U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
MEDIAX CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Nevada
(State or Other Jurisdiction of incorporation or organization)
84-1107138
(I.R.S. Employer Identification Number)
8522 National Boulevard, Suite 110, Culver City, California 90232
(310) 815-8002
(Address of Principal Executive Offices,
Including Zip Code and Telephone Number)
Nancy Poertner, President
MediaX Corporation
8522 National Boulevard, Suite 110,
Culver City, California 90232
Telephone (310) 815-8002
Facsimile (310) 815-8046
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
Copy to:
Richard O. Weed
Weed & Co. L.P.
4695 MacArthur Court, Suite 530
Newport Beach, CA 92660
Telephone (949) 475-9086
Facsimile (949) 475-9087
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
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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 registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of each class of Amount to maximum maximum Amount of
securities to be registered be offering price aggregate registration Fee
registered per unit offering price
- --------------------------- ---------- -------------- -------------- ----------------
$.0001 par value common 440,000 $3.40 $1,496,000 $415.89
stock underlying
Warrants
$.0001 par value common 2,074,000 $2.50(1) $5,185,000 $1,441.43
stock underlying 5%
Convertible Debenture
Total 2,514,000 $6,681,000 $1,857.32
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based on the average of the high and low prices of
MediaX's common stock on OTC Bulletin Board on September 22, 1999.
Pursuant to Rule 416, this registration statement also covers such indeterminate
number of shares of common stock as may become issuable upon conversion of the
Company's 5% Convertible Debenture or exercise of such Warrants (i) resulting
from any adjustment in the applicable Conversion Price of such Debentures of the
Exercise Price of such Warrants or (ii) to prevent dilution resulting from stock
splits, stock dividends or similar transactions.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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The Registrant may amend this registration statement. A registration statement
relating to these securities has been filed with the Securities and Exchange
Commission. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to 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.
PROSPECTUS
2,514,000 Shares of Common Stock
MediaX CORPORATION
This prospectus relates to the public offering, which is not being underwritten,
of 2,514,000 shares of common stock, par value $.0001 per share ("Common Stock")
of MediaX Corporation, a Nevada corporation (the "Registrant" or the "Company").
440,000 of the shares offered are shares underlying Warrants exercisable at
$3.40 per share. 2,074,000 of the shares offered are shares underlying the
Company's 5% Convertible Debenture. The Selling Stockholders may offer their
shares of common stock through public or private transactions, on or off the
NASDAQ OTC:BB, at prevailing market prices, or at privately negotiated prices.
The Company will not receive any of the proceeds from the sale of the shares of
Common Stock by the Selling Stockholders.
The Company's Common Stock is traded on NASDAQ OTC:BB, under symbol "MXMX." On
September 16, the last reported sale price for the common stock was $2.50 per
share.
You should carefully consider the risk factors beginning on page 6 of this
prospectus before purchasing any of the Common Stock offered by this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is September 23, 1999.
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THE COMPANY
GENERAL
MediaX Corporation (the "Registrant" or the "Company") was
incorporated under the laws of the State of Colorado on August 15, 1986 under
the name Fata Morgana, Inc. On September 15, 1988, the Company changed its name
to Edinburgh Capital, Inc. On May 13, 1994, the Company merged into Edinburgh
Capital, Inc. (a Nevada corporation) in order to change its state of domicile to
Nevada.
The Company was originally formed for the primary purpose of seeking
out acquisitions of properties, businesses, or merger candidates, without
limitation as to the nature of the business operations or geographic area of the
acquisition candidate. From inception through the date of completion of its
initial public offering of securities, the Company's activities were directed
toward the acquisition of operating capital.
The Company completed its initial public offering in October, 1989,
receiving net proceeds of approximately $245,000 from the sale of 30,000 Units
(each Unit consisting of 1,000 shares of the Company's no par value common
stock, and 100 common stock purchaser warrants exercisable at $.02) at $10 per
unit. The warrants expired in 1992.
During April 1994, the Company effected a 1 for 300 reverse stock
split and on February 23, 1996, the Company effected a 3.13 for 1 forward stock
split.
On February 23, 1996, the name of the Company was changed to Zeitgeist
Werks, Inc. On February 24, 1996, the Company acquired all of the issued and
outstanding shares of Zeitgeist, Inc., a Nevada corporation, in exchange for
1,250,000 shares of its common stock.
