As
filed
with the Securities and Exchange Commission on August 3, 2005
Registration
Number 333-112579
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Post-Effective
Amendment No. 2 to
FORM
SB-2
on
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
eMagin
Corporation
(Exact
name of registrant as specified in it's charter)
|
Delaware
|
13-3894575
|
|
(State
or other jurisdiction
|
(I.R.S.
Employer)
|
|
of
incorporation or organization)
|
Identification
No.)
|
2070
Route 52
Hopewell
Junction, New York 12533
(845)
838-7900
(Address,
including zip code, and telephone number, including area code
of
registrant’s
principal executive offices)
Gary
W.
Jones
Chief
Executive Officer
eMagin
Corporation
2070
Route 52
Hopewell
Junction, New York 12533
(845)
838-7900
(Name,
address, including zip code, and telephone number, including area code
of registrant's principal executive
offices)
Copies
to:
Richard
A. Friedman, Esq.
Eric
A.
Pinero, Esq.
Sichenzia
Ross Friedman Ference LLP
1065
Avenue of the Americas, 21st
Floor
New
York,
New York 10018
(212)
930-9700
Approximate
date of commencement of proposed sale to the public: From time to time
after the
effective date of this Registration Statement.
If
the
only securities being registered on this form are to be offered pursuant
to
dividend or interest reinvestment plans, please check the following
box.
[
]
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check
the following box. [X]
If
this
form is filed to register additional securities for an offering pursuant
to Rule
462(b) under the Securities Act, please check the following box and list
the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) 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
delivery of the prospectus is expected to be made pursuant to Rule 434,
please
check the following box. [ ]
CALCULATION
OF REGISTRATION FEE
|
Title
of each class of
|
Amount to
be
|
Proposed
|
Proposed
|
Amount
of
|
|
securities
to be registered
|
registered
(1)
|
maximum
|
maximum
|
registration fee
|
| |
|
offering
|
aggregate
|
|
| |
|
price
per
|
offering
price
|
|
| |
|
share
(2)
|
|
|
| Common stock,
$.001 par value |
3,342,421
|
$0.97
|
$3,242,148.37
|
$381.60
|
| Common
stock, $.001 par |
4,128,002
|
$0.97
|
$4,004,161.94
|
$471.29
|
| value,
issuable upon exercise |
|
|
|
|
| of
warrants |
|
|
|
|
|
Total
|
7,470,423
|
|
$7,246,310.31
|
$852.89*
|
*
Previously paid.
(1)
Includes shares of our common stock, par value $0.001 per share, which
may be
offered pursuant to this registration statement, which shares are issuable
upon
the exercise of warrants held by the selling stockholders.
In
addition to the shares set forth in the table, the amount to be registered
includes an indeterminate number of shares issuable upon exercise of the
warrants, as such number may be adjusted as a result of stock splits, stock
dividends and similar transactions in accordance with Rule 416.
(2)
Estimated solely for purposes of calculating the registration fee in accordance
with Rule 457(c) and Rule 457(g) under the Securities Act of 1933, using
the
average of the sale prices as reported on the American Stock Exchange on
August
2, 2005, which was $0.97 per share.
EXPLANATORY
NOTE
THIS
FILING DOES NOT INVOLVE THE REGISTRATION OF ANY NEW SHARES OF COMMON STOCK.
RATHER, THIS FILING UPDATES THE REGISTRATION OF THE COMMON STOCK ORIGINALLY
REGISTERED ON FORM SB-2 FILED ON FEBRUARY 6, 2004. WE FILED A POST-EFFECTIVE
AMENDMENT TO THE AFOREMENTIONED FORM SB-2 ON JANUARY 7, 2005 AND ARE CONVERTING
SUCH POST-EFFECTIVE AMENDMENT TO POST-EFFECTIVE AMENDMENT NO. 2 TO FORM
SB-2 ON
FORM S-3 PURSUANT TO THIS REGISTRATION STATEMENT.
IN
ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT ENTERED INTO WITH THE
INVESTORS WHO INVESTED IN OUR COMMON STOCK ON JANUARY 9, 2004, WE WILL
CONTINUE
TO MAINTAIN REGISTRATION OF THESE SHARES UNTIL FEBRUARY 2006.
The
registrant hereby amends this registration statement on such date or date(s)
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, as amended, or until the registration statement
shall
become effective on such date as the commission acting pursuant to said
Section
8(a) may determine.
THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH
THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
Registration
No. 333-112579
eMagin
Corporation
7,470,423
SHARES OF
COMMON
STOCK
This
prospectus relates to the resale by the selling stockholders, who invested
in
our common stock on January 9, 2004, of up to 7,470,423 shares
of
our common stock, including up to 4,128,002 shares
issuable upon the exercise of common stock purchase warrants. All these
securities were previously issued on January 9, 2004 and registered in
February
2004. As of July 26, 2005, 2,914,650 of these warrants have been exercised,
leaving a
balance of 1,213,352 A warrants that are exercisable until January 2009.
