Registration
StatementNo.333-67189333-SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------- AMENDMENT NO. 1 TOFORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------------------------EVANS & SUTHERLAND COMPUTER CORPORATION
(Exact(Exact name of registrant as specified in its charter)
Utah 87-0278175 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 600
Utah
87-0278175
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
770 Komas Drive
Salt Lake City, Utah 84108
(801) 588-1000
(Address,(Address, including zip code, and
telephone number, including area code,
of principal executive offices)
-------------------------------------------- John T. LemleyPaul Dailey
Acting Chief Financial Officer
and Corporate Secretary
Evans & Sutherland Computer Corporation
600770 Komas Drive
Salt Lake City, Utah 84108
(801) 588-1000
(Name,(Name, address, including zip code, and telephone
number, including area code, of agent for service)
--------------------------------------------Copies to:
Dawn M. Call Snell & Wilmer L.L.P. 111 East Broadway, Suite 900 Salt Lake City, Utah 84111 (801) 237-1900 --------------------------------------------J. Christopher Rodgers
Powell Goldstein LLP
901 New York Avenue, N.W.
Washington, D.C. 20001
Approximate date of commencement of proposed sale to the
public:public: From time to time after this Registration Statement becomes effective.If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
[ ]oIf any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box.
|X|xIf 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.
[ ]oIf 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.
[ ]oIf delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.
[ ]o
CALCULATION OF REGISTRATION FEE - --------------------------- -------------------------- -------------------------- ------------------------ ------------------------- Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of Securities to be Registered(2) Offering Price Aggregate Registration Registered(1) Per Unit Offering Price Fee - --------------------------- -------------------------- -------------------------- ------------------------ ------------------------- Common Stock, $.20 par 1,279,870 $ 18.6875(3) $ 23,917,571(3) $ 6,649 value 115,000 $17.625(4) $2,026,875(4) $563 Shares =========================== ========================== ========================== ======================== =========================CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
Amount to be
Registered(1)
Proposed Maximum
Offering Price
Per Unit(2)
Proposed Maximum
Aggregate Offering
Price(3)
Amount of
Registration
Fee(4)
Common Stock,
$0.20 par value per share
497,448
$
4.22
$
2,099,230.56
$
224.62
(1)This registration statement covers the
resale by certain selling shareholdersregistration of up toan aggregate of 1,394,870497,448 shares of common stock, $.20 par value, of Evans & Sutherland Computer Corporation("E&S"(the “Company”), 901,408 shares ofwhich may beacquiredheld bysuchthe sellingshareholdersshareholder. The selling shareholder was issued 412,500 shares on April 28, 2006 pursuant to the Company’s acquisition of all of the outstanding stock of Spitz, Inc. The selling shareholder’s shares are subject to a post-closing adjustment based uponconversioncertain trading price averages. The maximum number of shares issuable to the selling shareholder pursuant to the Spitz transaction is 497,448. The exact number ofClass B-1 Preferred Stock into common stock, 378,462sharesof which mayto beacquired by such selling shareholders uponregistered will be included in theexercise of presently outstanding warrants to purchase shares of Class B-1 Preferred Stock and the conversion of such stock into common stock, and 115,000 shares of which may be acquired by such selling shareholders upon the exercise of presently outstanding options to purchase common stock. (2)Company’s final amendment. In the event of a stock split, stock dividend, or similar transaction involvingE&S'scommon stock of the Company, to prevent dilution, the number of shares ofE&S'scommon stock of the Company registered shall be automatically increased to cover the additional shares of common stock in accordance with Rule 416(a) under the Securities Act of1933. (3)1933 (“Securities Act”).(2)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c), based on the closing price of the common stock on
November 5, 1998,September 22, 2006, as reported on theNASDAQNasdaq National Market.(4)(3)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c), based on the closing price of the common stock on
February 9, 1999,September 22, 2006, as reported on theNASDAQNasdaq National Market.(4)The
registrant hereby amendsregistration fee was paid as follows: $224.62 on September 28, 2006 for the registration of 497,448 shares.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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
The information in this
registration statement on such date or dates asprospectus is not complete and may benecessary 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 orchanged. We may not sell these securities until the registration statementshall become effective on such date asfiled with the Securities and Exchange Commissionacting pursuantis effective. This prospectus in not an offer tosaid Section 8(a), may determine.sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Subject To Completion, Dated September 28, 2006
PROSPECTUS
600770 Komas Drive
Salt Lake City, Utah 84108
(801) 588-1000
1,394,870EVANS & SUTHERLAND
497,448 SHARES COMMON STOCK
As referenced in our Current Report on Form 8-K dated April 28, 2006, we acquired all of the issued and outstanding stock of Spitz, Inc., a Delaware corporation, in consideration of 412,500 shares of our common stock to Spitz’s sole shareholder, Transnational Industries, Inc., a Delaware corporation, which is referred to herein as the selling shareholder. The shares issued to the selling shareholder are subject to a post-closing share adjustment based upon a 60 day trading price average ending on the day before we file our final amendment to this prospectus. With this prospectus, the selling
shareholdersshareholder identified in this prospectusor in the accompanying prospectus supplement areis offering up to1,394,870497,448 shares of our common stock. The sellingshareholdersshareholder currently holds 412,500 shares of our common stock. The maximum number of total shares which may be issued to the selling shareholder in connection with the acquisition of Spitz is 497,448.The selling shareholder may sell these shares through public or private transactions, on or off the
NASDAQNasdaq National Market, at prevailing market prices or at privately negotiated prices. As an alternative, the selling shareholder may also distribute the Company’s shares to its shareholders as a dividend or other distribution, and such shareholders of Transnational may or may not subsequently sell them. The selling shareholder or its shareholders will receive all of the net proceeds from the sale of the shares offered by it with this prospectus. The sellingshareholdersshareholder will pay all underwriting discounts and selling commissions, if any, applicable to the sale of those shares.E&SThe Company will not receive any proceeds from the sale of the selling shareholder’s shares.Before purchasing any of the shares, you should consider very carefully the information presented under the caption
"Risk Factors"“Risk Factors” on page24 of this prospectus.E&S'sWHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file at the SEC’s public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
The Company’s common stock is traded on the
NASDAQNasdaq National Market under the symbol"ESCC."“ESCC.”Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
dateDate of thisprospectusProspectus isFebruary 12, 1999.============================================ 1,394,870September 28, 2006497,448 Shares of
Common Stock
EVANS & SUTHERLAND
COMPUTER CORPORATION
PROSPECTUS
==============================================================================================================We have not authorized any dealer, salesperson or other person to give any information or represent anything not contained in this prospectus. You must not rely on any unauthorized information. This prospectus does not offer to sell or buy any shares in any jurisdiction where it is unlawful. The information in this prospectus is current only as of its date.
---------------TABLE OF CONTENTS
Page RISK FACTORS.................................................2 THE COMPANY..................................................6 USE OF PROCEEDS..............................................6 SELLING SHAREHOLDER..........................................7
1
ABOUT THIS
PROSPECTUS........................................7PROSPECTUSThis prospectus is part of a registration statement we have filed with the Securities and Exchange Commission (“SEC”) to register 497,448 shares of our common stock, par value $.20 (the “Shares”). This prospectus does not include all of the information contained in the registration statement and the exhibits to the registration statement. For further information about the Company and the Shares, you should read the registration statement and the exhibits to the registration statement.
