<PAGE>
As filed with the Securities and Exchange Commission on April 24, 1998.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CAM Designs Inc.
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(Exact name of registrant as specified in its charter)
Delaware 75-2257039
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
Birmingham Road, Allesley,
Coventry, United Kingdom CV59QE
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(Address of Principal Executive Offices) (Zip Code)
Edward I. Tishelman
c/o Hartman & Craven LLP
460 Park Avenue
New York, New York 10022
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(Name and address of agent for service)
(212) 753-7500
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(Telephone number, including area code, of agent for service)
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Copy to:
Edward I. Tishelman, Esq.
Hartman & Craven LLP
460 Park Avenue
New York, New York 10022
(212) 753-7500
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment Plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment Plans, 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. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Proposed
Title of each class maximum Proposed
of offering maximum
securities price aggregate Amount of
to be Amount to be per offering registration
registered registered share (1) price (2) fee
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Class A Common
Stock,par value
$.001 per share,
issuable upon
conversion of
Series A
Convertible
Preferred Stock 954,000 shares(2) $3.00 $2,862,000 $844.29
Class A Common
Stock, par value
$.001 per share,
issuable upon
exercise of
outstanding
warrants 56,000 shares $3.00 $168,000 $49.56
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of
1933, on the basis of the average of the high and low sale prices
reported on the Nasdaq SmallCap Market on April 22, 1998.
(2) For purposes of estimating the number of shares of the Company's Class
A Common Stock, par value $.001 per share ("Common Stock"), to be
included in this Registration Statement, the Company calculated 200% of
the number of shares of Common Stock issuable upon the conversion at
maturity of 800 shares of the Company's Series A Convertible Preferred
Stock, par value $.001 per share (the "Series A Stock"), or otherwise
pursuant to the Certificate of Designations, Preferences and Rights of
the Series A Stock, based on a conversion price of $2.75 per share in
accordance with Rule 416 of the Securities Act of 1933, as amended
("Rule 416"). Pursuant to Rule 416, the number of shares of Common
Stock to be registered hereunder also includes an indeterminate number
of shares which may become issuable upon conversion of or otherwise
with respect to the Series A Stock to prevent dilution resulting from
stock splits, stock dividends or similar transactions or by reason of
reductions in the conversion price of the Series A Stock in accordance
with the terms thereof.
<PAGE>
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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<PAGE>
Subject to completion, dated April 24, 1998
PROSPECTUS
1,010,000 SHARES OF
CLASS A COMMON STOCK
This Prospectus relates to the offer and sale from time to time of up to
1,010,000 shares (the "Shares") of Class A Common Stock, par value $.001 per
share ("Common Stock"), of CAM Designs Inc. (the "Company"), by the Selling
Stockholders named herein (the "Selling Stockholders"), or by their respective
pledgees, donees, transferees or other successors in interest that receive such
Shares as a gift, partnership distribution or other non-sale related transfer.
Of the 1,010,000 Shares being offered hereby: (i) 954,000 Shares are issuable
upon conversion of or otherwise with respect to 800 shares of the Company's
Series A Convertible Preferred Stock, par value $.001 per share ("Series A
Stock"), held by the Selling Stockholders; and (ii) 56,000 Shares are issuable
upon the exercise of certain warrants (the "Warrants") held by the Selling
Stockholders. The Series A Stock and the Warrants were issued by the Company to
the Selling Stockholders on March 31, 1998 in a private transaction (the "1998
Private Placement").
The number of Shares indicated as being issuable upon conversion of or
otherwise with respect to the Series A Stock and offered hereby represents an
estimate of the number of shares of Common Stock issuable upon conversion of or
otherwise with respect to the Series A Stock, based on 200% of the number of
shares of Common Stock issuable at a conversion price of $2.75 per share in
accordance with Rule 416 ("Rule 416") of the Securities Act of 1933, as amended
(the "Securities Act"), and in certain other events described in the Certificate
of Designations, Preferences and Rights of the Series A Stock (the "Certificate
of Designation"). Pursuant to Rule 416, the number of shares of Common Stock
underlying the Series A Stock and offered for sale hereby includes an
indeterminate number of shares as may be issued or issuable upon conversion of
or otherwise with respect to the Series A Stock by reason of the floating rate
conversion price mechanism and other adjustment mechanisms described in the
Certificate of Designation, or by reason of any stock splits, stock dividends or
similar transactions involving the Common Stock, in order to prevent dilution.
Although the Company will receive the exercise price of any Warrants which are
exercised, the Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. The expenses of registration of the Shares
which may be offered hereby under the Securities Act will be paid by the
Company.