The
selling stockholders may sell common stock from time to time in the principal
market on which the stock is traded at the prevailing market price or
in
negotiated transactions
THIS
FILING DOES NOT INVOLVE THE REGISTRATION OF ANY NEW SHARES OF COMMON STOCK.
RATHER, THIS FILING UPDATES THE REGISTRATION OF THE COMMON STOCK ORIGINALLY
REGISTERED ON FORM SB-2 FILED ON FEBRUARY 6, 2004. WE FILED A POST-EFFECTIVE
AMENDMENT TO THE AFOREMENTIONED FORM SB-2 ON JANUARY 7, 2005 AND ARE CONVERTING
SUCH POST-EFFECTIVE AMENDMENT TO POST-EFFECTIVE AMENDMENT NO. 2 TO FORM
SB-2 ON
FORM S-3 PURSUANT TO THIS REGISTRATION STATEMENT.
IN
ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT ENTERED INTO WITH THE
INVESTORS WHO INVESTED IN OUR COMMON STOCK ON JANUARY 9, 2004, WE WILL
CONTINUE
TO MAINTAIN REGISTRATION OF THESE SHARES UNTIL FEBRUARY 2006.
The
selling stockholders may be deemed underwriters of the shares of common
stock,
which they are offering. We will pay the expenses of registering these
shares.
Our
common stock is registered under Section 12(g) of the Securities Exchange
Act of
1934 and is listed on the American Stock Exchange under the symbol "EMA".
The
last reported sales price per share of our common stock as reported by
the
American Stock Exchange on August 2, 2005, was $0.97.
INVESTING
IN THESE SECURITIES INVOLVES SIGNIFICANT RISKS
SEE
"RISK FACTORS" BEGINNING ON PAGE 6
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined whether this
prospectus is truthful or complete. Any representation to the contrary
is a
criminal offense.
The
date
of this Prospectus is August ___, 2005
TABLE
OF CONTENTS
Page
| |
Page
|
| |
|
| Where You Can Find
More
Information................................................................................................................................................................................................................ |
5
|
| Incorporation
of
Documents By
Reference........................................................................................................................................................................................................... |
5
|
| Summary...................................................................................................................................................................................................................................................................... |
5
|
| Risk
Factors................................................................................................................................................................................................................................................................ |
6
|
| Forward-Looking
Statements.................................................................................................................................................................................................................................. |
10
|
| Use of
Proceeds......................................................................................................................................................................................................................................................... |
11
|
| Selling
Stockholders.................................................................................................................................................................................................................................................. |
11
|
| Plan
of
Distribution................................................................................................................................................................................................................................................... |
13
|
| Description
of
Securities Being
Registered.......................................................................................................................................................................................................... |
15
|
| Legal
Matters............................................................................................................................................................................................................................................................ |
15
|
| Experts........................................................................................................................................................................................................................................................................ |
15
|
You
may
only rely on the information contained in this prospectus or that we have
referred you to. We have not authorized anyone to provide you with different
information. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the common stock
offered by this prospectus. This prospectus does not constitute an offer
to sell
or a solicitation of an offer to buy any common stock in any circumstances
in
which such offer or solicitation is unlawful. Neither the delivery of this
prospectus nor any sale made in connection with this prospectus shall,
under any
circumstances, create any implication that there has been no change in
our
affairs since the date of this prospectus or that the information contained
by
reference to this prospectus is correct as of any time after its date.
We
have
filed a registration statement on Form SB-2 under the Securities Act of
1933, as
amended, relating to the shares of common stock being offered by this
prospectus, and reference is made to such registration statement. This
prospectus constitutes the prospectus of eMagin Corporation, filed as part
of
the registration statement, and it does not contain all information in
the
registration statement, as certain portions have been omitted in accordance
with
the rules and regulations of the Securities and Exchange Commission.
We
are
subject to the informational requirements of the Securities Exchange Act
of 1934
that require us to file reports, proxy statements and other information
with the
Securities and Exchange Commission. Such reports, proxy statements and
other
information may be inspected at public reference facilities of the SEC
at
Judiciary Plaza, 450 Fifth Street N.W., Washington D.C. 20549. Copies of
such
material can be obtained from the Public Reference Section of the SEC at
Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549 at prescribed
rates. The public could obtain information on the operation of the public
reference room by calling the Securities and Exchange Commission at
1-800-SEC-0330. Because we file documents electronically with the SEC,
you may
also obtain this information by visiting the SEC's Internet website at
http://www.sec.gov.
The
SEC
allows us to 'incorporate by reference' the information into this prospectus.