As allowed by SEC rules, this prospectus omits various information you can find in the registration statement or the exhibits to the registration statement. For further information, we refer you to the registration statement, including its exhibits and schedules. Statements contained in this prospectus about the provisions or contents of any contract, agreement or any other document referred to are not necessarily complete. For each of these contracts, agreements or documents filed as an exhibit to the registration statement, we refer you to the actual exhibit for a more complete description of the matters involved. You should not assume that the information in this prospectus or any applicable prospectus supplement is accurate as of any date other than the date on the front of those documents. For further information about us or the securities offered under this prospectus, you should refer to that registration statement, which you can obtain from the SEC as described below under the heading “Where You Can Find More Information.”
We have not authorized anyone to provide you with any information that is different from the information contained in this prospectus. The selling shareholder is offering to sell and seeking offers to buy, the Shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of the sale of any Shares.
In this prospectus, the “Company,” “E&S,” “we,” “us,” and “our” refer to Evans & Sutherland Computer Corporation.
WHERE YOU CAN FIND MORE
INFORMATION..........................8 PLAN OF DISTRIBUTION.........................................8 EXPERTS.....................................................10 LEGAL MATTERS...............................................10 ==================================================================INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC’s public reference rooms at 450 Fifth Street, Mail Stop 1-2, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from our web site at “http://www.es.com” or at the SEC’s website at “http://www.sec.gov.”
The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below, and any future filings
made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”):
1. Annual Report on Form 10-K for the fiscal year ended December 31, 2005, as amended through the date hereof;
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 2006;
3. Quarterly Report on Form 10-Q for the quarter ended June 30, 2006;
4. Current Report on Form 8-K dated as of June 7, 2006;
5. Current Report on Form 8-K dated as of May 26, 2006;
6. Current Report on Form 8-K dated as of April 28, 2006;
7. Current Report on Form 8-K dated as of February 7, 2006; and
8. Description of the Company’s capital stock contained in its registration statement on Form 8-A, including all amendments or reports filed for the purpose of updating such description.
You may request a copy of these filings, at no cost, by writing or telephoning Paul Dailey, Acting Chief Financial Officer, at Evans & Sutherland Computer Corporation, 770 Komas Drive, Salt Lake City, Utah 84108, telephone (801) 588-1000.
THE COMPANY
Evans & Sutherland produces high-quality visual systems used to rapidly and accurately display computer-generated images of the real world. With a 38-year history in computer graphics, we are widely regarded as both a pioneer and a leader in providing the world’s most realistic visual systems. We design, manufacture, market and support our visual systems and create unique content for planetariums, science centers, and entertainment venues. We use a wide range of hardware, from desktop personal computers (PCs) to what we believe are the most advanced image generation and display components in the world.
For more than 30 years, we have had a significant share of the overall market for systems used in planetariums, science centers, and entertainment venues. We estimate that our market share has ranged from 20% to 55%, depending on the specific market and time period. With our acquisition of Spitz, Inc. we are now able to provide complete solutions for these market areas as well as provide unique domes and similarly shaped structures for specialized architectural applications. Competitors in these markets range from large businesses who have segments of their business addressing these markets to small specialized providers of niche products and services.
As described in our Form 8-K dated May 26, 2006, the Company recently completed the sale of substantially all of the assets and certain liabilities related to our commercial and military simulation businesses and related service operations (collectively, the “Simulation Business”) to Rockwell Collins, Inc.. As part of the Rockwell Collins transaction closing, we entered into a laser projection systems agreement (the “Rockwell Laser Agreement) to provide and grant exclusive and non-exclusive licenses to use and sell, fixed-based and motion-based laser projection systems in connection with the Simulation Business and certain related businesses of Rockwell Collins. Following the completion of the Rockwell Collins transaction, we no longer operate our business in the military simulation market except for sales of our laser projectors to Rockwell Collins.
On April 28, 2006, we acquired all of the issued and outstanding stock of Spitz from Transnational Industries, Inc. which is referred to herein as the selling shareholder. As a result of our acquisition of Spitz and our sale of the Simulation Business to Rockwell Collins, we have focused our business on providing digital theaters and laser projectors. We are currently working on the production of certain new highly differentiated advanced display products such as the E&S Laser Projector (“ESLP”), to be offered in the digital theater and laser projection markets. Such advanced display products are intended to provide greater resolution, brightness, and contrast to projected images. As detailed in the Proxy Statement which we filed for the Rockwell Collins transaction on April 24, 2006, we intend to use a portion of the proceeds from the Rockwell Collins transaction for working capital in order to continue and to expand the Company’s business in the digital theater, planetarium, and laser projector industries. We intend to continue to develop and market our digital theater and laser projector products and technology and to identify and market new customers for such products and technology.
RISK FACTORS
Before making an investment decision, you should carefully consider the risk factors described below. If any of the following risks actually occurs, it could materially adversely affect our business, financial condition, and results of operations. The risks and uncertainties described below are not the only ones we are facing. We may have other risks and uncertainties of which we are not yet aware or which we currently believe are immaterial that may also impair our business operations. As a prospective investor, you should consult independent advisors as to the technical, tax, business and legal considerations regarding an investment in the
shares. Success DependentShares.As a result of the sale of the Simulation Business to Rockwell Collins on
Competitive StrategyMay 26, 2006, our business has significantly changed. As a result, some of the risks and uncertainties that should be considered in evaluating our business and operations have changed, including many of the risk factors described in our Annual Report on Form 10-K for our annual year ended December 31, 2005. Ourcontinueddomestic and international businesses continue to operate in highly competitive markets that involve a number of risks, some of which are beyond our control. The following discussion highlights some risks and uncertainties that should be considered in evaluating our business and operation following the sale of our Simulation Business.· Our Business Model Has Changed and May Not Produce Consistent Earnings Which Could Adversely Affect Our Business
With the sale of our Simulation Business to Rockwell Collins, our business model has significantly changed. Our business is now based on digital theaters and laser projectors. A significant portion of our future success will depend on completing and selling our laser projector, an unproven product, and future products based on this technology. There is no guarantee that the laser projector or any future products based on this same technology will be successful in the market or that we can develop them. If we are unable to develop our laser projector, our business may be adversely affected.
· We May Experience Difficulty In Identifying, Forming And Maintaining New Business Opportunities That Are Important To The Development Of Our Business.
We have invested, and expect to continue to invest, significant capital in new products, technologies, and business opportunities. We cannot assure you that we will be able to continue to identify suitable opportunities to expand our business in the future. The failure to form or maintain new business opportunities could significantly limit our ability to expand our operations and sales. Moreover, these new opportunities or investments require significant management time, involve a high degree of risk and will present significant challenges. We cannot assure you that these activities will be successful or that we will realize appropriate returns on these activities.
· Our Laser Projectors are New and have Limited Market Penetration.
Our laser projectors have limited market penetration. Our future success will be dependent in significant part on our ability to generate demand for our laser projectors and to develop additional commercial applications that incorporate our laser projector technology. We cannot be certain that our product will succeed in the market, and if we fail to generate increased sales, our future results of operations will be adversely affected.
· We May be Unable to Adequately Respond to Rapid Changes in Technology.
