As filed with the Securities and Exchange Commission on May 19, 1997
Registration No. ___
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
IMMECOR CORPORATION
(Name of small business issuer in its charter)
California 1115 68-0324628
(State or jurisdiction of
incorporation or (Primary Standard Industrial (I.R.S. Employer
organization) Classification Code Number) Identification No.)
100 Professional Center Drive
Rohnert Park, California 94928-2137
(707) 585-3036
(Address and telephone number of principal executive offices and principal
place of business)
Heinot H. Hintereder, President & Chief Executive Officer
Immecor Corporation
100 Professional Center Drive
Rohnert Park, California 94928-2137
(707) 585-3036
(Name, address and telephone number of agent for service)
Copies to:
Kenneth M. Christison, ESQ
601 Glenwood Avenue
Mill Valley, CA 94941
Approximate date of commencement of proposed
sale to the public: As soon as practicable after the
effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
Title of each Proposed maximum Proposed maximum Amount of
class of securities Amount to be offering price aggregate offering registration fee
to be registered registered per share price
Common Stock, without par value 750,000 $5.25 $3,937,500 $1,478
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 shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
If any of the securities on this form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box: /x/
IMMECOR CORPORATION
Cross-reference Sheet Showing Location in Prospectus:
PART I - INFORMATION REQUIRED IN PROSPECTUS
Form SB-2 Item Number and Caption Caption in Prospectus
1. Front of Registration Statement
Outside Front Cover of Prospectus ......Outside Front Cover of Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus ................Inside Front Cover Page of Prospectus
3. Summary Information and Risk Factors ..... Prospectus Summary; Risk Factors
4. Use of Proceeds .......................................... Use of Proceeds
5. Determination of Offering Price ........
Plan of Distribution - Determination of Offering Price
6. Dilution ..................................................... Dilution
7. Selling Security Holders ............................. Not Applicable
8. Plan of Distribution ..................................Plan of Distribution
9. Legal Proceedings ............................
Business - Legal Proceedings & Litigation
10. Directors, Executive Officers, Promoters
and Control Persons ................................ Management
11. Security Ownership of Certain Beneficial
Owners and Management ....................... Principal Shareowners
12. Description of Securities ......................Description of Common Stock
13. Interest of Named Experts and Counsel ..... Not Applicable
14. Disclosure of Commission Position on
Indemnification for Securities Act .......
Management - Indemnification of Officers and
Directors
15. Organization within Last Five Years .......... Not Applicable
16. Description of Business ..................Prospectus Summary; Risk Factors;
Selected Financial Data; Business;
Certain Transactions
17. Management's Discussion and Analysis
or Plan of Operation ..........Management's Discussion and Analysis of
Financial Condition and Results of Operations
18. Description of Property ...................Business - Properties/Facilities
19. Certain Relationships and Related
Transactions ..........................Certain Transactions
20. Market for Common Equity and
Related Stockholder Matters ..........Risk Factors; Dividend Policy;
Description of Common Stock; Shares Eligible
for Future Resale
21. Executive Compensation ............................Executive Compensation
22. Financial Statements .......................Index to Financial Statements
23. Changes In and Disagreements With
Accountants on Accounting and
Financial Disclosure ................................ Not Applicable
IMMECOR
CORPORATION
750,000 SHARES
COMMON STOCK
All of the 750,000 shares of common stock are being sold directly by IMMECOR
Corporation ("Immecor" or the "Company"). Prior to this offering, there has been
no public market for the Company's common stock; therefore, the public offering
price has been determined by the Company. After completion of this offering, and
dependent largely upon the number of shares sold in this offering, the Company's
shares may be traded on a stock exchange (no application has been made to any
stock exchange) or in the over-the-counter market, or no active trading market
may develop or be sustained. See "Risk Factors" and "Shares Eligible for Future
Resale."
This offering is being made directly by the Company for not more than
750,000 shares (the "maximum" amount). There is no minimum number of shares to
be sold in this offering and all funds received will go immediately to the
Company. See "Use of Proceeds." This offering will be terminated upon the
earlier of: the sale of the maximum amount, twelve months after the date of this
Prospectus or the date on which the Company decides to close the offering. A
minimum purchase of 100 shares is required. The Company reserves the right to
reject any Share Purchase Agreement in full or in part. See "Plan of
Distribution."
The common stock offered hereby involves a high degree of risk. See "Risk
Factors."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Underwriting
Price to Discounts and Proceeds to
Public Commissions (1) Company (2)
Per Share $5.25 None $5.25
Total Maximum (750,000 shares) $3,937,500 None $3,937,500
(1) The shares are being sold directly by the Company through a designated
executive officer who is registered as sales representative, where required, and
will not receive any commission. See "Plan of Distribution."
(2) Before deducting estimated expenses of $195,000 payable by the Company,
including registration fees, escrow agent fees, costs of printing, copying and
postage and other offering costs, in addition to legal and ac- counting fees.
The date of this Prospectus is May 19, 1997
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus, and, if given or made, such information and representations
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby to any person in any jurisdiction in
which such offer or solicitation is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information contained herein is correct as of any date
subsequent to the date hereof.
This Prospectus is available in an electronic format, upon appropriate
request from a resident of those states in which this offering may lawfully be
made. The Company will transmit promptly, without charge, a paper copy of this
Prospectus to any such resident upon receipt of a request.
TABLE OF CONTENTS
Page
Reference Data .............................. 02
Prospectus Summary .......................... 03
Risk Factors ................................ 05
Use of Proceeds ............................. 07
Dividend Policy ............................ 07
Capitalization .............................. 08
Dilution .................................... 09
Management's Discussion & Analysis of
Financial Condition & Results of Operations .. 10
Business ..................................... 13
Management .................................. 16
Executive Compensation ...................... 17
Principal Shareowners ....................... 17
Certain Transactions ........................ 18
Description of Common Stock ................. 18
Shares Eligible for Future Resale ........... 19
Plan of Distribution ........................ 19
Legal Matters ............................... 20
Experts ...................................... 20
Additional Information ....................... 20
Index to Financial Statements ............... F1
Until August 18, 1997 (90 days after the date of this Prospectus) all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
REFERENCE DATA
Upon the date of this Prospectus, the Company became subject to the
informational filing requirements of the Securities Exchange Act of 1934, as
amended ("Exchange Act") for its current fiscal year. Upon completion of this
offering, the Company may be required to register under the Exchange Act and
continue to file required annual and quarterly reports.
The Company intends to furnish its shareholders with annual reports
containing financial statements audited by an independent public accounting firm
after the end of its fiscal year. The Company's fiscal year ends on December 31.
The Company will send shareholders quarterly reports with unaudited financial
information for the first three quarters of each fiscal year.
The Company was incorporated in the State of California on January 14,
1994. The Company's corporate offices are located at 100 Professional Center
Drive, Rohnert Park, California 94928. The Company's telephone number is (707)
585-3036. The Company's facsimile number is (707) 585-6838. The Company's email
address is immecor@immecor.com, and the Company's world wide web home page is
http//www.immecor.com.
- 2 -
PROSPECTUS SUMMARY
The following summary is qualified in its entirety and should be read
in conjunction with the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Unless
otherwise indicated, the information in this Prospectus gives retroactive effect
to a one for five reverse stock split of the Company's outstanding common stock
prior to this offering. See "Shares Eligible for Future Resale."
The Company
Immecor Corporation ("Immecor") designs, assembles, and markets
high-quality fault-tolerant specialty computers used in automated wafer defect
inspection systems for the semiconductor industry, high performance file servers
and workstations for networks, intra and internet file servers, and personal
computers, all based on Intel Pentium Pro (P6) processors and configured to meet
customer specifications. Immecor uses single, dual, and quad versions of the
processor, all of which are Microsoft Windows NT, Novell, Banyan, and Token Ring
compatible. Immecor also markets other brand-name personal computers and
accessories. The Company also provides related services to its customers,
including integration and staging services, configuration control, upgrading
existing systems and warranty support. The Company markets its products through
its own sales staff to large corporations, small businesses, local state and
federal agencies and individual end-users. See "Business" and "Products".
The Company objective is to become a recognized leader in the specialty
computer for the computer aided manufacture and defect review station market
place within the semiconductor industry.
Immecor Corporation is located in Rohnert Park, California. Rohnert
Park is located in Sonoma County, approximately 50 miles north of San Francisco.
Proposed Development
The Company's development goals for 1997-1998 are to (i) further
capitalize the Company through this offering, (ii) obtain strategic partners,
(iii) lower production costs through vendor and strategic partner relationships
and increased sales volume, (iv) increase distribution of personal computers
through companies that already have computer distribution channels to chain
stores and large government and corporate end users and (v) continue to build
the Company's management team.
The Offering
Common Stock Offered by the Company ... 750,000 shares (Maximum)
Common Stock Outstanding Prior to the Offering .... 2,421,000 shares 1
Use of Proceeds ................................. Proceeds from the
sale of the
shares will be used to fund
expansion and marketing, and
general working capital.
Note 1: There will be 1,921,000 shares outstanding in the event the Company's
action for rescission of the issuance of 500,000 shares related to a previous
reorganization agreement is successful. See "Legal Proceedings and Litigation".
- 3 -
Summary Financial Data
The summary financial data for the years ended December 31, 1995, and
1996 have been derived from the Financial Statements and Notes to Financial
Statements, audited by L. V. Dorn II, independent auditors, whose report thereon
is also included. The summary financial data for the three months ended March
31, 1996 and 1997 have been derived from unaudited interim financial statements
of the Company contained elsewhere herein and reflect, in Management's opinion,
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the results of operations for these periods. Results of
operations for any interim period are not necessarily indicative of results to
be expected for the full fiscal year. The selected financial data should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Financial Statements and Notes thereto
included elsewhere in this Prospectus.
