As filed with the Securities and Exchange Commission on April 30, 1997
Registration No. 333-21505
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Amendment No. 3
to
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
PARADIGM TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 770140882-5
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
694 Tasman Drive
Milpitas, CA 95035
(408) 954-0500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MICHAEL GULETT
President and Chief Executive Officer
PARADIGM TECHNOLOGY, INC.
694 Tasman Drive
Milpitas, CA 95035
(408) 954-0500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
JORGE DEL CALVO
Pillsbury Madison & Sutro LLP
2700 Sand Hill Road
Menlo Park, CA 94025
---------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================
Proposed Proposed
maximum maximum
Title of each class of securities Amount to be offering price aggregate Amount of
to be registered registered (1) per share offering price registration fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value.......... 2,554,300 shares $1.97(2) $5,031,971.00(2) $1,524.84
Common Stock, $.01 par value.......... 1,430,000 shares $2.13(3) $3,045,900.00(3) $ 923.00
---------
Total $2,447.84(4)
===================================================================================================================
(1) Includes up to a maximum of 1,600,000 shares of Common Stock, issuable
upon conversion of or otherwise with respect to the Registrant's 5%
Series A Convertible Redeemable Preferred Stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low sales
prices of the Company's Common Stock on the Nasdaq National Market on
February 5, 1997.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low sales
prices of the Company's Common Stock on the Nasdaq National Market on
March 17, 1997.
(4) Previously paid.
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+ The information contained herein is subject to completion or +
+ amendment. A registration statement relating to these securities has +
+ been filed with the Securities and Exchange Commission. These +
+ securities may not be sold nor may offers to buy be accepted prior to +
+ the time the registration statement becomes effective. This prospectus +
+ shall not constitute an offer to sell or the solicitation of any offer +
+ to buy nor shall there be any sale of these securities in any State in +
+ which such offer, solicitation or sale would be unlawful prior to +
+ registration or qualification under the securities laws of any such +
+ State. +
+ +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 30, 1997
PROSPECTUS
- ----------
PARADIGM TECHNOLOGY, INC.
3,904,300 Shares of Common Stock
--------------
This Prospectus covers 3,904,300 shares (the "Shares") of Common Stock, par
value $.01 per share (the "Common Stock"), of Paradigm Technology, Inc.
("Paradigm" or the "Company") offered for the account of certain stockholders of
the Company (the "Selling Stockholders").
The Shares offered hereby by one of the Selling Stockholders consists of up
to a maximum of 1,600,000 shares of Common Stock issuable upon conversion of the
Company's 5% Series A Convertible Redeemable Preferred Stock (the "Preferred
Stock"). For purposes of determining the number of Shares to be offered by such
Selling Stockholder for this Prospectus, the number of shares of Common Stock
calculated to be issuable upon conversion of the Preferred Stock is based on a
conversion price of $1.5244 which represents an average closing bid price of the
Common Stock over five consecutive trading days. Such conversion price is used
merely for the purposes of setting forth a number for this Prospectus and is
greater than the average closing bid price over the five consecutive trading
days preceding April 21, 1997 which was $1.40. The number of shares of Common
Stock issuable upon conversion of the Preferred Stock is subject to adjustment
depending on the date of the conversion thereof and could be materially less or
more than such estimated amount depending on factors which cannot be predicted
by the Company including, among other things, the future market price of the
Common Stock. See "The Company--Recent Developments--Sale of Preferred Stock"
and "Risk Factors--Potential Volatility of Stock Price."
The Shares may be offered by the Selling Stockholders from time to time in
transactions (which may include block transactions) on the Nasdaq National
Market, in negotiated transactions, through a combination of such methods of
sale, or otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, or at negotiated prices. The Selling
Stockholders may effect such transactions by selling the Shares to or through
broker-dealers, who may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of the Shares for whom such broker-dealers may act as agents or to whom they may
sell as principals, or both (which compensation as to a particular broker-dealer
might be in excess of customary commissions). The Company will not receive any
of the proceeds from the sale of the Shares by the Selling Stockholders. The
Company has agreed to bear all expenses of registration of the Shares, but all
selling and other expenses incurred by a Selling Stockholder will be borne by
that Selling Stockholder.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and any commissions paid or any
discounts or concessions allowed to any such persons, and any profits received
on the resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Selling Stockholders"
and "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the symbol
"PRDM." On April 21, 1997, the last reported sale price of the Common Stock
reported on the Nasdaq National Market was $1.50 per share.
---------------
The Common Stock offered hereby involves a high degree of risk.
See "Risk Factors" beginning on page 6.
---------------
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.
---------------
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a 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 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 the information contained herein is correct as of any time subsequent to
the date hereof.
The date of this Prospectus is ___________, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
AVAILABLE INFORMATION............................................... 2
DOCUMENTS INCORPORATED BY REFERENCE................................. 3
THE COMPANY......................................................... 4
RISK FACTORS........................................................ 6
PRICE RANGE OF COMMON STOCK......................................... 12
USE OF PROCEEDS..................................................... 12
SELLING STOCKHOLDERS................................................ 13
PLAN OF DISTRIBUTION................................................ 14
LEGAL MATTERS....................................................... 15
EXPERTS............................................................. 15
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements, and other information filed by the Company can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C., as well as the regional
offices of the Commission located at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois, and 7 World Trade Center, Suite 1300, New York,
New York. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements, and other information that are filed
through the Commission's Electronic Data Gathering, Analysis and Retrieval
System. This Web site can be accessed at http://www.sec.gov. The Common Stock of
the Company is quoted on the Nasdaq National Market. Reports, proxy statements
and other information concerning the Company may be inspected at the offices of
the National Association of Securities Dealers, Inc. at 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock, reference is made to the
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete and, in each instance, reference is made
to the copy of such contract or document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. Copies of the Registration Statement, including all exhibits thereto,
may be obtained from the Commission's principal office in Washington, D.C. upon
payment of the fees prescribed by the Commission, or may be examined without
charge at the offices of the Commission described above.
