AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 2000
REGISTRATION NO. 333-95541
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 2 ON FORM S-3
TO
FORM SB-2 ON FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CUSEEME NETWORKS, INC.
(FORMERLY WHITE PINE SOFTWARE, INC.)
(Name of small business issuer in its charter)
DELAWARE 7372 04-3151064
(State or other jurisdiction (Primary Standard Industrial (I.R.S. employer
of incorporation or organization) Classification Code Number) identification number)
542 AMHERST STREET
NASHUA, NEW HAMPSHIRE 03063
(603) 886-9050
(Address and telephone number of principal executive offices and principal place
of business)
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KILLKO A. CABALLERO
CUSEEME NETWORKS, INC.
542 AMHERST STREET
NASHUA, NEW HAMPSHIRE 03063
(603) 886-9050
(Name, address and telephone number of agent for service)
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COPIES TO:
MARK L. JOHNSON, ESQ.
EMILY F. HAYES, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this post-effective Amendment becomes effective.
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, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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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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PROSPECTUS
1,302,084 SHARES
[LOGO]
COMMON STOCK
The selling stockholders named on page 11 are offering 1,302,084 shares of
common stock of CUseeMe Networks, Inc., formerly White Pine Software, Inc. We
will not receive any of the proceeds from sales of shares by the selling
stockholders.
Our common stock trades on the Nasdaq National Market under the symbol "CUSM."
On August 21, 2000, the last reported sale price of our common stock on the
Nasdaq National Market was $7.00 per share.
The selling stockholders may sell the shares from time to time on the Nasdaq
National Market or otherwise. They may sell the shares at prevailing market
prices or at prices negotiated with buyers. The selling stockholders will be
responsible for any commissions or discounts due to brokers or dealers. The
amount of those commissions or discounts will be negotiated before the sales. We
will pay all of the other offering expenses, which we estimate will total
$100,000.
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INVESTING IN THESE SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE
5.
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THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
August 22, 2000
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
NEITHER WE NOR THE SELLING STOCKHOLDERS HAVE AUTHORIZED ANYONE TO PROVIDE YOU
WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THE SELLING
STOCKHOLDERS ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON
STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. IN THIS
PROSPECTUS, REFERENCES TO "WE," "US" AND "OUR" REFER TO CUSEEME NETWORKS, INC.
AND ITS SUBSIDIARY.
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TABLE OF CONTENTS
PAGE
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Prospectus Summary.......................................... 3
Risk Factors................................................ 5
Use of Proceeds............................................. 11
Selling Stockholders........................................ 11
Plan of Distribution........................................ 12
Legal Matters............................................... 13
Experts..................................................... 13
Where You Can Find More Information......................... 13
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We own or have rights to trademarks or trade names that we use in
conjunction with the sale of our products and services. Our trademarks include
ClassPoint, CU-SeeMe, CUseeMe Networks, CU-SeeMe Web and MeetingPoint.
2
PROSPECTUS SUMMARY
BECAUSE THIS IS ONLY A SUMMARY, IT DOES NOT CONTAIN ALL OF THE INFORMATION
THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS, INCLUDING
"RISK FACTORS," BEFORE DECIDING TO INVEST IN SHARES OFFERED BY THIS PROSPECTUS.
OUR COMPANY
OUR BUSINESS.............................. We develop software solutions that facilitate worldwide
video and audio communication across the Internet,
intranets, extranets and other networks using the
Internet protocol.
OUR PRODUCTS.............................. Our group conferencing software products, CU-SeeMe and
MeetingPoint, create a client-server solution that
allows users to participate in real-time, multipoint,
multimedia conferences from the users' desktop
computers, using existing Internet, intranet and
extranet connections. Our CU-SeeMe Web software provides
multipoint video instant messaging over the Internet. By
developing multimedia conferencing products that require
no proprietary hardware, we are able to offer multimedia
conferencing at a substantially lower price than vendors
of traditional hardware-based systems and thereby to
encourage businesses and others to adopt multimedia
conferencing as a mass communication medium.
OUR MARKET................................ Our customers include Internet service providers, Web
portal sites, businesses, educational institutions,
government organizations and individual consumers. We
market and sell our products in the United States,
Europe and the Pacific Rim through distributors,
resellers, strategic partners, original equipment
manufacturers and our direct sales organization, as well
as directly over the Internet.