On June 27, 1996, MediaX, a California corporation, was merged into
Zeitgeist, Inc., and the Company issued 203,750 shares of its common stock to
the former shareholders of MediaX. On August 16, 1996 the Company changed its
name to MediaX Corporation.
During November 1998, the Company effected a 1 for 10 reverse stock
split. All financial information and share data in the remainder of this
prospectus give retroactive effect to the reverse stock split (including the two
aforementioned stock splits).
DESCRIPTION OF BUSINESS
As a result of the Company's acquisition of all of the issued and
outstanding shares of Zeitgeist, Inc. and MediaX, Inc., the Company has a new
management and a new business plan. The Company will operate primarily in
e-commerce, multimedia services and product development. It has obtained rights
to intellectual properties, and produces and publishes multimedia software and
content mainly for the Internet and for Satellite broadcasting channels. The
Company intends to maintain strict control of both quality and costs and to
retain profit margins that are traditionally dispersed across many small
companies, by taking a comprehensive approach to production and electronic
distribution of its products.
Management believes that due to the varied and extensive expertise of
its President, Executive Vice President and outside director in the areas of:
artist and record company management, film production, software development and
distribution and proprietary technology development, the Company will bridge the
entertainment and technology markets and enter into the Internet e-commerce
market.
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PRINCIPAL PRODUCTS AND SERVICES
New Products and Services
The Company designs and hosts high-value celebrity web sites such as
rodstewartlive.com and divinemusik.com and others. The web site entertainment
content includes live-chats, on-line shopping for artist specific merchandise
and the production of Internet events such as live concerts that are globally
broadcast on the Internet. The Company has established affiliate relationships
with companies like Broadcast.com, AOL, Yahoo! and others for this purpose. In
February 1999, the Company initiated amuZnet.com, an e-commerce site offering
more than 260,000 entertainment titles on CDS, DVDs and Videos by major record
labels and studios and over 4,000 independent music labels for purchase on-line.
The Company purposely directs the high-traffic generated by the celebrity web
sites through amuZnet.com with a simple link. This site is constantly updated
and developed into a "destination site" serving increasing revenue streams
through its e-commerce model.
The Company plans to provide the same services on an interactive
satellite channel, which will be launched late 1999 or early 2000. Contracts are
signed with EchoStar, one of the largest satellite providers, to implement this
model for interactive satellite distribution.
Historical Products and Services
The Company has developed, produced and marketed software products for
the information entertainment and development tool sector of the software
industry in the form of software distributed on floppy disks and CD-ROM. Three
released CD-ROM products are "On the Road with BB King, "Queensryche's Promised
Land" and "Peter Norton - PC Guru" distributed by MCA, EMI Records and the
Company, respectively.
The Company was selected by Apple Computer to produce the Welcome
Experience for their limited edition Twentieth Anniversary Macintosh which was
introduced on March 19, 1997. The multimedia presentation featured leading-edge
animation, digital video, interactive 3D graphics, original soundtrack and
theater quality audio which highlighted Macintosh's extreme multimedia
capabilities.
In December 1997, the Company released and distributed "Peter Norton -
PC Guru." During the fourth quarter of 1998, it was determined that this product
would not gain significant additional sales beyond 1998; therefore, the Company
has ceased distribution of the product.
The "Big Brother" project, based on George Orwell's novel "1984", is
currently in the final stages of production. The Company obtained production and
exclusive publishing rights during December 1996 from Newspeak Media, Inc. The
Company is in discussions with several leading publishers regarding the
licensing of the product and hopes to conclude an agreement within the calendar
year.
RISK FACTORS
Before purchasing the shares offered by this prospectus, you should
carefully consider the risks described below, in addition to the other
information presented in this prospectus or incorporated by reference into this
prospectus. If any of the following risks actually occur, they could adversely
effect the Company's business, financial condition or results of operations. In
such case, the trading price of the Company's common stock could decline and you
may lose all or part of your investment.