The market for our laser projectors is characterized by rapidly changing technology, evolving industry standards and frequent product introductions. The introduction of products and services embodying new technology and the emergence of new industry standards may render our existing laser projectors obsolete and unmarketable if we are unable to adapt to change. A significant factor in our ability to grow and to remain competitive is our ability to successfully introduce new products and services that embody new technology, anticipate and incorporate evolving industry standards and achieve levels of functionality and prices acceptable to the market. If our laser projectors are unable to meet our customers’ needs or we are unable to keep pace with technological changes in the industry, our laser projectors could eventually become obsolete. We may be unable to allocate the funds necessary to improve our current products or introduce new products to address our customers’ needs and respond to technological change. In the event that other companies develop more technologically advanced products, our competitive position relative to such companies would be harmed.
· Competitors or Third Parties May Infringe E&S Intellectual Property
Throughout its history E&S has been awarded numerous patents. While competitors or third parties have not materially infringed our patents, we are entering the production stage of a new product, the ESLP. We have a number of patents either issued or pending on this technology, but it represents a new field for us and may attract competitors with a risk of infringement and costly legal processes to defend our intellectual property rights which could adversely affect our business.
· Delays in New Product Introductions Could Negatively Affect Financial Performance
During 2006, we have introduced and intend to introduce several important new products, including the ESLP. Delays in introducing and delivering these products could reduce planned sales and profit contribution.
· Our Industry Is Undergoing Rapid Technological Changes, And Our Failure To Keep Up With Such Changes Could Cause Us To Lose Customers And Impede Our Ability To Attract New Customers.
Our success depends on our ability to compete in an industry that is highly competitive, with rapid technological advances and
constantly improvingproducts that require constant improvement in both price and performance.As most market areas in which we operate continue to grow, we are experiencing increased competition, and weWe expect this trend to continue.In recent years,If our competitors are more successful than wehave been forcedare in developing technology and products, then our revenues and growth rates could decline.Our industry is subject to rapid and significant changes in technology as well as customer requirements and preferences, and our failure to keep up with such changes could cause us to lose customers and impede our ability to attract new customers. New technologies could reduce the competitiveness of our theater and projector products. We may be required to select one technology over another, but at a time when it would be impossible to predict with any certainty which technology will prove to be the most economic, efficient or capable of attracting customer usage. Subsequent technological developments may reduce the competitiveness of our products and require upgrades or additional products that could be expensive or unfeasible. If we fail to adapt successfully to
domestictechnological changes or customer preferences, we could lose market share or impede our ability to attract new customers.· Resistance By Potential New Customers To Accept Our Products May Reduce Our Ability To Increase Our Revenue.
The expansion of our business will be dependent upon, among other things, the willingness of additional customers to accept our products and
worldwide political, economic, and technological developments that have strongly affected our markets. Under our current competitive strategy, we endeavor to remain competitive by growing existing businesses, developing new businesses internally, selectively acquiring businesses, increasing efficiency, improving access to new markets, and reducing costs. Although our executive management team and Board of Directors continue to review and monitor our strategic plans, we have no assurancetechnologies. We cannot assure you that we will beablesuccessful in overcoming the resistance of potential customers tocontinuechange their current projectors or theater technologies, and tofollowexpend the capital necessary to purchase and implement ourcurrent strategy or that this strategy will be successful. Stock Price Volatility Related to Period-to-Period Fluctuations of Earnings Our stock price is subject to significant volatilityproducts andwill likely be adversely affected if revenues or earnings in any quarter fail to meet the investment community's expectations. Our revenues and earnings may fail to meet expectations because they fluctuate and are difficult to predict. Our earnings during 1997 and 1998 fluctuated by as much as 194% from quarter to quarter. One of the reasons we experience such fluctuations is that the largest share of our revenues and earnings is from our core simulation-related businesses, which typically have long delivery cycles and contract lengths. In fact, well over half of each quarter's revenues typically result from orders received in previous quarters.technology. Thetiminglack of customer acceptanceof certain large-scale commercial or government contracts may affect the timing and amount of revenue that can be recognized; thus, causing our periodic operating results to fluctuate. Our results may further fluctuate if United States and international governments delay or even cancel production on large-scale contracts due to lack of available funding. Our earnings may not meet either investor or internal expectations because our budgeted operating expenses are relatively fixed in the short term, in light of expected revenue, and even a small revenue shortfall may cause a period's results to be below expectations. Such a revenue shortfall could arise from any number of factors, including delays in the availability of products, delays from chip suppliers, discontinuance of key components from suppliers, other supply constraints, transit interruptions, and overall economic conditions. Another reason our earnings may not meet expectations is that our gross margins are heavily influenced by mix considerations. These mix considerations include the mix of lower-margin prime contracts versus sub-contracts, the mix of new products and markets versus established products and markets, the mix of high-end products versus low-end products, as well as the mix of configurations within these product categories. Future margins may not duplicate historical margins or growth rates.Significant Investment in Research and Development We have no assurance that our significant investment in research and development will generate future revenues or benefits. We currently make and plan to continue to make a significant investment in research and development. We expect total spending for research and development to increase to approximately $31.5 million or 17% of sales in 1998 as compared to $25.5 million or 16% of sales in 1997. This investment is necessary for us to be able to compete in the graphics simulation industry. Developing new products and software is expensive and often involves a long payback cycle. While we have every reason to believe these investments will be rewarded with revenue-generating products, customer acceptance ultimately dictates the success of development and marketing efforts. Success Dependent on Ability to Develop, Produce and Transition New Products Our continued success depends onwould reduce our ability todevelop, produce and transition technologically complex and innovative products that meet customer needs. We have no assurance that we will be able to successfully continue such development, production and transition. The development of new technologies and products is increasingly complex and expensive, which among other risks, increases the risk of product introduction delays. The introduction of a new product requires close collaboration and continued technological advancement involving multiple hardware and software design and manufacturing teams within E&S as well as teams at outside suppliers of key components. The failure of any one of these elements could causeincrease ournew products to fail to meet specifications or to miss the aggressive timetables that we establish. As the variety and complexity of our product families increase, the process of planning and managing production, inventory levels, and delivery schedules also becomes increasingly complex. There is no assurance that acceptance of and demand for our new products will not be affected by delays in this process. Additionally, if we are unable to meet our delivery schedules, we may be subject to the penalties, including liquidated damages, that are included in some of our customer contracts. Product transitions are a recurring part of our business.revenue.· Our
short product life cycles require our ability to successfully manage the timely transition from current products to new products. In fact, it is not unusual for us to announce a new product while its predecessor is still in the final stages of its development. Our transition results could be adversely affected by such factors as development delays, late release of products to manufacturing, quality or yield problems experienced by production or suppliers, variations in product costs, delays in customer purchases of existing products in anticipation of the introduction of new products, and excess inventories of older products and components. Significant Dependence on United States Government Contracts In 1997, 29% of our sales were to agencies of the United States government, either directly or through prime contractors or subcontractors, for which there is intense competition. Accordingly, we have no assurance that we will be able to maintain a significant portion of our sales. These sales are subject to the inherent risks related to government contracts, including uncertainty of economic conditions, changes in government policies and requirements that may reflect rapidly changing military and political developments, and unavailability of funds. These risks also include technological uncertainties and obsolescence, and dependence on annual Congressional appropriation and allotment of funds. In the past, some of our programs have been delayed, curtailed, or terminated. Although we cannot predict such uncertainties, in our opinion there are no spending reductions or funding limitations pending that would impact our contracts. Other characteristics of the government contract market that may affect our operating results include the complexity of designs, the difficulty of forecasting costs and schedules when bidding on developmental and highly sophisticated technical work, and the speed with which product lines become obsolete due to technological advances and other factors characteristic of the market. Our earnings may vary materially on some contracts depending upon the types of government long-term contracts undertaken, the costs incurred in theirperformance, and the achievement of other performance objectives. Furthermore, due to the intense competition for available United States government business, maintaining or expanding government business increasingly requires us to commit additional working capital for long-term programs and additional investments in company-funded research and development. Our dependence on government contracts may lead to other perils as well becauseSales Could Decline Substantially as aUnited States government contractor or sub-contractor, our contractsResult of Terrorist Attacks andoperations are subjectOther Activities that Reduce the Willingness of Our Customers togovernment oversight.Purchase Products.The
