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As filed with the Securities and Exchange Commission on May 28, 1999.
Registration No. 333-77527
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Number Nine Visual Technology Corporation
(Exact name of registrant as specified in its charter)
Delaware 04-2821358
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
18 Hartwell Avenue
Lexington, MA 02421
(781) 674-0009
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Timothy Burns
Chief Financial Officer
Number Nine Visual Technology Corporation
18 Hartwell Avenue
Lexington, MA 02421
(781) 674-0009
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a copy to:
Neil H. Aronson, Esquire
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
(617) 542-6000
Approximate date of commencement of proposed sale to the public: As soon as
practical after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Maximum
Title of Each Class of Amount to be Proposed Maximum Aggregate Offering Amount of
Securities to be Registered Registered(1) Offering Price per Share Price(2) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 4,258,137 $2.4844 $10,578,915 $2,940.94
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</TABLE>
(1) Includes (i) 500,000 shares of common stock to be issued upon the
conversion of a portion of the Company's series A convertible preferred stock,
par value $.01 per share (the "Series A Preferred Stock"), (ii) 3,022,137 shares
of common stock which represents 200% of the common stock that may be issued
upon conversion of the Company's series B convertible preferred stock, par value
$.01 per share (the "Series B Preferred Stock"), as of April 29, 1999 (including
177,591 shares of common stock issuable as payment for dividends that will
accrue for a period of three (3) years following the date of issuance of the
Series B Preferred Stock, assuming all dividends are paid in shares of common
stock), (iii) 736,000 shares of common stock to be issued upon exercise of four
Common Stock Purchase Warrants issued by the Company, and (iv) an indeterminate
number of additional shares of common stock as may from time to time become
issuable upon conversion of the Series A Preferred Stock and Series B Preferred
Stock and upon exercise of the four warrants, by reason of stock splits, stock
dividends and other similar transactions, which shares are registered hereunder
pursuant to Rule 416, but does not cover an indeterminate number of shares of
common stock based on the conversion formulae of the Series A Preferred Stock
and Series B Preferred Stock.
(2) The price of $ 2.4844 per share, which was the average of the high and low
prices of the common stock reported by the Nasdaq Stock Market on April 28,
1999, is set forth solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) of the Securities Act of 1933, as amended.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
Subject to Completion, dated May 28, 1999
NUMBER NINE VISUAL TECHNOLOGY CORPORATION
4,258,137 Shares of Common Stock
. We have registered a total of up This Investment
to 4,258,137 shares of our common Involves
stock for sale by KA Investments A High Degree of Risk.
LDC, Silicon Graphics, Inc., You Should Purchase
Brighton Capital, Ltd., FSC Corp. and Shares Only If
S3 Incorporated. You Can Afford
A Complete Loss.
. We will not receive any of the
proceeds from the selling See "Risk Factors"
stockholder's sales of their Beginning on Page 3.
common stock.
Our common stock trades on the Nasdaq National Market under the symbol "NINE."
On May 27, 1999, the closing sale price of one share of our common
stock as quoted on the Nasdaq National Market was $2.50.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
__________ ____, 1999
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PROSPECTUS SUMMARY
You must consult the more detailed financial statements, and notes to
financial statements, incorporated by reference in this prospectus. This
prospectus contains forward-looking statements and actual results could differ
materially from those projected in the forward-looking statements as a result of
certain of the risk factors as outlined in this prospectus. Investing in our
common stock is very risky. You should be able to bear a complete loss of your
investment. You should carefully consider the information set forth under the
heading "Risk Factors."
THE COMPANY
Number Nine is a leading innovator and a supplier of high-performance
visual technology solutions, including:
. video/graphics accelerator subsystems,
. chips,
. productivity-enhancing software, and
. flat-panel monitor bundled solutions.
Our products enable desktop personal computers or PCs to generate and
display the increasingly sophisticated visual content of today's computing
environment with greater speed, photorealistic color, high resolution and
full-motion video. We also provide high-performance visual technology
subsystems that render and control the graphics and video images transmitted
to desktop PC monitors. Our products enable a PC to operate with more color,
higher resolution, faster screen refresh rates and other features. Our
primary products are video/graphics accelerator subsystems incorporating our
productivity-enhancing software.
A video/graphics accelerator subsystem consists primarily of an
accelerator chip, memory chips, a digital-to-analog converter or DAC, and
software drivers and utilities. The accelerator chip is the graphics "engine"
that enhances speed, image clarity and color by performing functions that
would otherwise be executed by the Central Processing Unit or CPU. Memory
chips are used to temporarily store graphics information for display and are
available in configurations such as SDRAM, SGRAM and higher-performance VRAM
and WRAM. The DAC converts data from the digital format in which it is
typically stored in the graphics memory to the analog format required in order
for the display monitor to function. Software drivers enable the accelerator
chip to interface with the CPU and optimize the overall performance of the
subsystem. Software utilities increase the number and variety of display
features of a PC and are increasingly being added to accelerator subsystems as
end-users seek greater functionality and access to advanced features.
Number Nine Visual Technology Corporation was incorporated in Connecticut
in May 1982, reincorporated as a Massachusetts corporation in January 1987 and
reincorporated as a Delaware corporation in December 1994. Our executive
offices are located at 18 Hartwell Avenue, Lexington, Massachusetts 02421 and
our telephone number is (781) 674-0009.
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RISK FACTORS
Investing in our common stock is very risky. You should be able to bear
a complete loss of your investment. You should carefully consider the
following factors, in addition to other information in this prospectus.
Competing Technologies May Render Some or All of Our Products or Future
Products Noncompetitive or Obsolete. The PC industry in general, and the
market for our products in particular, are characterized by:
. rapid technological advances,
. frequent new product introductions,
. short product life cycles,
. product obsolescence,
. changes in customer requirements or preferences for competing
products,
. evolving industry standards,
. significant competition, and
. rapidly changing pricing.
In this regard, the life cycle of products in our markets is often as
short as nine to twelve months. Therefore, our future prospects depend, in
part, upon our ability to:
. continually update our existing products in a timely manner, and
. continue to identify, develop and achieve market acceptance of
products that incorporate new technologies and standards and meet
evolving customer needs.