This means that we can disclose important information to you by referring
you to
another document filed separately with the SEC. The information that we
incorporate by reference is considered to be part of this prospectus. Because
we
are incorporating by reference our future filings with the SEC, this prospectus
is continually updated and those future filings may modify or supersede
some or
all of the information included or incorporated in this prospectus. This
means
that you must look at all of the SEC filings that we incorporate by reference
to
determine if any of the statements in this prospectus or in any document
previously incorporated by reference have been modified or superseded.
This
prospectus incorporates by reference the documents listed below and any
future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of
the Securities Exchange Act of 1934 until the selling stockholders sell
all of
our common stock registered under this prospectus.
•
our
annual report on Form 10-KSB/A for the fiscal year ended December
31, 2004;
•
our
quarterly reports on Form 10-Q/A for the fiscal quarter ended March 31,
2005;
•
Our
current reports on Form 8-K filed on May 9, 2005 and August 2, 2005 and
the
description of our common stock contained in Item 1 of our Registration
Statement on Form 8-K, dated March 16, 2000.
The
information about us contained in this prospectus should be read together
with
the information in the documents incorporated by reference. You may request
a
copy of any or all of these filings, at no cost, by writing or telephoning
us at
eMagin Corporation, 2070 Route 52, Hopewell Junction, New York 12533, Telephone:
(845) 838-7900.
eMagin
Corporation
We
design, develop, and market OLED (organic light emitting diode)-on-silicon
microdisplays and related information technology solutions. We integrate
high-resolution OLED displays (smaller than one-inch diagonal), magnifying
optics, and systems technologies to create a virtual image that appears
comparable to that of a computer monitor or a large-screen television.
We have
developed unique technology for producing high performance OLED microdisplays
and related optical systems. We are the only company to announce, publicly
show,
and sell full-color active matrix OLED-on-silicon microdisplays. We are
now
supplying our first two commercial microdisplay products (SVGA+ and SVGA
3D OLED
microdisplays) in initial commercial quantities to original equipment
manufacturers (OEMs). In addition, we sell integrated display and optics
modules
to military, homeland defense, industrial, and medical customers. These
products
are being applied or considered for near-eye and headset applications in
products such as entertainment and gaming headsets, handheld Internet and
telecommunication appliances, viewfinders, night vision viewers, firefighting
helmets, simulation tools, and wearable computers manufactured by OEM customers.
This
investment has a high degree of risk. Before you invest you should carefully
consider the risks and uncertainties described below and the other information
in this prospectus. If any of the following risks actually occur, our business,
operating results and financial condition could be harmed and the value
of our
stock could go down. This means you could lose all or a part of your investment.
RISKS
RELATED TO OUR FINANCIAL RESULTS
WE
HAVE A HISTORY OF LOSSES SINCE OUR INCEPTION AND MAY INCUR LOSSES FOR THE
FORESEEABLE FUTURE.
Accumulated
losses excluding non-cash transactions as of March 31, 2005 were $51 million
and
acquisition related non-cash transactions were $102 million, which resulted
in
an accumulated deficit of $153 million,
the
majority of which was related to the March 2000 merger and the subsequent
write-down of our goodwill. The non-cash losses were dominated by the
amortization and write-down of goodwill and purchased intangibles and write-down
of acquired in process research and development related to the March 2000
acquisition, and also included some non-cash stock-based compensation.
We have
not yet achieved profitability and we can give no assurances that we will
achieve profitability within the foreseeable future as we fund operating
and
capital expenditures in areas such as establishment and expansion of markets,
sales and marketing, operating equipment and research and development.
We cannot
assure investors that we will ever achieve
or
sustain
profitability or that our operating losses will not increase in the
future.
WE
MAY NOT BE ABLE TO EXECUTE OUR BUSINESS PLAN AND MAY NOT ACHIEVE PROFITABILITY
WITHOUT RAISING ADDITIONAL CASH
In
the
event that cash flow from operations is less than anticipated and we are
unable
to secure additional funding to cover our expenses, in order to preserve
cash,
we would be required to reduce expenditures and effect reductions in our
corporate infrastructure, either of which could have a material adverse
effect
on our ability to continue our current level of operations. To the extent
that
operating expenses increase or we need additional funds to make acquisitions,
develop new technologies or acquire strategic assets, the need for additional
funding may be accelerated and there can be no assurances that any such
additional funding can be obtained on terms acceptable to us, if at all.
If we
were not able to generate sufficient capital, either from operations or
through
additional debt or equity financing, to fund our current operations, we
would be
forced to significantly reduce or delay our plans for continued research
and
development and expansion. This could significantly reduce the value of
our
securities.