LIMITED OPERATING HISTORY; HISTORY OF LOSSES AND EXPECTATION OF FUTURE
LOSSES. MediaX was formed in 1996, and began selling software products in 1997
and music related products through e- commerce in February 1999. Accordingly,
the Company has only a limited operating history on which to base an evaluation
of its business and prospects. The Company's prospects must be considered in
light of the risks, expenses and difficulties frequently encountered by
companies in their early stage of development, particularly companies in new and
rapidly evolving markets such as e-commerce. Such risks include, but are not
limited to, possible inability to respond promptly to changes in a rapidly
evolving and unpredictable business environment and the risk of inability to
manage growth. To address these risks, the Company must, among other things,
expand its customer base, successfully implement its new business and marketing
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strategies, continue to develop and upgrade its Web site and
transaction-processing systems, provide superior customer service, respond to
competitive developments, and attract and retain qualified personnel. If the
Company is not successful in addressing such risks, it will be materially
adversely affected.
SINCE INCEPTION, THE COMPANY HAS INCURRED SIGNIFICANT LOSSES, AND AS
OF JUNE 30, 1999 HAD ACCUMULATED LOSSES OF $ 6 MILLION. For the six months ended
June 30, 1999 and the year ended December 31, 1998, the Company's net loss was
$902,248 and $2,762,066, respectively. The Company intends to invest heavily in
marketing and promotion, technology, and development of its administrative
organization. As a result, the Company believes that it will incur substantial
operating losses for the foreseeable future, and that the rate at which such
losses will be incurred may increase significantly from current levels. Because
the Company has few sales and small product gross margins, achieving
profitability given planned investment levels depends upon the Company's ability
to generate and sustain substantially increased revenue levels. There can be no
assurance that the Company will be able to generate sufficient revenues to
achieve or sustain profitability in the future.
WORKING CAPITAL DEFICIENCY. At June 30, 1999, the Company had negative
working capital of $291,669 as compared to negative working capital of
$1,773,728 at December 31, 1998. The Company's success and ongoing financial
viability is contingent upon the success of its new e-commerce model, the
licensing of "Big Brother" and the generation of related cash flows. There is no
assurance that such contingencies will be met in the future to meet the capital
needs of the Company. Should there be any significant delays in the release of
new products, or lack of acceptance in the marketplace for such products if
released, or if the Company's working capital needs otherwise exceed its
resources, the adverse consequences would be severe. The generation of the
Company's current growth and the expansion of the Company's current business
involve significant financial risk and require significant capital investment.
GOING CONCERN. The Company has experienced recurring net losses and
has limited liquid resources. Management's intent is to increase the Company's
sales and to continue searching for additional sources of capital. In the
interim, the Company will continue operating with minimal overhead and
administrative functions will be provided by key employees and consultants, some
of whom are compensated primarily in the form of the Company's common stock. The
Company may need to utilize its common stock to fund its operations through
fiscal 1999. Accordingly, the financial statements incorporated by reference
herein have been presented under the assumption the Company will continue as a
going concern.
DEPENDENCE ON CONTINUED GROWTH OF ONLINE COMMERCE. The Company's
long-term viability is substantially dependent upon the widespread consumer
acceptance and use of the Internet as a medium of commerce. Use of the Internet
as a means of effecting retail transactions is at an early stage of development,
and demand and market acceptance for recently introduced services and products
over the Internet is very uncertain. The Company cannot predict the extent to
which consumers will be willing to shift their purchasing habits from
traditional retailers to online retailers. The Internet may not become a viable
commercial marketplace. In addition, the Internet's viability as a commercial
marketplace could be adversely affected by delays in the development of services
or due to increased government regulation. Changes in or insufficient
availability of telecommunications services to support the Internet also could
result in slower response times and could adversely affect usage of the Internet
generally and MediaX in particular. Moreover, adverse publicity and consumer
concern about the security of transactions conducted on the Internet and the
privacy of users may also inhibit the growth of commerce on the Internet. If the
use of the Internet does not continue to grow or grows more slowly than
expected, or if the infrastructure for the Internet does not effectively support
growth that may occur, the Company would be materially adversely affected.
COMPETITION. The Company is a minor participant among companies which
engage in multimedia and Internet content development. Many of these companies
have significantly greater capitalization and experience in this industry. The
online commerce market is new, rapidly evolving and intensely competitive, and
the Company expects that competition will further intensify in the future.
Barriers to entry are minimal, and current and new competitors can launch new
sites at a relatively low cost. In addition, the broader retail music industry
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is intensely competitive. The Company currently competes with a variety of
companies, including other established online vendors and traditional retailers
of entertainment, music and multimedia products. Many of these traditional
retailers also support dedicated Web sites which compete directly with the
Company.