2
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Prospectus:
(1) the Company's Annual Report on Form 10-K for the year ended December
31, 1996, as amended by Form 10-K/A Amendment No. 1 filed on April 23,
1997 and as amended by Form 10-K/A Amendment No. 2 filed on April 30,
1997;
(2) the Company's Current Report on Form 8-K, dated February 5, 1997 and
filed with the Commission on February 6, 1997; and
(3) the Company's Registration Statement on Form 8-A registering the
Common Stock under Section 12(g) of the Exchange Act.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
to which this Prospectus relates shall be deemed to be incorporated by reference
into this Prospectus and to be part of this Prospectus from the date of filing
thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus and
the Registration Statement of which it is a part to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies or replaces such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Prospectus or such Registration Statement. The Company
will provide without charge to each person to whom a copy of the Prospectus has
been delivered, and who makes a written or oral request, a copy of any and all
of the foregoing documents incorporated by reference in the Registration
Statement (other than exhibits unless such exhibits are specifically
incorporated by reference into such documents). Requests should be submitted in
writing or by telephone to Paradigm Technology, Inc., 694 Tasman Drive,
Milpitas, California 95035, telephone (408) 954-0500.
3
<PAGE>
THE COMPANY
Paradigm Technology, Inc. ("Paradigm" or the "Company") designs and markets
high speed, high density static random access memory ("SRAM") semiconductor
devices to meet the needs of advanced telecommunications devices, networks,
workstations, high performance PCs, advanced modems and complex
military/aerospace applications. The Company focuses on high performance, 10
nanosecond ("ns") and faster SRAMs. For the year ended December 31, 1996, 10ns
and faster SRAMs accounted for approximately 36% of the Company's sales.
Paradigm believes its proprietary Complimentary Metal Oxide Semiconductor
("CMOS") process and design technologies enable it to offer SRAMs with high
speeds and small die sizes. Using a combination of innovative process
architecture and design know-how, the Company was one of the first companies to
introduce high speed CMOS SRAMs for three successive generations of product
densities: 256 kilobit ("K"), one megabit ("M"), and 4M. Paradigm's customers
include Hughes Network Systems, Motorola and US Robotics.
Recent Developments
Sale of Manufacturing Operations. On November 15, 1996, Paradigm sold its
wafer fabrication facility (the "Fab") to Orbit Semiconductor, Inc., a wholly
owned subsidiary of DII Group, Inc. ("Orbit"). The Company received aggregate
consideration of $20 million consisting of $6.7 million in cash, $7.5 million in
debt assumption, and promissory notes in the aggregate principal amount of $5.8
million. The sale of the Fab resulted in a loss of $4.6 million, which was
recorded in the fourth quarter of 1996.
As a result of the sale of the Fab, Paradigm's future needs for wafers will
need to be supplied by third parties. Orbit has agreed to supply the Company a
specified quantity of wafers to offset Orbit's payment obligations against the
promissory notes delivered in connection with the sale. The Company is also in
the process of seeking wafer supply from offshore foundries who would provide
8-inch wafers using 0.35 micron process technology. See "Risk Factors-Dependence
on Foundries and Other Third Parties."
Sale of Preferred Stock. On January 23, 1997, Paradigm sold a total of 200
shares of 5% Series A Convertible Redeemable Preferred Stock (the "Preferred
Stock") in a private placement to Vintage Products, Inc. at a price of $10,000
per share, for total proceeds (net of payments to third parties) of
approximately $1,880,000. The Preferred Stock is convertible at the option of
the holder into the number of fully paid and nonassessable shares of Common
Stock as is determined by dividing (A) the sum of (1) $10,000 plus (2) the
amount of all accrued but unpaid or accumulated dividends on the shares of
Preferred Stock being converted by (B) the Conversion Price in effect at the
time of conversion. The "Conversion Price" will be equal to the lower of (i)
$2.25 or (ii) eighty-two percent (82%) of the average closing bid price of a
share of Common Stock as quoted on the Nasdaq National Market over the five (5)
consecutive trading days immediately preceding the date of notice of conversion
of the Preferred Stock. The Company is not required to issue shares of Common
Stock equal to or greater than twenty percent (20%) of the Common Stock
outstanding on the date of the initial issuance of the Preferred Stock. At the
time of the initial issuance of the Preferred Stock, the Company had outstanding
7,243,154 shares of Common Stock, twenty percent of which equaled approximately
1,448,631 shares. The Company has the option of seeking stockholder approval for
the issuance of shares in excess of 1,448,631 shares, seeking Nasdaq National
Market approval for the issuance of shares in excess of 1,448,631 shares or
redeeming the shares in excess of 1,448,631 shares.
The Shares offered hereby by Vintage Products, Inc. ("Vintage") consist of
up to a maximum of 1,600,000 shares of Common Stock issuable upon conversion of
the Preferred Stock. For purposes of determining the number of Shares to be
offered by Vintage for this Prospectus, the number of shares of Common Stock
calculated to be issuable upon conversion of the Preferred Stock is based on a
conversion price of $1.5244 which represents an average closing bid price of the
Common Stock over five consecutive trading days. Such conversion price is used
merely for the purposes of setting forth a number for this Prospectus and is
greater than the average closing bid price over the five consecutive trading
days preceding April 21, 1997 which was $1.40. The number of shares of Common
Stock issuable upon conversion of the Preferred Stock is subject to adjustment
depending on the date of the conversion thereof and could be materially less or
more than such estimated amount depending on factors which
4
<PAGE>
cannot be predicted by the Company including, among other things, the future
market price of the Common Stock. See "Risk Factors--Potential Volatility of
Stock Price."
