AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 7, 1998
REGISTRATION NO. 333-43151
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 6 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CUMETRIX DATA SYSTEMS CORP.
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 5045 95-4574138
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
Incorporation or Organization) No.)
957 LAWSON STREET, INDUSTRY, CALIFORNIA 91748
(626) 965-6899
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
MAX TOGHRAIE, CHIEF EXECUTIVE OFFICER
957 LAWSON STREET
INDUSTRY, CALIFORNIA 91748
(626) 965-6899
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Agent for Service)
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COPIES TO:
MURRAY MARKILES, ESQ. RUBI FINKELSTEIN, ESQ.
Jessica Cullen Smith, Esq. Orrick, Herrington & Sutcliffe LLP
Troop Meisinger Steuber & Pasich, LLP 666 Fifth Avenue
10940 Wilshire Boulevard New York, New York 10103
Los Angeles, California 90024 (212) 506-5000
(310) 824-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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If any of the securities being registered in 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. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table itemizes the expenses incurred by the Registrant in
connection with the issuance and distribution of the Securities being
registered, other than underwriting discounts. All the amounts shown are
estimates except the Securities and Exchange Commission registration fee and the
NASD filing fee.
Registration fee--Securities and Exchange Commission........................... $ 4,300.00
NASD filing fee................................................................ 1,535.00
Nasdaq Listing fee............................................................. 10,000.00
Accounting fees and expenses................................................... 90,000.00
Legal fees and expenses (other than blue sky).................................. 150,000.00
Blue sky fees and expenses, including legal fees............................... 10,000.00
Underwriter's expenses......................................................... 345,000.00
Printing; stock certificates................................................... 100,000.00
Transfer agent and registrar fees.............................................. 2,500.00
Directors and Officers' Insurance.............................................. 50,000.00
Miscellaneous.................................................................. 38,665.00
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Total...................................................................... $ 802,000.00
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ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Articles of Incorporation include a provision that
eliminates the personal liability of its directors to the Registrant and its
shareholders for monetary damages for breach of the directors' fiduciary duties
in certain circumstances. This limitation has no effect on a director's
liability (i) for acts or omissions that involve intentional misconduct or a
knowing and culpable violation of law, (ii) for acts or omissions that a
director believes to be contrary to the best interests of the Registrant or its
shareholders or that involve the absence of good faith on the part of the
director, (iii) for any transaction from which a director derived an improper
personal benefit, (iv) for acts or omissions that show a reckless disregard for
the director's duty to the Registrant or its shareholders in circumstances in
which the director was aware, or should have been aware, in the ordinary course
of performing a director's duties, of a risk of a serious injury to the
Registrant or its shareholders, (v) for acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the Registrant or its shareholders, (vi) under Section 310 of the
California Corporations Code (the "California Code") (concerning contracts or
transactions between the Registrant and a director) or (vii) under Section 316
of the California Code (concerning directors' liability for improper dividends,
loans and guarantees). The provision does not extend to acts or omissions of a
director in his capacity as an officer. Further, the provision will not affect
the availability of injunctions and other equitable remedies available to the
Registrant's shareholders for any violation of a director's fiduciary duty to
the Registrant or its shareholders.
The Registrant's Articles of Incorporation also include an authorization for
the Registrant to indemnify its agents (as defined in Section 317 of the
California Code), through bylaw provisions, by agreement or otherwise, to the
fullest extent permitted by law. Pursuant to this latter provision, the
Registrant's Bylaws provide for indemnification of the Registrant's directors,
officers and employees. In addition, the Registrant, at its discretion, may
provide indemnification to persons whom the Registrant is not obligated to
indemnify. The Bylaws also allow the Registrant to enter into indemnity
agreements with individual directors, officers, employees and other agents.
These indemnity agreements have been entered into with all directors and provide
the maximum indemnification permitted by law. These agreements,
II-1
together with the Registrant's Bylaws and Articles of Incorporation, may require
the Registrant, among other things, to indemnify such directors against certain
liabilities that may arise by reason of their status or service as directors
(other than liabilities resulting from willful misconduct of a culpable nature),
to advance expenses to them as they are incurred, provided that they undertake
to repay the amount advanced if it is ultimately determined by a court that they
are not entitled to indemnification, and to obtain directors' and officers'
insurance if available on reasonable terms.
Section 317 of the California Code and the Registrant's Bylaws make
provision for the indemnification of officers, directors and other corporate
agents in terms sufficiently broad to indemnify such persons, under certain
circumstances, for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act.
Section 10 of the Underwriting Agreement filed as Exhibit 1.1 hereto sets
forth certain provisions with respect to the indemnification of certain
controlling persons, directors and officers against certain losses and
liabilities, including certain liabilities under the Securities Act.