We cannot assure you that we will be successful in managing product
transitions, including controlling inventory of older generation products when
introducing new products. We have experienced and could, in the future,
experience reductions in sales of older generation products as customers
delay purchases in anticipation of new product introductions. We establish
reserves for anticipated product returns, based upon historical return rates
of product returns and other factors. However, we cannot assure you that
reductions in sales and returns of older generation products by distributors,
primarily attributable to customer stock rotation, will not give rise to
charges for obsolete or excess inventory or substantial price protection
charges.
Dramatic Reductions in Sales to Significant Customers May Adversely
Affect Our Sales. The volume and timing of orders received during a particular
quarter are very difficult to forecast. Our customers can change delivery
schedules or cancel orders with limited or no penalties. For example, in
September 1996 Dell decided to stop buying our merchant graphics solution
starting in the fourth quarter of 1996. In addition, during the third quarter
of 1997, Dell reduced its purchases of our proprietary Imagine 128 Series 2
4MB VRAM product. As a result, our net sales to Dell decreased dramatically
from $62.7 million during 1996 to $4.9 million during 1997. Future sales to
significant customers are uncertain and depend upon the performance and
pricing of our new products and their acceptance by these customers.
Customers generally order on an as-needed basis, and as a result, we have
historically operated without significant backlog. Moreover, as is often the
case in the PC industry, a disproportionate percentage of our net sales in any
quarter may be generated in the final month or weeks of a quarter.
Consequently, a shortfall in sales in any quarter as compared to management
expectations may not be identifiable until the end of the quarter. Because
significant portions of operating expense levels are relatively fixed, the
timing of expense levels is based in large part on our expectations of future
sales. If sales do not meet our expectations, we may be unable to quickly
adjust spending, which could have a material adverse effect on our business.
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Our Success Depends Heavily Upon Sales to a Limited Group of OEMs. We
try to provide a broad line of high-performance hardware and software
video/graphics solutions, targeting both OEMs and two-tier and retail
distribution customers. The PC industry has a limited number of major OEMs
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driving the majority of PC sales. While we are pursuing a significant portion
of our business derived from the limited number of major OEMs, we cannot
assure you that we will be successful in establishing profitable relationships
with major OEMs. In addition, major OEMs exercise significant price pressure
on their suppliers, generating lower gross margins than those of retail and
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distribution customers. Our failure to establish profitable relationships with
major OEM customers, or to maintain and increase the volume and profitability
of the products manufactured for such customers would have a material adverse
effect on our business.
The Highly Competitive Market for Our Products May Adversely Affect Our
Business Results. Our current and prospective competitors include many
companies that have substantially greater name recognition and financial,
technical, manufacturing and marketing resources than we have. We cannot
assure you that we will be able to compete successfully against current and
future competitors.
The market for our products is highly competitive. Our ability to compete
successfully depends upon a number of factors both within and beyond our
control, including:
. Product performance,
. Product features,
. Product availability,
. Price,
. Quality,
. Timing of our new product introductions compared with the timing of
our competitors' product introductions,
. Emergence of new video/graphics and PC standards,
. Customer support, and
. Industry and general economic trends.
We compete by offering products emphasizing high performance and quality.
We strive to improve our current products and to introduce new products in
order to provide a broad product line where demand justifies it. Our current
principal competitors include ATI Technologies, Inc., Diamond Multimedia
Systems, Inc., and Matrox Electronic Systems, Inc. Each of these named
competitors markets graphics accelerator products that are marketed in
competition with our 64-bit and 128-bit graphics accelerator products. Our
principal competitors on chip technology include Intel Corporation, 3DFX
Interactive, Inc., 3DLabs Inc., Ltd., Nvidia Corporation, ATI Technologies,
Inc. and Matrox Electronic Systems, Inc.
Numerous competitors, particularly in higher-volume, lower-priced product
categories, have lowered their prices, which may result in reduced sales
and/or lower margins for our products. In addition, many companies compete on
the basis of their integrated circuit design capabilities by:
. supplying accelerator chips on a merchant basis,
. producing board-level products, and
. integrating the accelerator chip that will be placed directly on the
CPU motherboard.
We expect this trend to continue for low-end video/graphic accelerator
subsystems; however, we believe the market for video/graphic accelerator
subsystems in mid-range to high-end PCs will continue to exist.
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Several of our board-level competitors, as well as various independent
software developers, offer software products with features comparable to our
HawkEye software utilities. Future enhancements to such competing software
products that we do not match, or the inclusion of comparable features in
future versions of the Windows operating system, reduce the demand for our
HawkEye utilities software. In addition, we may eventually experience indirect
competition from suppliers of memory components, CPU manufacturers and others
to the extent they integrate advanced graphics processing capabilities into
future generations of products.
We May Not Be Profitable or Generate Cash from Operations in the Future.
We have incurred significant losses in the last several years. We intend to
continue to expend significant financial and management resources on the
development of additional products, sales and marketing, improved technology
and expanded operations. Although we believe that operating losses and
negative cash flows may diminish in the near future, we may not be profitable
or generate cash from operations in the foreseeable future.
If We Do Not Secure Additional Financing, We May Be Unable to Develop or
Enhance Our Services, Take Advantage of Future Opportunities or Respond to
Competitive Pressures. We require substantial working capital to fund our
business. We have had significant operating losses and negative cash flow
from operations. Additional financing may not be available when needed on
favorable terms or at all. If adequate funds are not available or are not
available on acceptable terms, we may be unable to develop or enhance our
services, take advantage of future opportunities or respond to competitive
pressures, which could materially adversely affect our business. Our capital
requirements depend on several factors, including the rate of market
acceptance of our products, the ability to expand our customer base, the
growth of sales and marketing and other factors. If capital requirements vary
materially from those currently planned, we may require additional financing
sooner than anticipated.
We Depend Upon a Limited Group of Suppliers for Key Components. We
depend on sole or limited source suppliers for certain key components and have
experienced:
. limited availability,
. delays in shipments, and
. unanticipated cost fluctuations related to the supply of components,
particularly memory chips.