Shutdown of NewLogic Corporation Operations. In June 1996, the Company
acquired NewLogic Corp. ("NewLogic") with the strategy to expand Paradigm's
product line beyond SRAMs. In early 1997, the Company believed that it was in
Paradigm's best interest to shut down the NewLogic operation and focus on
Paradigm's core SRAM products and markets.
The Company was incorporated in California in 1987 and reincorporated in
Delaware in 1995. The Company's executive offices are located at 694 Tasman
Drive, Milpitas, California 95035 and its telephone number is (408) 954-0500.
5
<PAGE>
When used in this Prospectus, the words "expects," "anticipates,"
"estimates" and similar expressions are intended to identify forward-looking
statements. Such statements, which include statements contained in "Risk
Factors" concerning the timing of availability and functionality of products
under development, product mix, trends in average selling prices, the percentage
of export sales and sales to strategic customers, the adoption or retention of
industry standards, and the availability and cost of products from the Company's
suppliers, are subject to risks and uncertainties, including those set forth
under "Risk Factors" and elsewhere in this Prospectus, that could cause actual
results to differ materially from those projected. These forward-looking
statements speak only as of the date of this Prospectus. The Company expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statement contained herein to reflect any
change in the Company's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.
RISK FACTORS
The securities offered hereby involve a high degree of risk. The following
factors should be considered carefully in evaluating an investment in the Shares
of Common Stock offered hereby.
Uncertainty of Future Profitability; Need for Additional Funds. For the
year ended December 31, 1996 the Company reported a net loss of $36.4 million.
The sale of the Company's fabrication facility in November 1996, resulted in a
loss of $4.6 million, which was recorded in the fourth quarter of 1996.
The Company's recent operations have consumed substantial amounts of cash.
The Company believes that cash flow from operations and other existing and
potential sources of liquidity will be sufficient to meet its projected working
capital and other cash requirements through at least the remainder of 1997.
However, there can be no assurance that the Company will not need additional
capital and if so that such capital can be successfully obtained on terms
acceptable to the Company or at all. The sale or issuance of additional equity
or convertible debt securities could result in additional dilution to the
Company's stockholders. There can be no assurance that additional financing, if
required, will be available when needed or, if available, will be on terms
acceptable to the Company.
Fluctuations in Quarterly Results. The Company has experienced significant
quarterly fluctuations in operating results and anticipates that these
fluctuations will continue. These fluctuations have been caused by a number of
factors, including changes in manufacturing yields by contracted manufacturers,
changes in the mix of products sold, the timing of new product introductions by
the Company or its competitors, cancellation or delays of purchases of the
Company's products, the gain or loss of significant customers, the cyclical
nature of the semiconductor industry and the consequent fluctuations in customer
demand for the Company's devices and the products into which they are
incorporated, and competitive pressures on prices. A decline in demand in the
markets served by the Company, lack of success in developing new markets or new
products, or increased research and development expenses relating to new product
introductions could have a material adverse effect on the Company. Moreover,
because the Company sets spending levels in advance of each quarter based, in
part, on expectations of product orders and shipments during that quarter, a
shortfall in revenue in any particular quarter as compared to the Company's plan
could have a material adverse effect on the Company. Beginning in late 1995 and
continuing into 1996, the market for certain SRAM devices experienced a
significant excess supply relative to demand, which resulted in a significant
downward trend in prices. The market for the Company's products could continue
to experience a downward trend in pricing which could adversely affect the
Company's operating results. The Company's ability to maintain or increase
revenues in light of the current downward trend in product prices will be highly
dependent upon its ability to increase unit sales volumes of existing products
and to introduce and sell new products in quantities sufficient to compensate
for the anticipated declines in average selling prices of existing products.
Declining average selling prices will also adversely affect the Company's gross
margins unless the Company is able to reduce its costs per unit to offset such
declines. There can be no assurance that the Company will be able to increase
unit sales volumes, introduce and sell new products, or reduce its costs per
unit.
Risks Relating to Low-Priced Stocks. The Common Stock is currently eligible
for listing on Nasdaq. In order to continue to be listed on Nasdaq, however, the
Company must maintain $2,000,000 in total assets, a $200,000 market value of the
public float and $1,000,000 in total capital and surplus. In addition, continued
inclusion on
6
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Nasdaq requires two market-makers and a minimum bid price of $1.00 per share. In
the future, if the Company fails to meet these maintenance criteria it may
result in the delisting of the Company's securities from Nasdaq, and trading, if
any, and the Company's securities would thereafter be conducted in the
non-Nasdaq over-the-counter market. If the Company's securities are delisted, an
investor could find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's securities. In addition, if
the Common Stock were to become delisted from trading on Nasdaq and the trading
price of the Common Stock were to remain below $5.00 per share, trading in the
Common Stock would also be subject to the requirements of certain rules
promulgated under the Securities Exchange Act of 1934, as amended, which require
additional disclosure by broker-dealers in connection with any trades involving
a stock defined as a penny stock (generally, any non-Nasdaq equity security that
has a market price of less than $5.00 per share, subject to certain exceptions).