RISKS
RELATED TO MANUFACTURING
THE
MANUFACTURE OF OLED-ON-SILICON IS NEW AND OLED MICRODISPLAYS HAVE NOT BEEN
PRODUCED IN SIGNIFICANT QUANTITIES.
If
we are
unable to produce our products in sufficient quantity, we will be unable
to
attract customers. In addition, we cannot assure you that once we commence
volume production we will attain yields at high throughput that will result
in
profitable gross margins or that we will not experience manufacturing problems
which could result in delays in delivery of orders or product
introductions.
WE
ARE DEPENDENT ON A SINGLE MANUFACTURING LINE.
We
initially expect to manufacture our products on a single manufacturing
line. If
we experience any significant disruption in the operation of our manufacturing
facility or a serious failure of a critical piece of equipment, we may
be unable
to supply microdisplays to our customers. For this reason, some OEMs may
also be
reluctant to commit a broad line of products to our microdisplays without
a
second production facility in place. Interruptions in our manufacturing
could be
caused by manufacturing equipment problems, the introduction of new equipment
into the manufacturing process or delays in the delivery of new manufacturing
equipment. Lead-time for delivery of manufacturing equipment can be extensive.
No assurance can be given that we will not lose potential sales or be unable
to
meet production orders due to production interruptions in our manufacturing
line. In order to meet the requirements of certain OEMs for multiple
manufacturing sites, we will have to expend capital to secure additional
sites
and may not be able to manage multiple sites successfully.
WE
EXPECT TO DEPEND ON SEMICONDUCTOR CONTRACT MANUFACTURERS TO SUPPLY OUR
SILICON
INTEGRATED CIRCUITS AND OTHER SUPPLIERS OF KEY COMPONENTS, MATERIALS AND
SERVICES.
We
do not
manufacture the silicon integrated circuits on which we incorporate our
OLED
technology. Instead, we expect to provide the design layouts to semiconductor
contract manufacturers who will manufacture the integrated circuits on
silicon
wafers. We also expect to depend on suppliers of a variety of other components
and services, including circuit boards, graphic integrated circuits, passive
components, materials and chemicals, and equipment support. Our inability
to
obtain sufficient quantities of high quality silicon integrated circuits
or
other necessary components, materials or services on a timely basis could
result
in manufacturing delays, increased costs and ultimately in reduced or delayed
sales or lost orders which could materially and adversely affect our operating
results.
RISKS
RELATED TO OUR INTELLECTUAL PROPERTY
WE
RELY ON OUR LICENSE AGREEMENT WITH EASTMAN KODAK FOR THE DEVELOPMENT OF
OUR
PRODUCTS, AND THE TERMINATION OF THIS LICENSE, EASTMAN KODAK'S LICENSING
OF ITS
OLED TECHNOLOGY TO OTHERS FOR MICRODISPLAY APPLICATIONS, OR THE SUBLICENSING
BY
EASTMAN KODAK OF OUR OLED TECHNOLOGY TO THIRD PARTIES, COULD HAVE A MATERIAL
ADVERSE IMPACT ON OUR BUSINESS.
Our
principal products under development utilize OLED technology that we license
from Eastman Kodak. We rely upon Eastman Kodak to protect and enforce key
patents held by Eastman Kodak, relating to OLED display technology. Eastman
Kodak's patents expire at various times in the future. Our license with
Eastman
Kodak could terminate if we fail to perform any material term or covenant
under
the license agreement. Since our license from Eastman Kodak is non-exclusive,
Eastman Kodak could also elect to become a competitor itself or to license
OLED
technology for microdisplay applications to others who have the potential
to
compete with us. The occurrence of any of these events could have a material
adverse impact on our business.
WE
MAY NOT BE SUCCESSFUL IN PROTECTING OUR INTELLECTUAL PROPERTY AND PROPRIETARY
RIGHTS.
We
rely
on a combination of patents, trade secret protection, licensing agreements
and
other arrangements to establish and protect our proprietary technologies.
If we
fail to successfully enforce our intellectual property rights, our competitive
position could suffer, which could harm our operating results. Patents
may not
be issued for our current patent applications, third parties may challenge,
invalidate or circumvent any patent issued to us, unauthorized parties
could
obtain and use information that we regard as proprietary despite our efforts
to
protect our proprietary rights, rights granted under patents issued to
us may
not afford us any competitive advantage, others may independently develop
similar technology or design around our patents, our technology may be
available
to licensees of Eastman Kodak, and protection of our intellectual property
rights may be limited in certain foreign countries. We may be required
to expend
significant resources to monitor and police our intellectual property rights.
Any future infringement or other claims or prosecutions related to our
intellectual property could have a material adverse effect on our business.