The Registrant maintains director and officer liability insurance.
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.
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
DOCUMENT EXHIBIT NUMBER
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Proposed form of Underwriting Agreement...................................... 1.1
Registrant's Restated Articles of Incorporation.............................. 3.1
Registrant's Amended and Restated Bylaws..................................... 3.2
Registrant's Form of Indemnification Agreement............................... 10.3
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
On November 26, 1997, the Company issued warrants to purchase 35,000 shares
of Common Stock to Joseph Stevens & Company, Inc. (the "Placement Agent
Warrants"). The Placement Agent's Warrants were sold for a nominal purchase
price of $3.50, or $.0001 per warrant, and were exercisable at $3.00 per share
during the period commencing November 26, 1998 and ending November 26, 2001. The
Placement Agent's Warrants were cancelled on March 6, 1998. In December 1997,
the Company issued warrants to purchase 45,000 shares of common stock of the
Company to Troop Meisinger Steuber & Pasich, LLP. The warrants issued to Troop
Meisinger Steuber and Pasich, LLP were issued for nominal consideration of
$45.00 and for legal services. These warrants are exercisable beginning December
23, 1997 and ending December 31, 2002 at an exercise price of $3.00 per share.
Each of Joseph Stevens & Company, Inc. and Troop Meisinger Steuber & Pasich,
LLP, represented that (i) it acquired the warrants for its own account with the
present intention of holding such warrants for investment purposes only and not
with a view to, or for sale in connection with, any distribution of such
warrants (other than a distribution in compliance with all applicable federal
and state securities laws); (ii) it is an experienced and sophisticated investor
and has such knowledge and experience in financial and business matters that it
is capable of evaluating the relative merits and the risks of an investment in
the warrants and of protecting its own interest in connection with the
transaction at issue; (iii) it is willing to bear and is capable of bearing the
economic risk of an investment in the warrants; and (iv) the Company made
available, prior to the date of its warrant agreement, to it the opportunity to
ask questions of the Company and its officers, and to receive from the Company
and its officers information concerning the terms and conditions of the warrant
and the warrant agreement and to obtain any additional information with respect
to the Company, its business, operations
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and prospects, as reasonably requested by it; and (v) it is an "accredited
investor" as that term is defined under Rule 501(a)(8) of Regulation D
promulgated by the Commission under the Securities Act. The issuance and sale of
these securities was exempt from the registration and prospectus delivery
requirements of the Securities Act pursuant to Section 4(2) of the Securities
Act (in accordance with Rule 506 of Regulation D and Rule 152 promulgated by the
Commission under the Securities Act) as a transaction not involving any public
offering.
On December 23, 1997, prior to the filing of the Registration Statement with
respect to the Offering, the Company completed a financing (the "Bridge
Financing") consisting of the sale of 20 units (the "Units"), each unit
comprised of: (i) an unsecured promising note (each a "Bridge Note") of the
Company in the principal amount of $20,000, bearing interest at a rate of 10%
per annum payable upon the earlier of the closing of the Offering or 18 months
from the date of issuance; (ii) 15,000 shares of Common Stock of the Company,
and (iii) 5,000 warrants of the Company, each warrant exercisable to purchase
one share of Common Stock at an initial exercise price of $3.00 per share,
subject to adjustment, during the 36-month period commencing one year from the
date the warrants are issued (the "Bridge Warrants"). Each Unit was sold for
$50,000 generating gross proceeds to the Company of $1,000,000 and net proceeds
of $740,000. 60,000 of the Bridge Warrants are exercisable during the period
beginning November 26, 1998 and ending November 26, 2001. 37,500 of the Bridge
Warrants are exercisable during the period beginning December 16, 1998 and
ending December 16, 2001. 2,500 of the Bridge Warrants are exercisable during
the period beginning December 23, 1998 and ending December 23, 2001. Prior to
filing the Registration Statement with respect to the Offering, the purchasers
in the Bridge Financing had entered into binding agreements for the purchase of
the Units. 12 of the Units we sold on November 26, 1997, 7.5 of the Units were
sold December 16, 1997, and 0.5 of the Units were sold on December 23, 1997. The
obligations of the purchasers were not subject to any conditions within the
control of the purchasers or any right of renegotiation. All purchasers of Units
in the Bridge Financing were brokerage customers of Joseph Stevens & Company,
Inc., the Underwriter, who acted as placement agent for the Bridge Financing,
but were not and are not otherwise related to or affiliated with the Company or
Joseph Stevens & Company, Inc. Joseph Stevens & Company, Inc. acted as placement
agent and there was no public solicitation or advertising in connection with the
offering. The transaction was exempt from the registration requirements of the
Securities Act of 1933 (the "Act") under Section 4(2) of the Act (in accordance
with Rule 506 of Regulation D and Rule 152 promulgated by the Commission under
the Act) as a transaction not involving any public offering. The proceeds were
used by the Company for working capital, to repay indebtedness and to commence
construction of the Company's first ACSA Center.