There can be no assurance that the Company will be able to compete
successfully against current and future competitors. New technologies and the
expansion of existing technologies may increase the competitive pressures of the
Company.
DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL. The
Company's success is substantially dependent on the ability and experience of
its senior management and other key personnel, particularly Nancy Poertner,
President, and Rainer Poertner, Chairman of the Board. Moreover, to accommodate
its anticipated growth, the Company may need to expand its employee base.
Competition for personnel, particularly persons having software development and
other technical expertise, is intense, and there can be no assurance that the
Company will retain existing personnel or hire additional, qualified personnel.
The inability of the Company to retain and attract the necessary personnel or
the loss of services of any of its key personnel could have a material adverse
effect on the Company.
INCREASED RELIANCE UPON STRATEGIC ALLIANCES. The Company increasingly
relies on strategic alliances and online and traditional advertising to attract
users to its Web site. The Company has entered into strategic alliances with
Broadcast.com, AOL, and Yahoo!. The Company's ability to generate increased
revenues largely will depend on increased traffic and purchases through these
alliances. There can be no assurance that the Company's strategic alliances will
generate a substantial number of new customers or net sales or that the
Company's infrastructure will be sufficient to handle the increased traffic that
may result therefrom. Moreover, there can also be no assurance that the Company
will be able to renew successful advertising programs or maintain its strategic
alliances beyond their initial terms or that additional third-party alliances
will be available to the Company on acceptable commercial terms or at all. The
Company expects to promote its brand name through a campaign that includes
online and radio advertising. The inability to maintain and further develop its
advertising campaign or strategic alliances could have a material adverse effect
on the Company.
RISK OF SYSTEM FAILURE. The Company's business is dependent on the
efficient and uninterrupted operation of its computer and communications
hardware systems. The Company's systems and operations are vulnerable to damage
or interruption from fire, flood, power loss, telecommunications failure,
break-ins, earthquake and similar events. Any system interruptions, including
any interruptions in the Company's Internet connections or internal systems
problems, that result in the unavailability of the Company's Web site or reduced
transaction processing performance would reduce the attractiveness of the
Company's product offerings and could, therefore, materially adversely affect
the Company. Substantially all of the Company's computer and communications
hardware is located at a single leased facility in Santa Cruz, CA.
SECURITY RISKS. A significant barrier to online commerce is concern
regarding the security of transmission of confidential information. The Company
relies on outside third parties to facilitate the secure transmission of
confidential information, such as customer credit card numbers. Nevertheless,
the Company's infrastructure is potentially vulnerable to physical or electronic
computer break-ins, viruses and similar disruptive problems. A party who is able
to circumvent the Company's security measures could misappropriate proprietary
information or cause interruptions in the Company's operations. To the extent
that activities of the Company or third-party contractors involve the storage
and transmission of proprietary information, such as credit card numbers, such
security breaches could expose the Company to a risk of loss or litigation and
possible liability. Therefore, the Company may be required to expend significant
capital and other resources to protect against such security breaches or to
alleviate problems caused by such breaches. There can be no assurance that the
Company's security measures will prevent security breaches or that failure to
prevent such security breaches will not have a material adverse effect on the
Company.
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VOLATILITY OF STOCK PRICE. The market price of the Common Stock has
been, and is likely to remain, highly volatile as is frequently the case with
developmental stage public companies and Internet companies in particular.
Quarterly operating losses of the Company, deviations in losses of operations
from estimates of securities analysts, changes in general conditions in the
economy, in Internet commerce and in the music retailing industry, or other
developments affecting the Company or its competitors could cause the market
price of the Common Stock to fluctuate substantially. The equity markets have,
on occasion, experienced significant price and volume fluctuations that have
affected the market prices for many companies' securities and that have often
been unrelated to the operating performance of these companies. Any such
fluctuations that occur following completion of the Offering may adversely
affect the market price of the Common Stock.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES. The Company is subject,
both directly and indirectly, to various laws and regulations relating to its
business, although there are few laws or regulations directly applicable to
access to the Internet. However, due to the increasing popularity and use of the
Internet, it is possible that a number of laws and regulations may be adopted
with respect to the Internet. Such laws and regulations may cover issues such as
user privacy, pricing, content, copyrights, distribution and characteristics and
quality of products and services. Furthermore, the growth and development of the
market for online commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies conducting
business online. The enactment of any additional laws or regulations may impede
the growth of the Internet which could, in turn, decrease the demand for the
Company's products and services and increase the Company's cost of doing
business, or otherwise have an adverse effect on the Company.