We actively work with memory component suppliers to secure pricing and
volume commitments for future production. Additionally, our suppliers could
make key components, such as memory graphics accelerator chips, less available
to the extent that they reduce our lines of credit and payment terms. In such
an event, we could have difficulty securing sufficient supply to meet customer
requirements. We cannot assure you that we will secure commitments in
sufficient amounts to meet our needs or at prices that will enable us to
attain profitability.
The Loss of Key Members of Our Management Staff Could Delay and May
Prevent the Achievement of Our Business Objectives. Our future success will
depend, to a significant extent, upon the efforts and abilities of our senior
management and professional, technical, sales and marketing personnel. The
competition for such personnel is intense. The loss and failure to promptly
replace any one of these key members could significantly delay and may prevent
the achievement of our business objectives. Accordingly, our failure to hire,
retain or adequately replace key personnel could have a material adverse
effect on our business.
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The Value of Our Stock Has in the Past and May in the Future Change
Suddenly and Significantly. The trading price of our common stock has been
subject to significant fluctuations to date, and could be subject to wide
fluctuations in the future, in response to many factors, including the
following:
. Quarter-to-quarter variations in our operating results,
. Announcements of technological innovations,
. New products or significant OEM system design wins by us or our
competitors,
. General conditions in the markets for our products or the computer
industry,
. The price and availability of purchased components,
. General financial market conditions,
. Changes in earnings estimates by analysts, or
. Other events or factors.
In this regard, we do not endorse or accept responsibility for the
estimates or recommendations issued by stock research analysts from time to
time. The volatility of public stock markets, and technology stocks
specifically, have frequently been unrelated to the operating performance of
the specific companies. These market fluctuations may adversely affect the
market price of our common stock.
Costs of Defending Shareholder Litigation and the Possible Liability
Relating to Such Litigation Could Divert Funds and Management Efforts Away
from the Manufacturing, Marketing and Sales of Our Products. We have been
served notice of three lawsuits seeking class action status on or about June
11, 1996, July 16, 1996 and October 16, 1996, respectively, filed in the
United States District Court for the District of Massachusetts naming as
defendants our company, the members of the Board of Directors during the
period in question, our former Chief Financial Officer and Treasurer, and the
selling shareholders and managing underwriters of our 1995 initial public
offering. The alleged class of plaintiffs consists of all persons who
purchased shares of our common stock on the open market between and including
May 26, 1995 through January 31, 1996. The plaintiffs, who seek unspecified
damages, interest, costs and fees, allege, among other things, that our
Registration Statement and Prospectus in our initial public offering and other
public statements and reports filed with the Securities and Exchange
Commission during the class period in question contained false and materially
misleading statements. The defendants deny liability, believe they have
meritorious defenses and intend to vigorously defend against these and any
similar lawsuits that may be filed, although the ultimate outcome of these
matters cannot yet be determined. By order of the District Court, these
actions have been consolidated into a single action. If the lawsuit is not
resolved satisfactorily for us, there could be a material adverse effect on
our business.
We May Have to Indemnify or Pay Damages to Some of Our OEM Customers for
Possible Intellectual Property Infringement Claims Filed or Threatened to Be
Filed. It is common in the PC industry for companies to assert intellectual
property infringement claims against other companies. As a consequence, we
indemnify some OEM customers in certain respects against intellectual property
claims relating to our products. If an intellectual property claim were to be
brought against us, or any of our OEM customers, and we, or any of our OEM
customers, were found to be infringing upon the rights of others, we could be
required to:
. pay infringement damages,
. pay licensing fees,
. modify our products so that they are not infringing, or
. discontinue offering products that were found to be infringing,
Any of the above-listed actions could have a material adverse effect on
our business. Several OEM customers recently sent us notices of potential
indemnity claims based upon notices of infringement that they have received
from a patent owner. Subsequently, the patent owner filed patent infringement
lawsuits in the U.S. and elsewhere against several of such OEM customers and a
number of other major PC systems
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manufacturers. We provide multimedia subsystems to our OEM customers for use
in such OEM customers' products that are alleged to infringe on the patent
owner's rights. Based upon our preliminary evaluation of the patent, we do not
believe the infringement claims are meritorious as to our products sold to our
customers. However, under the indemnity agreements or if we are directly sued,
we may be required to dedicate significant management time and expense to
defending ourselves or assisting our OEM customers in their defense of this or
other infringement claims, regardless of merit, which could have a material
adverse effect on our business. If an intellectual property claim were to be
brought against any of our suppliers and the supplier were found to be
infringing upon the rights of others, the supplier could be enjoined from
further shipments of our products to us, which could have a material adverse
effect on our business.
If the Series A or Series B Preferred Stock is Converted or If We Issue
Additional Shares of Equity Securities, the Value of Those Shares of
Common Stock Then Outstanding May Be Diluted. To the extent that we raise
additional capital by issuing equity securities at a price or a value per
share less than the then current price per share of common stock, the value of
the shares of common stock then outstanding will be diluted or reduced. At
present, we have two arrangements to issue additional equity securities which
could result in dilution to the present common stockholders. One arrangement
involves the issuance of our series A preferred stock, each share of which was
purchased or acquired for $2.75 and all of which are convertible into shares
of common stock on a one for one basis. Based on the number of shares of
series A preferred stock presently outstanding and an outstanding warrant to
purchase additional shares of series A preferred stock, as of April 29, 1999,
we would be required to issue up to 3,707,721 shares of common stock at a
price per share that is only approximately $.25 more than the last sale
price of the common stock of $2.50 on April 29, 1999. If the sale price of the
common stock increases, we may be required to issue shares of common stock at
a price per share that would be less than the then current price per
share.
We also have an arrangement which involves the issuance of our series B
preferred stock (and payment of dividends thereunder in shares of common
stock), which is convertible from and after July 28, 1999 into shares of
common stock at a price per share equal to the lesser of:
. $4.2703, or
. 88% of the average of the 10 lowest closing prices during the 30
trading days immediately prior to the date of conversion.