The Shares covered under the Registration Statement of which this Prospectus
is a part may be offered for sale from time to time by or for the account of the
Selling Stockholders, or their pledgees, donees, transferees or other successors
in interest, in the open market, on the Nasdaq SmallCap Market or on one or more
exchanges on which the Shares are then listed, in privately negotiated
transactions, in an underwritten offering, in a combination of such methods, or
by any other legally available means, at market prices prevailing at the time of
such sale, at prices related
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to such prevailing market prices, at negotiated prices or at fixed prices. The
Shares are intended to be sold through one or more broker-dealers or directly
to purchasers. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders, their
successors in interest and/or the purchasers of the Shares for whom such
broker-dealers may act as agent or to whom they may sell as principal, or both
(which compensation as to a particular broker-dealer may be in excess of
customary commissions). The Selling Stockholders, their successors in interest
and/or any broker-dealers acting in connection with the sale of the Shares
hereunder may be deemed to be underwriters within the meaning of Section 2(11)
of the Securities Act, and any commissions or other compensation received by
them and any profits realized by them on the resale of the Shares as
principals may be deemed underwriting compensation under the Securities Act.
See "SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION."
The Common Stock of the Company is traded on the Nasdaq SmallCap Market
under the symbol CMDA. On April 22, 1998, the closing sales price of the
Company's Common Stock as reported on the Nasdaq SmallCap Market was $3.00.
ANY INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK. SEE "INVESTMENT CONSIDERATIONS AND RISK FACTORS" COMMENCING ON PAGE 3
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _____________, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
DC 20549 and at the following Regional Offices of the Commission: 7 World Trade
Center, New York, New York 10048; and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, DC 20549, at prescribed rates. The Commission maintains an Internet
web site at http://www.sec.gov/ that contains such reports, proxy statements and
other information.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Common Stock offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all the information set forth in
the Registration Statement and the exhibits thereto and to which reference is
hereby made.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated by reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K for the year ended May 31,
1997;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
August 31, 1997, November 30, 1997 and February 28, 1998 and Quarterly Report on
Form 10-Q/A for the quarter ended February 28, 1998;
(3) the Company's Current Reports on Form 8-K filed on February 2, February
27 and April 15, 1998 and Current Report on Form 8-K/A filed on April 23,
1998; and
(4) the description of the Company's Common Stock contained in the Company's
registration statement on Form 8-A filed on June 12, 1995, including any
amendment or report filed for the purposes of updating such description.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the
<PAGE>
offering of the Common Stock shall be deemed to be incorporated by reference in
this Prospectus and to be part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
A copy of the documents incorporated by reference (other than exhibits
thereto) will be forwarded without charge to each person to whom this prospectus
is delivered, upon such person's written or oral request to CAM Designs Inc.,
Att: Secretary, Birmingham Road, Allesley, Coventry, CV59QE, United Kingdom,
telephone number 011-44-1-203-407-700.
FORWARD-LOOKING STATEMENTS
This Prospectus contains, or incorporates by reference, certain statements
that may be deemed "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. All statements,
other than statements of historical facts, that address activities, events or
developments that the Company intends, expects, projects, believes or
anticipates will or may occur in the future are forward-looking statements. Such
statements are based on certain assumptions and assessments made by management
of the Company in light of its experience and its perception of historical
trends, current conditions, expected future developments and other factors it
believes to be appropriate. The forward-looking statements included in this
Prospectus are also subject to a number of material risks and uncertainties,
including but not limited to economic, competitive, governmental and
technological factors affecting the Company's operations, markets, services and
prices, and other factors discussed in the Company's filings under the
Securities Act and the Exchange Act. Prospective investors are cautioned that
such forward-looking statements are not guarantees of future performance and
that actual results, developments and business decisions may differ from those
envisaged by such forward-looking statements.
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<PAGE>
INVESTMENT CONSIDERATIONS
AND RISK FACTORS
Potential Need for Additional Funding of Operating and Capital Requirements
The Company's currently anticipated levels of revenue and cash flow are
subject to many uncertainties and cannot be assured. Further, the Company's
business plan may change, or unforeseen events may occur, requiring the Company
to raise additional funds. The amount of funds required by the Company will
depend on many factors, including the extent and timing of performance of
pending and future contracts, the timing and costs associated with the
restructuring of the Company's development and engineering, marketing and
customer support capabilities and the Company's operating results. There can be
no assurance that, if and when needed, additional financing will be available,
or available on acceptable terms. The inability to obtain additional financing
or generate sufficient cash from operations could require the Company to reduce
or eliminate expenditures for research and development, marketing of its
services, or otherwise to curtail or discontinue its operations, which could
have a material adverse effect on the Company's business, financial condition
and results of operations.
