periods, depending upon the
specific terms of our contracts with clients and the relative level of
development effort devoted to projects which generate research and development
fees. Our results are also affected by the timing and extent of our expenses for
research and development, and sales and marketing. We have traditionally devoted
substantial resources to research and development, which has constrained our
investment and performance in other activities and, in turn, affected reported
operating results. While we have taken measures to reduce research and
development expenditures in the past, our investment in research and development
remains significant relative to our investment in other aspects of our
operations. License revenue related to OEM customer products which contain our
software is contingent upon those OEM customers' success in meeting anticipated
shipment dates, obtaining market acceptance for their products, and realizing
significant sales volume of those products. In addition, our results may be
affected by seasonal and other fluctuations in demand for mobile communications
devices and for related software products and services, as well as by the
general state of the domestic, Japanese, European, South African and global
economies. We believe that the market for smart phones and other mobile
communicating devices could ultimately reflect significant seasonal swings in
demand similar to those in the consumer electronics market, in which demand
typically peaks in the fourth calendar quarter of each calendar year.
INTERNATIONAL OPERATIONS.
We have derived most of our revenue from international operations in each
of the last three fiscal years. We anticipate that international revenue will
continue to represent a significant portion of our future revenue. Whether or
not we receive revenue from international sources depends on certain inherent
risks, including changes in local economic conditions, changes in regulatory
requirements and tariffs, potential difficulties in the collection of accounts
receivable, and unfavorable tax consequences. In particular, we derive a
substantial portion of our revenue from customers in Europe, Japan, and South
Africa, and we view these regions as strategic to our business objectives.
Although our revenue is generally denominated in U.S. dollars, fluctuations in
currency exchange rates and changes in local economic conditions could have
adverse consequences on our ability to execute agreements with international
customers, and as a result could adversely affect our ability to generate
revenue from technology licensing, professional services, research and
development fees, and mobile e-commerce and information services. In addition,
we are obligated to withhold income tax from royalty income from licensees in
certain countries, such as Japan and Finland. The amount and mix of our revenue
derived from such licensees will impact our accruals for income taxes. Our
income tax rate may vary depending on the amount and mix of our revenue actually
derived from licensees subject to foreign withholding taxes as compared to
amounts forecast by us.
NON-RECURRING REVENUES.
We may receive one-time technology license or engineering fees or recognize
revenue of paid but unamortized advance royalties under OEM agreements
(currently recorded as deferred revenue) if agreements are terminated, amended
or restructured or a product is discontinued. These charges could impact our
operating results. These amounts could be a material portion of our revenue, as
they have been in the past, and provide no corresponding cash flow benefit in
the period in which the revenue is recognized.
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DEPENDENCE ON KEY PERSONNEL.
Our future success depends in large part on the continued service of our
key technical, marketing, sales, administrative and management personnel, and on
our ability to attract and retain qualified employees. The competition in the
telecommunications, Internet, and high technology industries for talented
personnel is intense. We cannot assure you that we will succeed in attracting
and retaining such personnel. With the exception of certain executive positions,
we do not have employment contracts with our key employees. We have had a
significant number of changes in the senior leadership team over the last two
years. The loss of key employees, turnover, and our ability to attract and
retain members of our executive team, could have a material adverse effect on
our business, operating results, and financial condition.
COMPETITION IN MOBILE COMMUNICATION DEVICE OPERATING SYSTEMS.
We expect the market among mobile communicating device operating systems to
be highly competitive. Although we believe there will be opportunities for more
than one operating system, it is possible that a single operating system
supplier may dominate in one or more market segments. Companies with
significantly greater financial, technical, and marketing resources and greater
name recognition than us, such as Symbian (a joint venture involving Psion,
Ericsson, Motorola, and Nokia), Microsoft, Sun Microsystems, and Palm, Inc.,
have each developed or are reported to be developing operating systems which may
compete directly with our current operating system software. Further, developers
of real-time operating systems and low-end operating system software may attempt
to adapt their products for the smart phone market, to provide operating systems
which compete with ours. Although we believe our GEOS and GEOS-SC system
software has features that give us an advantage over competing operating
systems, companies may develop similar or better features. Moreover, a number of
our current licensees have also established relationships with certain of these
competing companies, and future licensees may do the same. In addition,
manufacturers may choose to develop or acquire proprietary operating systems for
mobile devices and compete directly with us. Our competitors may develop or
market mobile communication device operating system or application software
products that are superior to ours, that are offered at lower prices, or that
are more rapidly accepted by the market.