government may investigate and make inquiries of our business practices and conduct audits of our contract performance and cost accounting. These investigations may lead to claims against E&S. Under United States government procurement regulations and practices, an indictment of a government contractor could result in that contractor being fined and/or suspendeddemand fora period of time from eligibility for bidding on, or for award of, new government contracts; a conviction could result in debarment for a specified period of time. Dependence on Certain Significant Customers We currently derive a significant portion of our revenues from a limited number of non-government customers. The loss of any one or more of these customers could have a material adverse effect on our business, financial condition and results of operations. In 1997 we were dependent on three of our customers for approximately 26% of our consolidated revenues. In 1996 we were dependent on the same three customers for approximately 34% of our consolidated revenues. We expect that sales to a limited number of customers will continue to account for a substantial portion of our revenues in the foreseeable future. We have no assurance that revenues from this limited number of customers will continue to reach or exceed historical levels in the future. Significant Dependence on International Business Any reduction of our international business could significantly affect our revenues. Our international business accounted for 59% of our 1997 sales. We expect that international sales will continue to be a significant portion of our overall business in the foreseeable future. Our international business experiences many of the same risks our domestic business encounters as well as additional risks such as exposure to currency fluctuations and changes in foreign economic and political environments. Despite our exposure to currency fluctuations, we are not engaged in any hedging activities to offset the risk of exchange rate fluctuations. The current economic crisis affecting the Asian markets is an example of a change in a foreign economic environment that could affect our international business. We are currently unable to estimate the impact this crisis may have on our 1998 revenues. Any similar economic downturns may also decrease the number of orders we receive and our receivable collections. Our international transactions frequently involve increased financial and legal risks arising from stringent contractual terms and conditions and widely differing legal systems, customs, and standards in foreign countries. In addition, our international sales often include sales to various foreign government armed forces, with many of the same inherent risks associated with United States government sales identified above. Failure of Commercial Airline Business We have no assurance that our commercial airline business will continue to succeed. Our commercial airline business currently accounts for approximately 15% to 20% of our revenues and is subject to many of the risks related to the commercial simulation market that may adversely affect our business. The following risks are characteristic of the commercial simulation market: uncertainty of economic conditions, dependence upon the strength of the commercial airline industry, air pilot training requirements, competition, timely performance by subcontractors on contracts in which E&S is the prime contractor, and changes in technology.Failure of New Businesses We have no assurance that our new businesses will gain market acceptance or survive the intense competitive pressures of their respective markets. Our new businesses currently account for approximately 12% to 15% of our revenues in the aggregate; however, we project these businesses to grow to approximately 18% to 20% of revenues by 1999. These businesses will not survive and we will not meet our revenue projections if we are unable to (a) develop strong partner relationships with manufacturers of computer chips and personal computers in our desktop graphics business, (b) gain market acceptance of new technology and increase market size and demand in a developing new market in our digital theater business, and (c) gain market acceptance in a developing new market in our digital studio business. Other factors that may also affect the success of our new businesses include technological uncertainties and obsolescence, uncertainty of economic conditions, unavailability of working capital, and other risks inherent in new businesses. Lack of Return on Investment in Private Finance Initiatives We are currently involved in several private finance initiatives in which we may not recover our investment. A private finance initiative is designed to increase the involvement of the private sector in the provision of services that have traditionally been provided by the public sector. Private finance initiatives require the private sector to use its own capital to invest in assets which then are used to provide a long term service, such as simulation training, to a public sector customer. The number of programs being developed as private finance initiatives is increasing worldwide. We are currently involved in proposals to international military customers where we would be an equity partner of the private finance initiative's prime contractor and program manager. Private finance initiative programs, however, are subject to inherent risks, including the commitment and resulting unavailability of working capital and fixed assets, long cycles in which to receive a return on investment, and termination or default of contracts. These risks also include technological uncertainties and obsolescence, uncertainty of economic conditions, unavailability of funds, and changes in United States and international government policies and requirements that may reflect rapidly changing military and political developments. Year 2000 Noncompliance We have no assurance that all of our internal systems, products and services, and suppliers will be Year 2000 compliant and that the lack of compliance will not significantly impact our operations and financial results including our ability to continue as a going concern. The Year 2000 issue is the result of potential problems with computer systems or any equipment with computer chips that store the year portion of the date as just two digits (e.g. 98 for 1998). Systems using this two-digit approach will not be able to determine whether "00" represents the year 2000 or 1900. The problem, if not corrected, will make those systems fail altogether or, even worse, allow them to generate incorrect calculations causing a disruption of normal operations. Although we have created a company-wide Year 2000 team to identify and resolve Year 2000 issues associated with our information and non-information technology systems andour products and serviceswe have no assurance that we will address all potential problems. There can be no assurance that there will not be a delay in,is dependent upon new orders from customers operating various public attractions. In the event terrorist attacks orincreased costs associated with,other activities decreases theimplementationattendance for our customers’ venues, the demand or willingness ofYear 2000 modifications, or thatoursuppliers will adequately prepare for the Year 2000 issue. It is possible that any such delays, increased costs, or supplier failures could have a material adverse impact on our operations and financial results, by, for example, impacting our abilitycustomers todeliver products or services to our customers. We are currently developing a contingency plan to cope with our unresolved Year 2000 problems. For third-party products that we distribute withpurchase our productswe have sought information frommay decline and our revenue may decline substantially.· Our Shareholders May Not Realize Certain Opportunities Because of the
product manufacturers regarding the products' Year 2000 readiness status. We direct customers who use the third-party products to the product manufacturer for detailed Year 2000 status information. On our Year 2000 web site at www.es.com/investor/y2k_corp.html, we provide information regarding which of our products is Year 2000 ready and other general information related to our Year 2000 efforts. We have no assurance that the third-party products will be Year 2000 ready or that a lack of readiness by such third parties will not materially adversely impact our operations and financial results.Anti-Takeover Effect of State Law We are subject to theThe Utah Control Shares Acquisition Act
whichprovides that any person who acquires 20% or more of the outstanding voting shares of a publicly held Utah corporation will not have voting rights with respect to the acquired shares unless a majority of the disinterested shareholders of the corporation votes to grant such rights. This could deprive shareholders of opportunities to realize takeover premiums for their shares or other advantages that large accumulations of stock would provide because anyone interested in acquiring E&S could only do so with the cooperation of our board of directors and a majority of disinterested shareholders.· Your Ability to Sell Your Stock May be Substantially Limited
If we fail to meet any of the
board.continued listing standards of the Nasdaq National Market, our common stock may be delisted from the Nasdaq National Market. If we are delisted from the Nasdaq National Market, we expect our common stock will be traded on the Nasdaq Capital Market if we meet the listing standards of that market or we will attempt to be traded on the OTC Bulletin Board or “pink sheets” maintained by the National Quotation Bureau, Inc. The OTC Bulletin Board and pink sheets are generally considered less efficient markets than the Nasdaq National Market and the Nasdaq Capital Market.· We May Not Receive the $10 Million in Escrow Related to the Sale of Assets to Rockwell Collins and the Laser Projector Agreement
As part of the Rockwell Purchase Agreement and Laser Agreement, a total of $10.0 million is being held in an escrow account to secure any post-closing reduction in the purchase price based on the net asset value of the Simulation Business at closing, our indemnification obligations under the Rockwell Purchase Agreement and our delivery obligations under the Rockwell Laser Agreement. In the event that Rockwell Collins becomes entitled to any such purchase price reduction under the Rockwell Purchase Agreement, penalty under the Rockwell Laser Agreement or indemnification under the Rockwell Purchase Agreement, we may forfeit some or all of the $10.0 million deposited in escrow, which will reduce the amount of cash we have available in the future. Accordingly, there is no guarantee that we will receive these funds.
