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Filed Pursuant to Rule 424(b)(2)
Registration Statement # 333-77955
PROSPECTUS DATED MAY 25, 1999
795,136 SHARES
MATTSON TECHNOLOGY, INC.
COMMON STOCK
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This Prospectus relates to the public offering, which is not being
underwritten, of shares of the common stock of Mattson Technology, Inc. The
shares of Mattson common stock may be offered by any of the selling stockholders
named in this prospectus. The selling stockholders received their shares or the
right to their shares when we acquired Concept Systems Design, Inc. We will
receive no part of the proceeds of any sales made under this prospectus. All
expenses of registration incurred in connection with this offering are being
borne by us, but all selling and other expenses incurred by the selling
stockholders will be borne by such selling stockholders. None of the shares
offered pursuant to this prospectus have been registered prior to the filing of
the registration statement of which this prospectus is a part.
The common stock offered in this prospectus may be offered and sold by the
selling stockholders directly or through broker-dealers or underwriters acting
solely as agents. In addition, the broker-dealers and underwriters may acquire
the common stock as principals. The distribution of the common stock may be
effected in one or more transactions. These transactions may take place through
(1) the Nasdaq National Market, (2) privately negotiated transactions, (3)
underwritten public offerings, or (4) a combination of any such methods of sale.
These transactions may be made at (1) market prices prevailing at the time of
sale, (2) prices related to such prevailing market prices or (3) negotiated
prices. Usual and customary or specially negotiated brokerage fees or
commissions may be paid by the selling stockholders in connection with these
sales. See "PLAN OF DISTRIBUTION."
Mattson's common stock is traded on the Nasdaq National Market under the
symbol "MTSN". On May 24, 1999 the last reported sales price for the common
stock was $7.00 per share.
INVESTING IN THE COMMON STOCK OFFERED IN THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
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Each selling stockholder and any broker executing selling orders on behalf
of the selling stockholders may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933. Commissions received by any broker
executing selling orders may be deemed to be underwriting commissions under the
Securities Act.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is May 25, 1999.
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TABLE OF CONTENTS
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WHERE YOU CAN FIND MORE INFORMATION........................................................................ 3
INFORMATION INCORPORATED BY REFERENCE...................................................................... 3
FORWARD LOOKING INFORMATION................................................................................ 4
THE COMPANY................................................................................................ 4
RISK FACTORS............................................................................................... 5
SELLING STOCKHOLDERS....................................................................................... 14
PLAN OF DISTRIBUTION....................................................................................... 16
DESCRIPTION OF CAPITAL STOCK............................................................................... 16
LEGAL MATTERS..............................................................................................
EXPERTS.................................................................................................... 17
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WHERE YOU CAN FIND MORE INFORMATION
We filed this registration statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act") with the Securities and Exchange
Commission (the "SEC"). This prospectus does not contain all of the information
set forth in the registration statement. Those parts of the registration
statement which we omitted from this prospectus were omitted in accordance with
the rules and regulations of the SEC. For further information, please refer to
the registration statement. Copies of the registration statement may be obtained
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 upon payment of the fees prescribed by the SEC.
We are also subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). We file
reports, proxy statements and other information with the SEC to comply with the
Exchange Act. Such reports, proxy statements and other information can be
inspected and copied (1) on the Internet at http://www.sec.gov; (2) at the SEC's
regional offices at: Seven World Trade Center, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and (3) at the Public
Reference Room of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such material can be obtained from the Public Reference Section of the
SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. You may
call the SEC at 1-800-SEC-0330 to obtain information regarding the operation of
the Public Reference Room. Our common stock is quoted on Nasdaq under the
trading symbol MTSN. Reports, proxy statements and other information concerning
our company also may be inspected at the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
------------------------
INFORMATION INCORPORATED 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 a part of this prospectus. Any information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any additional documents we file with the SEC
until the selling stockholders have sold all the shares.
The following documents filed with the SEC are incorporated by reference
into this prospectus:
- the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
- the Company's Definitive Proxy Statement relating to the Annual Meeting of
Stockholders held May 20, 1999.
- the Company's Form 8-K/A filed May 6, 1999.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus and prior to the
termination of the offering of securities contemplated by this prospectus shall
be deemed to be incorporated by reference in this prospectus. Such documents
shall be considered to be a part of this prospectus from the date of filing of
such documents. Any statement contained in a document incorporated by reference
or deemed to be incorporated by reference into this prospectus shall be deemed
to be modified or superseded for all purposes of this prospectus and the
registration statement to the extent that a statement contained (1) in this
prospectus, (2) in any document incorporated by reference or (3) in any
subsequently filed document which also is incorporated or deemed to be
incorporated by reference in this prospectus modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
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We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered a copy of any and
all of the documents referred to above which have been or may be incorporated in
this prospectus by reference and were not delivered with this prospectus. We
will not deliver exhibits to such documents, unless such exhibits are
specifically incorporated by reference. We will provide this information upon
written or oral request by a person to whom we delivered a copy of the
prospectus. Requests for such copies should be directed to our principal
executive offices located at 3550 West Warren Avenue, Fremont, CA 94538,
Attention: Secretary. Our general telephone number is (510) 657-5900.