Years ended Three Months ended
December 31, March 31,
-1995- -1996- -1996- -1997-
(unaudited)
Statements of Income Data:
Revenue ..............................................$2,010,094 $3,591,382 $1,155,379 $935,433
Cost of goods sold .....................................1,763,856 3,137,320 996,339 735,739
---------- --------- ------- -------
Gross profit (loss) .............................246,238 454,062 159,040 199,694
Operating cost and expenses:
Operating income (loss) ................... (76,289) 74,645 58,357 65,343
Other income:
Interest income ............................... 78 722 157 483
Interest expense .............................. (770) (3,786) (807) 0
---- ------ ---- -
Income (loss) before for taxes ......... (76,981) 71,581 57,707 65,826
Income taxes .............................................(16,100) 18,800 14,000 16,150
------- ------ ------ ------
Net income (loss) .......................... $ (60,881) $ 52,781 $ 43,707 $ 49,676
--------- ---------- --------- --------
December 31, March 31,
1996 1997
(unaudited)
Balance Sheet Data:
Working capital ........................................... $ 210,580 $ 249,961
Total assets ..................................................631,564 708,276
Long term obligations ................................. 0 0
Stockholders' equity .................................... $ 252,540 $ 291,655
- 4 -
RISK FACTORS
An investment in the shares being offered by this Prospectus involves a
high degree of risk and should only be made by persons who can afford to risk
their entire investment. Prospective investors should consider carefully the
following risk factors, in addition to other information concerning the Company
and its business contained in this Prospectus, before purchasing shares.
The Company has a limited operating history.
At the effective date of this offering, the Company had an operating
history of approximately three years and three months. During such period, the
Company has experienced sustained growth in its business but there is no
assurance that such growth will continue.
The share offering price was set by the Company.
Prior to this offering, there has not been any public market for the
Company's common stock; therefore, the initial offering price for the shares was
determined by the Company. Among factors considered in determining the public
offering price were the Company's results of operations, its current financial
condition, its future prospects, the state of the markets for its products, the
experience of management, the state of the economy in general and the demand for
similar securities considered comparable to the shares offered by the Company.
See "Plan of Distribution - Determination of Offering Price."
Investorswill experience immediate dilution of book value per share. Purchasers
of shares in this offering will realize immediate dilution
of approximately $3.97 per share (or 75.62%) in the pro forma net tangible book
value from the initial public offering price, if the maximum amount offered is
raised. See "Dilution."
A public trading market for the shares may not develop.
The Company does not currently meet the requirements for listing on an
organized stock exchange or quotation of over-the-counter market maker trades on
the NASDAQ market. After completion of this offering, the Company intends to
apply for a listing on a United States regional exchange, if the Company meets
certain numerical listing requirements. However, there can be no assurance that
the Company will be listed or that a public market will develop or be sustained.
If it does not, the Company has been advised that a registered securities
broker-dealer would provide an order matching service for persons wishing to buy
or sell shares, upon completion of this offering. However, there is currently no
agreement between the Company and a registered securities broker-dealer.
The share price may vary after this offering.
The price of the shares, after the completion of this offering, may
vary due to general economic conditions and forecasts, the general business
condition of the Company, the release of the Company's financial reports and
sales of shares outstanding prior to this offering.
Sales of existing shares could adversely affect the market price. Sales of
shares outstanding prior to this offering may adversely affect
the market price of the shares after this offering. All of the shares of common
stock outstanding prior to this offering are "restricted securities" and
therefore may not be sold in a public distribution except in compliance with the
registration requirements of the Federal Securities Act of 1933 (the "Securities
Act") or an applicable exemption under the Securities Act, including an
exemption pursuant to Rule 144 of the General Rules and Regulations under the
Securities Act. After completion of this offering, up to one percent of the
outstanding shares would be eligible for sale within any three-months period.
See "Shares Eligible for Future Resale".
No minimum amount set for this offering.
Because there is no required minimum amount of shares to be sold in
this offering, all proceeds received will go directly to the Company, to be used
as described in "Use of Proceeds". If only a minimum amount were sold, the
result could be that all the proceeds were used to pay expenses of this
offering.
- 5 -
No dividends are intended.
It is the Company's intention to retain any earnings for use in its
business and pay no dividends on its common stock. See "Dividend Policy".
Voting control will remain with current management.
Immediately prior to this offering, the Company's management
beneficially owned 66.08% of the Company's common stock. After the completion of
this offering, if the maximum is sold, management will own 50.46% and will
effectively be able to control the Company. See "Principal Shareholders."
Loss of key personnel could interrupt progress.
The Company's business depends to a large extent on the services of
Jason C. Lai (Vice President, Sales and Marketing) and Nhon K. Tran (Vice
President, Operations). Both are principal stockholders and helped develop the
Company to its present position. Further progress is dependent upon their
continued commitment. The Company maintains a key-person life insurance policy
on Nhon K.
Tran and an employment contract with Jason C. Lai.
Present customer base consists of major customers only.
The Company's present business is based on a small number of relatively
large transactions. Of the Company's approximately $2,010,094 in total sales in
1995, $1,467,369, approximately 73%, were made to 3 corporate cus-tomers who
integrate the Company's core product into their own. Of the Company's
approximately $3,591,382 in total sales in 1996, $1,867,519, approximately 52%,
were made to the same 2 corporate customers. These transactions are not subject
to long term contracts, but rather depend upon the quality of the Company's
products and ability (i) to comply with these customer's technical
specifications and (ii) to provide the funds necessary to finance the purchase
of the materials needed for the assembly of the product and to extend credit
terms of 30 to 60 days net. In the recent past the Company has had difficulty in
attracting new corporate customers because of capital requirements and
limitations in its cash flow. For sales to new customers the Company currently
requires cash on delivery or substantial down payments at order time, a tactic
that benefits the Company's cash flow requirements but prevents the Company from
expanding its business and increasing sales volume and profits. Despite these
problems, the Company is currently expanding its customer base to lessen the
effect of having a small number of major customers only, the loss of anyone of
which would adversely affect the Company's business.
Fluctuations in cost of computer components.
The Company purchases the various components used in the assembly of
its computers from domestic and foreign manufacturers and distributors. Supply
and prices can be affected by multiple factors, such as under- or over- supply,
or the introduction of new technology, making components and inventories based
on older technologies obsolete. The Company's management practices
"just-in-time" inventory controls and believes that it will be able to assess
and to react to price fluctuation indicators based upon its past experience in
this market.
Uncertain market.
Although the Company believes that the products and services which it
has developed and which it is currently developing will be commercially
marketable, there can be no assurance that such products and services will be
commercially accepted by those companies and individuals which the Company
believes presently constitute the market. The Company intends to develop new
computer products for semiconductor manufacturing processes and the emerging
wireless communications technology and to seek new markets for such products in
addition to the existing markets, but there can be no assurance that such
developmental and marketing efforts will be successful.
Competition consists of large business entities.
The Company conducts in-depth research on the potential market for the
products it develops, prior to actual production and sales by introducing pilots
to existing customers; however, there can be no assurance that any of the
Company's products will be able to compete on a technological or cost basis with
other similar products which may be available before or after the time the
Company's products are introduced into the market. Large business entities with
greater financial strength and greater technical production capacity than the
Company are proactive competitors in the computer products field and especially
in the semiconductor wafer fabrication and the emerging wireless communications
technology segments of the overall market. These business entities may develop
systems and/or products which are competitive with, or superior to, the
Company's products, or which can be marketed more effectively.
- 6 -
Planned management of growth may create risk.
The Company plans and will make acquisitions of other companies in the
future and may use a portion of the net proceeds received by the Company from
this Offering to pay for legal and accounting expenses associated with due
diligence to do so. Significant uncertainties accompany any acquisition plans.
The actual acquisition of another company and its integration, include, without
limitation, the possibility of understated incurred, but not yet reported, costs
and contingent liabilities. Due to such uncertainties, any acquisition could
have an adverse effect on the Company. Also, as the so-called "Information Super
Highway" develops over the next few years, so will competition for acquisitions
of emerging promising high-technology companies intensify. There can be no
assurance that the Company will be sucessful in completing acquisitions in the
future. The Company's future results will be affected by its ability to acquire
technology companies with new products or significant annual sales volumes
complementing the Company's business strategy, and by its ability to manage its
anticipated growth.
Additional capital may not be available for the Company to carry out its plans.
The proceeds of this offering are intended to achieve certain
objectives. See "Use of Proceeds." More capital may be required for those
purposes than the Company will have. See "Capitalization." Changes in the
Company's objectives, to take advantage of opportunities or to meet competitive
challenges, may require additional capital. Raising additional funds through
issuance of equity securities will result in dilution to existing shareholders.
Debt financing would require interest expense and principal repayments, reducing
the Company's net cash flow and earnings potential. If required funding cannot
be secured, the Company may be forced to limit growth. See "Business Strategy,"
"Capitalization" and "Management's Discussion and Analysis of Financial
Conditions and Results of Operations - Liquidity and Capital Resources."
USE OF PROCEEDS
The net proceeds available to the Company from the sale of the shares
in this offering are estimated to be approximately $3,742,500 if the maximum is
sold, after deducting both selling and other offering expenses (estimated to be
$195,000). The Company expects to use the net proceeds for the purposes outlined
below. If the Company raises less than the maximum amount of this offering, it
intends to prioritize expenditures as follows: first use funds from the offering
for working capital and corporate needs, second increase sales and assembly
capacity and third improve existing products and develop new products.