Because of our transition away from the development of operating system
technology, we expect license fees and royalty revenues related to our operating
system technologies to decrease significantly in the future.
VOLATILITY OF STOCK PRICE.
If our revenues or results of operations do not meet the levels expected by
securities analysts, the trading price of our common stock could decrease or not
increase at the same rate as our competitors' stock or as the market in general.
In addition, our common stock price is volatile because it is associated with
internet, telecommunications and technology stocks, in general. As a result,
there are other factors that may affect our stock price unrelated to our
specific performance.
INVESTMENT RISK.
Our cash and cash equivalents consist of demand deposits and highly liquid
securities with original maturities of three months or less and our marketable
securities consist of equity securities, principally mutual funds. We believe
these investments are subject to minimal interest or market risks. Our long-term
investments consist of common shares in Wink Communications, Inc. and warrants
of MyTurn.com, Inc. The fair market value of these assets ($5,760,000 and
$695,000, respectively at September 30, 2000) is included in long-term
investments and will fluctuate with their respective market prices. As such
these investments are subject to fluctuations of the stock market as a whole and
the specific business risks of these companies.
FOREIGN EXCHANGE RISK.
We have derived most of our revenue from international operations in each
of the last three fiscal years. Although our invoices to customers are generally
denominated in U.S. dollars, our international subsidiaries use the local
currency as their functional currency. Our cash accounts in foreign countries
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are kept at the minimal levels necessary for operations. As the result of the
above, the Company is exposed to foreign exchange rate fluctuations and as these
exchange rates vary, the subsidiaries results, when translated, may vary from
expectations and adversely impact our results of operations.
ACTUAL RESULTS COULD DIFFER MATERIALLY FROM FORWARD-LOOKING STATEMENTS CONTAINED
IN THIS PROSPECTUS OR OUR SEC FILINGS.
Some of the statements contained in this Prospectus and in our filings with
the SEC, in our press releases and in oral statements are or may constitute
forward-looking statements. These include statements relating to:
o our financial position;
o our plans to increase revenues; and
o our competitive strengths, business objectives, or strategies.
Because these statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by those
forward-looking statements or from historical results. Factors that could cause
actual results to differ materially include, but are not limited to, those
discussed under the heading "Risk Factors."
In addition to the "Risk Factors," our business entails a variety of
additional risks, which are set forth in documents we have filed or will file
from time to time with the SEC. All subsequent written and oral forward-looking
statements attributable to us or our representatives are expressly qualified in
their entirety by these descriptions of these various risks. You should not
place undue reliance on our forward-looking statements, which speak only as of
the date they are made. We undertake no obligation to release publicly any
revisions which may be made to any forward-looking statements to reflect events
or circumstances after the date of those statements or to reflect the occurrence
of anticipated or unanticipated events.
THE COMPANY
Geoworks is a pioneer in wireless software solutions and services. Our
vision is to enable mobile information access in the business-to-business and
business-to-consumer markets. We participate in these markets by offering
software products and services for mobile communications, technology licensing,
and professional consulting services. Our Mobile ASP(TM) and Mobile Site(TM)
solutions combine our proprietary Mobile Server+(TM) technology with our mobile
media expertise to enable businesses to reach their mobile customers with
relevant and timely information. By licensing our software platforms, our
proprietary server, and our intellectual property portfolio, Geoworks plays a
significant role in advancing the worldwide market for mobile devices. We also
support industry-leading device manufacturers, carriers, and service providers
with professional services in software engineering and development, project
management, and wireless applications. We believe that voice and data
communications through devices such as phones, pagers, and personal digital
assistants (PDA's) represent a powerful new medium allowing anyone to easily
access and interact with information and services. Our products and services are
designed to mobilize the power of information in the new mobile communications
medium.