Any
such claims, with or without merit, could be time consuming to defend,
result in
costly litigation, divert management's attention and resources, or require
us to
enter into royalty or licensing agreements. Such royalty or licensing
agreements, if required, may not be available on terms acceptable to us,
if at
all. Protection of intellectual property has historically been a large
yearly
expense for eMagin. We have not been in a financial position to properly
protect
all of our intellectual property, and may not be in a position to properly
protect our position or stay ahead of competition in new research and the
protecting of the resulting intellectual property.
RISKS
RELATED TO THE MICRODISPLAY INDUSTRY
THE
COMMERCIAL SUCCESS OF THE MICRODISPLAY INDUSTRY DEPENDS ON THE WIDESPREAD
MARKET
ACCEPTANCE OF MICRODISPLAY SYSTEMS PRODUCTS.
The
market for microdisplays is emerging. Our success will depend on consumer
acceptance of microdisplays as well as the success of the commercialization
of
the microdisplay market. As an OEM supplier, our customer's products must
also
be well accepted. At present, it is difficult to assess or predict with
any
assurance the potential size, timing and viability of market opportunities
for
our technology in this market. The viewfinder microdisplay market sector
is well
established with entrenched competitors with whom we must compete.
THE
MICRODISPLAY SYSTEMS BUSINESS IS INTENSELY COMPETITIVE.
We
do
business in intensely competitive markets that are characterized by rapid
technological change, changes in market requirements and competition from
both
other suppliers and our potential OEM customers. Such markets are typically
characterized by price erosion. This intense competition could result in
pricing
pressures, lower sales, reduced margins, and lower market share. Our ability
to
compete successfully will depend on a number of factors, both within and
outside
our control. We expect these factors to include the following:
o
our
success in designing, manufacturing and delivering expected new products,
including those implementing new technologies on a timely basis;
o
our
ability to address the needs of our customers and the quality of our customer
services;
o
the
quality, performance, reliability, features, ease of use and pricing of
our
products;
o
successful expansion of our manufacturing capabilities;
o
our
efficiency of production, and ability to manufacture and ship products
on time;
o
the
rate at which original equipment manufacturing customers incorporate our
product
solutions into their own products;
o
the
market acceptance of our customers' products; and
o
product
or technology introductions by our competitors.
Our
competitive position could be damaged if one or more potential OEM customers
decide to manufacture their own microdisplays, using OLED or alternate
technologies. In addition, our customers may be reluctant to rely on a
relatively small company such as eMagin for a critical component. We cannot
assure you that we will be able to compete successfully against current
and
future competition, and the failure to do so would have a materially adverse
effect upon our business, operating results and financial condition.
THE
DISPLAY INDUSTRY IS CYCLICAL.
The
display industry is characterized by fabrication facilities that require
large
capital expenditures and long lead times for supplies and the subsequent
processing time, leading to frequent mismatches between supply and demand.
The
OLED microdisplay sector may experience overcapacity if and when all of
the
facilities presently in the planning stage come on line leading to a difficult
market in which to sell our products.
COMPETING
PRODUCTS MAY GET TO MARKET SOONER THAN OURS.
Our
competitors are investing substantial resources in the development and
manufacture of microdisplay systems using alternative technologies such
as
reflective liquid crystal displays (LCDs), LCD-on-Silicon ("LCOS")
microdisplays, active matrix electroluminescence and scanning image systems,
and
transmissive active matrix LCDs.
OUR
COMPETITORS HAVE MANY ADVANTAGES OVER US.
As
the
microdisplay market develops, we expect to experience intense competition
from
numerous domestic and foreign companies including well-established corporations
possessing worldwide manufacturing and production facilities, greater name
recognition, larger retail bases and significantly greater financial, technical,
and marketing resources than us, as well as from emerging companies attempting
to obtain a share of the various markets in which our microdisplay products
have
the potential to compete.
OUR
PRODUCTS ARE SUBJECT TO LENGTHY OEM DEVELOPMENT PERIODS.
We
plan
to sell most of our microdisplays to OEMs who will incorporate them into
products they sell. OEMs determine during their product development phase
whether they will incorporate our products. The time elapsed between initial
sampling of our products by OEMs, the custom design of our products to
meet
specific OEM product requirements, and the ultimate incorporation of our
products into OEM consumer products is significant. If our products fail
to meet
our OEM customers' cost, performance or technical requirements or if unexpected
technical challenges arise in the integration of our products into OEM
consumer
products, our operating results could be significantly and adversely affected.
Long delays in achieving customer qualification and incorporation of our
products could adversely affect our business.
OUR
PRODUCTS WILL LIKELY EXPERIENCE RAPIDLY DECLINING UNIT PRICES.