The applicability to the Internet of existing laws in various
jurisdictions is uncertain and could expose the Company to substantial
liability. The laws of certain foreign countries provide the owner of
copyrighted products with the exclusive right to expose, through sound and video
samples, copyrighted items for sale to the public and the right to distribute
such products. Any new legislation or regulation, or the application of existing
laws and regulations to the Internet could have a material adverse effect on the
Company.
The Company believes that its use of third party material on its Web
sites is permitted under current provisions of copyright law. However, legal
rights to certain aspects of Internet content and commerce are not clearly
settled and the Company's ability to rely upon one or more exemptions or
defenses under copyright law is uncertain. There can be no assurance that the
Company will be able to continue to provide rights to such information. The
failure to be able to offer such information could have a material adverse
effect on the Company.
In addition, several telecommunications carriers are seeking to have
telecommunications over the Internet regulated by the Federal Communications
Commission (the "FCC") in the same manner as other telecommunications services.
For example, America's Carriers Telecommunications Association has filed a
petition with the FCC for this purpose. In addition, because the growing
popularity and use of the Internet has burdened the existing telecommunications
infrastructure and many areas with high Internet use have begun to experience
interruptions in phone service, local telephone carriers, such as Pacific Bell,
have petitioned the FCC to regulate Internet service providers and online
service providers in a manner similar to long distance telephone carriers and to
impose access fees on such providers. If either of these petitions are granted,
or the relief sought therein is otherwise granted, the costs of communicating on
the Internet could increase substantially, potentially slowing the growth in use
of the Internet. Any such new legislation or regulation or application or
interpretation of existing laws could have a material adverse effect on the
Company's business, results of operations and financial condition.
POSSIBLE LIABILITY FOR PUBLISHING OR DISTRIBUTING CONTENT OVER THE
INTERNET. Due to the fact that the Company may be considered a publisher or
distributor of both its own and third party content, there is a potential that
claims will be made against the Company for defamation, negligence, copyright or
trademark infringement, invasion of privacy and publicity, unfair competition or
other theories based on the nature and content of such material. Such claims
have been brought, and sometimes successfully pressed, against online services
in the past. For example, claims could be made against the Company if material
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deemed inappropriate for viewing by young children could be accessed through the
Company Web sites. Although the Company carries general liability insurance, the
Company's insurance may not cover potential claims of this type or may not be
adequate to cover all costs incurred in defense of potential claims or to
indemnify the Company for all liability that may be imposed. Any cost or
imposition of liability that is not covered by insurance or is in excess of
insurance coverage could have a material adverse effect on the Company.
RELIANCE ON CERTAIN VENDORS. The Company relies primarily on one
provider for order fulfillment of recorded music titles and other related
products. The Company has no fulfillment operation or facility of its own and,
accordingly, is dependent upon maintaining its existing relationship or
establishing a new fulfillment relationship with one of the few other
fulfillment operations. There can be no assurance that the Company will maintain
its current relationship with it's primary fulfillment vendor beyond the term of
its existing agreement which expires on December 18, 2001 or that it will be
able to find an alternative, comparable vendor capable of providing fulfillment
services on terms satisfactory to the Company should its relationship with its
current fulfillment vendor terminate. An unanticipated termination of the
Company's relationship with it's current fulfillment vendor could materially
adversely affect the Company's results of operations.
YEAR 2000. The Year 2000 issue could result in system failures or
miscalculations causing disruptions of operations, including, among others, a
temporary inability to process transactions, send invoices or engage in similar
normal business activities which may materially adversely affect the Company. To
date, the Company has experienced very few problems related to Year 2000
problems and the Company does not believe that it has material exposure to the
Year 2000 issue with respect to the Company's information systems as these
systems correctly defined the Year 2000.
The Company is currently conducting an analysis to determine the
extent to which the systems of third parties raise Year 2000 issues that may
affect the Company. However, we cannot assure that the providers the Company
uses to fill orders for direct-to-consumer products, will in fact be Year 2000
compliant on a timely basis. Generally, the Company is unable to predict the
extent to which the Year 2000 issue will affect its suppliers, or the extent to
which the Company would be vulnerable to its suppliers' failure to remediate any
Year 2000 issues on a timely basis. The failure of a major supplier subject to
the Year 2000 issue to convert its systems on a timely basis or a conversion
that is incompatible with the Company's systems could have a material adverse
effect on the Company, which is not currently quantifiable. In addition, most of
the purchases from the Company's on-line web site are made with credit cards,
and the Company's operations may be materially adversely affected to the extent
the Company's customers are unable to use their credit cards due to Year 2000
issues that are not rectified by credit card providers.