FORWARD LOOKING INFORMATION
This prospectus and the documents incorporated herein by reference contain
"forward-looking statements" that have been made pursuant to the provisions of
the Private Securities Litigation Reform Act of 1995. A "forward-looking
statement" is a statement that is based on the following:
- Current expectations,
- Estimates and projections about our industry,
- Management's beliefs, and
- Certain assumptions made by our management.
Words such as "anticipates," "expects," "intends," "plans," "believes,"
"seeks," "estimates," variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict. As a result, actual results may
differ materially from those expressed or forecasted in any forward-looking
statements. Such risks and uncertainties include those set forth herein under
"RISK FACTORS" beginning on page 5. These risks and uncertainties are also noted
in the documents incorporated into the prospectus by reference. Unless required
by law, we undertake no obligation to update publicly any forward-looking
statements, whether as a result of (1) new information, (2) future events or (3)
otherwise. However, readers should carefully review the risk factors set forth
in other reports or documents that we file from time to time with the SEC. The
readers should focus particularly on the Quarterly Reports on Form 10-Q and any
Current Reports on Form 8-K.
THE COMPANY
We design, manufacture and market advanced fabrication equipment. We sell
this equipment to the worldwide semiconductor industry.
The Company was incorporated in California in November 1988. The company
reincorporated in Delaware in September 1997. Our principal executive offices
are located at 3550 West Warren Avenue, Fremont, California 94538. Our telephone
number is (510) 657-5900. As used in this prospectus, the terms "Company" and
"Mattson" refer to Mattson Technology, Inc.
In connection with our July 24, 1998 acquisition of Concept Systems Design,
Inc., we issued 795,136 shares of Mattson common stock to the selling
stockholders. The selling stockholders hold certain registration rights pursuant
to a Registration Rights Agreement among the Company and the appointed
representatives of the selling stockholders. The parties executed this
Registration Rights Agreement on July 24, 1998.
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RISK FACTORS
THE COMMON STOCK OFFERED IN THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK.
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THE PROSPECTUS, THE FOLLOWING
FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN INVESTMENT IN THE SHARES
OF COMMON STOCK OFFERED IN THIS PROSPECTUS. THE DISCUSSIONS IN THIS PROSPECTUS
MAY INCLUDE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.
DISCUSSIONS CONTAINING SUCH FORWARD-LOOKING STATEMENTS MAY BE FOUND IN THE
MATERIAL SET FORTH IN THIS SECTION. ACTUAL EVENTS OR RESULTS MAY DIFFER
MATERIALLY FROM THOSE DISCUSSED IN THIS SECTION.
IN ORDER TO ACHIEVE THE ANTICIPATED BENEFITS OF THE ACQUISITION OF CONCEPT,
WE MUST SUCCESSFULLY INTEGRATE THEIR OPERATIONS WITH OUR OWN AND RETAIN KEY
PERSONNEL. In order to achieve the anticipated benefits of the acquisition of
Concept, we must at a minimum be able to integrate the (1) businesses, (2)
personnel and (3) operations of the two companies efficiently and effectively.
No one can guarantee that this integration will occur smoothly or successfully.
We must dedicate management resources to coordinate the integration of the
operations of the two companies following the acquisition. Dedication of
management's time and energy to the integration of the two companies may
temporarily divert attention from the day-to-day business of the combined
company. A material adverse effect on our business and results of operations may
result if management cannot (1) successfully integrate the operations of the two
companies or (2) retain key personnel.
OUR QUARTERLY RESULTS HAVE FLUCTUATED SIGNIFICANTLY IN THE PAST AND MAY
FLUCTUATE SIGNIFICANTLY IN THE FUTURE. We derive most of our net sales from the
sale of a relatively small number of systems. The list prices on these range
from $375,000 to over $1,000,000. At our current revenue level, each sale, or
failure to make a sale, can have a material effect on us. Our backlog at the
beginning of a quarter typically does not include all sales required to achieve
our sales objectives for that quarter. Consequently, our net sales and operating
results for a quarter depend on us shipping orders scheduled to be sold during
that quarter and obtaining orders for systems to be shipped in that same
quarter. A delay in a shipment near the end of a quarter may cause net sales in
that quarter to fall significantly below our expectations. Such a delay may
materially and adversely affect our operating results for that quarter. Other
factors which may lead to fluctuations in our quarterly and annual operating
results include:
- Market acceptance of our systems and the products of our customers,
- Substantial changes in revenues from significant customers,
- Increased manufacturing overhead expenses due to reductions in the number
of systems manufactured,
- Geographic mix of sales,
- Timing of announcement and introduction of new systems by us and by our
competitors,
- Changes in product mix,
- Delays in orders due to customer financial difficulties, and
- Cyclicality in the semiconductor industry and the markets served by our
customers.
In particular, the following results of the current market slowdown raise
significant risks that quarterly results will fluctuate:
- Uncertainties regarding market conditions
- Customer order changes, and
- Customer order cancellations.