OUR NAME AND ADDRESS...................... On May 8, 2000, we changed our corporate name from White
Pine Software, Inc. to CUseeMe Networks, Inc. Our
principal executive offices are located at 542 Amherst
Street, Nashua, New Hampshire 03063. Our telephone
number is (603) 886-9050. Our web site is located at
WWW.CUSEEME.COM; information contained in our web site
is not a part of this prospectus.
ADDITIONAL CONSIDERATIONS................. Since inception, we have incurred substantial losses,
resulting in an accumulated deficit of $36.9 million at
June 30, 2000. We expect to incur additional substantial
losses for the foreseeable future. Market acceptance of
our application hosting services, which we introduced in
the second fiscal quarter of 2000, is critical to our
future success. For a discussion of these and other
risks relating to an investment in our common stock, see
"Risk Factors" below.
3
THE OFFERING
Common Stock Offered: All of the 1,302,084 shares offered by this prospectus
are being sold by the selling stockholders. The selling
stockholders acquired the shares from us in private
placements completed in December 1999.
Use of Proceeds: We will not receive any of the proceeds from sales of
shares by the selling stockholders.
Nasdaq National Market Symbol: CUSM (formerly WPNE)
4
RISK FACTORS
SOME OF THE INFORMATION IN THIS PROSPECTUS CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES. YOU CAN IDENTIFY
THESE STATEMENTS BY FORWARD-LOOKING WORDS SUCH AS "MAY," "WILL," "EXPECT,"
"ANTICIPATE," "BELIEVE," "ESTIMATE," "CONTINUE" AND SIMILAR WORDS. YOU SHOULD
READ STATEMENTS THAT CONTAIN THESE WORDS CAREFULLY BECAUSE THEY (1) DISCUSS OUR
FUTURE EXPECTATIONS, (2) CONTAIN PROJECTIONS OF OUR FUTURE OPERATING RESULTS OR
FINANCIAL CONDITION OR (3) STATE OTHER "FORWARD-LOOKING" INFORMATION. WE BELIEVE
IT IS IMPORTANT TO COMMUNICATE CERTAIN OF OUR EXPECTATIONS TO OUR INVESTORS.
THERE MAY BE EVENTS IN THE FUTURE, HOWEVER, THAT WE ARE NOT ACCURATELY ABLE TO
PREDICT OR OVER WHICH WE HAVE NO CONTROL. THE RISK FACTORS LISTED IN THIS
SECTION, AS WELL AS ANY OTHER CAUTIONARY LANGUAGE IN THIS PROSPECTUS, PROVIDE
EXAMPLES OF RISKS, UNCERTAINTIES AND EVENTS THAT MAY CAUSE OUR ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THE EXPECTATIONS WE DESCRIBE IN OUR FORWARD-LOOKING
STATEMENTS. BEFORE YOU INVEST IN OUR COMMON STOCK, YOU SHOULD BE AWARE THAT THE
OCCURRENCE OF ANY OF THE EVENTS DESCRIBED IN THESE RISK FACTORS AND ELSEWHERE IN
THIS PROSPECTUS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. IN SUCH CASE, THE TRADING PRICE OF OUR
COMMON STOCK COULD DECLINE AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.
WE HAVE INCURRED SUBSTANTIAL LOSSES IN THE PAST AND MAY NOT BE PROFITABLE IN THE
FUTURE.
We may never generate significant revenue or be profitable. Since we began
operations, we have incurred substantial losses. We incurred net losses of $8.4
million in 1998, $4.8 million in 1999 and $3.2 million in the first six months
of 2000. We had an accumulated deficit of $33.7 million at December 31, 1999 and
an accumulated deficit of $36.9 million at June 30, 2000.
We expect to incur substantial losses for the foreseeable future, because we
intend to continue investing heavily in the development and marketing of
MeetingPoint and our application hosting services. In February 2000, we
completed the sale of our legacy connectivity products business. In addition, we
expect that revenue from CU-SeeMe will not increase substantially, and may
decrease, during the foreseeable future. We cannot be certain that sales of
MeetingPoint and application hosting services and other new products and
services will offset lost revenue from the sale of our legacy connectivity
products business and declines in revenue from CU-SeeMe in 2000 or in later
years.