LIMITED PUBLIC MARKET. The Company's Common Stock is traded on the
Nasdaq OTC Bulletin Board which tends to be comprised of small businesses of
regional interest with limited trading activity. Although the Company intends to
submit an application to list the Common Stock on Nasdaq's National Market
System or Small Cap System as soon as it meets the listing qualifications, there
can be no assurance that the Company's securities will qualify for listing on
Nasdaq's National Market System or Small Cap System or on any other exchange.
NO DIVIDENDS. The Company has never declared or paid any dividends on
the Common Stock and does not anticipate paying any cash dividends on the Common
Stock in the foreseeable future.
AVAILABLE INFORMATION
The Company files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any document we file with the Commission at the
Commission's Public Reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the Commission at 1-800-SEC-0330 for further information on
the public reference room. The Company's Commission filings are also available
to the public at the Commission's web site at http://www.sec.gov.
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The Commission allows the Company to "incorporate by reference" the
information the Company files with them, which means that the Company can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and information that the Company files later with the Commission
will automatically update and supersede this information. The Company
incorporates by reference the documents listed below and any future filings the
Company makes with the Commission under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act prior to the termination of the offerings described
in this prospectus:
(a) Annual Report on Form 10-KSB for the fiscal year ended December 31,
1998;
(b) Quarterly Report on Form 10-QSB, for the quarterly periods ended March
31, 1999 and June 30, 1999;
You may request a copy of these filings, at no cost, by writing or
telephoning as follows:
MediaX Corporation
Attention: Investor Relations
8522 National Boulevard, Suite #110
Culver City, CA 90232
(310) 815-8002
This prospectus is part of a registration statement on Form S-3 the
Company filed with the SEC under the Securities Act. You should rely only on the
information or representations provided in this prospectus. The Company has not
authorized anyone to provide you with different information other than the
information contained in this prospectus. The Company is not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus is accurate as of any date other
than the date on the front of the document.
FORWARD-LOOKING STATEMENTS
Except for historical information contained herein, the matters
discussed in this prospectus are forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those set forth in such forward looking statements. Such risks
and uncertainties include, without limitation, the company's dependence on the
timely development, introduction and customer acceptance of products, the impact
of competition and downward pricing pressures, the ability of the company to
generate revenues and raise any needed capital, the effect of changing economic
conditions, and risks in technology development.
USE OF PROCEEDS
The Selling Stockholders are offering all of the shares of Common Stock
covered by this prospectus. The Company will not receive any proceeds from the
sales of these shares of Common Stock.
SELLING STOCKHOLDERS
The following table sets forth the number of shares owned by each of
the Selling Stockholders. All information contained in the table below is based
upon their beneficial ownership as of September 17, 1999. The Company is not
able to estimate the amount of shares that will be held by the selling
stockholders after the completion of this offering because those Selling
Stockholders may offer all or some of the shares and because there currently are
no agreements, arrangements or understandings with respect to the sale of any of
their shares other than those agreements and arrangements listed below. The
following table assumes that all of the shares being registered will be sold.
The Selling Stockholders are not making any representation that any shares
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covered by the prospectus will be offered for sale. The Selling Stockholders
reserve the right to accept or reject, in whole or in part, any proposed sale of
the shares.
Of the shares offered hereby, all are being offered by certain purchasers of the
Company's 5% Convertible Debenture or Warrants who acquired such securities in
connection with a $2,200,000 private placement in August of 1999.