Risk of Delisting from NASDAQ Stock Market
On March 26, 1998, the Company's Common Stock was delisted from the Nasdaq
National Market ("NMS") due to the Company's failure to meet the maintenance
criteria for the NMS and became listed for trading on the Nasdaq SmallCap Market
(the "SmallCap Market"). The SmallCap listing was subject to the Company's (i)
attaining a minimum in net tangible assets of $3,000,000 as reflected in a
public filing with the SEC on or before April 27, 1998 and (ii) the filing of a
Transfer Listing Application with the SmallCap Market. On April 15, 1998, the
Company filed an 8-K Report containing a balance sheet reflecting such minimum
in net tangible assets. On April 21, 1998, the Company filed the Transfer
Listing Application. There are no assurances, however, that the Company's Common
Stock will continue to meet listing requirements allowing its securities to be
included in such market, or that an active market for such stock will exist. The
failure to meet the listing requirements for the SmallCap Market could result in
the Company's Common Stock being delisted from the NASDAQ Stock Market
("NASDAQ") altogether if the Company failed to meet the Nasdaq SmallCap Market
listing criteria. If the Common Stock is delisted from trading on NASDAQ, then
trading would thereafter be conducted in the over-the-counter market in the
so-called "pink sheets" or the "Electronic Bulletin Board" of the National
Association of Securities Dealers, Inc., and consequently, an investor will
likely find it more difficult to dispose of, or to obtain accurate quotations as
to the price of, the Common Stock.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. Regulations promulgated by the
Commission generally define a penny stock to
3
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be an equity security that has a market price of less than $5.00 per share,
subject to certain exceptions. Such exceptions include any equity security
listed on NASDAQ or a national securities exchange and any equity security
issued by an issuer that has (i) net tangible assets of at least $2,000,000,
if such issuer has been in continuous operation for three years, (ii) net
tangible assets of at least $5,000,000, if such issuer has been in continuous
operation for less than three years or (iii) average annual revenue of at
least $6,000,000, if such issuer has been in continuous operation for less
than three years. Unless an exception is available, the regulations require
the delivery, prior to any transaction involving a penny stock, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith.
In addition, if the Common Stock is not quoted on NASDAQ, or if the Company
does not meet the other exceptions to the penny stock regulations cited above,
trading in the Common Stock would be covered by Rule 15g-9 promulgated under the
Exchange Act for non-NASDAQ and non-national securities exchange listed
securities. Under such rule, broker/dealers who recommend such securities to
persons other than established customers and accredited investors must make a
special written suitability determination for the purchaser and receive the
purchaser's written agreement to a transaction prior to sale. Securities also
are exempt from this rule if the market price is at least $5.00 per share.
If the Common Stock becomes subject to the regulations applicable to penny
stocks, the market liquidity for the Common Stock could be adversely affected.
In such event, the regulations on penny stocks could limit the ability of
broker/dealers to sell the Common Stock and thus the ability of purchasers of
the Common Stock to sell their securities in the secondary market.
History of Recent Losses
For the nine months ended February 28, 1998, the Company reported a net loss
after tax recoveries of approximately $1,048,000. The greater part of this loss
was occasioned by a fixed price contract with Rolls Royce which has since been
completed but other contributing factors were losses under a second completed
contract and costs incurred in consolidating and restructuring operations to
eliminate lower margin functions. While management of the Company is optimistic
about prospects for future operations, there can be no assurance that the
Company will not encounter further losses requiring additional equity or debt
funding. If such equity funding is available, it will undoubtedly result in
further dilution to existing holders of the Company's Common Stock.
General Business Risks
The Company's operations are subject to a variety of risks, both general to
the economy and specific to its own operations. Among general risks in the
industry are the cyclical nature of the automotive industry and the intense
competition among car makers within Western Europe, the U.S. and the Far Eastern
Rim. Risks specific to the Company include the dependence on a small number of
executive personnel, the potential need for additional capital, and the risks
inherent in
4
<PAGE>
international operations.
Risk of Non-payment of Dividends
The Company has not paid a dividend on its Common Stock since the dividend
paid for the period ending April 1, 1997, which was at the annual rate of $.05
per share.