Such rules require the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith, and impose various sales practice requirements on broker-dealers who
sell penny stocks to persons other than established customers and accredited
investors (generally institutions). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and must receive the purchaser's written consent to the transaction prior to the
sale. The additional burdens imposed upon broker-dealers by such requirements
may discourage broker-dealers from effecting transactions in the Common Stock,
which could severely limit the market liquidity of the Common Stock and the
ability of purchasers in this offering to sell the Common Stock in the secondary
market.
Dependence on New Products and Technologies. The market for the Company's
products is characterized by rapidly changing technology, short product life
cycles, cyclical oversupply and rapid price erosion. Average selling prices for
many of the Company's products have generally decreased over the products' life
cycles in the past and are expected to decrease in the future. Accordingly, the
Company's future success will depend, in part, on its ability to develop and
introduce on a timely basis new products and enhanced versions of its existing
products which incorporate advanced features and command higher prices. The
success of new product introductions and enhancements to existing products
depends on several factors, including the Company's ability to develop and
implement new product designs, achievement of acceptable production yields, and
market acceptance of customers' end products. In the past, the Company has
experienced delays in the development of certain new and enhanced products.
Based upon the increasing complexity of both modified versions of existing
products and planned new products, such delays could occur again in the future.
Further, the cost of development can be significant and is difficult to
forecast. In addition, there can be no assurance that any new or enhanced
products will achieve or maintain market acceptance. If the Company is unable to
design, develop and introduce competitive products or to develop new or modified
designs on a timely basis, the Company's operating results will be materially
adversely affected.
Dependence on Foundries and Other Third Parties. On November 15, 1996, the
Company sold its Fab to Orbit. Following the sale of the Fab, the Company and
Orbit entered into a Wafer Manufacturing Agreement. Orbit will supply a quantity
of wafers to the Company over a specified period of time to offset Orbit's
payment obligations against the promissory notes delivered in connection with
the sale. The Company is also in the process of seeking wafer supply from other
offshore foundries, and anticipates that it will conduct business with other
foundries by delivering written purchase orders specifying the particular
product ordered, quantity, price, delivery date and shipping terms and,
therefore, such foundries will not be obligated to supply products to the
Company for any specific period, in any specific quantity or at any specified
price, except as may be provided in a particular purchase order. Reliance on
outside foundries involves several risks, including constraints or delays in
timely delivery of the Company's products, reduced control over delivery
schedules, quality assurance, potential costs and loss of production due to
seismic activity, weather conditions and other factors. To the extent a foundry
terminates its relationship with the Company, or should the Company's supply
from a foundry be interrupted or terminated for any other reason, the Company
may not have a sufficient amount of time to replace the supply of products
manufactured by the foundry. Should the Company be unable to obtain a sufficient
supply of products to enable it to meet demand, it could be required to allocate
available supply of its products among its customers. Until recently, there has
been a worldwide shortage of advanced process technology foundry capacity and
there can be no assurance that the Company will obtain sufficient foundry
capacity to meet customer demand in the future, particularly if that demand
should increase. The Company is continuously evaluating potential new sources of
supply. However, the qualification process and the production ramp-up for
additional foundries could take longer than anticipated, and there
7
<PAGE>
can be no assurance that such sources will be able or willing to satisfy
the Company's requirements on a timely basis or at acceptable quality or per
unit prices.
Constraints or delays in the supply of the Company's products, whether
because of capacity constraints, unexpected disruptions at the current or future
foundries or assembly houses, delays in obtaining additional production at the
existing foundry or in obtaining production from new foundries, shortages of raw
materials, or other reasons, could result in the loss of customers and other
material adverse effects on the Company's operating results, including effects
that may result should the Company be forced to purchase products from higher
cost foundries or pay expediting charges to obtain additional supply.
Semiconductor Industry; SRAM Market. The semiconductor industry is highly
cyclical and has been subject to significant economic downturns at various
times, characterized by diminished product demand, production overcapacity and
accelerated erosion of average selling prices. During 1996, the market for
certain SRAM devices experienced an excess supply relative to demand which
resulted in a significant downward trend in prices. The Company expects to
continue to experience a downward trend in pricing which could adversely affect
the Company's operating margins. The selling prices that the Company is able to
command for its products are highly dependent on industry-wide production
capacity and demand, and as a consequence the Company could experience rapid
erosion in product pricing which is not within the control of the Company and
which could adversely effect the Company's operating results. The Company
expects that additional SRAM production capacity will become increasingly
available in the foreseeable future, and such additional capacity may adversely
affect the Company's margins and competitive position. In addition, the Company
may experience period-to-period fluctuations in operating results because of
general semiconductor industry conditions, overall economic conditions, or other
factors. The Company's business is also subject to the risks associated with the
imposition of legislation and regulations relating to the import or export of
semiconductor products.
Litigation. On August 12, 1996, a securities class action lawsuit was filed
in Santa Clara County Superior Court against the Company and certain of its
officers and directors (the "Paradigm Defendants"). The class alleged by
plaintiffs consists of purchasers of the Company's common stock from November
20, 1995 to March 22, 1996, inclusive. The complaint alleges negligent
misrepresentation, fraud and deceit, breach of fiduciary duty, and violations of
certain provisions of the California Corporate Securities Law and Civil Code.
The plaintiffs seek an unspecified amount of compensatory and punitive damages.