750,000 Shares
1. Increase of assembly capacity ................................ $ 500,000 13.36%
2. Increase demonstration equipment and wholesale inventory........ 800,000 21.38%
3. New product development ......................................... 1,400,000 37.41%
4. Working Capital and General Corporate Purposes ...................... 1,042,500 27.85%
Total net proceeds $ 3,742,500 100.00%
None of the net proceeds of this offering will be used to pay existing
debt as the Company is virtually debt-free.
Management does not anticipate changes in the proposed allocation of
estimated net proceeds of this offering but reserves the right to make changes,
if management believes those changes are in the best interests of the Company.
DIVIDEND POLICY
The Company has not declared or paid dividends since its inception,
presently intends to retain any earnings to facilitate growth and does not
anticipate paying cash dividends in the foreseeable future. The Company's future
lending agreements may also prohibit the payment of dividends.
- 7 -
CAPITALIZATION
The following table sets forth the actual capitalization of the Company
on March 31, 1997:
March 31, 1997
Short-term debt:
Current maturities of long-term debt $ 0
Total short-term debt 7,303
Long-term debt:
Total long-term debt, less current maturities 0
Stockholders' equity:
Common Stock, no par value, 50,000,000 shares authorized;
2,421,000 shares outstanding 1 293,701
Preferred Stock, no par value, 20,000,000 shares authorized;
None outstanding
Retained earnings (deficit) (2,046)
Total stockholders' equity 298,958
Total capitalization $ 298,958
<FN>
Note 1: There will be 1,921,000 shares outstanding in the event the Company's
action for rescission of the issuance of 500,000 shares related to a previous
reorganization agreement is successful. See "Legal Proceedings and Litigation".
</FN>
- 8 -
DILUTION
On March 31, 1997 the Company had a net tangible book value of
$291,655, or $0.12 per share. The Net tangible book value per share is equal to
the Company's total tangible assets, less its total liabilities and divided by
its total number of shares of common stock outstanding. After giving effect to
the sale of shares being offered, at the public offering price of $5.25 per
share, and the application of the estimated net proceeds, the pro forma net
tangible book value of the Company as of March 31, 1997, would have been
$4,060,954 or $1.28 per share. This represents an immediate increase in net
tangible book value of $1.16 per share to existing shareowners and an immediate
dilution of $3.97 per share to new investors purchasing shares in this offering.
The following table illustrates this per share dilution in net tangible book
value per share to new investors:
(750,000 shares)
Public Offering price per share $ 5.25
Net tangible book value per share
on March 31, 1997 $ 0.12
Increase
in net tangible book value per share
attributable to new investors 1.16
----
Pro forma net tangible book value per share
as of March 31, 1997, after this offering $ 1.28
------
Net tangible book value dilution per share
to new investors $ 3.97
------
The following table sets forth on a pro forma basis as of March 31,
1997 the difference between existing shareowners and new investors purchasing
shares in this offering, with respect to the number of shares purchased, the
total consideration paid and the average price paid per share, at the Maximum:
Average
Price
Shares Purchased Total Consideration Per
Number Percent Amount Percent Share
Maximum Sold:
Existing Shareholders 2,421,000 76.35% $ 320,500 7.53% $ 0.13
New Investors 750,000 23.65 3,937,500 92.47 5.25
------- ----- --------- ----- ----
Total 3,171,000 100.00% $ 4,258,000 100.00%
--------- ------ ----------- ------
NOTE: The information and calculations disclosed regarding dilution do
not consider the changes that would result subject to the outcome of a pending
law suit. See "Legal Proceedings and Litigation".
- 9 -
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following should be read in conjunction with the Financial
Statements and Notes thereto, "Capitalization" and "Selected Financial Data"
appearing elsewhere in this Prospectus. Operating Data presented in this
discussion are unaudited.
Overview
The Company designs and assembles highly specialized computer systems
used in semiconductor manufacturing processes in addition to personal computers
customized to specifications by business and individual users. The necessary
components are purchased from domestic and foreign manufacturers and
distributors. The Company markets the finished product through its own sales
force. The sales force is divided into Corporate and Retail.
Corporate solicits requests for proposals from manufacturers in need of
specialty computers for various computer aided manufacturing processes in
quantity, installs the prototypes at the customers site for various customer
related evaluation processes that include hardware components and operating and
application software changes until the computer system conforms to the customers
specifications and expectations so that letters of compliance from the various
domestic and international safety standard agencies can be obtained, if the
computer becomes part of a product to be sold outside the United States. This
process may consume several weeks and even months. During the process the
personnel involved becomes a team and develops understanding about the technical
problems encountered, and when the process is completed the customer's
satisfaction is guaranteed and the Company's profit margin is not diminished by
excessive after sale service calls and employee technical expertise is enhanced.
These sales are made on a credit basis with net 15, 30, 45, and 60 day terms,
depending upon the size of the sale, past payment experience, and other Company
credit policy criteria.
Retail advertises various personal computer systems in local newspapers
and displays these computer systems in the Company's showroom, where customers
can test the various systems and can decide upon the features they want. These
sales are made on a 25% down payment policy with the remainder due before
delivery. Currently assembly, 72-hour burn-in and testing consumes approximately
four days with delivery occuring on the fifth day. Delivery and installation of
the personal computer at the end users site is free of charge within a certain
radius of the Company's facilities. Outside this radius a modest delivery charge
is billed.
Net sales are net of product returns. When a product built to customer
specifications is returned, the Company charges a 15% restocking fee. The
Company grants all its customers a thirty (30) day money back guarantee on all
computer systems that do not perform to customer specifications.
All personal computers carry a one year free labor and material limited
warranty, with free on-site service during the first thirty days. In conjunction
with personal computer sales, the Company sells one, two, and three year service
contracts providing depot or on-site maintenance. The Company purchases the
service contracts from a major carrier. In addition, the Company provides
regular computer upgrade services to individuals and businesses at its
maintenance facility. Corporate customers may employ Company technicians on a
temporary basis.
The Company's cost of sales consists of the purchase price of the
various computer components going into the product, production labor and related
production overhead expenses, and after sale service calls. The Company intends
to negotiate component purchasing contracts directly with manufacturers rather
than with vendors as soon as large scale assembly becomes possible in order to
take advantage of manufacturers discounts. The Company has no contractual
relationship with any of its vendors.
The Company's growth strategy is to increase net sales by augmenting
its marketing and sales force, by increased advertising in technical
publications specific to the Company's specialty computers, and by increasing
distribution of personal computers through retail and wholesale organizations.
The Company will make the development of specialty computers for computer aided
manufacturing (CAM) and automated defect classification (ADC) for the
semi-conductor industry its core business. The Company plans to acquire
technology companies with new products under development or with significant
annual sales volumes complementing the Company's business strategy.
- 10 -
Financial Condition and Results of Operations:
The following table sets forth, as a percentage of net sales, certain
items included in the Company's Statements of Income and Retained Earnings (see
Financial Statements and Notes thereto elsewhere in this Prospectus) for the
periods indicated:
Years Ended Three Months Ended
December 31, March 31,
-1995- -1996- -1996- -1997-
Statements of Income Data:
Net sales................................ 100.00% 100.00% 100.00% 100.00%
Cost of sales ......................... 87.75 87.36 86.23 78.65
Gross profit ............................ 12.25 12.64 13.77 21.35
Depreciation and amortization ........... 0.20 0.26 0.19 0.34
Selling, general and administrative expenses 15.85 12.12 8.62 14.02
Flood insurance proceeds ................. 0.00 (1.82) 0.00 0.00
Total operating costs and expenses ...... 16.05 10.56 8.71 14.36
Operating income (loss) ................. (3.80) 2.08 5.05 6.99
Interest income (loss) .................... 0.00 0.02 0.01 0.05
Interest expense......................... (0.04) (0.11) (0.07) (0.00)
Income (loss) before income taxes........ (3.83) 1.99 4.99 7.04
Income Tax ............................. (0.80) 0.52 1.21 1.73
Net income (loss) ........... (3.03) 1.47 3.78 5.31
Year Ended December 31, 1996 Compared to the Year Ended December 31, 1995
Net sales. Net Sales increased by $1,581,288 or 78.67% from $2,010,094
in 1995 to $3,591,382 in 1996.
Gross profit. Gross Profit increased, as a percentage of net sales,
from 12.25% in 1995 to 12.64% in 1996, in a market characterized by heavy price
competition. Downward pressure on component prices also contributed to this
improvement.
Selling, general and administrative expenses. Selling, general and
administrative expenses decreased significantly as a percentage of net sales
from 15.85% in 1995 to 12.12% in 1996. This decrease in expenses as a percentage
of net sales was primarily due to increased sales volume and improvements in
operating efficiency.
Flood insurance proceeds. Flood insurance proceeds of $65,244 in 1996
is fully described in Note 8 of the Financial Statements included elsewhere in
this Prospectus.
Three Months Ending March 31, 1996 Compared to the Three Months Ending
March 31, 1997
Net sales. Net Sales decreased by $219,946 or 19.04% from $1,155,379
for the three months ending March 31, 1996 (the "1996 period") to $935,433 for
the three months ending March 31, 1997 (the "1997 period"). The net sales
decrease resulted primarily from the implementation of a marketing and sales
plan to sell larger customized specialty computers.