Potential for Dilution
As of April 24, 1998, 800 shares of the Series A Stock were issued and
outstanding. Each share of Series A Stock is convertible into such number of
shares of Common Stock as is determined by dividing the stated value ($1,000) of
each share of Series A Stock (as such value is increased by an annual premium of
7%) by the then current conversion price of the Series A Stock (which is
determined, generally, by reference to 80% of the average of the two (2) lowest
sales prices of the Common Stock during the thirty consecutive trading days
immediately preceding the date of determination). Based on a conversion price of
$2.75 per share for the stated value of the Series A Stock in accordance with
Rule 416, the Series A Stock would be convertible into approximately 352,000
shares of Common Stock at maturity. The number of shares issuable upon
conversion may be less than or greater than this number, depending upon: (a) the
market price of the Common Stock at the time of conversion, (b) the Company's
ability to maintain its NASDAQ listing; and (c) the Company's ability to obtain
shareholder approval for the issuance of Common Stock upon the conversion of the
Series A Stock and the exercise of the Warrants. In the event of a decrease in
the trading price of the Common Stock, holders of the Common Stock could
experience commensurately greater dilution upon conversion of the Series A
Stock. The shares of Common Stock into which the Series A Stock may be converted
are being registered pursuant to the Registration Statement of which this
Prospectus is a part. The Registration Statement of which this Prospectus is a
part also pertains to an additional 250,000 shares issuable under the terms of
the Certificate of Designation in the event of certain failures by the Company
to comply with the various provisions thereof.
Common Stock Eligible for Future Sale
Future sales of shares of Common Stock by existing stockholders under Rule
144 of the Securities Act or through the exercise of outstanding registration
rights, or the issuance of shares of Common Stock upon conversion of the Series
A Stock, exercise of the Warrants, and/or exercise of options or other warrants
to purchase Common Stock could materially adversely affect the market price of
the Common Stock and could materially impair the Company's future ability to
raise capital through an offering of equity securities. A substantial number of
shares of Common Stock are available for sale under Rule 144 in the public
market and no predictions can be made as to the effect, if any, that market
sales of such shares or the availability of such shares for future sale will
have on the market price of the Common Stock prevailing from time to time.
5
<PAGE>
THE COMPANY
The Company consists of a group of United Kingdom-based entities ("CAM UK")
organized between 1979 and 1988 to conduct business in the fields of automotive
and aerospace design and engineering and the placement of temporary personnel
engaged in automotive design and engineering activities. On September 9, 1994,
the Company was organized in the United States under the laws of the State of
Delaware for the purpose of acting as a holding company for the United
Kingdom-based operations, for examining potential expansion of business
activities into the United States, and for securing additional financing for the
enterprise as a whole, as well as eliminating the preferred shares outstanding
in CAM UK.
The Company's principal business activity is product development within the
automotive and aerospace markets. Product development encompasses such
pre-production disciplines as design/styling, engineering, tooling and
prototyping. The largest market sector is automotive design which, during the
fiscal year ended May 31, 1997, accounted for approximately 74% of the Company's
sales, with aerospace activities accounting for approximately 14.7% and
placement and recruitment activities the remaining 12% balance.
The Company intends to expand its facilities and capabilities to penetrate
further what it considers to be the high added value niche markets in the
automotive and aerospace industries for its services. In that connection, it
intends to aggressively explore and develop the potential for business
activities in the United States and the Asian markets. Any resultant business
from these sources are expected by the Company to continue to be performed at
its facilities in the United Kingdom until such future date as overseas business
generation may warrant the opening of a facility in the United States or
elsewhere. There can be no assurance, however, that the Company will be
successful in its attempt to expand and develop the foregoing markets.
The principal executive offices of the Company are located at Birmingham
Road, Allesley, Coventry CV59QE, United Kingdom. The telephone number is
011-44-1-203-407-700.
SELLING STOCKHOLDERS
The Shares being offered for resale by the Selling Stockholders were
acquired in connection with the 1998 Private Placement and consist of the shares
of Common Stock issuable upon the conversion of or otherwise with respect to the
Series A Stock and upon exercise of the Warrants. In connection with the 1998
Private Placement, the Company granted the Selling Stockholders certain
registration rights pursuant to which the Company agreed to keep the
Registration Statement, of which this Prospectus is a part, effective until the
date that all of such Shares have been sold pursuant to the Registration
Statement. The Company has agreed to indemnify the Selling Stockholders and each
of their officers, directors, members, employees, partners, agents and each
person who controls any of the Selling Stockholders against certain expenses,
claims, losses, damages and liabilities (or action, proceeding or inquiry by
regulatory or self-regulatory organization in respect thereof). The Company has
agreed to pay its expenses of registering the Shares under the Securities Act,
including registration and filing fees, blue sky expenses of registering the
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Shares under the Securities Act, including registration and filing fees, blue
sky expenses, printing expenses, accounting fees, administrative expenses and
its own counsel fees.