OUR QUARTERLY RESULTS MAY FLUCTUATE AND CAUSE THE PRICE OF OUR COMMON STOCK TO
FALL.
Our quarterly revenue and operating results are difficult to predict and may
fluctuate significantly from quarter to quarter. If our quarterly revenue or
operating results fall below the expectations of investors or public market
analysts, the price of our common stock could fall substantially. Our quarterly
operating results may vary significantly depending on a number of factors, some
of which are outside of our control. These factors include:
- the timing of the introduction or acceptance of new products offered by us
or our competitors;
- changes in demand for Internet services;
- changes in the mix of products sold by us;
- announcements of new products, services or technologies by us or our
competitors that cause customers to defer or cancel purchases of our
products;
- changes in pricing strategies by us or competitors;
- changes in regulations affecting the multimedia conferencing industry; and
- changes in currency exchange rates.
As a result of these factors, we may not be able to predict our operating
results accurately. In addition, MeetingPoint continues to undergo long
evaluation and sale cycles by potential users. The
5
lengths of these cycles make it particularly difficult for us to predict the
amount and timing of revenue from this product.
We base our expense levels on our product development plans and our
estimates of future revenue. To a large extent, our expenses are fixed. We may
be unable to adjust our spending in time to compensate for any unexpected
revenue shortfall, thus magnifying the adverse effect of any revenue shortfall.
OUR APPLICATION HOSTING SERVICES MAY NOT ACHIEVE SIGNIFICANT MARKET ACCEPTANCE.
We introduced our application hosting services in the second fiscal quarter
of 2000. Broad acceptance of our application hosting services is critical to our
future success and is subject to a number of significant risks, many of which
are outside of our control. These risks include:
- the ability of our system infrastructure to support large numbers of
concurrent users is unproven;
- corporate users may not be willing to outsource control and management of
their multimedia conferencing to a third party due to possible security,
reliability or other concerns;
- the introduction of competing products and technologies; and
- our dependence on third-party hardware and network providers.
WE FACE INTENSE COMPETITION FROM OTHER INDUSTRY PARTICIPANTS AND MAY NOT BE ABLE
TO COMPETE EFFECTIVELY.
The market for Internet communications products and services is extremely
competitive. Because the barriers to entry in the market are relatively low and
the potential market is large, we expect continued growth in the industry and
the entrance of new competitors in the future. Many of our current and potential
competitors, particularly Intel, Microsoft, PictureTel and Ezenia!, have
significantly longer operating histories and significantly greater managerial,
financial, marketing, technical and other competitive resources, as well as
greater name recognition, than we do. As a result, these companies may be able
to adapt more quickly to new or emerging technologies and changes in customer
requirements and may be able to devote greater resources to the promotion and
sale of their conferencing products and services. In addition, to the extent
that competitors choose to bundle competing multimedia conferencing applications
with other products, the demand for our products and services might be
substantially reduced.
As a result, we cannot assure you that we will be able to compete
successfully with existing or new competitors in the multimedia conferencing
market. We believe that our ability to compete successfully in this market will
depend on a number of factors both within and outside our control, including:
- the adoption and evolution of industry standards;
- the pricing policies of our competitors and suppliers;
- the timing of the introduction of new software products and services by us
and our competitors; and
- our ability to hire and retain highly qualified employees.
To remain competitive in the multimedia conferencing market, we must
continue to invest heavily in research and development and in sales and
marketing. We may not have sufficient resources to make those investments, or we
may not be able to make the technological advances necessary to continue to be
competitive. In addition, current and potential competitors have established or
may establish collaborative relationships among themselves and with third
parties to increase the visibility and utility of their products and services.
Accordingly, it is possible that new competitors or alliances may emerge
6
and rapidly acquire significant market share, which could have a material
adverse effect on our business.
WE MUST HIRE AND RETAIN SKILLED PERSONNEL IN A COMPETITIVE LABOR MARKET.
Qualified personnel are in great demand throughout the software and Internet
industries. Our success depends in large part upon our ability to attract,
train, motivate and retain highly skilled employees, particularly sales and
marketing personnel, professional services personnel and software engineers. If
we fail to attract and retain the highly trained technical personnel that are
integral to our sales, professional services and product development teams, the
rate at which we can generate sales and develop new products or services may be
limited. This could have a material adverse effect on our business, operating
results and financial condition.