Unpredictable order patterns often cause our manufacturing efficiency to
vary significantly from quarter to quarter. Any variation in our manufacturing
efficiency can adversely affect gross margins and
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net operating results. The time lag between our first contact with a customer
and the customer placing its first order typically lasts from nine to twelve
months. This lag is often even longer. Our customers often face competing
capital budget considerations. Time lags between first customer contact and the
customer placing its first order, coupled with the customer's competing capital
budget considerations, make the timing of customer orders uneven and difficult
to predict. Any of the following could adversely affect our financial
performance:
- Delay in receiving anticipated customer orders,
- Failure to receive anticipated customer orders,
- Deferrals of existing customer orders, or
- Cancellations of existing customer orders.
In addition, continued investments in the following areas may lead to
significantly higher fixed costs:
- Research
- Development and engineering, and
- Development of a worldwide sales and marketing organization.
Higher fixed costs resulting from any one or a combination of these
activities will be difficult or impossible to reduce rapidly if net sales goals
for that period are not met. We cannot accurately forecast the impact of these
and other factors on our operating results in any future period.
Our net loss for the first quarter of 1999 was $2.4 million, or $0.16 per
share. In particular, there can be no assurance that the continuing industry
downturn will not be worse or larger than currently expected.
See "INFORMATION INCORPORATED BY REFERENCE."
OUR FUTURE SUCCESS DEPENDS UPON OUR ABILITY TO DEVELOP OUR SYSTEMS AND
PRODUCTS AND THE MARKET'S ACCEPTANCE OF THEM. Our systems represent
alternatives to the conventional equipment currently marketed by our
competitors. As a result, we believe that our growth prospects depend in large
part upon our ability to gain acceptance by a broader group of customers. To
date, only our strip products have gained widespread market acceptance. Because
semiconductor manufacturers must make a substantial investment to install and
integrate capital equipment into a semiconductor production line, these
manufacturers will tend to choose semiconductor equipment manufacturers based on
the following:
- Past relationships,
- Product compatibility, and
- Proven financial performance.
Once a semiconductor manufacturer selects a particular vendor's capital
equipment, we believe that the manufacturer generally relies upon that equipment
for the specific production line application. In addition, the semiconductor
manufacturer frequently will attempt to consolidate its other capital equipment
requirements with the same vendor. Given these factors, there can be no
assurance that we will be successful in obtaining broader acceptance of our
systems and technology. The transition of the market to 300mm wafers will
present both an opportunity and a risk. We must introduce 300mm systems on a
timely basis and which meet customer requirements. To the extent that we are
unable to do this, our business, results of operations and financial condition
could be materially and adversely affected. See "INFORMATION INCORPORATED BY
REFERENCE."
OUR REVENUES ARE SIGNIFICANTLY DEPENDENT ON INDIVIDUAL CUSTOMERS MAKING
PURCHASES. We sell our products to leading integrated circuit manufacturers
located in the United States, Europe, Japan and the rest of the Pacific Rim.
During 1996 and 1998 there were no individually significant customers for our
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products. During 1997 one end user customer, TSMC, accounted for approximately
11% of sales. While we actively pursue new customers, there can be no assurance
that we will be successful in our efforts. Any significant weakening in customer
demand would have a material adverse effect on us. See "INFORMATION INCORPORATED
BY REFERENCE."
OUR REVENUES ARE HIGHLY DEPENDENT ON OUR JAPANESE DISTRIBUTOR, MARUBENI, AND
THE ASIAN MARKET IN GENERAL. We believe that strong sales in the Japanese
market will be essential to our future financial performance. As part of our
strategy for penetrating the Japanese market, we established a distributor
relationship with Marubeni. We are substantially dependent upon Marubeni to
address the Japanese market. Sales through Marubeni to customers in Japan
accounted for 16% of our net sales for the year ended December 31, 1998.
Although management believes that it maintains a good relationship with
Marubeni, there can be no assurance that the relationship will continue. In the
event of a termination of our distribution agreement with Marubeni, our strategy
to increase our sales in Japan would be adversely affected. In addition, upon
termination of this relationship with Marubeni, we would have the obligation to
repurchase up to $1 million of inventory related to our sales to Marubeni.
Although we intend to continue to invest significant resources in Japan,
including the hiring of additional personnel to support Marubeni's efforts,
there can be no assurance that we will be able to maintain or increase our sales
to the Japanese semiconductor industry.
We are also substantially dependent upon sales to Pacific Rim countries
generally. During the year ended December 31, 1998, approximately 50% of our net
sales were to customers based in the Pacific Rim. During 1997, we made
approximately 60% of our net sales to customers based in the Pacific Rim. As
such, we are particularly at risk with respect to effects from developments such
as the Asian economic problems. In addition, because some of our foreign sales
are denominated in U.S. dollars, our products become less price competitive in
countries with currencies that are declining in value in comparison with the
dollar. See "INFORMATION INCORPORATED BY REFERENCE."
OUR SALES CYCLE IS LENGTHY BECAUSE SALES OF OUR SYSTEMS DEPEND UPON THE
DECISIONS OF PROSPECTIVE CUSTOMERS TO MAKE SIGNIFICANT CAPITAL
COMMITMENTS. Sales of our systems depend, in significant part, upon the
decision of a prospective customer to increase manufacturing capacity or to
expand current manufacturing capacity. Both decisions typically involve a
significant capital commitment. Our ability to receive orders from potential
customers may depend upon such customers undertaking an evaluation for new
equipment. For many potential customers, such an evaluation may occur
infrequently. Following initial system qualification, we often experience
further delays in finalizing system sales while the customer:
- Evaluates the purchase of our systems,
- Receives approvals for the purchase of our systems, and
- Completes a new or expanded facility.