Gross profit. As a percentage of net sales, gross profit increased from
13.77% in the 1996 period to 21.35% in the 1997 period because of sales of
larger customized systems at higher gross profit margins..
Selling, general and administrative expenses. Selling, general and
administrative expenses increased as a percentage of net sales from 8.53% in the
1996 period to 14.02% in the 1997 period. The increase in expenses as a
percentage of net sales was primarily due to hiring of additional employees,
increased compensation levels for employees and higher occupancy cost.
- 11 -
Liquidity and Capital Resources
On March 31, 1997 and December 31, 1996, the Company had a working
capital of $249,961 and $210,580, respectively. The increase in working capital
was primarily due to improved profitability offset by offering costs and
repayments of notes and shareholder advances.
The Company had net cash provided by operating activities of $5,235 in
1996 and net cash used by operating activities of $225,034 in 1995. Net cash
provided by operating activities was $25,267 in the three months ending March
31, 1997, and $12,939 for the same period of 1996. The increase in net cash
provided by operating activities from 1995 to 1996 consisting primarily of a net
income of $52,781 in 1996 versus a net loss of $60,881 in 1995, and no
additional provisions for losses or accounts receivable in 1996 and decrease in
deferred taxes in 1996 compared with 1995. The increase in net cash provided by
operating activities for the three months ended March 31, 1997 compared with the
three months ended March 31, 1996 consisted primarily of increased profitability
and higher accounts payable in 1997.
The Company had net cash provided by financing activities of $64,688 in
1996 compared to $167,491 in 1995. This decrease was primarily due to the
collection of large notes receivable on sale of common stock in 1995 which did
not reoccur in 1996, which was partially offset by additions to notes payable
and shareholder advances in 1996 less offering costs which occurred only in
1996. Net cash used by financing activities was $66,216 for the three months
ending March 31, 1997, compared to net cash provided by financing activities of
$30,162 for the three months ending March 31, 1996. The primary reason for the
change was increases in notes payable and shareholder advances in 1996 compared
with significant repayments of notes payable and shareholder advances in 1997.
In addition, additional offering costs were paid during the three months ending
March 31, 1997 and not during the three months ending March 31, 1996.
The Company's primary capital needs are to fund its growth strategy,
which includes increasing its net sales, increasing its marketing and sales
force, increasing distribution channels, introducing new products and continuing
improvement of existing product lines.
The Company believes that the net proceeds from this offering, together
with the Company's line of credit and funds that may be generated from
operations, will be sufficient to fund the Company's anticipated working capital
requirements and expenditure requirements through 1998.
Federal and state net operating losses carryforward
The Company has available for carryforward for federal income tax
purposes of approximately $66,000 at December 31, 1996 and approximately $45,000
for State income tax purposes. These carryforwards expire as described in Note 9
to Financial Statements included elsewhere in this Prospectus..
Recent Accounting Pronouncements
During October of 1995, the Financial Accounting Standards Board issued
Statement No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123"),
which established a fair value-based method of accounting for stock-based
compensation plans. The Company currently has no stock-based compensation plans
but plans to adopt SFAS No. 123 in the future.
Inflation
The Company practices just-in-time inventory purchases to prevent
losses from industry-wide component price reductions. As such the Company does
not foresee any material inflationary trends for its components.
- 12 -
BUSINESS
Industry Background
During the last decade, the PC industry has grown rapidly as increased
functionality combined with lower pricing have made personal computers valuable
and affordable tools for business and personal use. Recent advances in the
technology, including the development of highspeed read-write CD-ROM drives,
high-speed data transmission hardware, multi-media, graphics and animation, have
increased the potential market dramatically. This trend has been further
augmented by the introduction of faster microprocessors and the introduction of
high performance chipsets with higher clock speeds such as the Power PC
architecture, new caching techniques and low power consumption features. While
the corporate market has become somewhat saturated with workstations for word
processing, data look-up and data formatting, new major opportunities present
themselves, from work-at-home to inverse multi-plexing, from videoconferencing
and audio broadcasting to remote disaster recovery and world-wide networking,
with some of these features and activities beginning to be integrated into the
Internet, with wireless communications technologies, and with many associated
opportunity niches ready to go mainstream.
Specialty computers that must meet sophisticated user written software
and advanced technologies requirements are beginning to play a larger role in
these developing business services markets. The recognizable shift from Gate
Array and Full Custom to Cell-Based Integrated Circuits will increase usage of
this computer in all areas of integrated circuit manufacture.
A major market segment is developing on the Internet and in
home/education systems. This market segment offers major opportunity now with
new software releases and new hardware (particularly multi-media packages and
CD-ROM technology) and is no longer limited to the computer-adept buyer, but is
being driven by the emergence of a younger generation of computer-literate
juveniles and young adults.
In addition, many older machines are no longer adequate to deal with
state-of-the-art software, and many existing computer owners will be upgrading
their equipment over the next few years. As much as 40 to 50% of 1997 sales and
sales over the next five years will be replacements of existing equipment. A
very high number of the currently installed computer user base consists of older
486 and lower version PC's.
Industry Growth Pattern Observations
There are three different growth patterns employed by the Company's
competitors, which are followed by most computer manufacturing and computer
sales organizations. Each has its own set of risks and rewards:
The Innovator Model: This model requires significant capital and strong
commitment to R&D and innovation, and can only be followed by the largest
players. Several large manufacturers follow this pattern. Retooling of large
centralized assembly plants with complementing parts inventories and staffing
retraining requirements, together with significant capital outlay are associated
with this model whenever existing technology changes. These models are also
technology bound, are marketed at runs of 100,000 or more copies at
predetermined profit margins that require hardware components to be manufactured
inexpensively and en masse for that model alone, making integration of new
technologies that come along nearly impossible or very expensive.
The Customer Access Model: This model requires focus on the ability to
aggregate and configure computer products to meet specific but average needs.
Mid-size computer manufacturers follow this pattern, either by association with
larger manufacturers and assemblers or by maintaining their own sizable
facilities with challenges similar to the Innovator Model, with the exception
that integration of later technologies is possible giving these models a longer
life span.
The Technology Manager Model: This model targets customer areas where
higher margin specialty software and advanced technologies meet specific
application requirements. The assembly of these models require up-to-date
knowledge of the customer's technological needs and matching expertise of the
supplier in the selection of technology and software available or forthcoming,
an approach that represents high-risk proprietary resources and financial
investments up-front by the partners to such projects but also a high-return
pattern if large volume sales, between 50 and 500 copies, materialize.
- 13 -
Market Observations
The Innovator Model is always exclusively marketed in large quantities
to small and large businesses with low computing power workstations for word
processing, data look-up and data formatting via office product chains and other
distributors "moving boxes" without providing satisfactory after-sale customer
services. This model is also sold to individual end users with no need for
special usage computing power and who are able to depreciate cost in a very
short time. This model is relatively high priced ranging from $2,000 to $3,000
because of certain featured innovations, and at the end of its cycle is sold at
discounted prices while the newer model becomes available.
The Customer Access Model is marketed to end users with specific but
average needs. Almost all independent computer equipment dealers who assemble
their own customized computers or who have them build by small computer assembly
houses sell this model for business and home use. Integration of later
technologies, so called "up-grades" is possible giving dealers repeat sales not
only for hardware components but also for software up-grades and troubleshooting
services. This model is more realistically priced ranging between $999 to $2,500
(depending upon configuration) because it must compete in the market with the
Innovator model and because it must afford upgradeability and hold its value
longer. In most cases, after-sale customer services are adequate.
The Technology Manager Model is marketed to users with specific needs
in all areas of scientific research and in specific areas, e. g., architecture,
construction, materials design, product development and computer aided
manufacturing. This market requires financial commitment to superior up-front
customer service including on-site technical support and the provision of
equipment for evaluation and demonstration purposes. Once the quality of the
product has been proven and satisfactory customer relationship has been
established, this market is highly profitable if the quality of the product is
maintained even though newer technologies might have to be integrated at a later
time. Depending upon configuration, this models price ranges from $10,000 to
$35,000 and up.
Company Strategy
The Company's strategic plan encompasses three areas of endeavor: 1)
design and develop products for emerging technology improvements in the
integrated circuit manufacturing process, 2) increase retail sales and at the
same time begin expansion into the wholesale market, and 3) make aquisitions of
technology companies that fit or complement the Company's own corporate profile
and efforts to enter the fibre optics and wireless communications market
segments.
Retail and Wholesale Market
The Company has chosen the Customer Access Model for its retail and
wholesale business strategy. The Company is totally commited to customer
satisfaction and currently provides this model at a high value, low cost, almost
commodity like prices, with the largest degree of current and future technical
customization possible to the consumer. Only nationally known brand name
components are used in its assembly. Assembly line improvements and the increase
in working capital accomplished with this offering will result in even higher
quality and lower prices with better profit margins for both retail and
wholesale operations. The Company currently assembles this model at its own
facilities and as sales volume increases will assemble at small independently
owned companies capable of following the Company's requirements as to
technological advances and price changes rapidly at competitive cost and
acceptable profit margins to the Company. These companies would be required to
be responsible for their own risk management and product development and could
become candidates for acquisition if they complement the Company's business
plans.