The following table sets forth the name of each Selling Stockholder, the
number of shares of Common Stock beneficially owned by such Selling Stockholder
as of April 24, 1998 and the number of Shares being offered by each Selling
Stockholder. The Shares being offered hereby are being registered to permit
public secondary trading, and the Selling Stockholders may offer all or part of
the Shares for resale from time to time. However, such Selling Stockholders are
under no obligation to sell all or any portion of such Shares nor are such
Selling Stockholders obligated to sell any Shares immediately under this
Prospectus. All information with respect to share ownership has been furnished
by the Selling Stockholders. Because the Selling Stockholders may sell all or
part of their Shares, no estimates can be given as to the number of Shares that
will be held by any Selling Stockholder upon termination of any offering made
hereby. See "PLAN OF DISTRIBUTION."
In the case of the Shares underlying the Series A Stock, the number of
Shares owned and offered for sale hereby represents an estimate of the number of
shares of Common Stock issuable upon conversion of or otherwise with respect to
the Series A Stock, based on 200% of the number of shares of Common Stock
issuable at a conversion price of $2.75 in accordance with Rule 416 and in
certain other events described in the Certificate of Designation. Pursuant to
Rule 416 under the Securities Act, Selling Stockholders may also offer and sell
Shares issued with respect to the Series A Stock and/or the Warrants as a result
of (i) stock splits, stock dividends or similar transactions, (ii) the effect of
anti-dilution provisions contained in the Certificate of Designation of the
Series A Stock and in the Warrants and (iii) by reason of changes in the
conversion price of the Series A Stock in accordance with the terms thereof.
This is not intended to constitute a prediction as to the number of Shares into
which the Series A Stock will be converted and the Warrants will be exercised.
Shares Beneficially Shares to be Shares
Name of Selling Owned Prior to Sold in the Owned After
Stockholder the Offering (1) Offering the Offering(1)(2)
- ----------- ---------------- -------- ------------------
JNC Strategic 1,010,000(3) 1,010,000 0
Fund Ltd.
- ------------------
[footnotes on next page]
7
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(1) Except as set forth in footnote (3) below, beneficial ownership is
determined in accordance with Rule 13d-3 of the Exchange Act. The persons
named in the table above have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.
(2) Assumes all Shares offered hereby are sold in the Offering.
(3) In accordance with Rule 416, the number of shares of Common Stock set
forth in the table represents an estimate of the number of shares of
Common Stock to be offered by the Selling Stockholders, based on 200% of
the number of shares of Common Stock that would have been issuable upon
conversion of or otherwise with respect to the Series A Stock at a
conversion price of $2.75 per share in accordance with Rule 416 (704,000
shares). In addition, the Registration Statement also covers up to 250,000
shares that may become issuable upon certain events described in the
Certificate of Designation and 56,000 shares that may become issuable upon
the exercise of Warrants. The actual number of shares of Common Stock
issuable upon conversion of the Series A Stock is determined by a formula
based on the market price at the time of conversion, is therefore subject
to adjustment and could be materially less or more than such estimated
number depending on factors which cannot be predicted by the Company.
Specifically, at any given time, the Series A Stock is convertible into a
number of shares of Common Stock determined by dividing the sum of (a) the
stated value of the Series A Stock and (b) a premium amount equal 7% (on
an annualized basis) of the stated value of the Series A Stock, by the
then applicable conversion price (calculated generally as 80% of the
average of the two (2) lowest sale prices of the Common Stock during the
thirty consecutive trading days immediately preceding the date of
determination) subject to certain restrictions and adjustments. The Shares
offered hereby, and included in the Registration Statement of which this
Prospectus is a part, include such additional number of shares of Common
Stock as may be issued or issuable upon conversion of the Series A Stock
by reason of the floating rate conversion price mechanism or other
adjustment mechanisms described in the Certificate of Designation for the
Series A Stock, or by reason of any stock split, stock dividend or similar
transaction involving the Common Stock, in order to prevent dilution, in
accordance with Rule 416. Pursuant to the terms of the Series A Stock and
the Warrants, the shares of Series A Stock and the Warrants are
convertible or exercisable by any holder only to the extent that the
number of shares of Common Stock thereby issuable, together with the
number of shares of Common Stock owned by such holder and its affiliates
(but not including shares of Common Stock underlying unconverted shares of
Series A Stock or unexercised portions of the Warrants) would not exceed
4.99% of the then outstanding Common Stock as determined in accordance
with Section 13(d) of the Exchange Act. Accordingly, the number of Shares
set forth in the table for a Selling Stockholder may exceed the number of
Shares that such Selling Stockholder could own beneficially at any given
time through such Selling Stockholder's ownership of the Series Stock and
the Warrants. In that regard, beneficial ownership of such Selling
Stockholder set forth in the table is not determined in accordance with
Rule 13d-3 under the Exchange Act.