Based on the number of shares of series B preferred stock presently
outstanding and the applicable conversion price as of April 29, 1999, we would
be required to issue up to 1,422,273 shares of common stock at a price per
share that is approximately $.39 less than the last sale price of the common
stock of $2.50 on April 29, 1999. In anticipation of price fluctuations that
may reduce the conversion price, we have registered for resale up to 3,022,137
shares of common stock which would become issuable upon conversion of the
series B preferred stock if the conversion price fell as low as approximately
$1.05 per share. If the conversion price fell even further, then more than
3,022,137 shares of common stock would be issuable upon conversion of the
series B preferred stock.
If additional funds are raised through the issuance of equity securities,
the percentage ownership of our stockholders will be reduced, stockholders may
experience additional dilution, or such equity securities may have rights,
preferences or privileges senior to those of our common stockholders.
If Our Common Stock is Delisted From The Nasdaq Stock Market, It
Would Be More Difficult for Stockholders to Sell Shares of Our Common Stock.
In order for our common stock to continue to be listed on The Nasdaq Stock
Market, we must comply with all of Nasdaq's continued listing requirements.
If Nasdaq determines that we have violated any of its continued listing
requirements, our common stock could be delisted. On May 20, 1999 Nasdaq
notified us that we are scheduled to be delisted from The Nasdaq Stock Market
effective upon the close of business on May 28, 1999. We are currently
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appealing this decision to delist us and expect a hearing regarding our appeal
sometime after July 1, 1999. Our appeal will prevent the delisting action
until Nasdaq renders a final decision following the hearing.
Even if our common stock is not delisted form the Nasdaq Stock Market,
the issuance and conversion of our series A and series B preferred stock could
cause Nasdaq to determine that we have violated up to three of its continued
listing requirements. The first of the three applicable Nasdaq rules requires
that our common stock have a minimum bid price per share of $1.00. Our bid
price is currently approximately $2.44 per share. If the series A and series
B preferred stock is converted at its current discount price and the common
stock issued upon conversion is subsequently sold in the public market, the
bid price of our common stock may be reduced to less than $1.00 per share, in
which case Nasdaq may determine that a violation exists and our common stock
may be delisted. The second applicable Nasdaq rule requires us to comply with
the more onerous requirements for initial listing if Nasdaq determines that we
have undergone a change in control or a change in financial structure.
Depending on the number of shares of common stock issued upon conversion of
the series A and series B preferred stock, Nasdaq may deem the issuance of
such preferred stock to be a change in control or a change in financial
structure and a violation that could result in delisting. The third
applicable Nasdaq rule permits Nasdaq to delist a security if it deems it
necessary to protect investors and the public interest. Therefore, if Nasdaq
determines that the returns on the series A and series B preferred stock are
excessive compared with the returns received by our common stockholders, and
such excess returns are egregious, Nasdaq could delist our common stock.
Our Computer System or our Suppliers' Computer System Could Fail When the
Year Changes to 2000. We use a number of computer software programs and
operating systems in our internal operations, including applications used in
financial business systems and various administration functions. We also
include software programs in our products. The Year 2000 issue refers to
potential problems with computer systems or any equipment with computer chips
or software that use dates where the date has been stored as just two digits
to represent the year, such as 98 for 1998. On January 1, 2000, any clock or
date recording mechanism which incorporates date sensitive software, using
only two digits to represent the year, may recognize a date using 00 as the
year 1900 rather than the year 2000. This could result in a system failure or
miscalculations, causing disruption of operations, or, among other things, a
temporary inability to process transactions, send invoices, or engage in
normal operating business activities.
We have conducted an assessment of our Year 2000 readiness to determine
the extent of any potential problems. Our assessment revealed that all our
products are not keyed to a two digit date storage system. That is, our
drivers and BIOS do not reference or update the time or date, nor are they
affected by the system clock. Based upon our assessment, we consider all our
products to be Year 2000 compliant. Our assessment also revealed that our
principal information systems correctly define the Year 2000 and do not
require any modification. As a result, we do not expect to incur any material
costs associated with Year 2000 issues. However, we cannot assure you that, to
date, we have identified all material Year 2000 issues associated with our
products.
We have conducted an assessment of our Year 2000 readiness of the
applications used in financial business systems and various administrative
functions to determine the extent of any potential problems. We obtained Year
2000 compliance statements from the manufacturers of our core internal
information systems. While these applications have been tested by their
manufacturers, we will continue to test our mission critical applications for
Year 2000 compliance. As a result, we do not expect to incur any material
costs associated with Year 2000 issues. However, we cannot assure you that,
to date, we have identified all material Year 2000 issues associated with
internal information systems which could have a material adverse effect on our
business.
We are in the process of contacting our customers, suppliers, financial
institutions, creditors, service providers and governmental agencies, with
whom we have a material relationship, in an effort to verify the Year 2000
readiness of these third parties that are in a position to impact us
materially. We have
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limited or no control over the actions of these third parties. Thus, while we
expect that we will be able to resolve any significant Year 2000 problems, we
cannot assure you that all material Year 2000 issues associated with third
parties will be identified and corrected on a timely basis, or that
corrections made by third parties will be compatible with our information
systems. The failure of our systems and applications or those operated by
third parties to properly operate or manage dates beyond 1999 could have a
material adverse effect on our business.
At this point, we do not believe we will be adversely affected, in a
material manner, by the Year 2000 issue. We are actively developing a
contingency plan to address any Year 2000 issues that may arise. We intend to
design and implement such a contingency plan prior to the end of the second
quarter of 1999, which will be based in part upon the balance of the responses
we expect to receive from third parties. We will attempt to identify and
resolve all Year 2000 problems that could materially affect our business
operations. However, management believes that it is not possible to determine
with complete certainty, that all Year 2000 problems affecting us have been
identified or corrected. The number of devices that could be affected and the
interactions among such devices are simply too numerous. In addition, we
cannot accurately predict how many Year 2000 problem-related failures will
occur or the severity, duration or financial consequences of these perhaps
inevitable and unforeseen failures. As a result, we are uncertain whether we
or our clients might experience:
. a significant number of operational inconveniences and
inefficiencies that may divert our time and attention, and
financial and human resources, from our ordinary business
activities, and/or
. a lesser number of serious system failures that may require
significant efforts by us or our clients to prevent or alleviate
material business disruptions.
