As Filed Withfiled with the Securities and Exchange Commission on May 19, 1999
September 28, 2006
Registration Statement No. 333-67189
333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------
AMENDMENT NO. 3 TO
FORM 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. Lemley
Paul Dailey
Acting Chief Financial Officer
and Corporate Secretary
Evans & Sutherland Computer Corporation
600
770 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. o
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. |X|
x
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.
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 (5)
- --------------------------- -------------------------- -------------------------- -------------------------- -----------------------
Common Stock, $.20 par 1,279,870 $ 18.6875(3) $ 23,917,571(3) $ 6,649
value 115,000 Shares $ 17.625(4) $ 2,026,875(4) $ 563
=========================== ========================== ========================== ========================== =======================
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 to an aggregate of 1,394,870497,448 shares of common stock, $.20 par value, of Evans & Sutherland Computer Corporation 901,408
shares of(the “Company”) which may be acquiredheld by suchthe selling shareholdersshareholder. 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 upon conversioncertain trading price averages. The maximum number of shares issuable to the selling shareholder pursuant to the Spitz transaction is 497,448. The exact number of Class B-1 Preferred Stock into common stock,
378,462 shares of which mayto be acquired by such selling shareholders
uponregistered will be included in the exercise 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 involving E&S's common stock of the Company, to prevent dilution, the number of shares of E&S's common 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 of 1933.
(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 the NASDAQNasdaq 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 the NASDAQNasdaq National Market.
(5)
(4)The registration fee was paid as follows: $6,649 in November 1998$224.62 on September 28, 2006 for the registration of 1,279,870 shares497,448 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 prospectus is not complete and $563 in February 1999 for the
registration of 115,000 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 orchanged. We may not sell these securities until the registration statement shall become effective on
such date asfiled with the Securities and Exchange Commission acting pursuantis effective. This prospectus in not an offer to said
Section 8(a), may determine.
Subject To Completion, Dated September 28, 2006
PROSPECTUS
600
770 Komas Drive
Salt Lake City, Utah 84108
(801) 588-1000
EVANS & SUTHERLAND
1,394,870
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 prospectus or in the accompanying prospectus supplement areis offering up to 1,394,870497,448 shares of our common stock. The selling shareholdersshareholder 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 selling shareholdersshareholder 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 page 24 of this prospectus.
E&S's
WHERE 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." The closing price of the stock on May 14, 1999 was $17.625.
“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 Date of this Prospectus is September 28, 2006
497,448 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
1
ABOUT THIS PROSPECTUS
This 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
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 19, 1999.
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.Shares.
As a result of the sale of the Simulation Business to Rockwell Collins on May 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. Our domestic 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's Business May Suffer if&S Intellectual Property
Throughout its Competitive Strategy is Not Successfulhistory 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 continuedIndustry 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
improving products 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 we have 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 be ablesuccessful in overcoming the resistance of potential customers to continuechange their current projectors or theater technologies, and to followexpend the capital necessary to purchase and implement our current strategy or that this strategy will be successful.
E&S's Stock Price May be Adversely Impacted if its Revenues or Earnings Fail to
Meet Expectations
Our stock price is subject to significant volatilityproducts and will 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 significantly 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 business, which
typically has long delivery cycles and contract lengths.technology. The timinglack of customer acceptance of 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:
o delays in the availability of products,
o delays from chip suppliers,
o discontinuance of key components from suppliers,
o other supply constraints,
o transit interruptions, and
o 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.
2
E&S's Significant Investment in Research and Development May Not Payoff if the
Products Do Not Meet its Customers' Needs
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.
Total spending for research and development was $31.8 million or 16.6% of sales
in 1998 as compared to $25.5 million or 16.0% 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.
E&S May Not Continue to be Successful if it is Unable to Develop, Produce and
Transition New Products
Our continued success depends onwould reduce our ability to develop, 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 our new 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:
o development delays,
o late release of products to manufacturing,
o quality or yield problems experienced by production or suppliers,
o variations in product costs,
o excess inventories of older products and components, and
o delays in customer purchases of existing products in anticipation
of the introduction of new products.
E&S May Not Maintain a Significant Portion of its Sales if it Fails to Maintain
its United States Government Contracts
In 1998, 37% 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
3
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 their
performance, 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
becauseCould Decline Substantially as a United States government contractor or sub-contractor, our
contractsResult of Terrorist Attacks and operations are subjectOther Activities that Reduce the Willingness of Our Customers to government 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 for a 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.
E&S's Revenues May Suffer if it Loses Certain Significant Customers
We currently derive a significant portion of our revenues from a
limited number of non U.S. 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 1998 we were dependent on three of our
customers for approximately 27% of our consolidated revenues. In 1997 we were
dependent on three of our customers for approximately 26% 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. We do not have
supply contracts with any of our significant customers.
E&S's Revenues Will Decrease if it Fails to Maintain its International Business
Any reduction of our international business could significantly affect
our revenues. Our international business accounted for 44% of our 1998 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
recent economic crisis affecting the Asian markets is an example of a change in
a foreign economic environment that could affect our international business. 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.