In
the
markets in which we expect to compete, prices of established products tend
to
decline significantly over time. In order to maintain our profit margins
over
the long term, we believe that we will need to continuously develop product
enhancements and new technologies that will either slow price declines
of our
products or reduce the cost of producing and delivering our products. While
we
anticipate many opportunities to reduce production costs over time, there
can be
no assurance that these cost reduction plans will be successful nor is
there any
assurance that our costs can be reduced as quickly as any reduction in
unit
prices. We may also attempt to offset the anticipated decrease in our average
selling price by introducing new products, increasing our sales volumes
or
adjusting our product mix. If we fail to do so, our results of operations
would
be materially and adversely affected.
RISKS
RELATED TO OUR BUSINESS
OUR
SUCCESS DEPENDS ON ATTRACTING AND RETAINING HIGHLY SKILLED AND QUALIFIED
TECHNICAL AND CONSULTING PERSONNEL.
We
must
hire highly skilled technical personnel as employees and as independent
contractors in order to develop our products. The competition for skilled
technical employees is intense and we may not be able to retain or recruit
such
personnel. We must compete with companies that possess greater financial
and
other resources than we do, and that may be more attractive to potential
employees and contractors. To be competitive, we may have to increase the
compensation, bonuses, stock options and other fringe benefits offered
to
employees in order to attract and retain such personnel. The costs of retaining
or attracting new personnel may have a material adverse affect on our business
and our operating results. In addition, difficulties in hiring and retaining
technical personnel could delay the implementation of our business plan.
OUR
SUCCESS DEPENDS IN A LARGE PART ON THE CONTINUING SERVICE OF KEY PERSONNEL.
Changes
in management could have an adverse effect on our business. We are dependent
upon the active participation of several key management personnel, including
Gary W. Jones, our chief executive officer. We will also need to recruit
additional management in order to expand according to our business plan.
The
failure to attract and retain additional management or personnel could
have a
material adverse effect on our operating results and financial performance.
OUR
BUSINESS DEPENDS ON NEW PRODUCTS AND TECHNOLOGIES.
The
market for our products is characterized by rapid changes in product, design
and
manufacturing process technologies. Our success depends to a large extent
on our
ability to develop and manufacture new products and technologies to match
the
varying requirements of different customers in order to establish a competitive
position and become profitable. Furthermore, we must adopt our products
and
processes to technological changes and emerging industry standards and
practices
on a cost-effective and timely basis. Our failure to accomplish any of
the above
could harm our business and operating results.
WE
GENERALLY DO NOT HAVE LONG-TERM CONTRACTS WITH OUR CUSTOMERS.
Our
business is operated on the basis of short-term purchase orders and we
cannot
guarantee that we will be able to obtain long-term contracts for some time.
Our
current purchase agreements can be cancelled or revised without penalty,
depending on the circumstances. In the absence of a backlog of orders that
can
only be canceled with penalty, we plan production on the basis of internally
generated forecasts of demand, which makes it difficult to accurately forecast
revenues. If we fail to accurately forecast operating results, our business
may
suffer and the value of your investment in the Company may decline.
OUR
BUSINESS STRATEGY MAY FAIL IF WE CANNOT CONTINUE TO FORM STRATEGIC RELATIONSHIPS
WITH COMPANIES THAT MANUFACTURE AND USE PRODUCTS THAT COULD INCORPORATE
OUR
OLED-ON-SILICON TECHNOLOGY.
Our
prospects will be significantly affected by our ability to develop strategic
alliances with OEMs for incorporation of our OLED-on-silicon technology
into
their products. While we intend to continue to establish strategic relationships
with manufacturers of electronic consumer products, personal computers,
chipmakers, lens makers, equipment makers, material suppliers and/or systems
assemblers, there is no assurance that we will be able to continue to establish
and maintain strategic relationships on commercially acceptable terms,
or that
the alliances we do enter into will realize their objectives. Failure to
do so
would have a material adverse effect on our business.
OUR
BUSINESS DEPENDS TO SOME EXTENT ON INTERNATIONAL TRANSACTIONS.
We
purchase needed materials from companies located abroad and may be adversely
affected by political and currency risk, as well as the additional costs
of
doing business with a foreign entity. Some customers in other countries
have
longer receivable periods or warranty periods. In addition, many of the
OEMs
that are the most likely long-term purchasers of our microdisplays are
located
abroad exposing us to additional political and currency risk. We may find
it
necessary to locate manufacturing facilities abroad to be closer to our
customers which could expose us to various risks, including management
of a
multi-national organization, the complexities of complying with foreign
laws and
customs, political instability and the complexities of taxation in multiple
jurisdictions.
OUR
BUSINESS MAY EXPOSE US TO PRODUCT LIABILITY CLAIMS.
Our
business may expose us to potential product liability claims. Although
no such
claims have been brought against us to date, and to our knowledge no such
claim
is threatened or likely, we may face liability to product users for damages
resulting from the faulty design or manufacture of our products. While
we plan
to maintain product liability insurance coverage, there can be no assurance
that
product liability claims will not exceed coverage limits, fall outside
the scope
of such coverage, or that such insurance will continue to be available
at
commercially reasonable rates, if at all.