We believe we must significantly increase our inventory investment in
evaluation systems because many customers use these systems in their evaluation
processes. Due to these factors, our systems typically have a lengthy sales
cycle during which we may expend substantial funds and management effort. There
can be no assurance that any of our efforts will succeed. See "INFORMATION
INCORPORATED BY REFERENCE."
OUR SALES REFLECT THE CYCLICALITY OF THE SEMICONDUCTOR INDUSTRY. Our
business depends in significant part upon capital expenditures by manufacturers
of semiconductor devices, including manufacturers that are opening new or
expanding existing fabrication facilities. The level of capital expenditures by
these manufacturers of semiconductor devices depend upon the current and
anticipated market demand for such devices and the products utilizing such
devices. The semiconductor industry is highly cyclical. The industry
historically experiences periods of oversupply that result in significantly
reduced demand for capital equipment, including the systems manufactured and
marketed by us. Although sales increased in the first
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quarter of 1999 and the fourth quarter of 1998 compared to sales in the third
quarter of 1998, sales had decreased for each of the first three quarters of
1998. We anticipate that a significant portion of new orders will depend upon
demand from semiconductor manufacturers who build or expand large fabrication
facilities. There can be no assurance that such demand will exist. Any future
downturns or slowdowns in the semiconductor market will materially and adversely
affect our net sales and operating results. See "INFORMATION INCORPORATED BY
REFERENCE."
WE MAY NOT BE ABLE TO COMPETE IN THE HIGHLY COMPETITIVE SEMICONDUCTOR
INDUSTRY. The market for our systems is both highly competitive and subject to
rapid technological change. Significant competitive factors include the
following:
- System performance,
- Cost of ownership,
- Size of installed base,
- Breadth of product line, and
- Customer support.
Principal competitors in the United States for our Aspen Strip systems
include:
- GaSonics,
- Eaton (formerly Fusion), and
- Matrix.
The following principal competitors for our Aspen Strip Systems have
established relationships with Japanese integrated circuit manufacturers:
- Canon,
- Plasma Systems Corporation,
- KEM (formerly McElectronics), and
- Tokyo Ohka
Competitors for our Aspen LiteEtch systems include:
- Lam Research,
- GaSonics,
- Matrix,
- Tegal, and
- Shibaura.
Competitors for our Aspen CVD systems include:
- Applied Materials,
- Novellus,
- ASM, and
- Watkins-Johnson.
Competitors for our Aspen RTP system include:
- AG Associates,
- Steag Microelectronics, and
- Applied Materials.
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Competitors for our epitaxial systems include:
- Applied Materials,
- Moore Technology
- ASM, and
- Toshiba.
The following characteristics of certain of our competitors (particularly
for CVD systems) give them a competitive advantage over us:
- Broader product lines,
- Longer operating history,
- Greater experience with high volume manufacturing,
- Broader name recognition,
- Substantially larger customer bases, and
- Substantially greater financial, technical and marketing resources.
In addition, to expand our sales we must often replace the systems of our
competitors. There can be no assurance that our competitors will not develop
enhancements to or future generations of competitive products that will offer
price/performance features that are superior to our systems. See "INFORMATION
INCORPORATED BY REFERENCE."
MOST OF OUR SALES REVENUE IS CONCENTRATED IN ASPEN STRIP SYSTEMS. From
inception until December 31, 1998, our sales of Aspen Strip systems constitute
91% of our sales. Our continued sales growth will depend upon achieving market
acceptance of: (1) Aspen CVD systems, (2) Aspen RTP systems, (3) Aspen LiteEtch
systems, (4) new EpiPro systems, and (5) future products. See "INFORMATION
INCORPORATED BY REFERENCE."
DEVELOPMENT AND ACCEPTANCE OF THE COMPANY'S EPI SYSTEMS WILL BE IMPORTANT TO
OUR BUSINESS STRATEGY IN THE FUTURE. Prior to our acquisition of Concept, we
had no experience with sales of EPI products. There can be no assurance that
development of the EPI technology will meet expectations or that any of our new
EPI products will:
- Adequately meet the requirements of the marketplace,
- Be of acceptable quality, or
- Achieve market acceptance as Mattson products.
In addition, there can be no assurance that our EPI products will function
and perform as planned or that we will not experience other delays or
difficulties in the development of these products. Our success in developing,
introducing, selling and supporting EPI products will depend on a variety of
factors in addition to product design and development. These additional factors
include:
- Timely and efficient implementation and continuation of manufacturing
processes,
- Effective sales,
- Marketing and customer service, and
- The absence of performance problems.
ACQUISITIONS, WHICH ARE INHERENTLY RISKY, ARE PART OF OUR BUSINESS
STRATEGY. As part of our business strategy, subject to certain regulatory
approvals and other conditions, we may make additional acquisitions
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of, or significant investments in, businesses that offer complementary products,
services and technologies. The risks commonly encountered in acquisitions of
businesses will accompany any acquisitions or investments. Such risks include,
among other things:
- Difficulty of assimilating the operations and personnel of the acquired
businesses,
- Potential disruption of our ongoing business,
- Inability of management to maximize our financial and strategic position
- Inability of management to manage the financial and strategic position of
acquired or invested products, services, and technologies,
- Inability to maintain uniform standards, controls and procedures and
policies, and
- Impairment of relationships with employees and customers which may occur
as a result of any integration.