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USE OF PROCEEDS
All the Shares offered hereby are being offered for the account of the
Selling Stockholders. Accordingly, the Company will not receive any proceeds of
any sales made hereunder, but will receive the exercise price of any Warrants
exercised by the Selling Stockholders. Any proceeds received from the exercise
of Warrants will be used for working capital and general corporate purposes.
PLAN OF DISTRIBUTION
The Shares may be sold or distributed from time to time by the Selling
Stockholders or by pledgees, donees or transferees of, or successors in interest
to, the Selling Stockholders, directly to one or more purchasers (including
pledgees) or through brokers, dealers or underwriters who may act solely as
agents or may acquire Shares as principals, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices, at negotiated
prices or at fixed prices, which may be changed. The distribution of the Shares
may be effected in one or more of the following methods: (i) ordinary brokers
transactions, which may include long or short sales, (ii) transactions involving
cross or block trades or otherwise on the Nasdaq SmallCap Market, (iii) purchase
by brokers, dealers or underwriters as principal and resale by such purchasers
for their own accounts pursuant to this Prospectus, (iv) "at the market" to or
through market makers or into an existing market for the Common Stock, (v) in
other ways not involving market makers or established trading markets, including
direct sales to purchasers or sales effected through agents, (vi) through
transactions in options, swaps or other derivatives (whether exchange listed or
otherwise),or (vii) any combination of the foregoing, or by any other legally
available means. In addition, the Selling Stockholders or their successors in
interest may enter into hedging transactions with broker-dealers who may engage
in short sales of shares of Common Stock in the course of hedging the positions
they assume with the Selling Stockholders. The Selling Stockholders or their
successors in interest may also enter into option or other transactions with
broker-dealers that require that delivery by such broker-dealers of the Shares,
which Shares may be resold thereafter pursuant to this Prospectus.
Brokers, dealers, underwriters or agents participating in the
distribution of the Shares may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of Shares for whom such broker-dealers may act as agent or to whom they may sell
as principal, or both (which compensation as to a particular broker-dealer may
be in excess of customary commissions). The Selling Stockholders and any
broker-dealers acting in connection with the sale of the Shares hereunder may be
deemed to be underwriters within the meaning of Section 2(11) of the Securities
Act, and any commissions received by them and any profit realized by them on the
resale of Shares as principals may be deemed underwriting compensation under the
Securities Act. Neither the Company nor any Selling Stockholder can presently
estimate the amount of such compensation. The Company knows of no existing
arrangements between any Selling Stockholder and any other stockholder, broker,
dealer, underwriter or agent relating to the sale or distribution of the Shares.
9
<PAGE>
Each Selling Stockholder and any other persons participating in a
distribution of securities will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including, without
limitation, Regulation M, which may restrict certain activities of, and limit
the timing of purchases and sales of securities by, Selling Stockholders and
other persons participating in a distribution of securities. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distributions subject to specified exceptions or
exemptions. All of the foregoing may affect the marketability of the securities
offered hereby.
Any securities covered by this Prospectus that qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under that Rule rather
than pursuant to this Prospectus.
There can be no assurance that the Selling Stockholders will sell any
or all of the shares of Common Stock offered by them hereunder.
LEGAL MATTERS
Counsel for the Company, Hartman & Craven LLP, 460 Park Avenue, New
York, New York 10022, has rendered an opinion to the effect that the Common
Stock offered for resale hereby is duly and validly issued, fully paid and
non-assessable.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K for the year ended May 31, 1997 have been so
incorporated in reliance on the report, included in the Annual Report on Form
10-K, of KPMG, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
10
<PAGE>
TABLE OF CONTENTS
Available Information................................................... 1
Incorporation of Certain Documents
by Reference........................................................ 1
Forward-Looking Statements.............................................. 2
Investment Considerations and
Risk Factors........................................................ 3
The Company............................................................. 6
Selling Stockholders.................................................... 6
Use of Proceeds......................................................... 9
Plan of Distribution.................................................... 9
Legal Matters........................................................... 10
Experts................................................................. 10
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 contained in the Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell or the solicitation of any offer
to buy any security other than the shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or a solicitation of any
offer to buy the shares of Common Stock by anyone in any jurisdiction in which
such offer or solicitation is not authorized, or in which the person making such
offer or solicitation is not qualified to do so, or to any person to whom it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that information contained herein is correct as of any time
subsequent to the date hereof.
1,010,000 Shares
CAM Designs Inc.