IF WE LOSE THE SERVICES OF OUR CHIEF EXECUTIVE OFFICER OR ANY OTHER KEY MEMBER
OF OUR MANAGEMENT TEAM, OUR BUSINESS COULD SUFFER.
Our future success depends to a significant degree on the skill, experience
and efforts of Killko Caballero, our chief executive officer, and other key
members of our management team. The loss of any key member of our management
team could have a material adverse effect on our business.
WE RELY ON ONE DISTRIBUTOR FOR A SIGNIFICANT PORTION OF OUR TOTAL REVENUE.
Sales to Ingram Micro represented 8% of our total revenue in 1999 and 26% of
our total revenue in 1998. The loss of, or a significant curtailment of
purchases by, Ingram Micro, including a loss or curtailment due to factors
outside of our control, could have a material adverse effect on our business.
WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY.
Our business could be seriously harmed if we are unable to protect
adequately our proprietary software and our other proprietary intellectual
property rights. We may be unable to deter misappropriation of our proprietary
technology, detect unauthorized use and take appropriate steps to enforce our
intellectual property rights. Our competitors could, without violating our
proprietary rights, develop technologies that are as good or better than our
technology.
Some of our multimedia conferencing products are licensed to customers under
"shrink wrap" licenses included as part of the product packaging. In most cases
our shrink wrap licenses are not negotiated with or signed by individual
licensees. Some of the provisions of our shrink wrap licenses, including
provisions limiting our liability and protecting us against unauthorized use,
copying, transfer and disclosure of the licensed program, may be unenforceable
under the laws of certain jurisdictions. Also, we have delivered technical data
and information relating to CU-SeeMe and MeetingPoint to the United States
government, and as a result, the United States government may have unlimited
rights to use the technical data and information or to authorize others to use
the technical data and information. We can not assure you that the United States
government will not authorize others to use our technical data and information
for purposes competitive with our products. In addition, the laws of some
foreign countries do not protect our proprietary rights to the same extent as do
laws in the United States.
CLAIMS BY OTHER COMPANIES THAT WE INFRINGE THEIR PROPRIETARY TECHNOLOGY COULD
PREVENT US FROM OFFERING OUR PRODUCTS OR OTHERWISE HURT OUR BUSINESS AND OUR
FINANCIAL CONDITION.
Because the protection of intellectual property rights is often critically
important to the success of companies in the multimedia conferencing industry,
our competitors or others could assert claims that our technologies infringe
their proprietary rights. From time to time, we have received and may receive in
the future notice of claims of infringement of other parties' proprietary
rights. Many participants in the software industry have an increasing number of
patents and have frequently demonstrated a
7
readiness to commence litigation based on allegations of patent or other
intellectual property infringement. For example, a third party has objected to
our use of the name "MeetingPoint." We may not have the financial resources
necessary to pursue any resulting litigation to a final judgment, and we may not
prevail in any litigation. In defending against such litigation, we could incur
significant legal and other expenses and our management could be distracted from
our principal business operations. If any party making a claim against us were
to prevail in litigation against us, we may have to pay substantial damages. The
court could also grant injunctive or other equitable relief that could prevent
us from offering our products and services without a license or other permission
from others, which may not be available on commercially available terms or at
all. Any of these outcomes could seriously harm our business and our financial
condition.
WE FACE ADDITIONAL RISKS FROM OUR INTERNATIONAL OPERATIONS.
Our international business involves a number of risks that could hurt our
operating results or contribute to fluctuations in those results. Our revenue
from international sales represented 24% of our total revenue in 1999 and 26% of
our total revenue in 1998. We intend to seek opportunities to expand our product
and service offerings into additional international markets, although we cannot
be certain that we will succeed in developing localized versions of our products
for new international markets or in marketing or distributing products and
services in those markets.
The majority of our international sales are currently denominated in U.S.
dollars, but there can be no assurance that a significantly higher level of
future sales will not be denominated in foreign currencies. To the extent our
sales are denominated in currencies other than U.S. dollars, fluctuations in
exchange rates may render our products less competitive relative to local
product offerings or result in foreign exchange losses. We have no experience in
implementing hedging techniques that might minimize our risks from exchange rate
fluctuations.