Corporate Market
The Company has chosen the Technology Manager Model for its corporate
customers that utilize the model in various configurations for their computer
aided manufacturing efforts. The most promising opportunity for the Company is
its recent break-in into computer aided manufacture of automatic reticle,
photomask defect inspection, wafer level defect inspection, line width and
registration systems with customer proprietary software integrated to a level
that supports wafer yield management. To truly manage yield, the collected data
must be stored, analyzed, interpreted, and then shared among the fab areas it
affects. Currently the Company's machines utilized in this process are
pre-assembled at the Company's facilities, installed and tested at the customers
site. In the future many of the necessary pre-tests will be accomplished at the
Company's facilities when the planned minienvironment designed to provide
adequate conditions for highly sensitive photo-optical and mechanical equipment
has been completed. Com-
- 14 -
pany management understands that the number one industry requirement namely that
computer suppliers provide cost effective products that are based on extendible
technology. Cost of ownership and the ability to satisfy customer delivery
requirements are critical ingredients in the selection process for advanced
computer equipment. It is the intention of the Company to make this business
area its core business, to train its essential employees in all facets of the
involved mechanical engineering and associated software development tasks and to
make every effort to broaden its presence and to increase sales substantially in
this market by participating in the long-term challenge for semiconductor
manufacturers towards transition from 8-inch wafers and 0.5 micron to 12-inch
wafers and "sub 0.2-micron" line geometrics.
Products
The Company currently markets 7 Pentium based models in the price range
from $779 to $1,450, Pentium based network servers and workstations to customer
specifications at negotiated prices depending upon configurations, CAM (computer
aided manufacture) or other type specialty computers ranging from $10,000 to
$35,000 and up. The Company also sells various brand name computers and printer
models, computer parts, software, network design and related services.
Computer Associated Business Services
The Company will continue to extend efforts in the area of wireless
data communications services in the northern part of California. This effort
will consist mostly of information gathering of what is being done in this
market to enhance the Company's expertise in this area and to position it for a
ready and go situation. The Company intends to fund start-up costs from the
proceeds of this offering but may use allocated funds to acquire a provider who
is in transition from wire to wireless services with a plant and customer base.
Research and Products under Development
The market serviced by the Company is characterized by rapid
technological change. Accordingly, the Company's product and process development
programs are devoted to the development of new computer configurations,
including new generations of products for existing markets, enhancements and
extensions of existing products engineering for specific customers. The Company
believes that its future success will depend, in part, upon its ability to
successfully introduce and market new and enhanced products and processes which
satisfy a broad range of customer needs and achieve market acceptance.
Future Acquisitions
The Company's basic acquisition strategy is to first concentrate on
small companies involved in distribution, and then to complement its operations
by acquisitions through the entire spectrum of small companies involved in
computer related services, i.e., motherboard assembly, parts construction,
software development, maintenance services, environmental services, and in
research and development of new computer products.
Competition
There are many company's with unlimited financial resources designing,
manufacturing, assembling, distributing and selling personal and specialty
computers with large research and development budgets and for the Company to
successfully compete in the market it has choosen it must constantly provide
lower pricing for high-end computer configurations and faster service response
times than available from competitors.
Company Location and Facilities
The Company's corporate headquarters are located at 100~105
Professional Center Drive, Western Business Park, Rohnert Park, California,
where the Company maintains 6,000 square feet of office, showroom and assembly
space. The Company intends to expand into 4,000 additional square feet of
available space in the same building to accomodate a second assembly area for
increased production, a research and testing facility for the Company's fibre
optic and wireless data transmission switching development efforts, and if the
Maximum is raised, a mini environment designed to provide adequate conditions
for highly sensitive equipment.
Employees
As of March 31, 1997, the Company had 8 full time and 4 part time
employees. The Company hires temporary employees for non-technical projects.
- 15 -
Legal Proceedings and Litigation
The Company has filed a law suit against three shareholders who were
formerly officers and directors of the Company, seeking rescission of the
issuance of 500,000 shares of the Company's stock in the acquisition of Advanced
Network Communications, Inc. In addition, the Company is seeking the return of
funds it believes were embezzled and taken through fraud prior to 1995 by the
three defendants. The Company intends to rigorously press its action, which has
not yet been set for trial. It is unlikely that the trial will commence before
the spring of 1998 and there can be no assurance as to the outcome of the
litigation.
Qualified Small Business Stock
A provision in the 1993 Federal Tax Law (the "Omnibus Budget
Reconciliation Act of 1933") which became effective in August 1993, provides, in
certain circumstances, a reduction in the capital gains tax for individuals or
certain other taxpayers who purchase shares at original issue from a "qualified
small business" and dispose of those shares after a holding period of at least
five years. One-half of the gain (up to certain limits) on such stock is
generally excluded from taxable income for regular tax purposes.
A "qualified small business" must have not more than $50 million in
gross assets at any time after August 10, 1993 through the date of issuance of
the shares. In addition, at least 80% of its assets must be used "in the active
conduct of one or more qualified trades or businesses" throughout the holding
period. The Internal Revenue Service has not yet issued Regulations or other
interpretations of this law, and it is uncertain how this new tax provision will
apply to the Company and to investors in its common stock, and because
qualifying for the benefits of the tax provision will depend in part on future
events about which the Company can provide no assurances, the Company makes no
representations as to the availability of the benefits of this provision to
prospective purchasers of its common stock. The Company intends to submit
reports to the Internal Revenue Service and to the Company's shareholders as may
be required under the law for use of this exclusion. There are also limitations
on the persons who may use any exclusion.
Potential investors are advised to consult their own
tax counsel for further details.
MANAGEMENT
Executive Officers, Significant Employees and Directors
The executive officers, significant employees and directors of the
Company are as follows:
Name Age Position
Heinot H. Hintereder 66 President & CEO, Director
Jason C. Lai 30 Vice President, Sales &
Marketing, Director
Keith W. Racuya 52 Secretary, Director
Richard C. Thiede 60 Treasurer, Director
Nhon K. Tran 34 Vice President,Engineering,
Director
Heinot H. Hintereder is co-founder of the Company. Was the Founder and
served as President and CEO of Immecor Corporation of Delaware until its
acquisition by the Company. Served as Manager of the Financial & Corporate
Support Unit, Fireman's Fund Insurance Companies, retired. Former President,
Founder, and CEO of Biblionics Corporation, a software development company.
Founder, Partner, and General Manager of W. Koehler K.G., a German trading
company. Mr. Hintereder was educated in Germany and holds the German equivalent
of a Masters degree in Business Administration.
Nhon K. Tran is a major investor in the Company. His expertise is in
robotic motion control products. Former Associate Engineer for new product
development for Parker Hannifin Corporation.
Jason C. Lai is co-founder of the Company. Served as Vice President
Sales & Marketing of Immecor Corporation of Delaware until its acquisition by
the Company. Former Sales and Marketing Executive for Comrex Systemation.
- 16 -
Keith W. Racuya is a local businessman, and was previously a large
scale computer equipment planner for Fireman's Fund Insurance Companies,
retired.
Richard C. Thiede is a local businessman, and was previously a system
executive for Firemen's Fund Insurance Companies, retired, where he was
responsible for development of several large scale key corporate systems. Mr.
Thiede holds a bachelors degree in finance from Lehigh University.
Executive Compensation
The following table sets forth, for the twelve-month period ending
December 31, 1996, certain compensation paid by the Company, including salary,
bonuses and certain other compensation, to its executive officers.
Summary Twelve Months Ending December 31, 1996 Compensation Table:
Compensation All Other
Name and Principal Position
Salary Bonus Compensation
Heinot H. Hintereder, Chief Executive Officer $ 34,834.00 $ - 0 - $ - 0 -
Jason C. Lai, Vice President, Sales & Marketing $ 46,620.00 $ 65,000 $ - 0 -
Nhon K. Tran, Vice President, Engineering $ 43,020.00 $ - 0 - $ - 0 -
Number of Directors, Term of Office and Compensation
All Directors hold office until the next annual meeting of shareholders
of the Company or until their successors have been elected and qualified.
Unsalaried board members receive $100 for their service on the Board and for
expenses they incur to attend meetings.
Indemnification of Officers and Directors
The Company's By-Laws provide that the liability of the directors for
monetary damages shall be limited to the fullest extent permissible under
California law. Insofar as indemnification for liabilities arising under the
federal securities laws may be permitted to directors, officers controlling
persons of the Company pursuant to that provision, or otherwise, the Company 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.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Company's Common Stock immediately
prior to this offering, and as adjusted to reflect the sales of the shares
offered hereby, for (i) each director and executive officers of the Company,
(ii) each shareholder known by the Company to own beneficially 5% or more of the
outstanding shares of its common stock and (iii) all directors and officers as a
group for each class of capital stock of the Company.
Directors Shares Percentage of Common Shares Outstanding
Officers Beneficially Before Offering Maximum Sold
and 5% Shareowners Owned ( 2,421,000 shares) ( 3,171,000 shares)
Jason C. Lai 337,500 13.94 10.64
Heinot H. Hintereder 887,300 36.65 27.995
Nhon K. Tran 375,000 15.49 11.83
Officers & Directors as a Group 1,599,800 66.08 50.46
James Chu * 166,666 6.88 5.26
Fred Pao * 166,667 6.88 5.26
Grace Lee * 166,667 6.88 5.26
Other Stockholders 321,200 13.28 10.12
<FN>
* The issuance of these shares is being rescinded subject to the outcome of a pending law suit. See "Legal
Proceedings and Litigation".
</FN>
- 17 -
CERTAIN TRANSACTIONS
Since its inception, from time to time, certain executive officers,
directors and shareholders have provided short-term funds to the Company in
order to finance medium to large purchases of computer components. All of these
funds have been repaid by the Company with the exception of one demand note in
the amount of $7,303. See "Notes to Financial Statements".