OUR
BUSINESS IS SUBJECT TO ENVIRONMENTAL REGULATIONS AND POSSIBLE LIABILITY
ARISING
FROM GOVERNMENTAL CLAIMS RELATED TO THE DISPOSAL OF HAZARDOUS SUBSTANCES
AND/OR
POTENTIAL EMPLOYEE CLAIMS OF EXPOSURE TO HARMFUL SUBSTANCES USED IN THE
DEVELOPMENT AND MANUFACTURE OF OUR PRODUCTS.
We
are
subject to various governmental regulations related to toxic, volatile,
experimental and other hazardous chemicals used in our design and manufacturing
process. Our failure to comply with these regulations could result in the
imposition of fines or in the suspension or cessation of our operations.
Compliance with these regulations could require us to acquire costly equipment
or to incur other significant expenses. We develop, evaluate and utilize
new
chemical compounds in the manufacture of our products. While we attempt
to
ensure that our employees are protected from exposure to hazardous materials,
we
cannot assure you that potentially harmful exposure will not occur or that
we
will not be liable to employees as a result.
RISKS
RELATED TO OUR STOCK
THE
SUBSTANTIAL NUMBER OF SHARES THAT ARE OR WILL BE ELIGIBLE FOR SALE COULD
CAUSE
OUR COMMON STOCK PRICE TO DECLINE EVEN IF THE COMPANY IS SUCCESSFUL.
Sales
of
significant amounts of common stock in the public market, or the perception
that
such sales may occur, could materially affect the market price of our common
stock. These sales might also make it more difficult for us to sell equity
or
equity-related securities in the future at a time and price that we deem
appropriate. As of July 26, 2005, we have outstanding (i) options to purchase
16,358,688 shares; and (ii) warrants to purchase 17,773,439 shares of common
stock.
WE
HAVE A STAGGERED BOARD OF DIRECTORS AND OTHER ANTI-TAKEOVER PROVISIONS,
WHICH
COULD INHIBIT POTENTIAL INVESTORS OR DELAY OR PREVENT A CHANGE OF CONTROL
THAT
MAY FAVOR YOU.
Our
Board
of Directors is divided into three classes and our Board members are elected
for
terms that are staggered. This could discourage the efforts by others to
obtain
control of the company. Some of the provisions of our certificate of
incorporation, our bylaws and Delaware law could, together or separately,
discourage potential acquisition proposals or delay or prevent a change
in
control. In particular, our board of directors is authorized to issue up
to
10,000,000 shares of preferred stock (less any outstanding shares of preferred
stock) with rights and privileges that might be senior to our common stock,
without the consent of the holders of the common stock.
The
Private Securities Litigation Reform Act of 1995 (the "Act") provides a
safe
harbor for forward-looking statements made by us or on our behalf. We and
our
representatives may from time to time make written or oral statements that
are
"forward-looking," including statements contained in this prospectus and
other
filings with the Securities and Exchange Commission, reports to our stockholders
and news releases. All statements that express expectations, estimates,
forecasts or projections are forward-looking statements within the meaning
of
the Act. In addition, other written or oral statements which constitute
forward-looking statements may be made by us or on our behalf. Words such
as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
"projects," "forecasts," "may," "should," variations of such words and
similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve risks,
uncertainties and assumptions which are difficult to predict. Therefore,
actual
outcomes and results may differ materially from what is expressed or forecasted
in or suggested by such forward-looking statements. We undertake no obligation
to update publicly any forward-looking statements, whether as a result
of new
information, future events or otherwise.
This
prospectus relates to shares of our common stock that may be offered and
sold
from time to time by the selling stockholders. We will not receive any
proceeds
from the sale of shares of common stock in this offering. Proceeds, if
any,
received on the exercise of currently outstanding warrants
will be
use for general working capital purposes.
The
table
below sets forth information concerning the resale of the shares of common
stock
by the selling stockholders. We will not receive any proceeds from the
resale of
the common stock by the selling stockholders. We will receive proceeds
from the
exercise of the warrants. Assuming all the shares registered below are
sold by
the selling stockholders, none of the selling stockholders will continue
to own
any shares of our common stock.
The
following table also sets forth the name of each person who is offering
the
resale of shares of common stock by this prospectus, the number of shares
of
common stock beneficially owned by each person, the number of shares of
common
stock that may be sold in this offering and the number of shares of common
stock
each person will own after the offering, assuming they sell all of the
shares
offered.
Shares Beneficially
Owned
Shares Beneficially Owned
Prior to the
Offering
After the Offering
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Total
Shares
Name Number Percent Registered
Number
Percent
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Langley
Partners, L.P.