Our international business also involves a number of other difficulties and
risks, including risks associated with:
- changing economic conditions in foreign countries;
- export restrictions and export controls relating to technology;
- compliance with existing and changing regulatory requirements;
- tariffs and other trade barriers;
- difficulties in staffing and managing international operations;
- longer payment cycles and problems in collecting accounts receivable;
- software piracy;
- political instability;
- seasonal reductions in business activity in Europe and certain other parts
of the world during the summer months; and
- potentially adverse tax consequences.
OUR SOFTWARE PRODUCTS MAY CONTAIN UNDETECTED DEFECTS.
Software developed by us or developed by others and incorporated by us into
our products may contain significant undetected errors when first released or as
new versions are released. Although we test our software products before
commercial release, we cannot be certain that errors in the products will not be
found after customers begin to use the software. Any defects in CU-SeeMe or
MeetingPoint, or any future products, may result in significant decreases in
revenue or increases in
8
expenses because of adverse publicity, reduced orders, product returns,
uncollectible accounts receivable, delays in collecting accounts receivable, and
additional and unexpected costs of further product development to correct the
defects.
OUR SUCCESS DEPENDS ON THE PERFORMANCE OF PARTICIPANTS IN OUR DISTRIBUTION
CHANNELS.
We market our group conferencing products by forming channel relationships
in key markets with major distributors. We also license our group conferencing
products to original equipment manufacturers, value-added resellers and
additional distributors for bundling with their products and services. We expect
that our future success will depend in large part upon these original equipment
manufacturers, value-added resellers and distributors. The performance of these
original equipment manufacturers, value-added resellers and distributors is
outside our control, and we are unable to predict the extent to which these
organizations will be successful in marketing and selling our group conferencing
products or products incorporating our group conferencing products. We cannot
assure you that we will be successful in establishing relationships with
original equipment manufacturers, value-added resellers and distributors, and if
we fail, our business could be seriously harmed.
Our distributors typically carry the products of some of our competitors.
The distributors have limited capital to invest in inventory, and their
decisions to purchase our products and, in the case of retail stores, to give
them critical shelf space, are partly a function of pricing, terms and special
promotions offered by our competitors, which we cannot predict or control.
We distribute certain of our products directly over the Internet. By
distributing our products over the Internet, we may increase the likelihood of
unauthorized copying and use of our software.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES MAY ADVERSELY AFFECT OUR BUSINESS.
The application of existing laws to the Internet is uncertain and may take
years to resolve, particularly with respect to property ownership, user privacy,
freedom of expression, pricing, characteristics and quality of products and
services, taxation, advertising, intellectual property rights, information
security and the convergence of traditional telecommunications services with
Internet communications. Because the Internet is becoming increasingly popular,
various foreign or domestic governmental bodies may seek to adopt laws and
control use of the Internet. We cannot predict the nature of any such laws.
Legislation could subject us or our customers to potential liability or could
decrease the growth of the Internet, either of which could have an adverse
effect on our business.
In March 1996, ACTA, a group of telecommunications common carriers, filed
the ACTA Petition with the FCC, arguing that providers of computer software
products that enable voice transmission over the Internet ("Internet telephone"
services), such as us, are operating as common carriers without complying with
various regulatory requirements and without paying certain charges required by
law. The ACTA Petition argues that the FCC has the authority to regulate both
the Internet and the providers of "Internet telephone" services and requests
that the FCC declare its authority over interstate and international
telecommunications services using the Internet, initiate rulemaking proceedings
to consider rules governing the use of the Internet for the provision of
telecommunications services, and order providers of "Internet telephone"
services software to immediately cease the sale of such software pending such
rulemaking. Certain parties have filed comments with the FCC regarding the ACTA
Petition. We are unable to predict the outcome of this proceeding. In December
1996, the FCC stated that it intended to address the legal questions raised by
the ACTA Petition in a future proceeding but has not yet done so. ACTA has
submitted petitions, similar to its FCC filing, to certain state regulators,
including public service commissions. Any action by the FCC or state regulators
to grant the relief sought by ACTA or otherwise to regulate use of the Internet
as a medium of communication, including any action to permit local exchange
carriers to impose additional charges for connections used for Internet access,
could have a material adverse effect on our business.