If we do not deliver a motion-based ESLP to Rockwell Collins by a specified time, Rockwell Collins has the right to withdraw up to $3.0 million from the escrow
account under the terms of the Rockwell Purchase Agreement and the related escrow agreement.
· We Continue to be Exposed to Contingent Liabilities Relating to the Sale of our Simulation Business, Which Could Adversely Affect Our Financial Conditon.
In connection with the sale of our Simulation Business, we agreed to indemnify Rockwell Collins for any losses from breaches of the representations, warranties or covenants we made in the Asset Purchase Agreement that occur within certain periods after the closing. We have also agreed that certain indemnification obligations will be capped at certain amounts. For example, an indemnification claim by Rockwell Collins could result if Rockwell Collins suffers any damages arising out of the inaccuracy of any of our representations or if we fail to comply with a covenant or other agreement in the Asset Purchase Agreement. In addition, we have agreed to retain all liabilities relating to the Simulation Business that are not being expressly assumed by Rockwell Collins, and to indemnify Rockwell Collins for any claims or damages arising from such retained liabilities. The payment of any such indemnification obligations could adversely impact our cash resources following the completion of the sale of our simulator business and our ability to pursue other opportunities, including the development of our digital theater and laser projector businesses.
· We May Not Be Able to Integrate Spitz into Our Operations Successfully
We may experience difficulties integrating Spitz’s business with ours. This could result in additional costs and loss of productivity that could materially affect our operations and financial results.
· We May Face Risks Related to an SEC Investigation and Securities Litigation in Connection with the Restatement of our Financial Statements
We are not aware that the SEC has begun any formal or informal investigation in connection with accounting errors requiring restatement of 2003 and 2004 financial statements and 2004 and 2005 quarterly financial statements, or that any laws have been violated. However, if the SEC makes a determination that the Company has violated Federal securities laws, the Company may face sanctions, including, but not limited to, monetary penalties and injunctive relief, which could adversely affect our business. In addition, the Company or its officers and directors could be named defendants in civil proceedings arising from the restatement. We are unable to estimate what our liability in either event might be.
· If we are unable to retain certain key personnel and hire new highly skilled personnel, we may not be able to execute our business plan.
We are substantially dependent on the continued services of certain key personnel. These individuals have acquired specialized knowledge and skills with respect to the Company and its operations. The loss of any of these individuals could harm our business. Our business is also dependent on our ability to retain, hire and motivate talented, highly skilled personnel. If we do not succeed in retaining and motivating our
existing key employees and in attracting new key personnel, we may be unable to meet our business plan and as a result, our stock price may decline.
Forward-Looking Statements and Associated Risks
This prospectus, including all documents incorporated herein by reference, includes certain
"forward-looking statements"“forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, including, among others, those statements preceded by, followed by or including the words"believes," "expects," "anticipates"“believes,” “expects,” “anticipates” or similar expressions.These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. Our actual results could differ materially from these forward-looking statements. In addition to the other risks described elsewhere in this
"Risk Factors"“Risk Factors” discussion, important factors to consider in evaluating such forward-looking statements include risk of product demand, market acceptance, economic conditions, competitive products and pricing, difficulties in product development, commercialization and technology. In light of these risks and uncertainties, many of which are described in greater detail elsewhere in this"Risk Factors"“Risk Factors” discussion, there can be no assurance that the events contemplated by the forward-looking statements contained in this prospectus will, in fact, occur.THE COMPANY E&S develops and manufactures hardware and software for visual systems that produce vivid and highly realistic three-dimensional (3-D) graphics and synthetic environments. Our product offerings include a full range of high-performance visual systems for simulation, training and virtual reality applications, as well as graphic accelerator products for personal computer workstations. We are organized into six business units. Each business unit develops and markets its products to a worldwide customer base. These business units can be grouped into two areas: core businesses and new businesses. The core businesses are the simulation-related units where we have an established market presence with significant market share and which represent the majority of E&S's revenues and earnings. The new businesses are in high-growth markets where we have superior technology, which can be directed to new applications. E&S was founded in 1968 and is headquartered in Salt Lake City, Utah. E&S also has offices located in Milpitas, California; Boston, Massachusetts; Dallas, Texas; Orlando, Florida; Beijing, China; Dubai, United Arab Emirates; Horsham, England; and Munich, Germany.USE OF PROCEEDS
Other than the price the selling shareholders will pay to exercise their warrants and options, weWe will not receive any of the proceeds from
anythe sale ofshares offered withShares by the selling shareholder pursuant to this prospectus. We will pay the costs of this offering, which are estimated to be$39,212. The$36,224.62. Any transfer taxes payable on any such shares and any commission and discounts payable to underwriters, agents or dealers will be paid by the sellingshareholders are not obligated to exercise their warrants and options, and there can be no assurance that they will choose to exercise all or anyshareholder.SELLING SHAREHOLDER
In connection with the acquisition of
such warrants and options. Our gross proceeds ifall of thewarrantsstock of Spitz from the selling shareholder, we issued 412,500 shares of our common stock to the selling shareholder. Pursuant to the Stock Purchase Agreement entered between the Company, Spitz, andoptions are exercised for cash would be $14,149,438. However, we are unable to predicttheexact amount of cash we will receive upon exercise of the warrants and options because the warrants and options have a cashless exercise provision. This provision allows the holder to pay for the warrants or options by reducingselling shareholder, the number ofshares receivedShares to be issued to the selling shareholder is subject to adjustment based uponexercise. Wethe average trading price of the Company’s stock during the 60 day period immediately preceding the date of registration. The maximum number of Shares which may be issued to the selling shareholder is 497,448. The exact number of Shares issued to the selling shareholder willuse any proceeds we receivebe provided in an amendment to this registration statement. The selling shareholder, including its respective transferees, pledges, donees or successors, may from time to time offer and sell theexercise of warrants and optionscommon stock issued toaugment our working capital for general corporate purposes.SELLING SHAREHOLDERSit pursuant to this prospectus.The following table sets forth
certain information asthe name ofFebruary 12, 1999, with respect tothe sellingshareholders. Beneficial ownership after this offering will depend onshareholder, the number of sharesactually sold by the selling shareholders. Toand percentage of ourknowledge, the selling shareholders have sole voting and investment power with respect to these securities. On July 22, 1998, we issued to Intel Corporation 901,408 shares of E&S's Class B-1 Preferred Stock and a warrant to purchase 378,462 shares of the Class B-1 Preferred Stock at a price per share of $33.28125. Intel paid us $23,999,988 for the 901,408 shares and we used these funds to augment our working capital for general corporate purposes. All of the shares of Class B-1 Preferred Stock may be converted into shares of common stock at any time, initially on a one-for-one basis. This conversion ratio is subject to adjustment if E&S issues common stock or Class B-1 Preferred Stock as a dividend or in a stock split or reduces the outstanding stock in a reverse stock split or stock combination. The conversion ratio may also be adjusted in the event of a reclassification or similar transaction. Once Intel converts the Class B-1 Preferred Stock into shares, it may offer or sell to the general public any or all of the shares with this prospectus. We have entered into an agreement with Intel to accelerate the development of high-end graphics and video subsystems for workstations. On October 14, 1998 we granted 40,000 options to purchase shares of common stock to Mr. Christiansen, a former E&S director and current E&S consultant, at an exercise price of $14 per share. All of these options are currently exercisable. On October 25, 1998, we granted 75,000 options to purchase shares of common stock to Mr. Gibbs, an E&S officer, at an exercise price of $13.25 per share. Of these options, 25,000 are currently exercisable, 25,000 will be exercisable on October 25, 1999, and 25,000 will be exercisable on October 25, 2000.