These factors could have a material adverse effect on our business, results
of operations or financial condition. Consideration paid for future
acquisitions, if any, could be in the form of:
- Cash,
- Stock,
- Rights to purchase stock or
- A combination of cash, stock and rights to acquire stock.
To the extent that shares of stock or other rights to purchase stock are
issued in connection with any such future acquisitions, dilution to existing
stockholders and to earnings per share may result. See "INFORMATION INCORPORATED
BY REFERENCE."
OUR FUTURE SUCCESS DEPENDS UPON OUR CONTINUING TO DEVELOP AND INTRODUCE NEW
SYSTEMS WHICH COMPETE EFFECTIVELY ON THE BASIS OF PRICE AND PERFORMANCE. We
compete and our customers compete in markets characterized by:
- Rapidly changing technology,
- Evolving industry standards, and
- Continuous improvements in products and services.
Because of continual changes in these markets, we believe that our future
success will depend, in part, upon our ability to continue to improve our
systems and our process technologies. Due to the continual change in these
markets, our success will also depend upon our ability to develop new
technologies and systems which (1) compete effectively on the basis of price and
performance and (2) adequately address customer requirements. In addition, we
must adapt our systems and processes to technological changes and to support
emerging target market industry standards. The success of new system
introductions is dependent on a number of factors. These factors include timely
completion of new system designs and market acceptance. There can be no
assurance that we will be able to improve our existing systems or develop new
technologies or systems in a timely manner. In particular, the transition of the
market to 300mm wafers will present us with both an opportunity and a risk. To
the extent that we are unable to introduce 300mm systems on a timely basis and
which meet customer requirements, our business, results of operations and
financial condition could be materially and adversely affected. See "INFORMATION
INCORPORATED BY REFERENCE."
OUR SUBSTANTIAL DEPENDENCE UPON A LIMITED NUMBER OF SUPPLIERS FOR SOME
COMPONENTS AND SUBASSEMBLIES REDUCES OUR CONTROL OVER THE TERMS OF THEIR
DELIVERIES. We rely to a substantial extent on outside vendors to manufacture
many of the Aspen systems' components and subassemblies. We obtain certain of
these
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components and subassemblies from a supplier or a limited group of suppliers.
Our reliance on outside vendors generally, and a sole or a limited group of
suppliers in particular, involves several risks. These risks include:
- A potential inability to obtain an adequate supply of required components,
- Reduced control over pricing of components, and
- Reduced control over timely delivery of components.
The manufacture of certain of these components and subassemblies is an
extremely complex process and requires long lead times. As a result, there can
be no assurance that delays or shortages caused by suppliers will not occur. Any
inability to obtain adequate deliveries or any other circumstance that would
require us to seek alternative sources of supply or to manufacture such
components internally could delay our ability to ship our systems. Any such
delay could have a material adverse effect on us. See "INFORMATION INCORPORATED
BY REFERENCE."
WE ARE HIGHLY DEPENDENT ON OUR KEY PERSONNEL. Our success depends to a
large extent upon the efforts and abilities of Brad Mattson, Chairman and Chief
Executive Officer, and other key managerial and technical employees. The loss of
Mr. Mattson or other key employees could have a material adverse effect on us.
We do not enter into written employment agreements with any of our executive
officers. The success of our business will also depend upon our ability to
continue to attract and retain qualified employees. In particular, we must
attract and retain highly skilled design and process engineers to manufacture
existing systems and develop new systems and processes. The competition for such
personnel is intense. See "INFORMATION INCORPORATED BY REFERENCE."
WE ARE HIGHLY DEPENDENT ON OUR SALES OVERSEAS, PARTICULARLY TO JAPAN AND
OTHER PACIFIC RIM COUNTRIES. International sales accounted for 67%, 65%, and 76%
of our total net sales during 1998, 1997, and 1996, respectively. We anticipate
that international sales will continue to account for a significant portion of
net sales. International sales are subject to certain risks, including:
- Unexpected changes in regulatory requirements,
- Exchange rates,
- Tariffs and other barriers,
- Political and economic instability,
- Difficulties in accounts receivable collections,
- Extended payment terms,
- Difficulties in managing distributors or representatives,
- Difficulties in staffing and managing foreign subsidiary operations, and
- Potentially adverse tax consequences.
Because of our dependence upon international sales in general, and on sales
to Japan and Pacific Rim countries in particular, we are particularly at risk to
effects from developments such as the Asian economic problems. Our international
sales are also subject to certain governmental restrictions, including the
Export Administration Act and the regulations promulgated under that act. Our
sales to date have been denominated in U.S. dollars. As a result, there have
been no losses related to currency fluctuations on sales. There can be no
assurance that any of these factors will not have a material adverse effect on
us. See "INFORMATION INCORPORATED BY REFERENCE."
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WE RELY ON OUR INTELLECTUAL PROPERTY RIGHTS TO PROTECT OUR PROPRIETARY
TECHNOLOGY. We rely on a combination of the following to protect our
proprietary technology:
- Patents,
- Copyrights,
- Trademark and trade secret laws,
- Non-disclosure agreements, and
- Other intellectual property protection methods.