Based on the foregoing, we do not believe that the Year 2000 problem will
have a material adverse effect on our business. Our ability to achieve Year
2000 compliance and the level of incremental costs associated therewith could
be adversely impacted by, among other things, the availability and cost of
programming and testing resources, vendors' abilities to modify proprietary
software and unanticipated problems identified in the ongoing compliance
review. Currently, we estimate that we have spent approximately $500,000 on
Year 2000 compliance. We estimate that our expense during 1999 will
approximate an additional $200,000.
WHERE TO FIND MORE INFORMATION
We are a public company and file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any document we file at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can
request copies of these documents by writing to the SEC and paying a fee for
the copying cost. Please call the SEC at 1-800-SEC-0330 for more information
about the operation of the public reference room. Our SEC filings are also
available to the public at the SEC's web site at "http://www.sec.gov." In
addition, you can read and copy our SEC filings at the office of the National
Association of Securities Dealers, Inc. at 1735 K Street, Washington, DC
20006.
This prospectus is only part of a Registration Statement on Form S-3 that
we have filed with the SEC under the Securities Act of 1933 and therefore
omits certain information contained in the Registration Statement. We have
also filed exhibits and schedules with the Registration Statement that are
excluded from this prospectus, and you should refer to the applicable exhibit
or schedule for a complete description of any statement referring to any
contract or other document. You may:
. inspect a copy of the Registration Statement, including the exhibits
and schedules, without charge at the public reference room, or
9
<PAGE>
. obtain a copy from the SEC upon payment of the fees prescribed by
the SEC.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it, 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 we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until the selling stockholders sell all of their shares
of common stock. The documents we are incorporating by reference are:
. Annual Report on Form 10-K for the year ended January 2, 1999, filed
on April 2, 1999;
. Amendment to the Annual Report on Form 10-K/A for the year ended
January 2, 1999, filed on April 30, 1999;
. Current Report on Form 8-K, filed on April 12, 1999;
. Quarterly Report on Form 10-Q for the quarter ended April 3, 1999,
filed on May 18, 1999; and
. The description of the common stock contained in our Registration
Statement on Form S-1 filed with the SEC on April 7, 1995, including
any amendments or reports filed for the purpose of updating such
description.
You may request a copy of these filings at no cost by writing or
telephoning our chief financial officer at the following address and number:
Number Nine Visual Technology Corporation
18 Hartwell Avenue
Lexington, MA 02421
(781) 674-0009
This prospectus is part of a Registration Statement we filed with the
SEC. You should rely on the information incorporated by reference provided in
this prospectus and the Registration Statement.
FORWARD LOOKING STATEMENTS
We also caution you that this prospectus contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements are
based on management's beliefs and assumptions and on information currently
available to management. Forward-looking statements include the information
concerning possible or assumed future results of operations and embody
statements in which we use words such as "expect," "anticipate, " "intend,"
"plan," "believe," "estimate," or similar expressions.
Forward-looking statements necessarily involve risks and uncertainties,
including those set forth in the Risk Factors section and elsewhere in this
prospectus. Our actual results could differ materially from those anticipated
in the forward-looking statements. The factors set forth in the Risk Factors
sections and other cautionary statements made in this prospectus should be
read and understood as being applicable to all related forward-looking
statements wherever they appear in this prospectus.
10
<PAGE>
USE OF PROCEEDS
All net proceeds from the sale of our common stock will go to the selling
stockholders who offer and sell their shares. Accordingly, we will not
receive any proceeds from the selling stockholders' sale of their common
stock.
DIVIDEND POLICY
We have not declared or paid dividends on our common stock in the past
and do not intend to declare or pay such dividends in the foreseeable future.
Our current long-term debt agreement prohibits the payment of cash dividends
without obtaining advance written approval from the lender.
SELLING STOCKHOLDERS
The table below lists the selling stockholders and other information
regarding the beneficial ownership of the common stock by each of the selling
stockholders. The second column of the table lists, as of May 26, 1999, the
number of each selling stockholder's shares of common stock (based on its
ownership of common stock, series A preferred stock, series B preferred stock
and/or warrants) which is owned by each selling stockholder or would be
issuable to the selling stockholder on May 27, 1999 upon conversion or
exercise of all of such securities then held by such selling stockholder and
then eligible to be converted. The third column of the table lists each
selling stockholder's portion of the 4,258,137 shares of common stock being
registered hereby. The total of 4,258,137 shares of common stock shown in the
third column of the table includes 200% of the shares that would have been
issuable to KA Investments LDC upon eventual conversion of all of its series B
preferred stock. The fourth column assumes the sale of all of the shares
offered by each selling stockholder.
Since the number of shares of common stock issuable upon eventual
conversion of the series B preferred stock and in payment of dividends
accruing thereon depends in part upon the market price of the common stock
prior to a conversion, the actual number of shares of common stock that will
then be issuable in respect of such conversions or dividend payments, and
consequently the number of shares of common stock that will then be
beneficially owned by KA Investments LDC, will fluctuate daily. Each share of
series A preferred stock is convertible into one share of common stock.
Pursuant to the certificate of designation for the series B preferred
stock, KA Investments LDC cannot convert series B preferred stock or receive
shares of common stock in payment of dividends thereon to the extent such
conversion or receipt of dividend payments would cause KA Investments LDC's
beneficial ownership of the common stock (other than shares deemed
beneficially owned through ownership of unconverted shares of the series B
preferred stock) to exceed 4.999% of the then issued and outstanding shares of
common stock. The certificate of designation for the series B preferred stock
further provides that KA Investments LDC cannot convert any series B preferred
stock or receive any shares of common stock in payment of dividends thereon on
or before July 27, 1999. Thereafter, KA Investments LDC may convert up to 25%
of the series B preferred stock on or after July 28, 1999, up to 50% of the
series B preferred stock, on a cumulative basis, on or after August 28, 1999,
up to 75% of the series B preferred stock, on a cumulative basis, on or after
September 28, 1999, and up to all of the series B preferred stock, on a
cumulative basis, on or after October 28, 1999.