Class A Common Stock
____________________
PROSPECTUS
____________________
_________________, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Registration Fee......... $ 894
Printing.................................................... 4,500*
Legal Fees.................................................. 5,000*
Accountants' Fees and Expenses.............................. 1,000*
Miscellaneous Expenses...................................... 1,500*
Total................................................. $12,894*
=========
- ----------
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Article V of the Company's Restated Certificate of Incorporation,
each person who is or was a director or officer of the Company, and each
director or officer of the Company who serves or served any other enterprise or
organization at the request of the Company, shall be indemnified by the Company
to the full extent permitted from time to time by the Delaware General
Corporation Law as the same exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights then said law permitted the
Company to provide prior to such amendment) or any other applicable laws as
presently or hereafter in effect.
Under such law, to the extent that such a person is successful on the
merits or otherwise in defense of a suit or proceeding brought against such
person by reason of the fact that such person is or was a director or officer of
the Company, or serves or served any other enterprise or organization at the
request of the Company, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred in connection with
such action.
If unsuccessful in defense of a third-party civil suit or a criminal
suit, or if such a suit is settled, such a person shall be indemnified under
such law against both (l) expenses (including attorneys' fees) and (2)
judgments, fines and amounts paid in settlement if such person acted in good
faith and in a manner such person reasonably believed to be in, or not opposed
to, the best interests of the Company, and with respect to any criminal action,
had no reasonable cause to believe such person's conduct was unlawful.
II-1
<PAGE>
If unsuccessful in defense of a suit brought by or in the right of the
Company, or if such suit is settled, such a person shall be indemnified under
such law only against expenses (including attorneys' fees) actually and
reasonably incurred in the defense or settlement of such suit if such person
acted in good faith and in a manner such person reasonably believed to be in, or
not opposed to, the best interests of the Company except that if such a person
is adjudged to be liable to the Company in such suit, such person cannot be
made whole even for expenses unless the court determines that such person is
fairly and reasonably entitled to indemnity for such expenses.
The Company may enter into one or more agreements with any person which
provide for indemnification greater or different than that provided in Article
V. Any amendments or repeal of Article V shall not adversely affect any right or
protection existing thereunder immediately prior to such amendment or repeal. In
addition, the Company maintains directors' and officers' reimbursement and
liability insurance pursuant to standard form policies. The risks covered by
such policies include certain liabilities under the securities laws.
ITEM 16. EXHIBITS.
EXHIBIT NO.
- -----------
4.1 The Company's Restated Certificate of Incorporation (incorporated
by reference to Exhibit 3.1 to the Company's Form 10-K for the year
ended May 31, 1997).
4.2 The Company's Amended Certificate of Incorporation incorporated by
reference to Exhibit 3.1A to the Company's Form 10-K for the year
ended May 31, 1997).
4.3 The Company's By-laws (incorporated by reference to Exhibit 3.2 to
the Company's Form 10-K for the year ended May 31, 1997).
4.4 Certificate of Designations, Preferences and Rights dated March 27,
1998 (incorporated by reference to Exhibit 4.1 to the Company's
Form 8-K/A dated April 23, 1998).
4.5 Securities Purchase Agreement dated as of March 27, 1998 by and
between the Company and JNC Strategic Fund Ltd. (incorporated by
reference to Exhibit 4.2 to the Company's Form 8-K/A dated April
23, 1998).
4.6 Stock Purchase Warrant dated March 31, 1998 issued by the Company
to JNC Strategic Fund Ltd. (incorporated by reference to Exhibit
4.3 to the Company's Form 8-K/A dated April 23, 1998).
4.7 Registration Rights Agreement dated as of March 27, 1998 by and
between the Company and JNC Strategic Fund Ltd. (incorporated by
reference to Exhibit 4.4 to the Company's Form 8-K/A dated April
23, 1998).
. 5 Opinion of Hartman & Craven LLP with respect to the legality of the
securities being registered hereby.
23.1 Consent of KPMG.
23.2 The consent of Hartman & Craven LLP is contained in its opinion
filed as Exhibit 5 to this registration statement.
II-2
<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 1993;
(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;
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)(l)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section l 5(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.
(4) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(b)
under the Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
II-3
<PAGE>
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(b) 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 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Allesley, Coventry, United Kingdom on April 24, 1998.
CAM DESIGNS INC.
By: /s/ John R. Davidson
---------------------------------------
John R. Davidson
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/John R. Davidson Chairman of the Board, President and Chief April 24, 1998
- ------------------------------------------ Executive Officer (Principal Executive Officer)
John R. Davidson
/s/ Robert A. Righton Chief Financial Officer, Secretary and Director April 24, 1998
- ------------------------------------------ (Principal Financial and Accounting Officer)
Robert A. Righton
Director April 24, 1998
- ------------------------------------------
Florian Homm
Director April 24, 1998
- ------------------------------------------
Peter D. Horbury
/s/ Theodore Sall Director April 24, 1998
- ------------------------------------------
Theodore Sall, Ph.D
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
5 Opinion of Hartman & Craven LLP with respect to the legality
of the securities being registered hereby.