We believe that patents are of less significance in this industry than such
factors as innovative skills, technical expertise and know-how of our personnel.
There can be no assurance that our competitors will not be able to legitimately
ascertain the non-patented proprietary information embedded in our systems. If
this occurs, we may be precluded from preventing the use of such information. To
the extent we wish to assert our patent rights, there can be no assurance that
any claims of our patents will be sufficiently broad to protect our technology.
In addition, there can be no assurance that:
- Any patents issued to us will not be challenged, invalidated or
circumvented,
- Any rights granted thereunder will provide adequate protection to us, or
- We will have sufficient resources to prosecute our rights.
No lawsuits are pending against us regarding infringement of any existing
patents or other intellectual property rights. In addition, we have not received
any unresolved notices that we are infringing intellectual property rights of
others. Still, there can be no assurance that such infringement claims will not
be asserted by third parties in the future. There also can be no assurance in
the event of such claims of infringement that we will be able to obtain licenses
on reasonable terms. Our involvement in any patent dispute or other intellectual
property dispute or action to protect trade secrets and know-how could have a
material adverse effect on us. Adverse determinations in any litigation could do
the following:
- Subject us to significant liabilities to third parties,
- Require us to seek licenses from third parties, and
- Prevent us from manufacturing and selling our systems.
Any of these situations could have a material adverse effect on us. See
"INFORMATION INCORPORATED BY REFERENCE."
OUR FAILURE TO COMPLY WITH CURRENT OR FUTURE ENVIRONMENTAL REGULATIONS COULD
RESULT IN SUBSTANTIAL LIABILITY TO THE COMPANY. We are subject to a variety of
federal, state and local laws, rules and regulations. These laws, rules and
regulations pertain to the use, storage, discharge and disposal of hazardous
chemicals during (1) sales demonstrations and (2) research and development. In
recent years we have seen an increase in the amount of public attention focused
on the environmental impact of operations which use hazardous materials. To the
best of our knowledge, we are in compliance with all federal, state and local
environmental regulations. However, failure to comply with present or future
regulations could result in the following:
- Substantial liability to us,
- Suspension or cessation of our operations,
- Restrictions on our ability to expand at our present locations,
- Requirements for the acquisition of significant equipment, or
- Other significant expense.
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<PAGE>
See "INFORMATION INCORPORATED BY REFERENCE."
THE PRICE OF OUR COMMON STOCK HAS IN THE PAST AND MAY IN THE FUTURE
FLUCTUATE SIGNIFICANTLY. Significant volatility characterized the market price
of our common stock in the past. Our stock price declined substantially from its
highs. There can be no assurance that the market price of our common stock will
not decline in the future. We believe that a variety of factors could cause the
price of our common stock to fluctuate, perhaps substantially, including:
- Announcements of developments related to our business,
- Fluctuations in our operating results and order levels,
- General conditions in the semiconductor industry or in the worldwide
economy,
- Announcements of technological innovations,
- New products or product enhancements by us or by our competitors,
- Developments in patents or other intellectual property rights, and
- Developments in our relationships with our customers, distributors and
suppliers.
In addition, in recent years the stock market in general, and the market for
shares of small capitalization stocks in particular, experienced extreme price
fluctuations. These fluctuations were often unrelated to the operating
performance of the affected companies. Such fluctuations could adversely affect
the market price of our common stock. See "INFORMATION INCORPORATED BY
REFERENCE."
WE ARE EXPOSED TO RISKS RELATED TO YEAR 2000 (Y2K) ISSUES FROM OUR PRODUCTS,
OUR INTERNATIONAL INFRASTRUCTURE AND OUR BUSINESS PARTNERS WHICH COULD HAVE A
SIGNIFICANT IMPACT ON OUR FINANCIAL CONDITION. As with many other companies,
the Year 2000 computer issue presents risks for us. We use a significant number
of computer software programs and operating systems in our internal operations,
including applications used in our (1) financial systems, (2) product
development systems, (3) order management systems and (4) manufacturing systems.
The inability of computer software programs to accurately recognize, interpret
and process date codes designating the year 2000 and beyond could cause systems
to yield inaccurate results or encounter operating problems resulting in the
interruption of the business operations which they control. This could adversely
affect our ability to (1) process orders, (2) forecast production requirements
or (3) issue invoices. A significant failure of the computer integrated
manufacturing systems, which monitor and control factory equipment, would
disrupt manufacturing operations and cause a delay in completion and shipping of
products. Moreover, if our critical suppliers' or customers' systems or products
fail because of a Year 2000 malfunction, it could impact our operating results.
Finally, our own products could malfunction as a result of a failure in date
recognition, giving rise to the possibility of warranty claims and litigation.
Based on currently available information, our management does not believe that
the Year 2000 issues discussed above, related to internal systems or products
sold to customers, will have a material impact on our financial condition or
overall trends in results of operations. However, we are uncertain to what
extent we may be affected by such matters. A significant disruption of our
financial management and control systems or a lengthy interruption in our
manufacturing operations caused by a Year 2000 related issue could result in a
material adverse impact on our operating results and financial condition. In
addition, it is possible that a supplier's failure to ensure Year 2000
capability or our customer's concerns about Year 2000 readiness of our products
would have a material adverse effect on our results of operations.