4
If E&S's Commercial Simulation Business Fails, E&S's Revenues will Decrease
We have no assurance that our commercial simulation (airline) business
will continue to succeed. Our commercial simulation business currently accounts
for approximately 15% to 20% of our revenues. This business 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:
o uncertainty of economic conditions,
o dependence upon the strength of the commercial airline industry,
o air pilot training requirements,
o competition,
o changes in technology, and
o timely performance by subcontractors on contracts in which E&S is
the prime contractor.
E&S May Not Meet its Revenue Projections if its New Businesses Fail
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 25% to 30% of revenues for 1999. These businesses will not survive
and we will not meet our revenue projections if we are unable to:
o develop strong partner relationships with manufacturers of
computer chips and personal computers in our workstation products
group,
o gain market acceptance of new technology and increase market size
and demand in a developing new market in our digital theater
business, and
o 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.
E&S's Operations Will be Significantly Impaired if it Fails to be Year 2000
Compliant
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 and our products and services we 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 or increased costs associated with,other activities decreases the implementationattendance for our customers’ venues, the demand or willingness of Year 2000 modifications, or that our suppliers 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 to deliver products or
services to our customers. In mid-1999 we expect to finalize a contingency plan
to cope with potential Year 2000 problems.
5
For third-party products that we distribute withpurchase our products we have
sought information from 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. Onmay decline and 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.
E&S'srevenue may decline substantially.
· Our Shareholders May Not Realize Certain Opportunities Because of the Anti-Takeover Effect of State Law
We are subject to the
The Utah Control Shares Acquisition Act which provides 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 is an established high-technology company with outstanding computer
graphics technology and a worldwide presence in high-performance 3D visual
simulation. In addition, E&S is now applying this core technology into higher
performance personal computer products for both simulation and workstations. E&S
has three reportable segments: the Simulation Group, the Workstation Products
Group, and the Applications Group. The three groups benefit from shared core
graphics technology synergy, and each group's new products are based on open
Intel and Microsoft hardware and software standards. Each reportable segment
markets its products to a worldwide customer base. 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.
6
USE OF PROCEEDS
Other than the price the selling shareholders will pay to exercise
their warrants and options, we
We will not receive any of the proceeds from anythe sale of shares offered withShares by the selling shareholder pursuant to this prospectus. We will pay the costs of this offering, which are estimated to be $69,212. 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 selling shareholders 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 if all of the warrantsstock 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, and options are exercised for cash would
be $14.1 million. However, we are unable to predict the exact 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 of shares receivedShares to be issued to the selling shareholder is subject to adjustment based upon exercise. 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 will use 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 the exercise of warrants and
optionscommon stock issued to augment our working capital for general corporate purposes.
SELLING SHAREHOLDERS
it pursuant to this prospectus.
The following table sets forth certain information asthe name of May 7, 1999,
with respect to the selling shareholders. Beneficial ownership after this
offering will depend onshareholder, the number of shares actually sold by the selling
shareholders. To our knowledge, 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 $24.0
million 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 Henry N. 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 William C. 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.
In the following table, the calculation of the percentage of the shares
of common stock beneficially owned prior to the offering includes allour common stock beneficially owned by athe selling shareholder as aimmediately prior to the registration, the number of shares registered and the number of shares and percentage
of the
9,586,979 shares ofour common stock outstanding on May 7, 1999, together withto be beneficially owned by the selling shareholder assuming all options, warrants or other securities whichshares covered by this registration statement are sold. However, because the selling shareholder may convert
into common stock. The calculation of the number of shares of common stock
beneficially owned after the offering assumes that the selling shareholder
disposes ofoffer all or a portion of the shares covered by this prospectus at any time and does not acquirefrom time to time hereafter, the exact number of shares that the selling shareholder may hold at any time hereafter cannot be determined at this time. The last two columns of this table assume that all shares covered by this prospectus will be sold by the selling shareholder and that no additional shares of our common stock. It also assumes no other exercise of options,
warrants, conversion rights or additional securities, if any.
|
| Beneficial Ownership Prior |
| Shares Covered |
| Beneficial Ownership |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
Name |
| Number |
| Percent (1) |
|
|
| Number |
| Percent (1) |
|
|
|
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|
|
|
|
|
|
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|
Transnational Industries, Inc. |
| 412,500 |
| 3.6 | % | 497,448 |
| — |
| — | % |
|
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(1) We have calculated the percentage of issued and outstanding shares of common stock.
7
ABOUT THIS PROSPECTUS
This prospectus is partstock held by the selling shareholder based on 11,341,163 shares of acommon stock issued and outstanding as of June 30, 2006.
(2) We have assumed all shares of common stock set forth in this registration statement we have filed with
the Securities and Exchange Commission to register 1,394,870 shares of our
common stock, par value $.20. This prospectus does not includebeen sold.
PLAN OF DISTRIBUTION
Any or all of the information contained inselling shareholder’s Shares may be sold from time to time by 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 otherwise are
not 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 only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of the sale 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, 1998;
(2) Proxy Statement dated April 20, 1999;
(3) Quarterly Report on Form 10-Q for the quarter ended April 2,
1999; and
(4) Description of E&S's capital stock contained inshareholder, its
registration 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 Mark C. McBride, Corporate Secretary, at Evans & Sutherland Computer
Corporation, 600 Komas Drive, Salt Lake City, Utah 84108, telephone (801)
588-1000.