9
WE MAY REQUIRE ADDITIONAL CAPITAL.
We may need to raise additional capital in order to fund the development and
marketing of our products and services. Although we expect our cash and cash
equivalents to provide us with sufficient working capital through at least the
first fiscal quarter of 2001, our current plans and projections may prove to be
inaccurate or our expected cash flow may prove to be insufficient to fund our
operations because of product delays, unanticipated expenses or other unforeseen
difficulties. Our ability to obtain additional financing will depend on a number
of factors, including market conditions, our operating performance and investor
interest. These factors may make the timing, amount, terms and conditions of any
financing unattractive. They may also result in our incurring additional
indebtedness or accepting stockholder dilution. If adequate funds are not
available or are not available on acceptable terms, we may have to forego
strategic acquisitions or investments, defer our development activities, or
delay our introduction of new products and services. Any of these actions may
seriously harm our business and operating results.
THE MARKET PRICE OF OUR COMMON STOCK HAS BEEN EXTREMELY VOLATILE.
The market price of our common stock has been extremely volatile in the
past, and may be expected to be volatile in the future for many reasons,
including:
- actual or anticipated variations in our revenue and operating results;
- announcements of the development of improved technology;
- changes in estimates of our financial performance, or the absence of
coverage, by securities analysts;
- conditions and trends in the Internet and multimedia conferencing
industries;
- adoption of new accounting standards; and
- general market conditions.
Recently the stock markets have experienced extreme price and volume
fluctuations that have dramatically affected the market prices of the stocks of
many technology companies, particularly companies associated with the Internet.
These fluctuations often have been unrelated or disproportionate to the
operating performance of those companies. These factors may adversely affect the
market price of our common stock.
VOLATILITY IN OUR STOCK PRICE MAY LEAD TO LITIGATION AGAINST US.
Stockholders frequently commence securities class action litigation against
a company after a significant decrease in the company's stock price. If our
stock price drops and our stockholders commence litigation against us, we could
incur significant legal and other expenses defending the litigation and our
management could be distracted from our principal business operations. Either of
these outcomes could seriously harm our business.
DELAWARE LAW AND OUR CHARTER DOCUMENTS CONTAIN ANTI-TAKEOVER AND INDEMNIFICATION
PROVISIONS THAT MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR STOCK.
Section 203 of the Delaware General Corporation Law and our charter and
by-laws contain provisions that might enable our management to resist a takeover
of our company. These provisions might discourage, delay or prevent a change in
the control of our company or a change in our management. These provisions could
also discourage proxy contests and make it more difficult for you and other
stockholders to elect directors and take other corporate actions. The existence
of these provisions could limit the price that investors might be willing to pay
in the future for shares of our common stock.
10
USE OF PROCEEDS
All of the shares of common stock offered by this prospectus are being
offered by the selling stockholders. For information about the selling
stockholders, see "Selling Stockholders." We will not receive any proceeds from
sales of these shares. We received approximately $20 million from the sale of
those shares to the selling stockholders in private placements completed in
December 1999.
SELLING STOCKHOLDERS
The following table sets forth information with respect to the beneficial
ownership of our common stock as of June 14, 2000, by each of the selling
stockholders. Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Except as indicated, each of the
selling stockholders possesses sole voting and investment power with respect to
all of the shares of common stock owned by them, subject to community property
laws where applicable.
PERCENTAGE OF
SHARES
NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED
--------------------------------------------------- -------------------
OUTSTANDING RIGHT TO TOTAL SHARES BEFORE AFTER
SHARES ACQUIRE NUMBER OFFERED OFFERING OFFERING
----------- ------------------------- --------- -------- -------- --------
Austin W. Marxe and David Greenhouse....... 1,108,421 -- 1,108,421 325,521 9.1% 6.4%
153 East 53 Street, 51st Floor
New York, New York 10022
CFE, Inc. ................................. 325,521 -- 325,521 325,521 2.6 --
Private Equity Holding (Cayman) Ltd. ...... 325,521 -- 325,521 325,521 2.6 --
Altamira Management Ltd.................... 325,521 -- 325,521 325,521 2.6 --
- --------------------------
* Represents less than 1% of the outstanding shares of common stock.