13
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information regarding each selling
stockholder, each of whom is a former shareholder of Concept.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY SHARES TO
OWNED PRIOR TO BE SOLD IN SHARES BENEFICIALLY
NAME AND ADDRESS OF SELLING STOCKHOLDER OFFERING(1) OFFERING OWNED AFTER OFFERING
- ------------------------------------------------------------- ----------------- ----------- -----------------------
<S> <C> <C> <C>
Jim Mezey.................................................... 81,426 72,259 *
5671 Portrush Court
San Jose, CA 95138
Glenn Pfefferkorn............................................ 37,011 32,844 *
46676 Windmill Drive
Fremont, CA 94539
Janet Pfefferkorn............................................ 37,011 32,844 *
46676 Windmill Drive
Fremont, CA 94539
Roger Cory................................................... 91,789 81,456 *
3409 Mira Vista Circle
San Jose, CA 95132
Robert and Linda Mailho Family Trust......................... 74,024 65,691 *
14338 Kirk Allan Lane
Sonora, CA 95370
Alan Carbonaro............................................... 84,387 74,887 *
1834 Sterling Place
Livermore, CA 94550
Louise Campbell McBride, Trustee of the...................... 29,609 26,276 *
Louise Campbell McBride Living Trust
dated 1/28/98
3807 Hancock Drive
Santa Clara, CA 95051
Robert Dixon and Judith E. Dixon............................. 76,984 68,317 *
Trustees of the Dixon Family 1994 Trust,
dated 9-9-94
2801 Lockheed Way
Carson City, NV 89706
Pacific Induction Inc. Profit Sharing Plan................... 29,609 26,276 *
1963 Josephine Avenue
San Jose, CA 95124
Marlene M. LoCastro, Trustee of the Marlene.................. 5,921 5,254 *
M. LoCastro 1997 Trust, dated
November 6, 1997
16050 Los Gatos-Almaden Road
Los Gatos, CA 95032
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY SHARES TO
OWNED PRIOR TO BE SOLD IN SHARES BENEFICIALLY
NAME AND ADDRESS OF SELLING STOCKHOLDER OFFERING(1) OFFERING OWNED AFTER OFFERING
- ------------------------------------------------------------- ----------------- ----------- -----------------------
<S> <C> <C> <C>
David Eck.................................................... 59,218 52,551 *
c/o Solar Products, Inc.
5 Colton Road East
Lyme, CT 06330
Charles Sutcliffe............................................ 37,011 32,844 *
c/o Silicon Valley Management
15474 Via Vaquero
Monte Sereno, CA 95030
Vergil Owen.................................................. 29,609 26,276 *
c/o All Weld
1011 Pectin Ct.
Milpitas, CA 95035
Barbara Leavery.............................................. 740 657 *
6601 Rinconada Drive
Citrus Heights, CA 95610
J. Michael Hernandez......................................... 1,048 930 *
623 Windmill Lane
Pleasanton, CA 94566
Shawna Morgan................................................ 118 105 *
6043 I Joaquin Murieta
Newark, CA 94560
Ling Zhu..................................................... 240 213 *
4516 Mackinaw Street
Union City, CA 94587
Andrea Borst................................................. 55 49 *
4506 Boones Trail Terrace
Chesterfield, VA 23832
Western Asset Management SEP-IRA FBO......................... 888 788 *
Daniel P. White
3397 Hilow Road
Los Gatos, CA 95032
Yokogawa Electric Corporation................................ 118,438 105,105 *
Yoshiaki Ugai
2-9-32 Nakacho, Musashino-shi
Tokyo, 180-8750 Japan
------- -----------
795,136(2) 705,622(2)
</TABLE>
- ------------------------
* Less than 1%
(1) Based on the number of shares beneficially owned at July 24, 1998, the date
of the acquisition of Concept Systems Design, Inc.
(2) The difference between the number of shares beneficially owned prior to the
offering and the shares to be sold in the offering is equal to the total
number of shares of Mattson Common Stock to be held in escrow.
15
<PAGE>
PLAN OF DISTRIBUTION
We have been advised by the selling stockholders that they may sell all or a
portion of their shares of common stock. The selling stockholders plan to sell
on the Nasdaq National Market, or otherwise. The selling stockholders may sell
their shares (1) at prices and on terms prevailing at the time of sale, (2) at
prices related to the then current market price, or (3) in negotiated
transactions. The selling stockholders may sell one or more of the following
methods:
- Block trades in which the broker or dealer so engaged will attempt to sell
the Shares as agent, but may position and resell a portion of the block as
principal to facilitate the transaction,
- Purchases by a broker or dealer as principal and resale by such broker or
dealer for its own account pursuant to this prospectus,
- On over-the-counter distribution in accordance with the rules of the
Nasdaq National Market,
- Ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
- Privately negotiated transactions.
There is no assurance that selling stockholders will offer or sell any or
all of their shares of common stock registered under this prospectus. An escrow
agent holds in escrow 89,514 of the shares of stock owned by the selling
stockholders. This escrow lasts until July 24, 1999, which is one year after the
closing of the acquisition of Concept. The escrow fund will secure
indemnification obligations in connection with the acquisition. Accordingly,
shares held in escrow are not available for sale at this time.