Name of Selling Shares of Common Stock Shares of Common Shares of Common Stock Shareholder Beneficially Owned Prior Stock Being Registered Beneficially Owned After to the Offering For Resale the Offering(2) - ---------------------------- ------------------------------- -------------------------- ------------------------------ Number % of Class(1) Number Number Percent(3) ------------ -------------- -------------------------- ------------ --------------Intel Corporation 1,282,128 11.46% 1,279,870 2,258 * Henry N. Christiansen 40,000 * 40,000 0 * William C. Gibbs 75,000 * 75,000 0 ** Represents less than 1% of the total issued and outstanding shares of common stock. (1) Includes allcommon stock beneficially owned by the selling shareholderas aimmediately prior to the registration, the number of shares registered and the number of shares and percentageof
the 9,910,236 shares ofour common stockoutstanding on February 12, 1999, together withto be beneficially owned by the selling shareholder assuming alloptions, warrants or other securities whichshares covered by this registration statement are sold. However, because the selling shareholder mayconvert into common stock. (2) Assumes that the selling shareholder disposes ofoffer all or a portion of the shares covered by this prospectus at any time anddoes not acquirefrom time to time hereafter, the exact number of shares that the selling shareholder may hold at anyadditional common stock. Assumes no other exercisetime hereafter cannot be determined at this time. The last two columns ofoptions, warrants, conversion rights or additional securities, if any. (3) Includesthis table assume that allcommon stock beneficially ownedshares covered by this prospectus will be sold by the selling shareholderas a percentage of the 11,305,106 shares of common stock outstanding after the offeringandexercise of all options and warrants and conversion of securities into common stock. ABOUT THIS PROSPECTUS This prospectus is part of a registration statement we have filed with the Securities and Exchange Commission to register 1,394,870that no additional shares of our common stockpar value $.20. This prospectus does not include all of the information contained in the registration statement and the exhibits to the registration statement. For further information about E&S and the shares, you should read the registration statement and the exhibits to the registration statement. Statements contained in this prospectus concerning documents we have filed with the SEC as exhibits to the registration statement or otherwisearenot necessarily complete and, in each instance, you should refer to the actual filed document. Nevertheless, we have provided all material information from the exhibits that is relevant to this prospectus.We have not authorized anyone to provide you with any information that is different from the information contained in this prospectus. The selling shareholders are offering to sell and seeking offers to buy the shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate onlyheld as of the date hereof or subsequently bought or sold by the selling shareholder.
Beneficial Ownership Prior
to the Registration
Shares Covered
by this
Registration
Statement
Beneficial Ownership
After the Shares
are Sold (2)
Name
Number
Percent (1)
Number
Percent (1)
Transnational Industries, Inc.
412,500
3.6
%
497,448
—
—
%
(1) We have calculated the percentage of issued and outstanding shares of common stock held by the selling shareholder based on 11,341,163 shares of common stock issued and outstanding as of June 30, 2006.
(2) We have assumed all shares of common stock set forth in this
prospectus, regardlessregistration statement have been sold.PLAN OF DISTRIBUTION
Any or all of the selling shareholder’s Shares may be sold from time
of delivery of this prospectus or ofto time by thesale of any shares. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms at 450 Fifth Street, Mail Stop 1-2, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from our web site at "http://www.es.com" or at the SEC's website at "http://www.sec.gov." The SEC allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below, and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934: (1) Annual Report on Form 10-K for the fiscal year ended December 31, 1997, as amended through the date hereof; (2) Proxy Statement dated April 20, 1998; (3) Quarterly Report on Form 10-Q for the quarter ended March 27, 1998; (4) Quarterly Report on Form 10-Q for the quarter ended June 26, 1998, as amended through the date hereof; (5) Quarterly Report on Form 10-Q for the quarter ended September 25, 1998, as amended through the date hereof; (6) Current Report on Form 8-K dated July 13, 1998; and (7) Description of E&S's capital stock contained inselling shareholder, itsregistration statement on Form 8-A filed September 27, 1978, including all amendments or reports filed for the purpose of updating such description. You may request a copy of these filings, at no cost, by writing or telephoning John T. Lemley, Chief Financial Officer, at Evans & Sutherland Computer Corporation, 600 Komas Drive, Salt Lake City, Utah 84108, telephone (801) 588-1000. PLAN OF DISTRIBUTION The selling shareholders, theirpledgees, donees, transferees, distributees orsuccessors-in-interestsuccessors-in-interest. The selling shareholder may sellanyall oralla portion of thesharesShares from time to time while the registration statement of which this prospectus is a part remains effective.E&S has agreed thatThe aggregate proceeds to the selling shareholder from the sale of the selling shareholder’s Shares offered by it hereby willusebe the prices at which such Shares are sold, less any commissions. Alternatively, the selling shareholder may elect to distribute the Shares to itsbest efforts to keep the registration statement effective for three years (orstockholders on ashorter period if all the shares have been soldpro rata basis as a dividend ordisposed of prior to such time).other distribution. The sellingshareholdersshareholder’s stockholders may then elect to sell their proportionate amount of the Shares.The selling shareholder or its stockholders may sell
sharesShares on theNASDAQNasdaq National Market, in privately negotiated transactions or otherwise, atany price.fixed prices that may by changed, at market prices prevailing at the time of sale, at prices related to such market prices or at negotiated prices. Shares may be sold by one or more of the following methods, without limitation:(a) block trades in which the broker or dealer so engaged will attempt to sell the sharesShares as agent but may position and resell a portion of the block as principal to facilitate the transaction, (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this prospectus, (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers, (d) privately negotiated transactions, and (e) a combination of any such methods of sale. In effecting sales, brokers and dealers engaged by the sellingshareholdersshareholder or the Company may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from the selling shareholder (or, if any such broker-dealer acts as agent for the purchaser of such Shares, from such purchaser) in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. Broker-dealers may agree with the Company or the sellingshareholdersshareholder to sell a specified number ofsharesShares at a stipulated price pershare,Share, and, to the extent such broker-dealeris unable to do so acting as agent for the selling
shareholders,shareholder, to purchase as principal any unsoldsharesShares at the price required to fulfill the broker-dealer commitment to the sellingshareholders.shareholder. Broker-dealers who acquiresharesShares as principal may thereafter resell suchshares.Shares from time to time in transactions (which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above) in the over-the-counter market or otherwise at prices and on terms then prevailing at the time of sale, at prices then related to the then-current market price or in negotiated transactions and, in connection with such resales, may pay to or receive from the purchasers of such Shares commissions as described above. The Company or the sellingshareholdersshareholder may also sellsharesShares in accordance with Rule 144 under the Securities Act or other exemption from registration, rather than pursuant to this prospectus.In connection with distributions of