The information reported regarding Messrs. Marxe and Greenhouse is based on
Amendment No. 2 to Schedule 13G filed with the Securities and Exchange
Commission on March 2, 2000 by Special Situations Fund III, L.P., MGP Advisers
Limited Partnership, Special Situations Technology Fund, L.P., SST Advisers,
L.L.C., Special Situations Cayman Fund, L.P., AWM Investment Company, Inc.,
Special Situations Private Equity Fund, L.P., MG Advisors L.L.C., Austin W.
Marxe and David Greenhouse. Of the 1,108,421 shares, (a) 665,192 shares are
beneficially owned by Special Situations Fund III, L.P. and MGP Advisers Limited
Partnership (the general partner of and investment advisor to Special Situations
Fund III, L.P.), (b) 143,600 shares are beneficially owned by Special Situations
Technology Fund, L.P. and SST Advisers, L.L.C. (the general partner of and
investment advisor to Special Situations Technology Fund, L.P.), (c) 221,504
shares are beneficially owned by Special Situations Cayman Fund, L.P. and AWM
Investment Company, Inc. (the general partner of and investment advisor to
Special Situations Cayman Fund, L.P.) and (d) 78,125 shares are beneficially
owned by Special Situations Private Equity Fund, L.P. and MG Advisors L.L.C.
Messrs. Marxe and Greenhouse, who serve as officers, directors and members or
principal shareholders of the three investment advisors, claim sole voting and
dispositive powers for all of the 1,108,421 shares. Of the shares offered,
78,125 are offered by Special Situations Private Equity Fund, L.P., 65,104 are
offered by Special Situations Cayman Fund, L.P., and 182,292 are offered by
Special Situations Fund III, L.P. The 1,108,421 outstanding shares of common
stock beneficially owned by Messrs. Marxe and Greenhouse may be deemed to be
owned by Adam Stettner, one of our directors. Mr. Stettner is an employee of an
entity controlled by Messrs. Marxe and Greenhouse. Mr. Stettner disclaims
ownership of all of the shares being offered hereby by Messrs. Marxe and
Greenhouse. He also disclaims beneficial ownership of all other shares owned by
Messrs. Marxe and Greenhouse other than 143,600 shares owned by Special
Situations Technology Fund, L.P., of which he is the managing director.
CFE, Inc. is a wholly owned subsidiary of General Electric Capital
Corporation.
11
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to
time by the selling stockholders. The term "selling stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. Such sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
in negotiated transactions. The selling stockholders may sell their shares by
one or more of, or a combination of, the following methods:
- purchases by a broker-dealer as principal and resale by such broker-dealer
for its own account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- block trades in which the broker-dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- an over-the-counter distribution in accordance with the rules of the
Nasdaq National Market;
- in privately negotiated transactions; and
- in options transactions.
In addition, any shares that qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this prospectus.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In connection with
distributions of the shares or otherwise, the selling stockholders 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 the common stock in the course of
hedging the positions they assume with selling stockholders. The selling
stockholders may also sell the common stock short and redeliver the shares to
close out such short positions. The selling stockholders may also enter into
option or other transactions with broker-dealers or other financial institutions
which require the delivery to such broker-dealer or other financial institution
of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or
amended to reflect such transaction). The selling stockholders may also pledge
shares to a broker-dealer or other financial institution, and, upon a default,
such broker-dealer or other financial institution, may effect sales of the
pledged shares pursuant to this prospectus (as supplemented or amended to
reflect such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling stockholders
and any broker-dealers who execute sales for the selling stockholders may be
deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. Any profits realized by the selling stockholders and
the compensation of any broker-dealer may be deemed to be underwriting discounts
and commissions.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
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We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholders and their affiliates. In
addition, we will make copies of this prospectus available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a prospectus
supplement will be distributed that will set forth the number of shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling stockholders to keep the Registration
Statement of which this prospectus constitutes a part effective until such time
as all of the shares covered by this prospectus have been disposed of pursuant
to and in accordance with the Registration Statement.
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[LOGO]
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be paid by the
Company in connection with the issuance and distribution of the securities being
registered, other than sales commissions. All amounts shown are estimates except
for amounts of filing and listing fees.