In July 2000, we acquired AirBoss. AirBoss has developed a suite of
patented software products that allow mobile users to access corporate intranets
and the Internet remotely via wireless data communication networks. Using
AirBoss software, wireless devices users can seamlessly network with enterprise
applications, extending their corporate networks into mobile networks. The
AirBoss solution operates with leading commercial wireless networks, including
CDPD, GSM, CDMA/TDMA, MobiTex, ARDIS or satellite. The AirBoss products'
solutions are based on client-server architecture, operating both on the
wireless mobile devices and on special purpose AirBoss servers connected to
corporate computer networks. The AirBoss products support a full range of client
device operating systems including Windows 95, Windows 98, Windows NT, Windows
CE, Palm OS, RIM INTER@ACTIVE 850 and 950 pagers, and embedded systems. This
flexibility allows AirBoss users to "mix and match" network components utilizing
whichever wireless transmission technology is most appropriate without changes
in wireless data functionality or performance.
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Our company was incorporated in California in 1983, and reincorporated
in Delaware in 1997. The principal executive officers are located at 960
Atlantic Avenue, Alameda, California 94501 and the telephone number is (510)
814-1660. We also maintain offices in New Jersey, Japan, and the United Kingdom.
Our fiscal year is April 1 through March 31. You can visit our website at
http://www.geoworks.com.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common shares offered
by this Prospectus, nor will such proceeds be available for our use or benefit.
Accordingly, our stockholders will not suffer any dilution through the sale of
the common shares offered by this Prospectus, as we are not selling or issuing
any shares of our common stock. All shares offered or sold through the use of
this Prospectus were previously sold and issued by us to the selling
stockholders.
PLAN OF DISTRIBUTION
Geoworks is registering 3,377,437 shares of common stock, par value of
$0.001 per share, on behalf of certain selling stockholders. Geoworks will
receive no proceeds from this offering. The Shares (as defined below) may be
offered by certain stockholders of Geoworks or by pledgees, donees, transferees
or other successors in interest that receive such Shares as a gift, partnership
distribution or other non-sale related transfer (the "selling stockholders"). Of
the Shares, 3,017,881 of them (the "Telcordia Shares") were originally issued by
Geoworks in connection with the acquisition of substantially all of the assets
of a separate, unincorporated division of Telcordia Technologies, Inc., a
Delaware corporation ("Telcordia"), by Geoworks New Jersey Corporation, a New
Jersey corporation and wholly-owned subsidiary of Geoworks, which was then known
as AirBoss Acquisition Corporation, pursuant to the Asset Purchase and Stock
Sale Agreement dated as of July 24, 2000, by and among Geoworks, Geoworks New
Jersey Corporation, and Telcordia. The Telcordia Shares are being registered by
Geoworks pursuant to the Registration Rights Agreement dated as of July 24,
2000, entered into by Geoworks and Telcordia as part of the consummation of the
transaction.
Of the Shares, 355,556 of them (the "Integral Shares") were originally
issued by Geoworks in connection with the Stock Purchase Agreement dated as of
September 1, 2000, by and among Geoworks and Integral Capital Partners V, Side
Fund, L.P., a Delaware limited partnership, and Integral Capital Partners V,
L.P., a Delaware limited partnership (collectively, "Integral"). The Integral
Shares are being registered by Geoworks pursuant to the Registration Rights
Agreement, dated as of September 1, 2000, entered into by Geoworks and Integral
as a condition of consummating the transaction.
Of the Shares, 4,000 of them (the "Cambridge Shares") were originally
issued to Cambridge Consulting in connection with the Agreement for Consulting
with Cambridge Consulting, dated June 19, 2000. The Cambridge Shares; the
Telcordia Shares, and the Integral Shares are referred to herein as the
"Shares," all of which were issued pursuant to the exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), provided by Section 4(2) thereof.
The selling stockholders will act independently of Geoworks in making
decisions with respect to the timing, manner and size of each sale. The sales
may be made on one or more exchanges or 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 selling
stockholders may effect such transactions by selling the Shares to or through
broker-dealers. The Shares may be sold by one or more, or a combination of, the
following: (a) a block trade in which the broker-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; (b) purchases by a broker-dealer as
principal and resale by such broker-dealer for its account pursuant to this
Prospectus; (c) an exchange distribution in accordance with the rules of such
exchange; (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (e) in privately negotiated transactions. To the
extent required, this Prospectus may be amended or supplemented from time to
time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in the resales.