In effecting sales, brokers or dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from the selling stockholders in amounts to be
negotiated prior to the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. We will pay all
expenses incident to the offering and sale to the public of shares by the
selling stockholders. We will not pay (1) underwriting commissions or similar
charges and (2) legal fees and disbursements of counsel for the selling
stockholders.
We agreed with the selling stockholders to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of:
- Such time as each of the selling stockholders may sell all of the shares
held by him, her or it without registration pursuant to Rule 144 under the
Securities Act within a three-month period;
- Such time as all of the shares have been sold by the selling stockholders,
or
- July 24, 1999, (one (1) year following the date that we closed the
acquisition of Concept).
We intend to de-register any of the shares not sold by the selling
stockholders at the end of such period. At such time, however, any unsold shares
may be freely tradable subject to compliance with Rule 144 of the Securities
Act.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 60,000,000 shares of common stock
and 2,000,000 shares of preferred stock. As of April 2, 1999, there were
15,489,022 shares of common stock and no shares of preferred stock outstanding.
COMMON STOCK. Subject to preferences that may be applicable to any
outstanding preferred stock, holders of common stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of the
funds legally available therefor. Each holder of common stock is entitled to one
vote for each share held of record by such holder. If we liquidate, dissolve or
wind up the company, holders of
16
<PAGE>
common stock are entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preference of any outstanding preferred
stock. The outstanding shares of common stock have no preemptive, subscription,
redemption or conversion rights. All of the outstanding shares of common stock
are, and the shares to be outstanding upon completion of this offering will be,
fully paid and nonassessable. The rights, preferences and privileges of the
holders of common stock are subject to, and may be adversely affected by, the
rights of the holders of any series of preferred stock which we may designate
and issue in the future.
PREFERRED STOCK. The Board of Directors is authorized, subject to any
limitations prescribed by law, to provide for the issuance of preferred stock in
series. By filing a certificate pursuant to the applicable law of the State of
Delaware, we may establish the number of shares to be included in each such
series, and to fix the designation, powers, preferences and rights of the shares
of each such series. The certificate filed in Delaware will also set any
qualifications, limitations or restrictions on any series of stock.
DELAWARE LAW AND CERTAIN CHARTER PROVISIONS. We are a Delaware corporation
and will be subject to Section 203 of the Delaware General Corporation Law (the
"Delaware Law"). In general, Section 203 of the Delaware Law prevents an
"interested stockholder" (defined generally as a person owning 15% or more of a
corporation's outstanding voting stock) from engaging in a "business
combination" (as defined in the Delaware Law) with a Delaware corporation for 3
years following the date such person became an interested stockholder. A
business combination may occur subject to certain exceptions. One exception
requires the approval of the board and the holders of at least two-thirds of the
outstanding shares of voting stock not owned by the interested stockholder. The
existence of this provision could have the effect of discouraging takeover
attempts, including attempts that might result in a premium over the market
price for the shares of common stock.
Our certificate of incorporation and bylaws may limit the ability of
stockholders to change the size of the board of directors and to fill vacancies
on the board of directors. Our certificate of incorporation provides that any
action required or permitted to be taken by our stockholders may be taken only
at a duly called annual or special meeting of the stockholders. The certificate
of incorporation does not provide for cumulative voting in the election of
directors. The bylaws also establish procedures, including advance notice
procedures, with regard to the nomination, other than by or at the direction of
the Board of Directors, of candidates for elections as directors or for
stockholder proposals to be submitted at stockholder meetings. The amendment of
any of these provisions would require approval by holders of two-thirds or more
of the outstanding common stock.
These and other provisions could have the effect of making it more difficult
to effect a change in the control of the board of directors. This may discourage
tender offers for our common stock, including offers at a premium over the
market price. These provisions also may result in a delay in changes in control
and of management. These provisions could have the effect of making it more
difficult for proposals favored by stockholders to be presented for stockholder
consideration.
We have also included in our certificate of incorporation provisions to (1)
eliminate the personal liability of its directors for monetary damages resulting
from breaches of their fiduciary duty to the extent permitted by the Delaware
Law and (2) indemnify its directors and officers to the fullest extent permitted
by Section 145 of the Delaware Law.
TRANSFER AGENT AND REGISTRATION. The transfer agent and registrar for our
common stock is ChaseMellon Shareholder Services.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Mattson Technology, Inc. for the
year ended December 31, 1998 and the audited historical financial statements of
Concept Systems Design, Inc. as of June 30, 1998 and for the year then
17
<PAGE>
ended incorporated in this prospectus by reference to the Form 8-K/A of Mattson
Technology, Inc. dated May 6, 1999 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.
The financial statements of Concept Systems Design, Inc. as of June 30, 1997
and for the year then ended included in our Form 8-K/A dated May 6, 1999 have
been incorporated into our Form 8-K/A in reliance on the report of Arthur
Andersen LLP, independent public accountants, given on the authority of that
firm as experts in giving said reports.
18
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS. IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES TO
WHICH THIS PROSPECTUS RELATES, OR AN OFFER IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE OF SECURITIES HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
795,136 SHARES
MATTSON TECHNOLOGY, INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
MAY 25, 1999
19