DESCRIPTION OF COMMON STOCK
The Company's authorized capital stock consists of 50,000,000 shares of
Common Stock, no-par value. Immediately prior to this offering, there were
2,421,000 shares of Common Stock outstanding and held by 33 shareholders. Owners
of Common Stock are entitled to one vote per share in all matters to be voted on
by shareholders, except that, upon giving the legally required notice,
shareholders may cumulate their votes in the election of directors. Subject to
the rights of holders of outstanding shares of Preferred Stock, if any, the
holders of Common Stock are entitled to receive dividends when, as and if
declared by the Board of Directors out of funds legally available therefor. In
the event of liquidation, dissolution or winding up of the Company, the Common
Stock shareholders are entitled to share ratably in all assets remaining which
are available for distribution to them after payment of all liabilities and
after provision has been made for each class of stock, if any, having preference
over the Common Stock. Common Stock shareholders, as such, have no conversion,
preemptive or other subscription rights, and there are no redemption provisions
applicable to the Common Stock. All of the outstanding shares of Common Stock
are, and the shares of Common Stock offered by this Prospectus, when issued for
the consideration set forth in this Prospectus, will be fully paid and
non-assessable.
Registration Rights
There are no agreements between current shareholders and the Company
with respect to registration of Company shares under the Securities Act.
Transfer Agent and Registrar
The Company acts as its own transfer agent and registrar for the
Company's Common Stock.
DESCRIPTION OF PREFERRED STOCK
The Company's Restated Certificate of Incorporation provides for the
issuance of 20,000,000 shares of Preferred Stock, no-par value. None are
outstanding.
The Board of Directors has the authority to issue up to 20,000,000
shares of Preferred Stock in one or more series and to fix the rights,
preferences, privileges, qualifications, limitations and restrictions thereof,
including dividend rights, dividend rates, conversion rights, voting rights,
terms of redemption, redemption prices, liquidation preferences and the number
of shares constituting any series or the designation of such series, without any
further vote or action by the shareholders. The issuance of Preferred Stock may
have the effect of delaying or preventing a change in control of the Company
without further action by the shareholders. The issuance of Preferred Stock with
voting and conversion rights may adversely affect the voting power of the
holders of Common Stock, including the loss of voting control to others. Because
the terms of the Preferred Stock may be fixed by the Board of Directors without
Stockholder action, Preferred Stock could be issued quickly with terms
calculated to defeat a proposed take-over of the Company, or to make the removal
of current or future management of the Company more difficult. The Management of
the Company is not aware of any threatened transaction to obtain control of the
Company.
- 18 -
SHARES ELIGIBLE FOR FUTURE RESALE
Upon completion of this offering, the Company will have 3,171,000
shares of common stock outstanding if the maximum amount is sold. The shares
sold in this offering will be freely tradable without restriction or further
registration under the Securities Act unless purchased by "affiliates" of the
Company, as that term is defined in Rule 144 under the Securities Act ("Rule
144") described below. Sales of outstanding shares to residents of certain
states or jurisdictions may only be effected pursuant to a registration in or
applicable exemption from the registration provision of the securities laws of
such states or jurisdictions.
The outstanding shares of common stock, which are held of record by
shareholders prior to this offering are "restricted securities" and may not be
sold in a public distribution except in compliance with the registration
requirements of the Securities Act or an applicable exemption under the
Securities Act, including an exemption pursuant to Rule 144. Rule 144(k)
provides that persons who are not deemed to be "affiliate" and who have
beneficially owned shares for at least three years are entitled to sell their
shares at any time under Rule 144 without regard to the limita- tions described
above. Sales of substantial amounts of shares in the public market could
adversely affect the prevailing market prices and could impair the Company's
future ability to raise capital through an offering of its equity securities.
The Company's common stock is not listed or quoted on any organized
exchange or other trading market, nor has the Company applied for a formal
listing or quotation. There can be no assurances that a market will develop or
be sustained. The post-offering fair value of the Company's common stock,
whether or not any secondary trading market develops, is variable and may be
impacted by the business and financial condition of the Company, as well as
factors beyond the Company's control. The price may also vary due to economic
conditions and forecasts and general conditions in the computer industry.
PLAN OF DISTRIBUTION
The Company proposes to offer and sell the shares directly to members
of the public residing in selected states (A listing of those states in which
residents may purchase shares is on the Share Purchase Agreement, which
accompanies this Prospectus). Announcements of this offering, in the form
prescribed by Rule 134 of the Securities Act, will be communicated to selected
persons. A copy of this Prospectus will be delivered to those who request it,
together with the Share Purchasing Agreement. All shares will be sold at the
public offering price of $5.25 per share and a minimum purchase of 100 shares is
required. The Company reserves the right to reject any subscription or share
purchase agreement in full or in part.
The Company will effect offers and sales of shares through printed
copies of this Prospectus delivered by mail and electronically. Any voice or
other communications will be conducted in certain states through its executive
officers, and in other states through a designated sales agent, licensed in
those states. Under Rule 3a4-1 of the Exchange Act, none of these employees of
the Company will be deemed a "broker", as defined in the Exchange Act, solely by
reason of participation in this offering, because (i) none is subject to any of
the statutory disqualifications set forth in Section 3(a)(39) of the Exchange
Act; (ii) in connection with the sale of the shares hereby offered, none will
receive, directly or indirectly, any commissions or other remuneration based
either directly or indirectly on transactions in securities; (iii) none is an
associated person (partner, officer, director or employee) of a broker or
dealer; and (iv) each meets all of the following conditions: (a) primarily
perform substantial duties for the issuer otherwise than in connection with
transactions in securities; (b) was not a broker or dealer, or as an associated
person of a broker or dealer, within the preceeding 12 months; and (c) will not
participate in selling an offering of securities for any issuer more than once
every 12 months.
Determination of Offering Price
Prior to this offering there has been no market for the common stock of
the Company, and there can be no assurances that a market will develop or be
sustained. Accordingly, the public offering price has been determined by the
Company's Board of Directors. Among factors considered in determining the public
offering price were the Company's results of operation, the Company's current
financial condition, its future prospects, the state of the markets for its
products, the experience of management and the economics of the industry segment
in general.
- 19 -
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon by Kenneth M. Christison, Attorney at Law, 601 Glenwood Avenue, Mill
Valley, California 94941.
EXPERTS
The Financial Statements of the Company as of and for the years ending
December 31, 1995, and December 31, 1996 have been included herein and in the
Registration Statement in reliance on the report of L. V. Dorn II, independent
certified public accountant, appearing elsewhere herein, and upon the authority
of said firm as an expert in accounting and auditing.
ADDITIONAL INFORMATION
A Registration Statement on Form SB-2, including amendments thereto,
relating to the shares offered hereby has been filed with the Securities
Exchange Commission, Office of Small Business Policy, Washington, D.C.. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and sched-ules thereto. Statements contained in this
Prospectus as to the contents of any contract or other documents referred to are
not necessarily complete and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. For further information with respect to the Company and the shares
offered hereby, reference is made to such Registration Statement, exhibits and
schedules. A copy of the Registration Statement may be inspected by anyone
without charge at the Commission's principal office located at 450 Fifth Street,
N.W., Washington, D.C. 20549, the Northeast Regional Office located at 7 World
Trade Center, 13th Floor, New York, New York, 10048, and the Midwest Regional
Office located at Northwest Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661-2511 and copies of all or any part thereof may be obtained from
the Public Reference Branch of the Commission upon the payment of certain fees
prescribed by the Commission.
- 20 -
IMMECOR CORPORATION INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Accountant F-2
Financial Statements
Balance Sheet F-3
Statements of Income F-4
Statements of Cash Flows F-5
Statements of Shareholders' Equity F-6
Notes to Financial Statements F-7 to F-12
F-1
REPORT OF INDEPENDENT ACCOUNTANT
Immecor Corporation
Rohnert Park, California
I have audited the accompanying balance sheets of Immecor Corporation (the
Company) as of December 31, 1995 and 1996, and the related statements of income,
cash flows and shareholders' equity for the years then ended. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements present fairly, in all material
respects, the financial position of Immecor Corporation as of December 31, 1995
and 1996, and the results of its operations and its cash flows for the years
ended December 31, 1995 and 1996, in conformity with generally accepted
accounting principles.
I have also reviewed the accompanying balance sheet of Immecor Corporation as of
March 31, 1997 and the related statements of income, cash flows, and
shareholders' equity for the three months ended March 31, 1996 and 1997 in
accordance with Statement on Standards for Accounting and Review Services issued
by the American Institute of Certified Public Accountants. All information
included in these financial statements is the representation of management of
Immecor Corporation.
A review consists principally of inquires of organization personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. According, I do not express such an opinion.
Based upon my review, I am not aware of any material modifications that should
be made to the accompanying financial statements as of March 31, 1997 and for
the three months ended March 31, 1996 and 1997 in order for them to be in
conformity with generally accepted accounting principles.