11
<PAGE>
The information provided in the table below has been obtained from the
selling stockholders. The selling stockholders may sell all, some or none of
their shares in this offering. See "Plan of Distribution."
<TABLE>
<CAPTION>
Number of Shares Shares Beneficially
Names Beneficially Maximum Number Owned After Offering
of Selling Owned Prior to of Shares Being ---------------------------------
Stockholders Offering Offered Number Percent
- ------------------------- ------------------------ ------------------------- -------------- ---------------
<S> <C> <C> <C> <C>
KA Investments LDC 195,000(1) 3,217,137(2) 0 *
Silicon Graphics, Inc. 3,456,894(3) 500,000 2,956,894 23%
Brighton Capital, Ltd. 30,000(4) 30,000 0 *
FSC Corp. 211,000(5) 211,000 0 *
S3 Incorporated 300,000(6) 300,000 0 *
________________
</TABLE>
* Less than one percent of the outstanding shares of common stock.
(1) Includes 195,000 shares of common stock for KA Investments LDC ("KAI")
(based on ownership of a Common Stock Purchase Warrant (the "KAI Warrant"))
which would be issuable to KAI on May 26, 1999 upon the exercise of the
of the KAI Warrant for the right to purchase up to 195,000 shares of common
stock at an exercise price of $3.45 per share. Does not include 1,422,273
shares of common stock (based on its ownership of series B preferred
stock) which would otherwise be issuable on May 26, 1999 to KAI upon
conversion of all of the series B preferred stock held by KAI at a
conversion price of $2.1093 (which represents 88% of the average of the ten
lowest per share market values during the period of 30 consecutive trading
days prior to and including May 26, 1999), because under the series B
preferred stock certificate of designation, KAI cannot convert series B
preferred stock or receive shares of common stock in payment of dividends
thereon (i) on or before July 26, 1999, or (ii) in excess of the 4.999% of
the then issued and outstanding shares of common stock.
(2) 3,022,137 of the 3,217,137 shares of common stock listed represent 200% of
the shares which would be issuable to KAI upon eventual conversion of all
of the series B preferred stock, including 177,591 shares of common stock
issuable as payment for dividends that will accrue for a period of three
(3) years following the date of issuance of the series B preferred stock,
assuming all dividends are paid in shares of common stock. Also includes
195,000 shares of common stock issuable upon exercise of the KAI Warrant.
Since the number of shares of common stock issuable upon conversion of the
series B preferred stock and in payment of dividends thereon depends in
part upon the market price of the common stock prior to a conversion, the
actual number of shares of common stock that will be issuable in respect of
such conversions or dividend payments and, consequently, offered for sale
under this prospectus, cannot be determined at this time. However, the
Company has contractually agreed to include herein 200% of the shares of
common stock issuable upon conversion of the series B preferred stock as if
all of such shares were convertible as of April 29, 1999.
(3) Includes (i) 662,000 shares of common stock directly owned by Silicon
Graphics, Inc. ("SGI") (ii) 2,500,894 shares of common stock for SGI (based
on its ownership of series A preferred stock) which would be issuable to
SGI on May 26, 1999 upon conversion of the series A preferred stock held by
SGI, and (iii) 294,000 shares of common stock for SGI (based on ownership
of a Series A Convertible Preferred Stock Purchase Warrant (the "SGI
Warrant")) which would be issuable to SGI on May 26, 1999 upon conversion
of the series A preferred stock which would be issuable to SGI upon
exercise of the SGI Warrant which entitles SGI to purchase up to the number
of shares of series A preferred stock that is convertible into 3% of the
Company's issued and outstanding common stock calculated on a fully diluted
basis, excluding the series A preferred stock, shares of common stock
issued upon conversion of the series A preferred stock and any warrants or
options that are not "in the money". The exercise price under the
SGI Warrant is $2.75 per share of series A preferred stock.
(4) Includes 30,000 shares of common stock for Brighton Capital, Ltd.
("Brighton") (based on ownership of a Common Stock Purchase Warrant (the
"Brighton Warrant")) which would be issuable to Brighton on May 26, 1999
upon the exercise of the Brighton Warrant, which entitles Brighton the
right to purchase up to 30,000 shares of common stock at an exercise price
of $3.45 per share.
(5) Includes 211,000 shares of common stock for FSC Corp. ("FSC") (based on
ownership of a Common Stock Purchase Warrant (the "FSC Warrant")) which
would be issuable to FSC on May 26, 1999 upon the exercise of the
FSC Warrant, which entitles FSC the right to purchase up to 211,000
shares of common stock at an exercise price of $2.86 per share.
(6) Includes 300,000 shares of common stock for S3 Incorporated ("S3") (based
on ownership of a Common Stock Purchase Warrant (the "S3 Warrant")) which
would be issuable to S3 on May 26, 1999 upon the exercise of the S3
Warrant, which entitles S3 to purchase up to 300,000 shares of common stock
at an exercise price of $2.49 per share.
12
<PAGE>
PLAN OF DISTRIBUTION
KA Investments LDC is offering shares of common stock, $.01 par value per
share, which are issuable to it upon conversion of the series B convertible
preferred stock, $.01 par value per share (and the payment of dividends
thereon in shares of common stock), and exercise of a common stock purchase
warrant, both of which were acquired from us in a private placement
transaction, pursuant to a Convertible Preferred Stock Purchase Agreement,
dated as of March 31, 1999. This prospectus covers the resale by KA
Investments LDC of up to 3,217,137 shares of common stock issuable upon
conversion of the series B preferred stock (and payment of dividends thereon)
and exercise of its common stock purchase warrant.