sharesShares or otherwise, the Company and the sellingshareholdersshareholder may enter into hedging transactions with broker-dealers or other financial institutions. In connection with such transactions, broker-dealers or other financial institutions may engage in short sales ofE&S'sthe Company’s common stock in the course of hedging the positions they assume with the sellingshareholders.shareholder. The sellingshareholdersshareholder may also sellE&S'sthe common stock short and deliversharesShares to close out such short positions. The sellingshareholdersshareholder may also enter into option or other transactions with broker-dealers or other financial institutions which require the delivery to such broker-dealers or other financial institutions ofsharesShares offered hereby, whichsharesShares such broker-dealers or other financial institutions may resell pursuant to this prospectus. The sellingshareholdersshareholder may also pledgesharesShares to a broker-dealer or other financial institution, and, upon default, such broker-dealer or other financial institution may effect sales of the pledgedsharesShares pursuant to this prospectus.The selling
shareholdersshareholder and any brokers and dealers through whom sales of thesharesShares are made may be deemed to be"underwriters"“underwriters” within the meaning of the Securities Act, and the commissions or discounts and other compensation paid to such persons may be regarded asunderwriters'underwriters’ compensation.E&SThe Company will pay all expenses of registration (including the fees and expenses of the selling
shareholders'shareholder’s counsel) incurred in connection with this offering, but the sellingshareholdersshareholder will pay all underwriting discounts, brokerage commissions and other similar expenses incurred by the sellingshareholders. E&Sshareholder. The Company has agreed to indemnify the sellingshareholdersshareholder against certain losses, claims, damages and liabilities, including those arising under the Securities Act.At the time a particular offer of the
sharesShares is made, to the extent required,E&Sthe Company will distribute a supplement to this prospectus which will identify and set forth the aggregate amount ofsharesShares being offered and the terms of the offering.The selling shareholder may sell the Shares at any price. Sales of the
sharesShares at less than market prices may depress the market price ofE&S'sthe Company’s common stock. Moreover, generally the sellingshareholders areshareholder is not restricted as to the number ofshares thatShares which may be sold at any one time, and it is possible that a significant number ofsharesShares could be sold at the same time.However, to12
The Company, the
extent a selling shareholder is an affiliate of E&S, the selling shareholder would be subject to the volume limitations of Rule 144 under the Securities Act. Theselling shareholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M, which may limit the timing of purchases and sales of thesharesShares by the sellingshareholdersshareholder and any other such person. Furthermore, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of thesharesShares to engage in market-making activities with respect to the particularsharesShares being distributed for a period of up to five business days prior to the commencement of such distribution. All of the foregoing may affect the marketability of thesharesShares and the ability of any person or entity to engage in market-making activities with respect to theshares.Shares. To comply with certain
states'states’ securities laws, if applicable, thesharesShares may be sold in any such jurisdictions only through registered or licensed brokers or dealers. ThesharesShares may not be sold in certain states unless the seller meets the applicable state notice and filing requirements.EXPERTS
The consolidated financial statements and
scheduleschedules of Evans&and Sutherland Computer Corporation as of December 31,19972005 andDecember 27, 19962004, and for each of the years in the three-year period ended December 31,1997,2005, have been incorporated by reference hereinand in the registration statementin reliance upon the report of KPMG LLP, independentcertifiedregistered publicaccountants,accounting firm, appearing elsewhere incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.The audit report covering the December 31, 2005, consolidated financial statements contains an explanatory paragraph that states the consolidated financial statements as of December 31, 2004 and for each of the years ended December 31, 2004 and 2003 have been restated.
LEGAL MATTERS
For purposes of this offering,
Snell & Wilmer L.L.P., Salt Lake City, Utah,Powell Goldstein LLP, as counsel toE&S,the Company, is giving its opinion on the validity of theshares.II-1Shares.PART II
INFORMATION NOT
REQUIREDRQUIRED IN PROSPECTUSITEM 14. Other Expenses of Issuance and Distribution
E&SThe Company estimates that expenses in connection with the transactions described in this registration statement will be as follows.
E&S will pay allAll expenses incurred with respect to thetransactions. SEC Registration Fee....................................................$ 7,212 Printing Expenses.........................................................1,000 Accounting Fees and Expenses..............................................5,000 Legal Fees and Expenses..................................................25,000 Transfer Agent Fees and Expenses..........................................1,000 Total.........................................................$ 39,212transactions will be paid by the Company.
SEC Registration Fee
$
224.62
Printing Expenses
2,000
Accounting Fees and Expenses
8,000
Legal Fees and Expenses
25,000
Transfer Agent Fees and Expenses
1,000
Total
$
36,224.62
ITEM 15. Indemnification of Directors and Officers
Section 15-10a-901, et seq., of the Utah Revised Business Corporations Act authorizes a court to award, or a
corporation'scorporation’s board of directors to grant, indemnify to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act. The E&S Bylaws require E&S to indemnify its directors and officers, including circumstances in which indemnification is otherwise discretionary under Utah law. E&S has entered into indemnification agreements with its directors containing provisions which are in some respects broader than the specific indemnification provisions contained in Utah law. The indemnification agreements may require E&S, among other things, to indemnify its directors and officers against certain liabilities that may arise by reason of their status or service as directors or officers (other than liabilities arising from willful misconduct of a culpable nature), to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified, and to obtain director and officer insurance, if available on reasonable terms. E&S's&S’s Articles of Incorporation provide for indemnification of its directors and officers to the maximum extent permitted by Utah law, and E&S's&S’s Bylaws provide for indemnification of its directors, officers, employees and other agents as permitted by Utah law.ITEM 16. Exhibits
Exhibit Number Exhibit4.1 Series B Preferred Stock and Warrant Purchase Agreement dated July 20, 1998, between E&S and Intel, filed with the Form 10-Q for the quarter ended September 25, 1998, incorporated herein by reference 4.2 Warrant to Purchase Series B Preferred Stock dated July 22, 1998, between E&S and Intel, filed with the Form 10-Q for the quarter ended September 25, 1998, incorporated herein by reference 4.3 Certificate of Designation, Preferences and Other Rights of the Class B-1 Preferred Stock of E&S, filed with the Form 10-Q for the quarter ended September 25, 1998, incorporated herein by reference 4.4 Option to purchase shares of E&S common stock dated October 14, 1998 between E&S and Henry Christiansen 4.5 Option to purchase shares of E&S common stock dated October 25, 1998 between E&S and William Gibbs 5.1 Opinion of Snell & Wilmer, LLP 23.1 Consent of KPMG LLP 23.2 Consent of Snell & Wilmer, LLP (included in Exhibit 5.1) 24 Power of Attorney (included on signature page of registration statement)II-2· Articles of Incorporation and Bylaws
3.1.1Articles of Incorporation, as amended, filed as Exhibit 3.1 to Evans & Sutherland Computer Corporation’s Annual Report on Form 10-K, SEC File No. 000-08771, for the fiscal year ended December 25, 1987, and incorporated herein by this reference.