Plaintiffs allege, among other things, that the Paradigm Defendants wrongfully
represented that the Company would have protection against adverse market
conditions in the semiconductor market based on the Company's focus on high
speed, high performance semiconductor products. The Paradigm Defendants intend
to vigorously defend the action. On September 30, 1996, the Paradigm Defendants
filed a demurrer seeking to have plaintiffs' entire complaint dismissed with
prejudice. On December 12, 1996, the Court sustained the demurrer as to all of
the causes of action except for violation of certain provisions of the
California Corporate Securities Law and Civil Code. The Court, however, granted
plaintiffs leave to amend the complaint to attempt to cure the defects which
caused the Court to sustain the demurrer. Plaintiffs failed to amend within the
allotted time. On January 8, 1997, the Paradigm Defendants filed an answer to
the complaint denying any liability for the acts and damages alleged by the
plaintiffs. Plaintiffs have since served the Paradigm Defendants with discovery
requests for production of documents and interrogatories, to which the Paradigm
Defendants have responded, with other responses not yet due. The Paradigm
Defendants have served the plaintiffs with an initial set of discovery requests.
Additional discovery is scheduled to take place prior to the hearing on the
motion for class certification, tentatively scheduled for May 20, 1997. There
can be no assurance that the Company will be successful in such defense. Even if
Paradigm is successful in such defense, it may incur substantial legal fees and
other expenses related to this claim. If unsuccessful in the defense of any such
claim, the Company's business, operating results and cash flows could be
materially adversely affected.
On February 21, 1997, an additional purported class action lawsuit was
filed in Santa Clara County Superior Court against the Company and certain of
its officers and directors, with causes of action and factual allegations
essentially identical to those of the August 12, 1996 class action lawsuit. This
second class action is asserted against the same Paradigm Defendants,
PaineWebber, Inc. and Smith Barney. The Paradigm Defendants have authorized
counsel to acknowledge service which occurred on April 9, 1997. The Paradigm
Defendants responsive pleading is due by May 9, 1997. The Paradigm Defendants
believe the new class action to be essentially identical to the
8
<PAGE>
causes of action and factual allegations as the August 12, 1996 class
action. Therefore, the Company believes that it probably will be subject to the
demurrer which the Court sustained in the August 12, 1996 class action as to all
causes of action asserted against Michael Gulett and all but one of the causes
of action asserted against the remaining Paradigm Defendants. There can be no
assurances that the Court will determine that the February 21, 1997 class action
will be subject to the demurrer or that the Company will be successful in the
defense of the class actions.
Product and Customer Concentration; Dependence on Telecommunications and
Computer Industries. Currently, substantially all of the Company's sales are
derived from the sale of SRAM products. Additionally, a substantial portion of
the Company's sales is derived from a relatively small number of customers. For
the year ended December 31, 1995, Motorola accounted for 28% of the Company's
sales, and for the year ended December 31, 1996, Motorola, All American
Semiconductor and Micron Technology accounted for 25%, 13% and 13%,
respectively, of the Company's sales. Substantially all of the Company's
products are incorporated into telecommunications and computer-related products.
The telecommunications and computer industries have recently experienced strong
unit sales growth, which has increased demand for integrated circuits, including
the memory products offered by the Company. However, these industries have from
time to time experienced cyclical, depressed business conditions. Such industry
downturns have historically resulted in reduced product demand and declining
average selling prices. The Company's business and operating results could be
materially and adversely affected by a downturn in the telecommunications or
computer industries in the future.
Competition. The semiconductor industry is intensely competitive and is
characterized by rapidly changing technology, short product life cycles,
cyclical oversupply and rapid price erosion. The Company competes with large
domestic and international semiconductor companies, most of which have
substantially greater financial, technical, marketing, distribution, and other
resources than the Company. The Company's principal competitors in the high
performance SRAM market include Motorola and Micron Technology. Other
competitors in the SRAM market include Alliance Semiconductor, Cypress
Semiconductor, Integrated Device Technology, Integrated Silicon Solution,
Samsung and numerous other large and emerging semiconductor companies. In
addition, other manufacturers can be expected to enter the high speed, high
density SRAM market.
The ability of the Company to compete successfully depends on elements
outside its control, including the rate at which customers incorporate the
Company's products into their systems, the success of such customers in selling
those systems, the Company's protection of its intellectual property, the
number, nature, and success of its competitors and their product introductions,
and general market and economic conditions. In addition, the Company's success
will depend in large part on its ability to develop, introduce, and manufacture
in a timely manner products that compete effectively on the basis of product
features (including speed, density, die size, and packaging), availability,
quality, reliability, and price, together with other factors including the
availability of sufficient manufacturing capacity and the adequacy of production
yields. There is no assurance that the Company will be able to compete
successfully in the future.
Strategic Relationships; Potential Competition. The Company, pursuant to
certain licenses of its technology, has entered into strategic relationships
with NKK Corporation ("NKK") and Atmel Corporation ("Atmel"). The Company has
had a long-standing business relationship with NKK which began in October 1992.
The Company, NKK and affiliates of NKK entered into several equity and debt
transactions which provided start-up and development funding to the Company.
Given the long-standing relationship, the Company and NKK entered into three
technology license and development agreements which provide for NKK to supply
the Company a specified number of 1M SRAMs for three years. These Agreements
provided funding to the Company.
The Company's business relationship with Atmel began in April 1995 when
pursuant to certain agreements, Atmel purchased a substantial number of shares
of the Company's capital stock from the Company, certain stockholders of the
Company who had been unsecured creditors of the Company as of the reorganization
and from the Company's equipment lessors. Atmel also acquired certain warrants
to purchase shares of the Company's Common Stock. In 1995, the Company and Atmel
entered into a five-year License and Manufacturing Agreement pursuant to which
Atmel would provide the capacity to manufacture wafers at its wafer
manufacturing facility. The Company entered into such agreement with Atmel
because Atmel provided the Company with significant wafer manufacturing capacity
when such capacity was in short supply.