Filing fee of SEC........................................... $ 7,778
Listing fee of Nasdaq Stock Market, Inc..................... 17,500
Accounting fees and expenses................................ 10,000
Blue sky fees and expenses (including related legal fees)... 1,500
Legal fees and expenses..................................... 30,000
Printing and engraving expenses............................. 30,000
Miscellaneous............................................... 3,222
--------
Total..................................................... $100,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law affords a Delaware
corporation the power to indemnify its present and former directors and officers
under certain conditions. Article SEVENTH of the charter of CUseeMe
Networks, Inc. (formerly White Pine Software, Inc.) (the "Company") provides
that the Company shall indemnify each person who at any time is, or shall have
been, a director or officer of the Company, and is threatened to be or is made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he or she is, or was, a director or officer of the Company, or is or was
serving at the request of the Company as a director, officer, employee, trustee,
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement incurred in connection with any such action, suit or
proceeding to the maximum extent permitted by the Delaware General Corporation
Law.
Section 102(b)(7) of the Delaware General Corporation Law gives a Delaware
corporation the power to adopt a charter provision eliminating or limiting the
personal liability of directors to the corporation or its stockholders for
breach of fiduciary duty as directors, provided that such provision may not
eliminate or limit the liability of directors for (a) any breach of the
director's duty of loyalty to the corporation or its stockholders, (b) any acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) any payment of a dividend or approval of a stock
purchase that is illegal under Section 174 of the Delaware Corporation Law or
(d) any transaction from which the director derived an improper personal
benefit. Article NINTH of the Company's charter provides that to the maximum
extent permitted by the Delaware General Corporation Law, no director of the
Company shall be personally liable to the Company or to any of its stockholders
for monetary damages arising out of such director's breach of fiduciary duty as
a director of the Company. No amendment to or repeal of the provisions of
Article NINTH shall apply to or have any effect of the liability or the alleged
liability of any director of the Company with respect to any act or failure to
act of such director occurring prior to such amendment or repeal. A principal
effect of such Article NINTH is to limit or eliminate the potential liability of
our directors for monetary damages arising from breaches of their duty of care,
unless the breach involves one of the four exceptions described in (a) through
(d) above.
Section 145 of the Delaware General Corporation Law also affords a Delaware
corporation the power to obtain insurance on behalf of its directors and
officers against liabilities incurred by them in
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those capacities. The Company has procured a directors' and officers' liability
and company reimbursement liability insurance policy that (a) insures directors
and officers of the Company against losses (above a deductible amount) arising
from certain claims made against them by reason of certain acts done or
attempted by such directors or officers and (b) insures the Company against
losses (above a deductible amount) arising from any such claims, but only if the
Company is required or permitted to indemnify such directors or officers for
such losses under statutory or common law or under provisions of the Company's
charter or by-laws.
ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------
5.1 Opinion of Hale and Dorr LLP (filed previously)
23.1 Consent of Ernst & Young LLP
23.2 Consent of Hale and Dorr LLP (included in Exhibit 5.1)
(filed previously)
24.1 Power of Attorney (contained on page II-5 of the
registration statement as originally filed)
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required pursuant to Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(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 to included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 and Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in this Registration
Statement.
(2) That, for the purposes of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration, by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference to the
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Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by its is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on behalf by the undersigned, thereunto duly authorized,
in the City of Nashua, New Hampshire on August 22, 2000.
CUSEEME NETWORKS, INC.
By: /s/ KILLKO A. CABALLERO
-----------------------------------------
Killko A. Caballero
President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed by the following persons in
the capacities indicated on August 22, 2000.
SIGNATURE TITLE
--------- -----
/s/ KILLKO A. CABALLERO President, Chief Executive Officer and
------------------------------------------- Chairman (PRINCIPAL EXECUTIVE OFFICER)
Killko A. Caballero
/s/ CHRISTINE J. COX Chief Financial Officer, Vice President of
------------------------------------------- Finance, Treasurer and Assistant Secretary
Christine J. Cox (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
* Director
-------------------------------------------
Joseph J. Esposito
* Director
-------------------------------------------
Jonathan G. Morgan
* Director
-------------------------------------------
Adam Stettner
*By: /s/ KILLKO A. CABALLERO
---------------------------------------
Killko A. Caballero
Attorney-in-fact
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