8
PLAN OF DISTRIBUTION
The selling shareholders, their pledgees, donees, transferees, distributees or successors-in-interestsuccessors-in-interest. The selling shareholder may sell anyall or alla portion of the sharesShares 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 will usebe the prices at which such Shares are sold, less any commissions. Alternatively, the selling shareholder may elect to distribute the Shares to its best efforts to keep the
registration statement effective for three years (orstockholders on a shorter period if all the
shares have been soldpro rata basis as a dividend or disposed of prior to such time).other distribution. The selling shareholdersshareholder’s stockholders may then elect to sell their proportionate amount of the Shares.
The selling shareholder or its stockholders may sell sharesShares on the NASDAQNasdaq National Market, in privately negotiated transactions or otherwise, at any 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 selling shareholdersshareholder 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 selling shareholdersshareholder to sell a specified number of sharesShares at a stipulated price per share,Share, and, to the extent such broker-dealer
is unable to do so acting as agent for the selling shareholders,shareholder, to purchase as principal any unsold sharesShares at the price required to fulfill the broker-dealer commitment to the selling shareholders.shareholder. Broker-dealers who acquire sharesShares as principal may thereafter resell such shares.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 selling shareholdersshareholder may also sell sharesShares 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 selling shareholdersshareholder 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 of E&S'sthe Company’s common stock in the course of hedging the positions they assume with the selling shareholders.shareholder. The selling shareholdersshareholder may also sell E&S'sthe common stock short and deliver sharesShares to close out such short positions. The selling shareholdersshareholder 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 of sharesShares offered hereby, which sharesShares such broker-dealers or other financial institutions may resell pursuant to this prospectus. The selling shareholdersshareholder may also pledge sharesShares to a broker-dealer or other financial institution, and, upon default, such broker-dealer or other financial institution may effect sales of the pledged sharesShares pursuant to this prospectus.
The selling shareholdersshareholder and any brokers and dealers through whom sales of the sharesShares 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 as underwriters'underwriters’ compensation. E&S
The 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 selling shareholdersshareholder will pay all underwriting discounts, brokerage commissions and other similar expenses incurred by the selling shareholders. E&Sshareholder. The Company has agreed to indemnify the selling shareholdersshareholder 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 of sharesShares being offered and the terms of the offering.
9
The selling shareholder may sell the Shares at any price. Sales of the sharesShares at less than market prices may depress the market price of E&S'sthe Company’s common stock. Moreover, generally the selling shareholders areshareholder is not restricted as to the number of shares thatShares which may be sold at any one time, and it is possible that a significant number of sharesShares could be sold at the same time. However, to
12
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.
The selling 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 the sharesShares by the selling shareholdersshareholder and any other such person. Furthermore, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of the sharesShares to engage in market-making activities with respect to the particular sharesShares 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 the sharesShares and the ability of any person or entity to engage in market-making activities with respect to the shares.
Shares.
To comply with certain states'states’ securities laws, if applicable, the sharesShares may be sold in any such jurisdictions only through registered or licensed brokers or dealers. The sharesShares 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, 19982005 and 19972004, and for each of the years in the three-year period ended December 31, 1998,2005, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent certifiedregistered public accountants,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 to E&S,the Company, is giving its opinion on the validity of the shares.
10
================================================================================
1,394,870 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..............................................7
SELLING SHAREHOLDERS.........................................7
ABOUT THIS PROSPECTUS........................................8
WHERE YOU CAN FIND MORE INFORMATION..........................8
PLAN OF DISTRIBUTION.........................................9
EXPERTS.....................................................10
LEGAL MATTERS...............................................10
================================================================================
PART II
INFORMATION NOT REQUIREDRQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
E&S
The 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 the transactions.
SEC Registration Fee....................................................$ 7,212
Printing Expenses.........................................................1,000
Accounting Fees and Expenses.............................................20,000
Legal Fees and Expenses..................................................40,000
Transfer Agent Fees and Expenses..........................................1,000
Total.........................................................$ 69,212
transactions 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 Exhibit
4.1 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, filed with the Form S-3 Amendment #1 on February 12, 1999,
incorporated herein by reference
4.5 Option to purchase shares of E&S common stock dated October 25, 1998 between E&S and
William Gibbs, filed with the Form S-3 Amendment #1 on February 12, 1999, incorporated
herein by reference
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-1
· 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 Registration Fee"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 benefit plan'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.
II-2
(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.
II-3
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 19th28th day of May,
1999.
EVANS & SUTHERLAND COMPUTER CORPORATION
By: /S/ Mark C. McBride
Mark C. McBride
Vice President, Corporate Controller and
Corporate Secretary
September, 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 | ||
/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 | September 28, 2006 | ||
David J. Coghlan | ||||
/s/ William Schneider, Jr. | Director | September 28, 2006 | ||
William Schneider, Jr. | ||||
/s/ James | Director | September 28, 2006 | ||
James |