23.1 Consent of KPMG.
23.2 The consent of Hartman & Craven LLP is contained in its
opinion filed as Exhibit 5 to this registration statement.
II-6
<PAGE>
EXHIBIT 5
HARTMAN & CRAVEN LLP
460 Park Avenue
New York, New York 10022
April 24, 1998
CAM Designs Inc.
Birmingham Road
Allesley
Coventry CV59QE
United Kingdom
Re: Registration Statement on Form S-3
----------------------------------
Dear Sirs:
We are acting as counsel to CAM Designs Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission (the "Commission") of a Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act
of 1933, as amended (the "Act"). The Registration Statement relates to (i)
954,000 shares (the "Conversion Shares") of the Company's common stock, $0.001
par value per share ("Common Stock"), which are issuable upon conversion of
800 shares of the Company's Series A Convertible Preferred Stock, par value
$.001 per share (the "Preferred Stock") and (ii) 56,000 shares of Common Stock
(the "Warrant Shares") which are issuable upon exercise of warrants (the
"Warrants") outstanding pursuant to a Stock Purchase Warrant, dated March 31,
1998 (the "Warrant Agreement"). The Conversion Shares and the Warrant are
hereinafter collectively referred to as the "Shares".
In connection with this opinion, we have examined and relied upon
copies certified or otherwise identified to our satisfaction of: (i) the
Certificate of Designations, Preferences and Rights dated March 27, 1998 and
filed with the Secretary of State of the State of Delaware (the "Certificate
of Designation"); (ii) the Warrant Agreement; (iii) the Registration Statement
(including the exhibits thereto) and the Prospectus contained therein; (iv)
the Company's Certificate of Incorporation, as amended and By-laws, as
amended; and (v) the minute books and other records of corporate proceedings
of the Company, as made available to us by officers of the Company; and have
reviewed such matters of law as we have deemed necessary or appropriate for
the purpose of rendering this opinion.
For purposes of this opinion we have assumed the authenticity of an
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of all documents submitted to us as copies. We
have also assumed the legal capacity of all natural persons, the genuineness
of all signatures
<PAGE>
on all documents examined by us, the authority of such persons signing on
behalf of the parties thereto other than the Company and the due
authorization, execution and delivery of all documents by the parties thereto
other than the Company. As to certain factual matters material to the opinion
expressed herein, we have relied to the extent we deemed proper upon
representations, warranties and statements as to factual matters of officers
and other representatives of the Company. Our opinion expressed below is
subject to the qualification that we express no opinion as to any law other
than the laws of the State of Delaware and the federal laws of the United
States of America. Without limiting the foregoing, we express no opinion with
respect to the applicability thereto or effect of municipal laws or the rules,
regulations or orders of any municipal agencies within any such state.
Based upon and subject to the foregoing qualifications, assumptions
and limitations and the further limitations set forth below, it is our opinion
that the Shares to be issued by the Company upon the conversion of the
Preferred Stock and the exercise of the Warrants have been duly authorized and
reserved for issuance and, when certificates for the Shares have been duly
executed by the Company, countersigned by a transfer agent, duly registered by
a registrar for the Shares and issued and paid for in accordance with the
terms of the Certificate of Designation and the Warrant Agreement, the Shares
will be validly issued, fully paid and non-assessable.
This opinion is limited to the specific issues addressed herein, and
no opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the State of Delaware or the federal laws of the United States of
America be changed by legislative action, judicial decision or otherwise.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Commission promulgated thereunder.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose.
Very truly yours,
/s/HARTMAN & CRAVEN LLP
<PAGE>
EXHIBIT 23.1
2 Cornwall Street Tel +44 (0) 121 232 3000
Birmingham Fax +44 (0) 121 232 3173
B3 2DL DX 709850 Birmingham 26
United Kingdom
The Board of Directors
CAM Designs Inc.
Birmingham Road
Allesley Our Ref: mjs/5/cab
Coventry
CV5 9QE
24 April 1998
Dear Sirs
We consent to incorporation by reference in the registration statement (No.
333- ) on Form S-3 of CAM Designs Inc. of our report dated 12 September 1997,
relating to the consolidated balance sheets of CAM Designs Inc. and subsidiaries
as of May 31, 1997, and 1996, and the related consolidated statements of
earnings, retained earnings, and cash flows for each of the years in the
two-year period ended May 31, 1997, which report appears in the May 31, 1997,
annual report on Form 10-K of CAM Designs Inc.
Yours faithfully
/s/ KPMG
- -----------
KPMG
Birmingham
England