9
<PAGE>
The Company previously licensed the design and process technology for
substantially all of its products at such time, including certain of its 256K,
1M and 4M products, to NKK as a source of revenue. The Company has not licensed
any of its current products to NKK. In the future, the Company may compete with
NKK with respect to all of such products in certain Pacific Rim countries, North
America and Europe and, as to certain of its 256K and 1M products, in the rest
of the world. In 1995, NKK commenced production of products using the Company's
design and process technologies, and therefore may become a more significant
competitor of the Company. Paradigm has also licensed to Atmel the right to
produce certain of its SRAM products which provided significant wafer
manufacturing capacity. As a result, the Company is likely to compete with Atmel
with respect to such products. Because Atmel has greater resources than the
Company and has foundry capacity, any such competition could adversely affect
the Company. To the extent that the Company enters into similar arrangements
with other companies, it may compete with such companies as well.
Dependence on Patents, Licenses and Intellectual Property; Potential
Litigation. The Company intends to continue to pursue patent, trade secret, and
mask work protection for its semiconductor process technologies and designs. To
that end, the Company has obtained certain patents and patent licenses and
intends to continue to seek patents on its inventions and manufacturing
processes, as appropriate. The process of seeking patent protection can be long
and expensive, and there is no assurance that patents will be issued from
currently pending or future applications or that, if patents are issued, they
will be of sufficient scope or strength to provide meaningful protection or any
commercial advantage to the Company. In particular, there can be no assurance
that any patents held by the Company will not be challenged, invalidated, or
circumvented, or that the rights granted thereunder will provide competitive
advantage to the Company. The Company also relies on trade secret protection for
its technology, in part through confidentiality agreements with its employees,
consultants and third parties. There can be no assurance that these agreements
will not be breached, that the Company will have adequate remedies for any
breach, or that the Company's trade secrets will not otherwise become known to
or independently developed by others. In addition, the laws of certain
territories in which the Company's products are or may be developed,
manufactured, or sold may not protect the Company's products and intellectual
property rights to the same extent as the laws of the United States.
There has been substantial litigation regarding patent and other
intellectual property rights in the semiconductor industry. In the future,
litigation may be necessary to enforce patents issued to the Company, to protect
trade secrets or know-how owned by the Company, or to defend the Company against
claimed infringement of the rights of others and to determine the scope and
validity of the proprietary rights of others. The Company has from time to time
received, and may in the future receive, communications alleging possible
infringement of patents or other intellectual property rights of others. Any
such litigation could result in substantial cost to and diversion of effort by
the Company, which could have a material adverse effect on the Company. Further,
adverse determinations in such litigation could result in the Company's loss of
proprietary rights, subject the Company to significant liabilities to third
parties, require the Company to seek licenses from third parties, or prevent the
Company from manufacturing or selling its products, any of which could have a
material adverse effect on the Company.
International Operations. Approximately 28% and 25% of the Company's sales
in the years ended December 31, 1995 and 1996, respectively, were attributable
to sales outside the United States, primarily in Asia and Europe, and the
Company expects that international sales will continue to represent a
significant portion of its sales. In addition, the Company expects that a
significant portion of its products will be manufactured by independent third
parties in Asia. Therefore, the Company is subject to the risks of conducting
business internationally, and both manufacturing and sales of the Company's
products may be adversely affected by political and economic conditions abroad.
Protectionist trade legislation in either the United States or foreign
countries, such as a change in the current tariff structures, export compliance
laws, or other trade policies, could adversely affect the Company's ability to
have products manufactured or sell products in foreign markets. The Company
cannot predict whether quotas, duties, taxes, or other charges or restrictions
will be imposed by the United States, Hong Kong, Japan, Taiwan, or other
countries upon the importation or exportation of the Company's products in the
future, or what effect any such actions would have on its relationship with NKK
or other manufacturing sources, or its general business, financial condition and
results of operations. In addition, there can be no assurance that the Company
will not be adversely affected by currency fluctuations in the future. The
prices for the Company's products are denominated in dollars. Accordingly, any
increase in the value of the dollar as compared to currencies in the Company's
principal overseas
10
<PAGE>
markets would increase the foreign currency-denominated sales prices of the
Company's products, which may negatively affect the Company's sales in those
markets. The Company has not entered into any agreements or instruments to hedge
the risk of foreign currency fluctuations. Currency fluctuations in the future
may also increase the manufacturing costs of the Company's products. Although
the Company has not to date experienced any material adverse effect on its
operations as a result of such international risks, there can be no assurance
that such factors will not adversely impact the Company's general business,
financial condition and results of operations.
Employees; Management of Growth. The Company's future success will be
heavily dependent upon its ability to attract and retain qualified technical,
managerial, marketing and financial personnel. The Company has experienced a
high degree of turnover in personnel, including at the senior and middle
management levels. The competition for such personnel is intense and includes
companies with substantially greater financial and other resources to offer such
personnel. There can be no assurance that the Company will be able to attract
and retain the necessary personnel, or successfully manage its expansion, and
any failure to do so could have a material adverse effect on the Company.
Potential Volatility of Stock Price. The trading price of the Company's
Common Stock is subject to wide fluctuations in response to variations in
operating results of the Company and other semiconductor companies, actual or
anticipated announcements of technical innovations or new products by the
Company or its competitors, general conditions in the semiconductor industry and
the worldwide economy, and other events or factors. The Company's stock traded
from a high of $37.25 in August 1995 to a low of $1.31 in April 1997. In
addition, the stock market has in the past experienced extreme price and volume
fluctuations, particularly affecting the market prices for many high technology
companies, and these fluctuations have often been unrelated to the operating
performance of the specific companies. These market fluctuations may adversely
affect the market price of the Company's Common Stock.