L. V. Dorn II
Certified Public Accountant
Fort Bragg, California
May 14, 1997
F-2
IMMECOR CORPORATION
BALANCE SHEETS
ASSETS December 31, March 31, 1997
1995 1996 (unaudited)
Current Assets:
Cash $ 6,358 $ 54,677 $ 10,776
Accounts Receivable (net of allowance
for doubtful accounts of $10,000) 311,981 380,357 437,662
Inventories (Note 2) 142,667 129,421 209,167
Notes receivable 4,500 5,765 5,543
Income taxes receivable 4,266 - -
Prepaid expenses and other current assets 3,050 4,550 3,050
Deferred income taxes 32,834 14,834 384
------ ------ ---
Total Current Assets 505,656 589,604 666,582
Equipment and
improvements, net (Note 3) 32,525 41,960 41,694
- ------ ------ ------
Total assets $ 538,181 $ 631,564 $ 708,276
------------- ------------- ----------
LIABILITIES and SHAREHOLDERS EQUITYY
Current Liabilities:
Notes payable (Note 4) $ - $ 29,606 $ 7,303
Accounts payable 296,448 254,374 353,019
Accrued liabilities 11,943 30,671 25,194
Advances from shareholders (Note 5) 10,259 61,579 28,227
Customer deposits 3,534 2,794 1,178
Income taxes - - 1,700
-----
Total Current Liabilities 322,184 379,024 416,621
------- ------- -------
Long-term lease and commitments (Note 6)
Shareholders' equity:
Common stock, no par value,
50,000,000 authorized;
2,421,000 shares issued and outstanding 320,500 304,262 293,701
Preferred stock, no par value,
20,000,000 shares authorized;
none issued and outstanding - - -
Retained earnings (deficit) (104,503) (51,722) (2,046)
-------- ------- ------
Total shareholders' equity 215,997 252,540 291,655
------- ------- -------
Total liabilities and shareholders' equity $ 538,181 $ 631,564 $ 708,276
---------------- ------------ -----------
See accompanying notes to financial statements
F-3
IMMECOR CORPORATION - A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF INCOME - AUDITED
Year ended Three months ended
December 31, March 31,
1995 1996 1996 1997
(unaudited)
Net sales (Note 7) $ 2,010,094 $ 3,591,382 $1,155,379 $ 935,433
Cost of sales 1,763,856 3,137,320 996,339 735,739
--------- --------- ------- -------
Gross profit 246,238 454,062 159,040 199,694
Operating costs and expenses:
Selling, general and
administrative expenses 318,510 435,253 98,478 131,133
Depreciation 4,017 9,408 2,205 3,218
Flood insurance proceeds (Note 8) - (65,244) - -
- -------
Total operating costs and expenses 322,527 379,417 100,683 134,351
------- ------- ------- -------
Operating income (loss) (76,289) 74,645 58,357 65,343
Interest income 78 722 157 483
Interest expense (770) (3,786) (807) -
---- ------ ----
Income (loss) before income taxes (76,981) 71,581 57,707 65,826
Income taxes (Note 9) (16,100) 18,800 14,000 16,150
- ------- ------ ------ ------
Net income (loss) $ (60,881) $ 52,781 $ 43,707 $ 49,676
----------- ---------- ---------- -----------
Net income (loss) per share $ (.025) $ .022 $ .018 $ .021
----------- ---------- ---------- -----------
Weighted average shares outstanding 2,421,000 2,421,000 2,421,000 2,421,000
--------- --------- --------- ---------
See accompanying notes to financial statements
F-4
Immecor Corporation
Statements of Cash Flows
Year ended Three months ended
December 31, March 31,
1995 1996 1996 1997
Operating Activities:
Net income (loss) $ (60,881) $ 52,781 $ 43,707 $ 49,676
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation 4,017 9,408 2,205 3,218
Provision for losses on accounts receivable (46,000) - - -
Deferred income taxes (12,634) 18,000 13,200 14,450
Gain on disposal of equipment - 2,761 - -
Changes in:
Accounts and notes receivable (182,486) (69,641) (33,851) (57,083)
Inventories (98,279) 13,246 43,124 (79,746)
Income taxes (11,373) 4,266 5,066 1,700
Prepaid expenses and all other 4,914 (1,500) - 1,500
Accounts payable 204,101 (42,074) (93,692) 98,645
Accrued liabilities and customer deposits (26,413) 17,988 33,180 (7,093)
------- ------ ------ ------
Net cash (used) provided by operating activities (225.034) 5,235 12,939 25,267
-------- ----- ------ ------
Investing Activities:
Purchase of equipment (19,342) (21,604) (1,012) (2,952)
Other
Net cash used by investing activities (19,342) (21.604) (1.012) (2,952)
------- ------- ------ ------
Financing Activities:
Collection of notes receivable arising from
sale of common stock 170,000
Additions to notes payable 29,606 15,000 -
Offering costs (16,238) - (10,561)
Principal payments on notes payable - - - (22,303)
Shareholder advances (2,559) 51.320 15.162 (33,352)
------ ------ ------ -------
Net cash (used) provided by financing activities 167.441 64,688 30.162 (66,216)
------- ------ ------ -------
Increase (decrease) in cash (76,935) 48,319 42,089 (43,901)
Cash balance, beginning of period 83,293 6,358 6,358 54,677
------ ----- ----- ------
Cash balance, end of period $ 6,358 $ 54,677 $ 48,447 $ 10,776
----------- ------ -------- ------
Supplemental Disclosure of Cash flow Information:
Cash paid during the year for
InterestS $ 770 $ 2,086 $ 481 -
----- ------- -----
Income taxes $ 7,907 $ 800 $ - $ -
----- --- ---- -------
See accompanying notes to financial statements
F-5
IMMECOR CORPORATION - A DEVELOPMENT STAGE COMPANY
Statements of Shareholders' Equity
Retained
Common Earnings
Stock (Deficit) Total
Balance, December 31, 1994 $ 150,500 $ (43,622)$ 106,878
Year ended December 31, 1995:
Collection of notes receivable arising from
sale of common stock 170,000 - 170,000
Net loss - (60,881) (60,881)
------- -------
Balance, December 31, 1995 320,500 (104,503) 215,997
Year ended December 31, 1996:
Offering costs (16,238) - (16,238)
Net income - 52,781 52,781
------ ------
Balance, December 31, 1996 304,262 (51,722) 252,540
Three months ended March 31, 1997 (unaudited):
Offering costs (10,561) - (10,561)
Net income - 49,676 49,676
------ ------
Balance, March 31, 1997 (unaudited) $ 293,701 $ (2,046) $ 291,655
---------------- ---------------- ---------------
See accompanying notes to financial statements
F-6
IMMECOR CORPORATION
Notes to Financial Statements
Years ended December 31, 1995 amd 1996
Three months ended March 31, 1996 and 1997 (unaudited)
Note 1: Summary of Significant Accounting Policies
Basis of presentation: Immecor Corporation has prepared the financial statements
on an accrual basis of accounting and in accordance with generally accepted
accounting pronciples. The financial statements and notes thereto are the
responsibility of the Company's management. During 1996 the Company had a
division which operated under the name of Computer 2000 and its results of
operations for 1996 and 1997 (unaudited) and financial position as of December
31, 1996 and March 31, 1997 (unaudited) are included in the accompanying
financial statements.
Description of business: The Company designs and assembles specialized computer
systems used in semiconductor manufacturing processes in addition to personal
computers customized to specifications by business and individual users. The
necessary components are purchased from domestic and foreign manufacturers and
distributors. The Company markets the finished product through its own sales
force.
Inventories: Inventories are stated at the lower of cost (first-in, first-out)
or market.
Equipment and improvements: Equipment and improvements are carried at cost less
accumulated depreciation. Depreciation is provided on the straight-line method
over estimated useful lives generally ranging from five to seven years.
Expenditures for major renewals that extend useful lives of equipment and
improvements are capitalized. Expenditures for maintenance and repairs are
charged to expense as incurred. For income tax purposes, depreciation is
computed using the accelerated depreciation methods.
Advertising: The Company expenses costs of advertising the first time the
advertising takes place.
F-7
IMMECOR CORPORATION
Notes to Financial Statements
Years ended December 31, 1995 amd 1996
Three months ended March 31, 1996 and 1997 (unaudited)
Note 1: Summary of Significant Accounting Policies (continued)
Income taxes: The Company has adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. Accordingly, the Company
computes income taxes using the asset and liability method, under which deferred
income taxes are provided for temporary differences between the financial basis
of the Company's assets and liabilities.
Earnings per share: Earnings per share amounts are based on the weighted average
number of common stock shares outstanding. There were no common stock
equivalents to be considered.
Note 2: Inventories
Inventories consist of the following:
December 31, March 31,
1995 1996 1997
(unaudited)
Purchased parts $ 111,247 $ 104,124 $ 163,547
Finished systems 31,420 25,297 45,620
------ ------ ------
$ 142,667 $ 129,421 $ 209,167
--------- --------- ----------
Note 3: Equipment and Improvements Equipment and improvements consist of the
following:
December 31, March 31,
1995 1996 1997
(unaudited)
Equipment and furniture $ 39,060 $ 49,497 $ 52,449
Transportation equipment 4,330 12,243 12,243
----- ------ ------
43,390 61,740 64,692
Less accumulated depreciation 10,865 19,780 22,998
------ ------ ------
$ 32,525 $ 41,960 $41,694
--------- ---------- -------
F-8
IMMECOR CORPORATION
Notes to Financial Statements
Years ended December 31, 1995 amd 1996
Three months ended March 31, 1996 and 1997 (unaudited)
Note 4: Notes Payable Notes payable consist of the following:
December 31, March 31,
1995 1996 1997
(unaudited)
Note payable to Jerry Liu with
interest at 12% due January 1997 $ - $ 15,000 $ -
Note payable to Thu Tran with
interest at 18% due in March 1997 - 14,606 7,303
------ -----
$ - $ 29,606 $ 7,303
-------- ---------
Note 5: Advances from Shareholders
The Company receives advances from some of the corporate officers who are also
major shareholders to meet working capital requirements. These advances are
generally repaid within 30 to 60 days.