Name and address of Selling Number of shares Percent of class of Number of shares
Stockholder beneficially owned shares beneficially offered hereby
prior to the offering owned prior to the
offering
- ---------------------------- --------------------- ------------------- ----------------
Apple Investors, LLC 220,000 shares of 9.9% 658,815
c/o WEC Asset Management LLC common stock
One World Trade Center underlying Warrants
Suite 4563
New York, NY 10048 438,815 shares of
common stock
underlying 5%
Convertible Debenture(1)
(1) Under the Registration Rights Agreement between the Company and Apple
Investors LLC, the Company agreed to register at least two times the number of
shares issuable upon conversion of the 5% Convertible Debenture on the date of
filing and such indeterminate number of shares of common stock as may become
issuable upon conversion of the Company's 5% Convertible Debenture or exercise
of such Warrants (i) resulting from any adjustment in the applicable Conversion
Price of such Debentures of the Exercise Price of such Warrants or (ii) to
prevent dilution resulting from stock splits, stock dividends or similar
transactions.
PLAN OF DISTRIBUTION
The Company is registering the common stock on behalf of the Selling
Stockholders. As used in this prospectus, the term "Selling Stockholders"
includes pledgees, transferees or other successors-in-interest selling shares
received from the Selling Stockholder, as a pledgor, a borrower or in connection
with other non-sale-related transfers after the date of this prospectus. This
prospectus may also be used by transferees of the Selling Stockholders,
including broker-dealers or other transferees who borrow or purchase the share
to settle or close out short sales of shares of common stock. The Selling
Stockholders will act independently of the Company in making decisions with
respect to the timing, manner, and size of each sale or non-sale related
transfer. The Company will not receive any of the proceeds of this offering.
The Selling Stockholders may sell their shares of common stock directly
to purchasers from time to time. Alternatively, they may from time to time offer
the common stock to or through underwriters, broker/dealers or agents, who may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholders or the purchasers of such securities
for whom they may act as agents. The Selling Stockholders and any underwriters,
broker/dealers or agents that participate in the distribution of common stock
may be deemed to be "underwriters" within the meaning of the Securities Act and
any profit on the sale of such securities and any discounts, commissions,
concessions or other compensation received by any such underwriter,
broker/dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.
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The Common Stock may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
sale of the Common Stock may be effected by means of one or more of the
following transactions (which may involve block transactions):
- in the over-the-counter market or
- in transactions otherwise than on such exchanges or services,
including pursuant to Rule 144 or another exemption from
registration
In connection with sales of the common stock or otherwise, the Selling
Stockholders may enter into hedging transactions with broker/dealers, who in
turn may engage in short sales of the common stock in the course of hedging the
positions they assume. The Selling Stockholders may also sell common stock short
and deliver common stock to close out such short positions, or loan or pledge
common stock to broker/dealers who in turn may sell such securities.
At the time a particular offering of the common stock is made, a
prospectus supplement, if required, will be distributed which will set forth the
aggregate amount common stock being offered and the terms of the offering,
including the name or names of any underwriters, broker/dealers or agents, any
discounts, commissions and other terms constituting compensation from the
selling stockholders and any discounts, and commissions or concessions allowed
or re-allowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if
applicable, the common stock will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers.
The Selling Stockholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of sales of the common stock by the Selling Stockholders. The
foregoing may affect the marketability of such securities.
EXPERTS
Davis & Co., CPA's, P.C., independent auditors, have audited the
Company's financial statements included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1998, which is incorporated by reference
in this prospectus and elsewhere in the registration statement. The Company's
financial statements are incorporated by reference in reliance on Davis & Co.,
CPA's, P.C.'s report, given on their authority as experts in accounting and
auditing.
Richard O. Weed has expressed an opinion concerning the validity of the
securities being registered. Mr. Weed owns 31,000 shares of the Company's Common
Stock.
MATERIAL CHANGES
On May 27, 1999, the Company filed a registration statement on Form
S-3 covering 55,000 shares of the Company's common stock for the benefit of
three selling securities holders. On Monday, July 12, 1999, the Securities and
Exchange Commission declared the registration statement effective.
On July 28, 1999, the Company filed a post effective amendment to the
Form S-3 registration statement to register an additional 41,000 shares of the
Company's common stock. On August 13, 1999, the Securities and Exchange
Commission declared the amendment effective.
On August 24, 1999, the Company entered into a Securities Purchase
Agreement with Apple Investors, LLC. In exchange for $2,200,000, the Company
issued a 5% Convertible Debenture in the principal amount of $2,200,000 and a
Warrant to purchase 220,000 shares of the Company's common stock at $3.40 per
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12
share to Apple Investors, LLC. The proceeds will be used by the Company for
working capital. The offer and sale of the securities was exempt from
registration under Section 4(2) of the Securities Act of 1933, as amended.