Antitakeover Effect of Certain Charter Provisions. Certain provisions of
the Company's Certificate of Incorporation and Bylaws and of Delaware law could
discourage potential acquisition proposals and could delay or prevent a change
in control of the Company. Such provisions could diminish the opportunities for
a stockholder to participate in tender offers, including tender offers at a
price above the then current market value of the Common Stock. Such provisions
may also inhibit fluctuations in the market price of the Common Stock that could
result from takeover attempts. In addition, the Board of Directors, without
further stockholder approval, may issue Preferred Stock that could have the
effect of delaying or preventing a change in control of the Company. The
issuance of Preferred Stock could also adversely affect the voting power of the
holders of Common Stock, including the loss of voting control to others.
11
<PAGE>
PRICE RANGE OF COMMON STOCK
The Common Stock is traded in the over-the-counter market on the Nasdaq
National Market under the symbol "PRDM." The following table sets forth, for the
Company's fiscal years indicated, the high and low last sale prices of the
Common Stock as reported by the Nasdaq National Market.
<TABLE>
High Low
---- ---
<S> <C> <C>
1995
Second Quarter (from June 28, 1995)................. $23.25 $17.25
Third Quarter....................................... 37.25 22.25
Fourth Quarter...................................... 30.25 12.00
1996
First Quarter....................................... $19.00 $8.25
Second Quarter...................................... 12.00 6.25
Third Quarter....................................... 7.38 3.88
Fourth Quarter...................................... 5.50 2.06
1997
First Quarter....................................... $3.00 $1.38
Second Quarter (through April 21, 1997)............. 1.88 1.31
</TABLE>
On April 21, 1997, there were approximately 239 holders of record of the
Common Stock. See the cover page of this Prospectus for the last sales price of
the Common Stock reported on the Nasdaq National Market as of a recent date.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders.
12
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information as of March 31, 1997
regarding the beneficial ownership of Common Stock by each of the Selling
Stockholders and the Shares offered hereby by such Selling Stockholders.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Number of Beneficially
Owned Prior Shares Owned After
to Offering(1) Being Offered Offering(1)
------------------- ------------- -------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Vintage Products, Inc(2)............ 1,600,000 22.1% 1,600,000 -- --%
Arlozorv Street
Telaviv, Israel
Chiang Lam(3)....................... 1,350,000 18.7% 1,350,000 -- --
ACMA Limited(4)..................... 1,300,000 18.0% 1,300,000 -- --
17 Jurong Port Road
Singapore 2261
Atmel Corporation................... 853,050 11.8% 853,050 -- --
2125 O'Nel Drive
San Jose, CA 95731
Angeliki Perlegos................... 14,000 * 14,000 -- --
Kris Chellam........................ 12,000 * 12,000 -- --
Tsung-Ching Wu...................... 12,000 * 12,000 -- --
Michael Ross........................ 10,000 * 10,000 -- --
Krish Panu.......................... 5,000 * 5,000 -- --
Jack Peckham........................ 5,000 * 5,000 -- --
Steve Schumann...................... 5,000 * 5,000 -- --
Mike Sisois......................... 5,000 * 5,000 -- --
Grahma Turner....................... 5,000 * 5,000 -- --
Gust Perlegos....................... 3,000 * 3,000 -- --
Mary Perlegos....................... 3,000 * 3,000 -- --
Peter Babalis....................... 2,500 * 2,500 -- --
Ralph Bohannon...................... 2,500 * 2,500 -- --
Gladwyn D'Souza..................... 2,500 * 2,500 -- --
James Hu............................ 2,500 * 2,500 -- --
Saroj Pathak........................ 2,500 * 2,500 -- --
Charles Schleich.................... 2,500 * 2,500 -- --
Gust Perlegos as Custodian.......... 2,000 * 2,000 -- --
for Archie Perlegos
Gust Perlegos as Custodian.......... 2,000 * 2,000 -- --
for Nick Perlegos
Gust Perlegos as Custodian.......... 2,000 * 2,000 -- --
for Pete Perlegos
Norman Hall......................... 1,250 * 1,250 -- --
--------- ---------
Total......................... 3,904,300 3,904,300
- -------------
* Less than 1%.
13
<PAGE>
(1) Information with respect to beneficial ownership is based upon
information obtained from the Selling Stockholders.
(2) Represents up to a maximum of 1,600,000 shares of Common Stock
issuable upon conversion of the Preferred Stock. For purposes of
determining the number of Shares to be offered by Vintage Products, Inc.
for this Prospectus, the number of shares of Common Stock calculated to
be issuable upon conversion of the Preferred Stock is based on a
conversion price of $1.5244 which represents an average closing bid price
of the Common Stock over five consecutive trading days. Such conversion
price is used merely for the purposes of setting forth a number for this
Prospectus and is greater than the average closing bid price over five
consecutive trading days preceding April 21, 1997 which was $1.40. The
number of shares of Common Stock issuable upon conversion of the
Preferred Stock is subject to adjustment depending on the date of the
conver- sion thereof and could be materially less or more than such
estimated amount depending on factors which cannot be predicted by the
Company including, among other things, the future market price of the
Common Stock. See "The Company--Recent Developments--Sale of Preferred
Stock" and "Risk Factors--Potential Volatility of Stock Price."
The natural persons who share beneficial ownership of the shares of
Common Stock owned by Vintage Products, Inc. are unknown to the Company
and do not include any of the persons listed on this Selling Stockholders
table.