Note 6: Long-Term Lease and Commitments
The Company leases its corporate headquarters under a noncancelable operating
lease which expires in February 1998. The Company is also obligated to pay the
lessor its prorata share of utilities for the building on a monthly basis.
Minimum future rental payments under the lease agreement as of Dcember 31, 1996
are as follows:
1997 $ 49,314
1998 8,804
---- -----
$ 58,118
---------
Rental expense under the above lease was $ 26,921 in 1995 and $ 37,983
in 1996 and $ 6,087 and $ 11,100 for the three months ended March 31, 1996 and
1997 respectively (unaudited).
F-9
IMMECOR CORPORATION
Notes to Financial Statements
Years ended December 31, 1995 amd 1996
Three months ended March 31, 1996 and 1997 (unaudited)
Note 7: Sales to Major Customers
A material part of the Company's business is dependent upon sales to major
customers, the loss of which would have a material adverse effect on the
Company's financial position and results of operations. Three customers
individually accounted for over 10% of the Company's 1995 sales. Sales to these
three customers aggregated over 73% of total sales in 1995. Two customers
individually accounted for over 10% of the Company's 1996 sales. Sales to these
two customers aggregated over 38% of total sales in 1996. One customer
individually accounted for over 16% of the Company's sales during the three
months ended March 31, 1996 (unaudited). Two customers individually accounted
for over 10% of the Company's sales during the three months ended March 31,
1997. Sales to these two customers aggregated over 62% of total sales during the
three months ended March 31, 1997 (unaudited). The Company is attempting to
expand its customer base to lessen the effect of having major customers.
Note 8: Insurance Proceeds
On February 4, 1996, the Company incurred major rain damage to its corporate
offices and production facilities due to leaks in the roof which caused an
interruption of its operations. The loss was covered by insurance as follows:
Inventory replacement $ 77,392
Business interruption 38,821
Equipment replacement 6,550
Miscellaneous cost reimbursement 24,383
------
147,896
Less deductible 250
---
Proceeds from insurance company 146,896
Amounts allocated to inventory, equipment and repairs 81,652
------
Insurance proceeds per statement of income $ 65,244
----------
F-10
IMMECOR CORPORATION
Notes to Financial Statements
Years ended December 31, 1995 amd 1996
Three months ended March 31, 1996 and 1997 (unaudited)
Note 9:
Income Taxes A reconciliation of the statutory federal income tax rate with the
Company's effective tax rate is as follows for the periods ended:
Years ended Three Months ended
December 31, March 31,
-1995- -1996- -1996- -1997-
(unaudited)
Statutory rate for income
from $100,000 to $335,000 (39.0%) 39.0% 39.0% 39.0%
Reduction due to income under $100,000 20.3 (20.70) (22.4) (21.6)
State income taxes,
net of federal income tax benefit (7.5) 7.7 7.8 7.7
Non-deductible costs 1.0 1.0 .7 .1
Other 4.3 (0.7) (.6) (.7)
--- ---- --- ---
Effective tax rate (20.9%) 26.3% 24.5% 24.5%
----- ---- ---- ----
The provision (credit) for income taxes consists of the following for the
periods ended:
Years ended Three Months ended
December 31, March 31,
-1995- -1996- -1996- -1997-
(unaudited)
Currently payable (receivable):
Federal $ (4,266) $ - $ - $ -
State 800 800 800 1,700
Deferred liability (benefit) (12,634) 18,000 13,200 14,450
------- ------ ------ ------
$ (16,100) $ 18,800 $ 14,000 $ 16,150
--------- -------- -------- --------
F-11
IMMECOR CORPORATION
Notes to Financial Statements
Years ended December 31, 1995 amd 1996
Three months ended March 31, 1996 and 1997 (unaudited)
Note 9: Income Taxes (Continued)
Deferred incom taxes (benefits) reflect the tax effect of temporary differences
between the amounts of assets and liabilities for financial reporting and
amounts as measured for tax purposes. The tax effect of temporary differences
and carryforwards that cause significant portions of deferred tax assets and
liabilities are as follows for the periods ended:
Years ended Three Months ended
December 31, March 31,
-1995- -1996- -1996- -1997-
(unaudited)
Depreciation $ 77 $ (255) $ (70) $ (100)
Inventory and accounts receivable allowances (12,591) 18,375 13,370 -
Tax loss carry forward - - - 14,400
Other, net (120) (120) (100) 150
---- ---- ---- ---
$(12,634) $18,000 $ 13,200 $ 14,450
-------- ------- -------- -----------
The Company has net operating losses for incom purposes which can be used to
offset future taxable income. Federal losses total approximately $ 66,000 at
December 31, 1996 and expire $ 17,200 in 2010 and $ 48,800 in 2011. State losses
total approximately $ 45,000 at December 31, 1996 and expire $ 21,700 in 2000
and $ 23,300 in 2001.
F-12
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
Section xx of Article of the Registrant's By-laws provides that it may
indemnify any director, officer, agent or employee as to those liabilities and
on those terms and conditions as are specified in Section 317 of the California
Corporations Code. In any event, the Registrant shall have the right to purchase
and maintain insurance on behalf of any such persons whether or not the
Registrant would have the power to indemnify such persons against the liability
insured against.
Insofar as indemnification for liabilities arising under the Securities
Act, indemnification may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing section. The Registrant has
been informed 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.
Item 25. Other Expenses of Issuance and Distribution
Expenses of the Registrant in connection with the issuance and
sitribution of the securities being registered are estimated as follows,
assuming the Maximum offering amount is sold:
Securities and Exchange Commission filing fee .................... $ 1,478
Blue sky filing fees ............................................. 5,500
Accountant's fees and expenses .................................... 30,000
Legal fees and expenses ...................................... 42,375
Printing ..................................................... 50,000
Marketing expenses ............................................ 25,000
Postage ...................................................... 16,000
Transfer Agent's fees .......................................... 5,000
Miscellaneous ..................................................... 19,647
Total .........................................................$ 195,000
The Registrant will bear all expenses shown above.
Item 26. Recent Sales of Unregistered Securities
(a) The following information is given for all securities that Immecor
Corporation (the "Company") sold within the past three years without registering
the securities under the Securities Act.
Date Title Amount
(1) 1/14/94 Common Stock 1,000,000
(2) 2/1/94 Common Stock 500,000
(3) 3/1/94 Common Stock 500,000
(4) 12/31/94 Common Stock 421,000
(b) No underwriters were used in connection with any of the issuances of
shares.
The class of persons to whom the Company issued shares was those
persons known to the
(1) Founders
(2) Founders
(3) Directors, Business associates
(4) Employees, Directors, private investors
(c) No underwriters were used in connection with any of the issuances of
shares or options so there were no underwriting discounts or
commissions. The transactions and the types and amounts of
consideration received by the Company were:
(1) Cash
(2) Cash
(3) Certain business assets.
See "Legal Proceedings and Litigation."
(4) Cash
(d) Total amounts are well within the $1,000,000 limit of Rule 504.
Item 27. Exhibits
The exhibits listed below are filed as part of this Registration
Statement pursuant to item 601 of Regulation S-B.
Exhibit
Number Description
Articles of Incorporation
Amendment to Articles of Incorporation filed March 7,
1994
By-laws
Form of Common Stock Certificate
Opinion and consent of counsel with respect to the
legality of the shares being registered
Employment contract with Jason C. Lai
Lease of Registrants facilities and Amendments to
Lease Agreement
Consent of L. V. Dorn II, Certified Public Accountant
Consent of Kenneth M. Christison, Attorney at Law
(Reference is made to Exhibit 5)
Power of Attorney
Share Purchase Agreement
Item 28. Undertakings
(a) The Registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by section 10(xxx) 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 additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act treat each
post-effective amendment as a new Registration Statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering. (e) 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.
SIGNATURES
In accordance with the requirements of the Securities Act of 1993, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2, and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of Rohnert
Park, State of California, on May 5, 1997.
By ___/s/__________________________ By __/s/____________________________
Heinot H. Hintereder, President & CEO Keith W. Racuya, Scretary
Each person whose signature appears below appoints Heinot H.
Hintereder, Jason C. Lai, Keith W. Racuya, Richard C. Thiede and Nhon K. Tran or
any of them, his or her attorney-in-fact, with full power of substitution and
resubstitution, to sign any and all amendments (including post-efective
amendments) to this Registration Statement on Form SB-2 of Immecor Corporation,
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact and agent or his or her
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
Signatures Title Date
/s/ President & Chief Executive Officer May 5, 1997
Heinot H. Hintereder
/s/ Vice President, Sales & Marketing May 5, 1997
Jason C. Lai Director
/s/ Secretary and Director May 5, 1997
Keith W. Racuya
/s/ Treasurer and Director May 5, 1997
Richard C. Thiede
/s/ Vice President, Engineering May 5, 1997
Nhon K. Tran Director
EXHIBIT INDEX
Item 27. Exhibits
The exhibits listed below are filed as part of this Registration
Statement pursuant to item 601 of Regulation S-B.
Page Exhibit
Number Number Description
Articles of Incorporation
Amendment to Articles of Incorporation filed March 7,
1994
By-laws
Form of Common Stock Certificate
Opinion and consent of counsel with respect to the
legality of the shares being registered
Employment contract with Jason C. Lai
Lease of Registrants facilities
Consent of L. V. Dorn II, Certified Public Accountant
Consent of Kenneth M. Christison, Attorney at Law
(Reference is made to Exhibit 5)
Power of Attorney
Share Purchase Agreement