Silicon Graphics, Inc. is offering shares of common stock, which are
issuable to it upon conversion of a portion of the series A convertible
preferred stock, $.01 par value per share, it acquired from us upon conversion
of a secured subordinated convertible promissory note, pursuant to a
Securities Purchase Agreement, dated as of May 7, 1998. This prospectus
covers the resale by Silicon Graphics, Inc. of up to 500,000 acquired shares
of common stock.
Brighton Capital Ltd. is offering shares of common stock, which are
issuable to it upon exercise of a common stock purchase warrant dated March
31, 1999 it acquired from us in consideration for consulting services provided
to us in connection with the issuance of the series B convertible preferred
stock to KAI. This prospectus covers the resale by Brighton Capital Ltd. of
up to 30,000 shares of common stock.
FSC Corp. is offering shares of common stock, which are issuable to it
upon exercise of a common stock purchase warrant dated March 31, 1999 it
acquired from us pursuant to a Loan and Securities Agreement dated March 31,
1999 by and between us and BankBoston, N.A., of which FSC Corp. is an
affiliate. This prospectus covers the resale by FSC Corp. of up to 211,000
shares of common stock.
S3 Incorporated is offering shares of common stock, which are issuable to
it upon exercise of a common stock purchase warrant dated April 26, 1999 it
acquired from us in conjunction with the successful partnership effort
between us and S3 Incorporated relating to a design award on a major OEM.
This prospectus covers the resale by S3 Incorporated of up to 300,000
acquired shares of common stock.
In addition to covering the resale of the above mentioned shares of
common stock, this prospectus covers an indeterminate number of additional
shares as may from time to time become issuable upon conversion of the series
A and series B preferred stock or upon exercise of the four common stock
purchase warrants by reason of stock splits, stock dividends and other similar
transactions, but does not cover an indeterminate number of shares of common
stock based on the conversion formulae of the series A and series B preferred
stock.
In accordance with the registration rights granted to each selling
stockholder, we agreed to register their shares under the Securities Act of
1933, and we have filed a Registration Statement on Form S-3 with the SEC.
The Registration Statement covers the resale of the common stock from time to
time on the Nasdaq National Market or in privately-negotiated transactions.
This prospectus forms a part of the Registration Statement. We have also
agreed to prepare and file such amendments and supplements to the Registration
Statement as may be necessary to keep such Registration Statement effective
until no longer required for the selling stockholders to sell their
shares.
The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading
13
<PAGE>
facility on which the shares are traded or in private transactions. These
sales may be at fixed or negotiated prices. The selling stockholders may use
any one or more of the following methods when selling shares:
. ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers,
. block trades in which the broker-dealer 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-dealer as principal and resale by the broker-
dealer for its account,
. an exchange distribution in accordance with the rules of the
applicable exchange,
. privately negotiated transactions,
. short sales,
. broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share,
. a combination of any such methods of sale, and
. any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.
The selling stockholders may pledge their shares to their brokers under
the margin provisions of customer agreements. If a selling stockholder
defaults on a margin loan, the broker may, from time to time, offer and sell
the pledged shares.
Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-
dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. The selling stockholders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act of 1933.
We are required to pay all fees and expenses incident to the registration
of the shares, including fees and disbursements of counsel to the selling
stockholders. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under
the Securities Act of 1933.
In order to comply with the securities laws of certain states, the shares
must be offered or sold only through registered or licensed brokers or
dealers. In addition, in certain states, the shares may not be offered or
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 the Securities Exchange Act of 1934, any person engaged in the
distribution of the shares may not simultaneously engage in market-making
activities with respect to the common stock for five business days prior to
the start of the distribution. In addition, each selling stockholder and any
other person participating in a distribution will be subject to the Securities
and Exchange Act of 1934, which may limit the timing of purchases and sales of
common stock by the selling stockholder or any such other person. These
factors may affect the marketability of the common stock and the ability of
brokers or dealers to engage in market-making activities.
14
<PAGE>
These shares were originally issued to the selling stockholders pursuant
to an exemption from the registration requirements under Sections 4(2) or
3(a)(9) of the Securities Act of 1933 or otherwise.
LEGAL MATTERS
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. of Boston,
Massachusetts, will deliver its opinion that the shares of common stock
offered in this prospectus have been validly issued and are fully paid and
non-assessable.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended January 2,
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.
15
<PAGE>
<TABLE>
<S> <C>
You should rely only on the Number Nine
information contained in this Visual Technology
prospectus. We have not Corporation
authorized anyone to provide you
with information different from 4,258,137 shares of
that contained in this prospectus. Common Stock
The selling stockholders are
offering to sell and seeking -----------------------
offers to buy shares of our common PROSPECTUS
stock only in jurisdictions where -----------------------
offers and sales are permitted.
The information contained in this
prospectus is accurate only as of
May 27, 1999. You should
not assume that this prospectus is
accurate as of any other date.
TABLE OF CONTENTS
Page
----
Prospectus Summary......................... 2
Risk Factors............................... 3
Where to Find More Information............. 9
Incorporation of Documents by Reference.... 10
Forward Looking Statements................. 10
Use of Proceeds............................ 11
Dividend Policy............................ 11
Selling Stockholders....................... 11
Plan of Distribution....................... 14
Legal Matters.............................. 16
Experts.................................... 16
________, 1999
=====================================================
</TABLE>
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the Company's estimates (other than the
SEC and Nasdaq registration fees) of the expenses in connection with the
issuance and distribution of the shares of common stock being registered.
None of the following expenses are being paid by the selling stockholders.
<TABLE>
<CAPTION>
Item Amount
- ----- --------
<S> <C>
SEC registration fee............................. $ 2,940.94
Nasdaq listing fee............................... 47,220.00
Legal fees and expenses.......................... 12,000.00
Accounting fees and expenses..................... 10,000.00
Miscellaneous fees and expenses.................. 839.06
--------------
Total............................................ $73,000.00
--------------
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 145(a) of the General Corporation Law of the State of Delaware
provides that a Delaware corporation may 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 or enterprise,
against expenses, 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 cause to believe his conduct was
unlawful.