On September 10, 1999, the stockholders of the Company, holding a
majority of the voting power, took the following actions: (1) appointed Nancy
Poertner, Rainer Poertner, and Matthew MacLaurin to serve as Directors of the
Company until the next annual meeting of shareholders; (2) ratified and
confirmed the appointment of Davis & Co., CPAs, P.C. as the Company's
independent auditor for the fiscal year ending December 31, 1999; (3) approved
an amendment to the Company's articles of incorporation to increase the number
of authorized shares of $.0001 par value common stock to 25,000,000 shares; and
(4) approved and ratified the 1998 Amendment to the Company's Stock Option Plan.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
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 Securities and Exchange
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.
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13
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES, OR AN OFFER OR SOLICITATION WITH RESPECT
TO THOSE SECURITIES TO WHICH IT RELATES TO ANY PERSONS IN ANY JURISDICTION WHERE
SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE HEREIN AT ITS DATE IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
Table of Contents
The Company ................................................[ ]
Risk Factors................................................[ ]
Available Information.......................................[ ]
Use of Proceeds.............................................[ ]
Selling Stockholders........................................[ ]
Plan of Distribution........................................[ ]
Experts.....................................................[ ]
MediaX CORPORATION
2,514,000 Shares of Common Stock
PROSPECTUS
September 23, 1999
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14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth the expenses in connection with the issuance and
distribution of the Securities being registered, other than underwriting
discounts and commissions. We shall bear all such expenses. All amounts set
forth below are estimates, other than the SEC registration fee.
SEC Registration Fee $ 1,857.32
Accounting Fees and Expenses $ 5,000.00
Miscellaneous $ 10,000.00
-----------------
TOTAL $ 16,857.32
-----------------
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The only statute, charter provision, bylaw, contract, or other arrangement under
which any controlling person, director or officer of registrant is insured or
indemnified in any manner against any liability which they may incur in their
capacity as such is Sections 78.7502 and 78.751, the text of which is set forth
below.
Section 78.7502. Discretionary and mandatory indemnification of
officers, directors, employees and agents: General provisions
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court
deems proper.
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15
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
Section 78.751. Authorization required for discretionary
indemnification; advancement of expenses; limitation on indemnification and
advancement of expenses
1. Any discretionary indemnification under NRS 78.7502, unless ordered
by a court or advanced pursuant to subsection 2, may be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting
of directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were
not parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.
2. The articles of incorporation, the bylaws or an agreement made by
the corporation may provide that the expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to NRS 78.7502 or for the
advancement of expenses made pursuant to subsection 2, may not be made to or on
behalf of any director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
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16
EXHIBITS
# DESCRIPTION
- ------ --------------------
3.1(d) Certificate of Amendment to Filed electronically herewith
Articles to increase number
of shares of common stock to
25,000,000.
5.1 Opinion of Richard O. Weed Filed electronically herewith
10.22 Securities Purchase Agreement Filed electronically herewith
with Apple Investors, LLC
23.1 Consent of Davis & Co., CPA's, P.C. Filed electronically herewith
24.1 Consent of Richard O. Weed Filed electronically herewith
UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to:
(i) include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) reflect in the Prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement; and
(iii) 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 information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Company pursuant to Section 13 or
Section 5(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(b) That, for the purpose of determining liability under the Securities
Act, each post-effective amendment shall be deemed to be a new registration
statement of the securities offered, and the offering of the securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the termination of the offering.
2. The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in 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.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form S-3 and has duly caused this registrations
statement to be signed on its behalf by the undersigned, thereon duly authorized
in the City of Culver City, California on September 23, 1999.
MediaX CORPORATION
a Nevada corporation
By: /s/ Nancy Poertner
----------------------------------
Nancy Poertner,
Director and President
Pursuant to the requirement of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on September 23, 1999.
Signature Title Date
- ---------------------------- ---------------------------------- -----------------
/s/ Nancy Poertner
- ----------------------------
Nancy Poertner President, Secretary, and Director September 23, 1999
/s/ Rainer Poertner
- ----------------------------
Rainer Poertner Director September 23, 1999
/s/ Matthew MacLaurin
- ----------------------------
Matthew MacLaurin Executive V.P. and Director September 23, 1999
/s/ Jackie Cabellon Controller (Principal Accounting
- ---------------------------- Officer)
Jackie Cabellon
September 23, 1999
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