(3) Includes 1,110,000 shares held by ACMA and 200,000 shares issuable upon
exercise of outstanding warrants. Also includes 50,000 shares issuable
upon exercise of outstanding warrants held by Mr. Lam. Mr. Lam is a
consultant and advisor to ACMA. Mr. Lam disclaims beneficial ownership of
the shares held by ACMA.
(4) Includes 200,000 shares issuable upon exercise of outstanding warrants.
ACMA is a publicly held Singapore Corporation. The directors of ACMA who
share voting and investment power with respect to the shares held by ACMA
are as follows: Quek Sim Pin, Executive Chairman; Tan Chee Jin; Tan Seng
Tjie; Rai Rajen, Managing Director; Low Seow Chye; Kwok Chee Wai; Tan
Keng Lin; Chou Kong Seng, Finance Director. See note 3 above.
</TABLE>
Because a Selling Stockholder may offer by this Prospectus all or some part
of the Common Stock which he or she holds, no estimate can be given as of the
date hereof as to the amount of Common Stock actually to be offered for sale by
a Selling Stockholder or as to the amount of Common Stock that will be held by a
Selling Stockholder upon the termination of such offering. See "Plan of
Distribution."
PLAN OF DISTRIBUTION
Sales of the Shares may be effected by or for the account of the Selling
Stockholders from time to time in transactions (which may include block
transactions) on the Nasdaq National Market, in negotiated transactions, through
a combination of such methods of sale, or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale or at negotiated
prices. The Selling Stockholders may effect such transactions by selling the
Shares directly to purchasers, through broker-dealers acting as agents for the
Selling Stockholders, or to broker-dealers who may purchase Shares as principals
and thereafter sell the Shares from time to time in transactions (which may
include block transactions) on the Nasdaq National Market, in negotiated
transactions, through a combination of such methods of sale, or otherwise. In
effecting sales, broker-dealers engaged by a Selling Stockholder may arrange for
other broker-dealers to participate. Such broker-dealers, if any, may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they may sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such persons,
and any profits received on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
14
<PAGE>
The Company has agreed to bear all expenses of registration of the Shares
(other than fees and expenses, if any, of counsel or other advisors to the
Selling Stockholders). Any commissions, discounts, concessions or other fees, if
any, payable to broker-dealers in connection with any sale of the Shares will be
borne by the Selling Stockholder selling such Shares.
LEGAL MATTERS
Certain legal matters with respect to the validity of Common Stock offered
hereby are being passed upon for the Company by Pillsbury Madison & Sutro LLP,
Menlo Park, California.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K of Paradigm Technology, Inc. for the year ended
December 31, 1996, have been so incorporated in reliance on the report (which
contains an explanatory paragraph related to the Company's reorganization on
June 21, 1994) of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities being
registered hereby. Normal commission expenses and brokerage fees are payable
individually by the Selling Stockholders. All amounts are estimated except the
Securities and Exchange Commission registration fee.
<CAPTION>
Amount
------
<S> <C>
SEC registration fee.............................. $ 2,447.84
Accounting fees and expenses...................... 6,000.00
Legal fees and expenses........................... 15,000.00
Miscellaneous fees and expenses................... 1,552.16
-----------
Total..................................... $ 25,000.00
===========
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). Article VII of the Registrant's
Amended and Restated Certificate of Incorporation (Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1996)
provides for indemnification of the Registrant's directors, officers, employees
and other agents to the extent and under the circumstances permitted by the
Delaware General Corporation Law. The Registrant has also entered into
agreements with its directors and officers that will require the Registrant,
among other things, to indemnify them against certain liabilities that may arise
by reason of their status or service as directors or officers to the fullest
extent not prohibited by law.
Item 16. Exhibits
Exhibit
Number Description of Document
------- -----------------------
5.1 Opinion of Pillsbury Madison & Sutro LLP.*
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Pillsbury Madison & Sutro
LLP (included in its opinion filed
as Exhibit 5.1 to this Registration
Statement).
24.1 Power of Attorney (see page II-3).*
- --------
* Previously filed.
II-1
<PAGE>
Item 17. Undertakings
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.
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 Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-2
<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 Milpitas, State of California, on April 30, 1997.
PARADIGM TECHNOLOGY, INC.
By /s/ MICHAEL GULETT
----------------------------------------
Michael Gulett
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ MICHAEL GULETT President and Chief Executive Officer
- --------------------------------- (Principal Executive Officer) and Director April 30, 1997
Michael Gulett
/s/ EMEKA CHUKWU Controller (Principal Financial Officer) April 30, 1997
- ---------------------------------
Emeka Chukwu
*/s/ GEORGE COLLINS Director April 30, 1997
- ---------------------------------
George Collins
*/s/ JAMES KOCHMAN Director April 30, 1997
- ---------------------------------
James Kochman
* By: /s/ MICHAEL GULETT
- ---------------------------------
Attorney-in-fact
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Document
- ------- -----------------------
5.1 Opinion of Pillsbury Madison & Sutro LLP.*
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in its
opinion filed as Exhibit 5.1 to this Registration
Statement).
- ----------
* Previously filed.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 23, 1997, except as to the second paragraph of Note 14, which is as of
February 21, 1997, appearing on page 39 of Paradigm Technology, Inc.'s Annual
Report on Form 10-K/A Amendment No. 1, as amended for the year ended December
31, 1996. We also consent to the reference to us under the heading "Experts" in
such Prospectus.
PRICE WATERHOUSE LLP
San Jose, California
April 29, 1997