In connection with distributions of the Shares or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Shares in the course of hedging the positions they assume with selling
stockholders. The selling stockholders may also sell Shares short and redeliver
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the Shares to close out such short positions. The selling stockholders may also
enter into option or other transactions with broker-dealers which require the
delivery to the broker-dealer of the Shares registered hereunder, which the
broker-dealer may resell or otherwise transfer pursuant to this Prospectus. The
selling stockholder may also loan or pledge the Shares registered hereunder to a
broker-dealer and the broker-dealer may sell the Shares so loaned or upon a
default the broker-dealer may effect sales of the pledged shares pursuant to
this Prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions) in amounts to be
negotiated in connection with the sale. Such broker-dealers or agents and any
other participating broker-dealers or the selling stockholders may be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act in
connection with such sales and any such commission, discount or concession may
be deemed to be underwriting discounts or commissions under the Securities Act.
If the selling stockholders or any broker-dealers qualify as "underwriters,"
they will be subject to the prospectus delivery requirements of the Securities
Act. In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus. The selling stockholders may transfer the Shares in other ways
not involving market makers or established trading markets, including directly
by gift, distribution, or other non-sale related transfer.
The selling stockholders have not advised us that they have entered into
any agreements, understandings, or arrangements with any underwriters or
broker-dealers regarding the sale of their securities. We have not been advised
by any of the selling stockholders that there is any underwriter or coordinating
broker acting in connection with the proposed sale of the Shares. However,
Telcordia, in connection with our grant of registration rights to it, agreed to
certain market stand-off provisions in the event that we were to file a
registration statement for an underwritten public offering of our common stock.
Under certain circumstances, Telcordia has agreed, to the extent requested by us
and the underwriter, if any, that it will not, directly or indirectly, sell,
offer to sell, contract to sell (including, without limitation, any short sale),
grant any option to purchase, or otherwise transfer or dispose of (other than to
donees or purchasers, who agree to be similarly bound) any of our securities
then held by it. This agreement will expire following the conclusion of the
market stand-off period of the second registration statement that we file that
registers our common stock, or other securities of the same class (or other
related securities), to be sold on its behalf to the public in an underwritten
offering, but in any event not later than July 24, 2005. Each Telcordia market
stand-off period is not to extend beyond the 90th day following the effective
date of each such registration statement and is not to be applicable more than
once in any 12-month period. Telcordia may decline a market stand-off request if
all of our executive officers and directors have not entered into similar
agreements.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states, the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules and regulations under the Securities Exchange Act of
1934 ("Exchange Act"), any person engaged in the distribution of the Shares may
not simultaneously engage in market making activities with respect to our common
stock for a period of two business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, each selling
stockholder will be subject to applicable provisions of the Exchange Act and the
associated rules and regulations thereunder, including, without limitation,
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholders. Geoworks will make
copies of this Prospectus available to the selling stockholders and has informed
them of the need for delivery of copies of this Prospectus to purchasers at or
prior to the time of any sale of the Shares offered hereby. Geoworks assumes no
obligation to so deliver copies of this Prospectus or any related prospectus
supplement.
Geoworks will file a supplement to this Prospectus, if required, pursuant
to Rule 424(b) under the Securities Act upon being notified by a selling
stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer. Such supplement will disclose: (a) the name of each such selling
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stockholder and of the participating broker-dealer(s), (b) the number of shares
involved, (c) the price at which such shares were sold, (d) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where applicable,
(e) that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this Prospectus, and (f)
other facts material to the transaction.
The selling stockholders will be responsible for any fees, disbursements
and expenses of any counsel for the selling stockholders. All other expenses
incurred in connection with the registration of the Shares, including printer's
and accounting fees and the fees, disbursements and expenses of counsel for
Geoworks will be borne by us. Commissions and discounts, if any, attributable to
the sales of the Shares will be borne by the selling stockholders. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the Shares against certain liabilities,
including liabilities arising under the Securities Act. Geoworks will indemnify
the selling stockholders against claims arising out of any untrue statement of a
material fact contained in this registration statement or any omission to state
therein a material fact necessary in order to make the statement made therein
not misleading.