Section 145(b) provides that a Delaware corporation may 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 or in the 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
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted under similar standards, except
that no indemnification may be made in respect of 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 in which such action
or suit was brought shall determine that despite the adjudication of
liability, such person is fairly and reasonably entitled to be indemnified for
such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of
a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of
any other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him or
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 such Section 145.
The Restated Certificate of Incorporation and Restated By-laws of the
Company provide for indemnification of the Company's directors and officers to
the fullest extent permitted by law. The Restated By-laws also permit the
Board of Directors to authorize the Company to purchase and maintain insurance
against
2
<PAGE>
any liability asserted against any director, officer, employee or agent of the
Company arising out of his capacity as such. Insofar as indemnification for
liabilities under the Securities Act may be permitted to directors, officers,
or controlling persons of the Company pursuant to the Company's Restated
Certificate of Incorporation, its Restated By-laws and the Delaware General
Corporation Law, the Company has been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in such
Act and is therefore unenforceable.
As permitted by Section 102(b)(7) of the Delaware General Corporation
Law, the Company's Restated Certificate of Incorporation provides that
directors of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to
the Company 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 Delaware General Corporation Law, relating to
prohibited dividends or distributions or the repurchase or redemption of stock
or (iv) for any transaction from which the director derives an improper
personal benefit. As a result of this provision, the Company and its
stockholders may be unable to obtain monetary damages from a director for
breach of his or her duty of care.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits.
4.1 Restated Certificate of Incorporation of the Company (Filed as
an Exhibit to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 filed with the Securities and
Exchange Commission on August 15, 1995 and incorporated herein
by reference)
4.2 Restated By-laws of the Company, as amended (Filed as an
Exhibit to the Quarterly Report on Form 10-Q for the quarter
ended April 3, 1999 filed with the Securities and Exchange
Commission on May 18, 1999 and incorporated herein by
reference)
4.3 Certificate of Designation, Preferences and Rights of Series A
Convertible Preferred Stock. (Filed as an Exhibit to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 1999 filed with the Securities and Exchange
Commission on April 2, 1999 and incorporated herein by
reference)
4.4 Certificate of Designation, Preferences and Rights of the
Series B Convertible Preferred Stock and Certificate of
Correction to the Certificate of Designation, Preferences and
Rights of the Series B Convertible Preferred Stock. (Filed as
an Exhibit to the Registrant's Current Report on Form 8-K for
the March 31, 1999 event filed with the Securities and
Exchange Commission on April 12, 1999 and incorporated
herein by reference)
5.1* Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
regarding legality
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5.1)
24.1* Power of Attorney (included on signature page)
_________________________________
*Previously filed with the Securities and Exchange Commission on
April 30, 1999.
3
<PAGE>
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(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 the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or any
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
derivation from the low end or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering price set
forth the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration
4
<PAGE>
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.
(d) The undersigned Registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus,
to deliver, or cause to be delivered to each person to whom the prospectus is
sent or given, the latest quarterly report that is specifically incorporated
by reference in the prospectus to provide such interim financial information.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Pre-Effective Amendment No. 1 to its
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Lexington and Commonwealth of
Massachusetts on the 28th day of May, 1999.
NUMBER NINE VISUAL TECHNOLOGY CORPORATION
By: /s/Timothy J. Burns
-----------------------
Timothy J. Burns
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment No. 1 to its Registration Statement has been signed below
by the following persons and in the capacities indicated on the 28th day of
May, 1999.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ------
<S> <C> <C>
/s/ Wallace E. Smith Chief Executive Officer May 28, 1999
- ----------------------------------- (Principal Executive Officer)
Wallace E. Smith
*_________________________________ Chief Operating Officer May 28, 1999
William Ralph
/s/ Timothy J. Burns Chief Financial Officer May 28, 1999
- ----------------------------------- (Principal Financial and Accounting
Timothy J. Burns Officer)
*__________________________________ Chief Executive Officer and Director May 28, 1999
William H. Thalheimer
*__________________________________ Director May 28, 1999
Stanley W. Bialek
*----------------------------------- Director May 28, 1999
Dr. Fouad H. Nader
</TABLE>
*By executing his name hereto, Timothy J. Burns is signing this document on
behalf of the persons indicated above pursuant to powers of attorney duly
executed by such persons and filed with the Securities and Exchange
Commission.
By: /s/ Timothy J. Burns
-----------------------
Timothy J. Burns
Attorney-in-Fact
6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
------ -------
4.1 Restated Certificate of Incorporation of the Company (Filed as
an Exhibit to the Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 filed with the Securities and
Exchange Commission on August 15, 1995 and incorporated herein
by reference.)
4.2 Restated By-laws of the Company, as amended (Filed as an
Exhibit to the Quarterly Report on Form 10-Q for the quarter
ended April 3, 1999 filed with the Securities and Exchange
Commission on May 18, 1999 and incorporated herein by
reference.)
4.3 Certificate of Designation, Preferences and Rights of Series A
Convertible Preferred Stock. (Filed as an Exhibit to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 1999 filed with the Securities and Exchange
Commission on April 2, 1999 and incorporated herein by
reference.)
4.4 Certificate of Designation, Preferences and Rights of the
Series B Convertible Preferred Stock and Certificate of
Correction to the Certificate of Designation, Preferences and
Rights of the Series B Convertible Preferred Stock. (Filed as
an Exhibit to the Registrant's Current Report on Form 8-K for
the March 31, 1999 event filed with the Securities and
Exchange Commission on April 12, 1999 and incorporated herein
by reference)
5.1* Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
regarding legality
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5.1)
24.1* Power of Attorney (included on signature page)
- ---------------------------------
* Previously filed with the Securities and Exchange Commission on April 30,
1999.
7
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated march 31, 1999 relating to the
financial statements, which appears in the 1998 Annual Report to Shareholders
of Number Nine Visual Technology Corporation, which is incorporated by
reference in Number Nine Visual Technology Corporation's Annual Report on Form
10-K for the year ended January 2, 1999. we also consent to the references to
us under the heading "Experts" in such Registration Statement.
/S/ PRICE WATERHOUSE COOPERS LLP
--------------------------------------
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
May 27, 1999