On April 12, 1996, the Company sold 2,192,118 shares of its Common stock to
Nancy Hundt in consideration of $200,000 cash. On November 12, 1997, Ms. Hundt
signed an investment representation which states that she purchased the shares
for her own account and not with a view to resale or distribution. On April 12,
1996, Ms. Hundt was appointed, and she accepted, director of the Company. There
were no underwriters involved in the sale of these securities and there was no
public solicitation or advertisement by the Company in connection with the sale
of these securities. This transaction was exempt from the registration
requirements of the Act under section 4(2) of the Act and section 25102(f) of
the California Securities Law. The proceeds were used by the Company as working
capital to cover general start-up costs.
On April 12, 1996, the Company sold 1,096,059 shares of its Common Stock
each to James Ung and Mei Yang, who are married, each of whom paid $25,000 in
consideration therefor. On November 12, 1997, each of Mr. Ung and Ms. Yang
signed an investment representation which states that each of Mr. Ung and Ms.
Yang purchased the shares for their own accounts and not with a view to resale
or distribution. On April 12, 1996, Mr. Ung and Ms. Yang were appointed, and
they each accepted, director of the Company. There were no underwriters involved
in the sale of these securities and there was no public solicitation or
advertisement by the Company in connection with the sale of these securities.
This transaction was exempt from the registration requirements of the Act under
Section 4(2) of the Act and section 25102(f) of the
II-3
California Securities Law. The proceeds were used by the Company as working
capital to cover general start-up costs.
On April 7, 1997, the Company sold 65,764 shares of its Common Stock and an
option to purchase an additional 372,659 shares, which option expired October 7,
1997, to Vince Yiang, the brother of Mei Yang, who paid $300,000 in
consideration therefor. On November 12, 1997, Mr. Yiang signed an investment
representation in which Mr. Yiang represents that he purchased the shares for
his own account and not with a view to resale or distribution, and that he has
an individual net worth greater than $1.0 million. There were no underwriters
involved in the sale of these securities and there was no public solicitation or
advertisement by the Company in connection with the sale of these securities.
The transaction was exempt from the registration requirements of the Act under
Section 4(2) of the Act. The proceeds were used by the Company as general
working capital.
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ITEM 16. EXHIBITS.
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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1.1 Form of Underwriting Agreement.
1.2 Form of Underwriter's Warrant Agreement.
1.3* Form of Financial Advisory and Consulting Agreement.*
3.1 Articles of Incorporation of Registrant.*
3.2 Certificate of Amendment to Articles of Incorporation, as filed on December 22, 1997.*
3.2.1 Certificate of Amendment of the Articles of Incorporation, as filed on January 6, 1998.*
3.3 Amended and Restated Bylaws of Registrant.*
4.1 Specimen Stock Certificate of Common Stock of Registrant.*
5.1 Opinion and Consent of Troop Meisinger Steuber & Pasich, LLP.*
10.1 Standard Sublease Agreement, dated April 9, 1996, between ITT Barton Instruments and the Company.*
10.2 Employment Agreement, dated May 1, 1997, between the Company and James Ung.*
10.3 Employment Agreement, dated July 1, 1997, between the Company and Mei Yoon Yang.*
10.4 Executive Employment Agreement, dated July 1, 1997, between the Company and Max Toghraie.*
10.5 Amended and Restated License Agreement, dated July 1, 1997, between Computer-Aided Software Integration,
Inc. and the Company.*
10.6 Reseller Agreement, made effective as of September 15, 1997, between Computer-Aided Software
Integration, Inc. and the Company.(++)*
10.7 Promissory Note, dated July 1, 1997, executed by the Company in favor of Computer Aided Software
Integration, Inc.*
10.8 Warrant Agreement, dated July 1, 1997, between the Company and Computer-Aided Software Integration,
Inc.*
10.9 Promissory Note, dated July 1, 1997, executed by the Company in favor of Ralph Glasgal.*
10.10 Lease Agreement, dated for reference purposes October 28, 1997, between the Company and Fortune Dynamic,
Inc.*
10.11 Guaranty, dated December 3, 1997, given by James Ung to Fortune Dynamic, Inc.*
10.12 Dealer Loan and Security Agreement, dated June 3, 1997, between the Company and FINOVA Capital
Corporation.*
10.13 Individual Guaranty, dated June 3, 1997, between FINOVA Capital Corporation and James Ung and Mei Yang.*
10.14 Amended and Restated 1997 Stock Plan.*
10.15 Form of Nonstatutory Stock Option Agreement.*
10.16 Warrant Agreement, dated December 23, 1997, between the Company and Troop Meisinger Steuber & Pasich,
LLP.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Troop Meisinger Steuber & Pasich, LLP (included in its Opinion filed as Exhibit 5.1
herewith)*
27 Financial Data Schedule.*
99.1 Consent of Carl L. Wood.*
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++ Specified portions of this Exhibit have been omitted and filed separately
with the United States Securities and Exchange Commission pursuant to a
request for an order granting confidential treatment pursuant to Rule 406 of
the General Rules and Regulations under the Securities Act of 1933.