Geoworks has undertaken to keep a registration statement of which this
Prospectus constitutes a part effective until the earlier of the disposition of
the securities offered hereby or November __, 2003. After such period, if we
choose not to maintain the effectiveness of the registration statement of which
this Prospectus constitutes a part, the securities issuable offered hereby may
not be sold, pledged, transferred or assigned, except in a transaction which is
exempt under the provisions of the Securities Act or pursuant to an effective
registration statement thereunder.
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SELLING STOCKHOLDERS
For ease of reference, the term "selling stockholder" also includes any
transferees, pledgees, donees, or successors to the selling stockholders named
in the table below. Pledgees could include banks, brokers, financial
institutions, or other lenders. To the extent required, we will name any
additional selling stockholder in a supplement to this Prospectus.
The following table sets forth the number of shares of common stock owned
by each of the selling stockholders and the percentage of the total outstanding
shares of Geoworks owned by each selling stockholder as of November 27, 2000.
None of the selling stockholders has had any position, office, or material
relationship with us or any of our affiliates within the past three years, other
than as a result of the acquisition, or current ownership, of the Shares or
other securities of Geoworks. Because the selling stockholders may offer all or
some of the Shares which they hold pursuant to the offering contemplated by this
Prospectus, and because there are currently no agreements, arrangements or
understandings with respect to the sale of any of the Shares, no estimate can be
given as to the amount of the Shares that will be held by the selling
stockholders after completion of this offering. The Shares offered by this
Prospectus may be offered from time to time by the selling stockholders named
below.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NUMBER OF SHARES PERCENT OF REGISTERED FOR SALE
NAME OF SELLING STOCKHOLDER BENEFICIALLY OWNED OUTSTANDING SHARES HEREBY
<S> <C> <C> <C>
Telcordia Venture Capital Corporation (1) 3,017,881 13.7% 3,017,881
Integral Capital Partners V, L.P. 350,312 1.6% 350,312
Integral Capital Partners V, Side Fund, L.P. 5,244 * 5,244
Cambridge Consulting 4,000 * 4,000
TOTAL: 3,377,437 15.3% 3,377,437
</TABLE>
__________________________
* Less than one percent
(1) Telcordia Venture Capital Corporation is a wholly-owned
subsidiary of Telcordia Technologies, Inc., an SAIC company.
This Prospectus also covers any additional shares of common stock which
become issuable in connection with the shares registered for sale hereby by
reason of any stock dividend, stock split, recapitalization, or other similar
transaction effected without the receipt of consideration which results in an
increase in the number of the Company's outstanding shares of common stock.
LEGAL MATTERS
The validity of the common shares offered by this Prospectus will be passed
upon by Bryan Cave LLP, Irvine, California.
EXPERTS
Ernst & Young LLP, independent auditors, audited our consolidated financial
statements included in our Annual Report on Form 10-K for the year ended March
31, 2000, as set forth in their report, which is incorporated by reference in
this Prospectus and elsewhere in this Registration Statement. Our consolidated
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. As a result, we file annual, quarterly and special
reports, proxy statements and other information with the SEC. Because our shares
are traded on The Nasdaq National Market under the symbol "GWRX, " those
materials can also be inspected and copied at the offices of that organization.
Here are ways you can reach and obtain copies of this information:
<TABLE>
------------------------------------------------------------ ---------------------------------------------------------
WHAT IS AVAILABLE WHERE TO GET IT
------------------------------------------------------------ ---------------------------------------------------------
<S> <C> <C>
Paper copies of information SEC's Public Reference Room
Judiciary Plaza Building
450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549
SEC's Pacific Regional Office
5670 Wilshire Boulevard, 11th Floor
Los Angeles, CA 90036-3648
The Nasdaq Stock Market, Inc.
1735 K Street, N.W.
Washington, D.C. 20006
------------------------------------------------------------ ---------------------------------------------------------
On-line information, free of charge SEC's Internet website at HTTP://WWW.SEC.GOV
------------------
------------------------------------------------------------ ---------------------------------------------------------
Information about the SEC's Public Reference Rooms Call the SEC at 1-800-SEC-0330
------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
This Prospectus is part of a Registration Statement on Form S-3 we filed
with the Securities and Exchange Commission. This Prospectus does not contain
all of the information set forth in the registration statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. You can get a copy of the registration statement from the sources
listed above.