3.1.2Amendments to Articles of Incorporation filed as Exhibit 3.1.1 to Evans & Sutherland Computer Corporation’s Annual Report on Form 10-K, SEC File No. 000-08771, for the fiscal year ended December 30, 1988, and incorporated herein by this reference.
3.1.3Certificate of Designation, Preferences and Other Rights of the Class B-1 Preferred Stock of Evans & Sutherland Computer Corporation, filed as Exhibit 3.1 to Evans & Sutherland Computer Corporation’s Form 10-Q, SEC File No. 000-08771, for the quarter ended September 25, 1998, and incorporated herein by this reference.
3.2.1Amended and Restated Bylaws of Evans & Sutherland Computer Corporation, filed as Exhibit 3.2 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, 2000, and incorporated herein by this reference.
3.2.2Amendment No. 1 to the Amended and Restated Bylaws of Evans & Sutherland Computer Corporation, filed as Exhibit 3.3 to Evans & Sutherland Computer Corporation’s Form 10-K for the year ended December 31, 2000, and incorporated herein by this reference.
· Instruments Defining the Rights of Security Holders
4.1Form of Rights Agreement, dated as of November 19, 1998, between Evans & Sutherland Computer Corporation and American Stock Transfer Trust Company which includes as Exhibit A, the form of Certificate of Designation for the Rights, as Exhibit B, the form of Rights Certificate and as Exhibit C, a Summary of Rights, filed as Exhibit 1 to Evans & Sutherland Computer Corporation’s Registration Statement on Form 8-A filed December 8, 1998, and incorporated herein by this reference.
4.2First Amendment to Rights Agreement dated as of June 7, 2000 between Evans & Sutherland Computer Corporation and American Stock Transfer & Trust Company, filed as Exhibit 10.14 to Evans & Sutherland Computer Corporation’s Form 10-Q for the quarter ended June 30, 2000, and incorporated herein by this reference.
4.3Second Amendment to Rights Agreement dated as of August 13, 2004 between Evans & Sutherland Computer Corporation and American Stock Transfer & Trust Company, filed as Exhibit 4.1 to Evans & Sutherland Computer Corporation’s Form 8-K filed on August 16, 2004, and incorporated herein by this reference.
· Opinion on Legality
5.1 Opinion of Powell Goldstein LLP, filed herein.
· Subsidiaries of the Registrant
21.1Subsidiaries of Registrant filed as exhibit 21.1 to Evans & Sutherland Computer Corporation’s Form 10-K filed April 3, 2006, and incorporated herein by this reference.
· Consent of Experts and Counsel
23.1Consent of Independent Registered Public Accounting Firm, filed herein.
ITEM 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a twenty percent (20%) change in the maximum aggregate offering price set forth in the
"Calculation“Calculation of RegistrationFee"Fee” table in the effective registration statement;(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 (1)(i) and (1)(ii) do not apply if the registration statement is on Form S-3, Form S-8, or Form F-3 and 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 Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities 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 Securities Act, each filing of the
registrant'sregistrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefitplan'splan’s annual report pursuant to Section 15(d) of the Exchange Act) 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.(5) To deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.
(6) That, insofar as indemnification for liabilities arising under the Securities 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 Commission such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final adjudication of such issue.
17
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 authorized this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Salt Lake City, State of Utah on the
12th28th day ofFebruary, 1999. EVANS & SUTHERLAND COMPUTER CORPORATION By: ______/s/_____________________________ Mark C. McBride Vice President, Corporate Controller and Corporate SecretarySeptember, 2006.
EVANS & SUTHERLAND
COMPUTER CORPORATION
By: /s/ David H. Bateman
David H. Bateman
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 capacity and on the dates indicated.
Signature
Title
Date
February 12, 1999 _______*_________________________/s/ David H. Bateman
Chief Executive Officer and Director
September 28, 2006
David H. Bateman
(Principal Executive Officer)
/s/ Paul L. Dailey
Acting Chief Financial Officer
September 28, 2006
Paul L. Dailey
(Principal Financial Officer and Principal Accounting Officer)
/s/ David J. Coghlan
Chairman of the Board
of Directors Stewart Carrell _______*________________________September 28, 2006
David J. Coghlan
/s/ William Schneider, Jr.
Director
and President (Chief Executive February 12, 1999 -September 28, 2006
William Schneider, Jr.
/s/ James
R. Oyler Officer) _______*_________________________ Vice President and Chief Financial February 12, 1999 - John T. Lemley Officer (Principal Financial Officer) Vice President, Corporate Controller and _______*__________________________ Corporate Secretary (Principal February 12, 1999 - Mark C. McBride Accounting Officer) _______*__________________________P. McCarthyDirector
February 12, 1999 Gerald S. Casilli _______*_________________________ Director February 12,1999 Peter O. Crisp _____ *_________________________ Director February 12, 1999 --- Ivan E. Sutherland ______ /s/__________________________ February 12, 1999 ---- Mark C. McBride * Attorney-in-factEXHIBIT INDEX
Exhibit Number Exhibit4.1 Series B Preferred Stock and Warrant Purchase Agreement dated July 20, 1998, between E&S and the selling shareholder, filed with the Form 10-Q for the quarter endedSeptember
25, 1998, incorporated herein by reference 4.2 Warrant to Purchase Series B Preferred Stock dated July 22, 1998, between E&S and the selling shareholder, filed with the Form 10-Q for the quarter ended September 25, 1998, incorporated herein by reference 4.3 Certificate of Designation, Preferences and Other Rights of the Class B-1 Preferred Stock of E&S, filed with the Form 10-Q for the quarter ended September 25, 1998, incorporated herein by reference 4.4 Option to purchase shares of E&S common stock dated October 14, 1998 between E&S and Henry Christiansen 4.5 Option to purchase shares of E&S common stock dated October 25, 1998 between E&S and William Gibbs 5.1 Opinion of Snell & Wilmer, LLP 23.1 Consent of KPMG LLP 23.2 Consent of Snell & Wilmer, LLP (included in Exhibit 5.1) 24 Power of Attorney (included on signature page of registration statement)28, 2006James P. McCarthy