* Previously filed.
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ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) To provide to the underwriter at the closing specified in the
underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(1) For the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the Offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused Amendment No. 6 to this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California, on April 7,
1998.
CUMETRIX DATA SYSTEMS CORP.
By: /s/ MAX TOGHRAIE
-----------------------------------------
Max Toghraie
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, Amendment No. 6
to this Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
/s/ MAX TOGHRAIE
- ------------------------------ Chief Executive Officer April 7, 1998
Max Toghraie and Director
*
- ------------------------------ President and Director April 7, 1998
James Ung
*
- ------------------------------ Secretary, Treasurer April 7, 1998
Mei Yang and Director
Chief Financial Officer
* and
- ------------------------------ Principal Accounting April 7, 1998
Carl Wood Officer
*
- ------------------------------ Director April 7, 1998
Nancy Hundt
*
- ------------------------------ Director April 7, 1998
David Tobey
*
- ------------------------------ Director April 7, 1998
Philip J. Alford
*By: /s/ MAX TOGHRAIE
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Max Toghraie April 7, 1998
ATTORNEY-IN-FACT
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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1.1 Form of Underwriting Agreement.
1.2 Form of Underwriter's Warrant Agreement.
1.3 Form of Financial Advisory and Consulting Agreement.*
3.1 Articles of Incorporation of Registrant.*
3.2 Certificate of Amendment to Articles of Incorporation, as filed on December 22, 1997.*
3.2.1 Certificate of Amendment of the Articles of Incorporation, as filed on January 6, 1998.*
3.3 Amended and Restated Bylaws of Registrant.*
4.1 Specimen Stock Certificate of Common Stock of Registrant.*
5.1 Opinion and Consent of Troop Meisinger Steuber & Pasich, LLP.*
10.1 Standard Sublease Agreement, dated April 9, 1996, between ITT Barton Instruments and the Company.*
10.2 Employment Agreement, dated May 1, 1997, between the Company and James Ung.*
10.3 Employment Agreement, dated July 1, 1997, between the Company and Mei Yoon Yang.*
10.4 Executive Employment Agreement, dated July 1, 1997, between the Company and Max Toghraie.*
10.5 Amended and Restated License Agreement, dated July 1, 1997, between Computer-Aided Software Integration,
Inc. and the Company.*
10.6 Reseller Agreement, made effective as of September 15, 1997, between Computer-Aided Software
Integration, Inc. and the Company.(++)*
10.7 Promissory Note, dated July 1, 1997, executed by the Company in favor of Computer Aided Software
Integration, Inc.*
10.8 Warrant Agreement, dated July 1, 1997, between the Company and Computer-Aided Software Integration,
Inc.*
10.9 Promissory Note, dated July 1, 1997, executed by the Company in favor of Ralph Glasgal.*
10.10 Lease Agreement, dated for reference purposes October 28, 1997, between the Company and Fortune Dynamic,
Inc.*
10.11 Guaranty, dated December 3, 1997, given by James Ung to Fortune Dynamic, Inc.*
10.12 Dealer Loan and Security Agreement, dated June 3, 1997, between the Company and FINOVA Capital
Corporation.*
10.13 Individual Guaranty, dated June 3, 1997, between FINOVA Capital Corporation and James Ung and Mei Yang.*
10.14 Amended and Restated 1997 Stock Plan.*
10.15 Form of Nonstatutory Stock Option Agreement.*
10.16 Warrant Agreement, dated December 23, 1997, between the Company and Troop Meisinger Steuber & Pasich,
LLP.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Troop Meisinger Steuber & Pasich, LLP (included in its Opinion filed as Exhibit 5.1
herewith)*
27 Financial Data Schedule.*
99.1 Consent of Carl L. Wood.*
- ------------------------
++ Specified portions of this Exhibit have been omitted and filed separately
with the United States Securities and Exchange Commission pursuant to a
request for an order granting confidential treatment pursuant to Rule 406 of
the General Rules and Regulations under the Securities Act of 1933.
* Previously filed.