INDEMNIFICATION OF OUR OFFICERS AND DIRECTORS
Our Certificate of Incorporation (i) eliminates the liability of our
directors for monetary damages to the fullest extent permitted by Delaware law
and (ii) authorizes us to indemnify our officers and directors to the fullest
extent permitted by Delaware law. Additionally, we have entered into
Indemnification Agreements with our directors under which we have undertaken to
indemnify each such agent to the fullest extent permitted by our Certificate of
Incorporation, bylaws, and applicable law against all expenses, liability and
loss (which are not paid by insurance or otherwise by the Company) reasonably
incurred or suffered by such agent in connection with the defense of any action
or proceeding to which the agent was or is a party or is threatened to be made a
party by reason of conduct in his capacity as an officer or director, or in
which the agent is or may be involved by reason of the fact that he is or was
serving as an officer or director of ours. The indemnification agreements apply
to any action taken by the indemnitee while serving as an officer or director of
ours, whether occurring before or after the date of the agreement. The
agreements do not provide indemnification for any acts or omissions from which a
director may not be relieved of liability under the Delaware General Corporation
Law.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling us pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission (the "Commission") such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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 previously filed
information, including information contained in this document.
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under File No. 0-23926 pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this
offering has been completed:
o Our Annual Report on Form 10-K for the year ended March 31, 2000,
filed on June 29, 2000;
o Our Current Report on Form 8-K dated July 24, 2000, filed on August 8,
2000;
o Our Definitive Proxy Statement, dated August 10, 2000, filed on August
8, 2000 in connection with our 2000 Annual Meeting of Stockholders
held on September 12, 2000;
o Our Current Report on Form 8-K dated September 1, 2000, filed on
September 14, 2000;
o Our Current Report on Form 8-K/A dated July 24, 2000, filed on October
10, 2000;
o Our Quarterly Report on Form 10-Q for the quarter ended September 30,
2000, filed on November 14, 2000; and
o All reports and other documents filed by us pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
subsequent to the date of this Prospectus and prior to the termination
of the offering.
You may request free copies of these filings by writing or telephoning us
at the following address:
Investor Relations Department
Geoworks Corporation
960 Atlantic Avenue
Alameda, California 94501
(510) 814-1660
[email protected]
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses (other than underwriting discounts and sales commissions)
relating to the registration of common shares will be borne by us. These
expenses, except the SEC registration fee, are estimated to be as follows*:
SEC Registration Fee ---------------------------$ 3,022.67
Accountants' Fees ------------------------------ 25,000.00
Legal Fees ------------------------------------- 7,500.00
Printing Fees ---------------------------------- 2,500.00
Transfer Agent Fees ---------------------------- - 0 -
Miscellaneous ---------------------------------- 977.33
Total ------------------------------------------$ 39,000.00
* The selling stockholders will pay any sales commissions or underwriting
discounts incurred in connection with the sale of shares registered hereunder.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the Delaware General Corporation Law (the
"DGCL") empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability, but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful on the merits or otherwise in the
defense of any such action, suit or proceeding referred to in subsections (a)
and (b) of Section 145 or in the defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith; that the indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights
which the indemnified party may be entitled; that indemnification provided by
Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators; and empowers the corporation to purchase and maintain insurance
on behalf of a director or officer of the corporation against any liability
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asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of the director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article VII of the registrant's Certificate of Incorporation, as amended,
provides that, to the fullest extent permitted by the DGCL, as the same exists
or as it may hereafter be amended, no director of the registrant shall be
personally liable to the registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director. Article VIII of the registrant's Bylaws
further provides that the registrant shall, to the maximum extent and in the
manner permitted by the DGCL, indemnify each of its directors and officers
against expenses (including attorneys' fees), judgments, fines, settlements and
other amounts actually and reasonably incurred in connection with any
proceeding, arising by reason of the fact that such person is or was an agent of
the registrant.
Additionally, the Company has entered into Indemnification Agreements with
its directors under which the Company has undertaken to indemnify each such
agent to the fullest extent permitted by its Certificate of Incorporation,
bylaws and applicable law against all expenses, liability and loss (which are
not paid by insurance or otherwise by the Company) reasonably incurred or
suffered by such agent in connection with the defense of any action or
proceeding to which the agent was or is a party or is threatened to be made a
party by reason of conduct in his capacity as an officer or director, or in
which the agent is or may be involved by reason of the fact that he is or was
serving as an officer or director of the Company.
The Company also maintains on behalf of its directors and officers
insurance protection against certain liabilities arising out of the discharge of
their duties.
ITEM 16. EXHIBITS.
2.1 Asset Purchase and Stock Sale Agreement, dated as of July 24, 2000, by
and among Geoworks Corporation, AirBoss Acquisition Corporation, and
Telcordia Technologies, Inc. (incorporated by reference to Exhibit No.
2.1 to registrant's report on Form 8-K filed on August 8, 2000).
2.2 Registration Rights Agreement, dated as of July 24, 2000, by and
between Geoworks Corporation and Telcordia Technologies, Inc.
(incorporated by reference to Exhibit No. 2.3 to registrant's report on
Form 8-K filed on August 8, 2000).
2.3 Stock Purchase Agreement, dated as of September 1, 2000, by and among
Geoworks Corporation, Integral Capital Partners V, L.P., and Integral
Capital Partners V, Side Fund, L.P. (incorporated by reference to
Exhibit No. 2.1 to registrant's report on Form 8-K filed on September
14, 2000).
2.4 Registration Rights Agreement, dated as of September 1, 2000, by and
among Geoworks Corporation, Integral Capital Partners V, L.P., and
Integral Capital Partners V, Side Fund, L.P. (incorporated by reference
to Exhibit No. 2.2 to registrant's report on Form 8-K filed on
September 14, 2000).
4.1 Certificate of Incorporation of Geoworks Corporation, as amended
(incorporated by reference to Exhibit No. 4.01 to registrant's report
on Form 8-K filed on October 27, 1997).
4.1a Certificate of Amendment of Certificate of Incorporation of
Registrant, filed November 3, 2000, with the Secretary of State of the
State of Delaware (incorporated by reference to Exhibit No. 3.1a to
registrant's quarterly report on Form 10-Q filed on November 14, 2000).
4.2 Bylaws of Geoworks Corporation (incorporated by reference to Exhibit
No. 4.02 to registrant's report on Form 8-K filed on October 27, 1997).
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5.1* Opinion of Bryan Cave LLP.
23.1* Consent of Ernst & Young LLP, Independent Auditors.
23.2* Consent of Bryan Cave LLP (included in Exhibit 5.1).
24.1* Power of Attorney (included in signature page).
_________________________
* Items so noted are filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement;
provided, however, that paragraphs (1)(i) and (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 this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a view registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) 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.
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(5) 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, we
have been advised that in the opinion of the SEC that such indemnification is
against public policy as expressed in the Securities Act of 1933 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 of 1933 and will be governed by the
final adjudication of such issue.
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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 Alameda, State of California, on November 27, 2000.
GEOWORKS CORPORATION
By: /s/ DAVID L. GRANNAN
----------------------------------
David L. Grannan
Chief Executive Officer
(Principal Executive Officer)
By: /s/ TIMOTHY J. TOPPIN
----------------------------------
Timothy J. Toppin
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATED
<S> <C> <C>
/s/ David Neylon Chairman of the Board of Directors November 27, 2000
---------------------------
David Neylon
/s/ David L. Grannan Director November 27, 2000
---------------------------
David L. Grannan
/s/ Stephen T. Baker Director November 27, 2000
---------------------------
Stephen T. Baker
/s/ John B. Balousek Director November 27, 2000
---------------------------
John B. Balousek
/s/ Kevin P. Fitzgerald Director November 27, 2000
---------------------------
Kevin P. Fitzgerald
/s/ Andrew Cole Director November 27, 2000
---------------------------
Andrew Cole
</TABLE>
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -------------
5.1 Opinion of Bryan Cave LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Bryan Cave LLP (included in Exhibit 5.1).
24.1 Power of Attorney.