(1)
910,179 1.1%
910,179
- 0 -
0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Spectra
Capital
Management, 778,599 * 778,599 -
0 - 0.0
%
LLC
(2)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Truk
Opportunity Fund,
LLC
630,753
* 630,753
- 0 -
0.0
%
(3)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Ellis
International Ltd.
(4)
546,107
* 546,107
- 0 - 0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Stonestreet,
LP
(5)
546,107
*
546,107
- 0 -
0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
SRG
Capital
(6)
366,984 * 366,984 -
0 -
0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Platinum
Partners
Value 364,072
* 364,072 -
0 - 0.0
%
Arbitrage
Fund LP(7)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
RHP
Master Fund,
Ltd.(8)
364,072 * 364,072
- 0 - 0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Gabriel
Capital, L.P. (9) 364,071 * 364,071
- 0 - 0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
AS
Capital Partners
LLC(10)
273,055 *
273,055
- 0 - 0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
OTAPE
Investments
LLC(11) 273,055
* 273,055 -
0 - 0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
TCMP3
Partners
(12) 272,944
* 272,944
- 0 - 0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Basso
Equity
Opportunity
229,365
* 229,365
- 0 - 0.0
%
Holding
Fund Ltd. (13)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Basso
Multi-Strategy
Holding
229,365
* 229,365
- 0 - 0.0
%
Fund
Ltd. (13)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Andrew
Burton First Trust
& 155,720
* 155,720 -
0 - 0.0
%
Co.
Money Purchase Pension
Plan
(14)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
West
End Convertible
Fund 182,036
*
182,036
- 0 - 0.0
%
L.P.
(15)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Whalehaven
Fund Ltd.
(16)
182,036
* 182,036
- 0 -
0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Bristol
Investment
Fund, 182,036
* 182,036
- 0 -
0.0
%
Ltd.
(17)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Gamma
Opportunity
Capital
155,720
* 155,720
- 0 - 0.0
%
Partners
LP (18)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Clearview
International
182,036 * 182,036 -
0 - 0.0
%
Investment
Ltd. (19)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Trust
u/w Ella Grey,
Mary
163,831
*
163,831
- 0 - 0.0
%
Cronson
(20)
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Cohanzik
Partners, L.P.
(21) 91,017
*
91,017
- 0 - 0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
Steve
Amsterdam
(22)
18,205
* 18,205 -
0 -
0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
U.S.
Display
Consortium
9,058
* 9,058 -
0 - 0.0
%
------------------------------
--------------------- -------------------- ------------------- -----------------
-------------
7,470,423 9.0% 7,470,423
- 0 - 0.0
%
------------------------------
===================== ==================== =================== =================
=============
The
number and percentage of shares beneficially owned is determined in accordance
with Rule 13d-3 of the Securities Exchange Act of 1934, and the information
is
not necessarily indicative of beneficial ownership for any other purpose.
Under
such rule, beneficial ownership includes any shares as to which the selling
stockholders has sole or shared voting power or investment power and also
any
shares which the selling stockholders has the right to acquire within 60
days.
The actual number of shares of common stock issuable upon the conversion
of the
convertible preferred stock is subject to adjustment depending on, among
other
factors, the future market price of the common stock, and could be materially
less or more than the number estimated in the table.
(1)
Represents shares of common stock where the original 513,354 warrants have
been
exercised.
(2)
Represents (i) 540,504 shares of common stock; and (ii) 238,095 shares
of common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share. This
entity is an affiliated of a broker-dealer and acquired these shares in
the
ordinary course of business and not with a view to distribute.
(3)
Represents (i) 465,753 shares of common stock; and (ii) 165,000 shares
of common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(4)
Represents (i) 403,250 shares of common stock and (ii) 142,857 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(5)
Represents shares of common stock where the original 308,012 warrants have
been
exercised.
(6)
Represents (i) 270,984 shares of common stock and (ii) 96,000 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(7)
Represents shares of common stock where the original 205,342 warrants have
been
exercised.
(8)
Represents (i) 268,834 shares of common stock and (ii) 95,238 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(9)
Represents (i) 268,833 shares of common stock and (ii) 95,238 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(10)
Represents (i) 201,626 shares of common stock and (ii) 71,429 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(11)
Represents (i) 201,626 shares of common stock and (ii) 71,429 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(12)
Represents (i) 201,544 shares of common stock and (ii) 71,400 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(13)
Represents shares of common stock where the original 129,365 warrants have
been
exercised.
(14)
Represents (i) 108,101 shares of common stock; and (ii) 47,619 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(15)
Represents (i) 134,417 shares of common stock and (ii) 47,619 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(16)
Represents shares of common stock where the original 102,671 warrants have
been
exercised.
(17)
Represents shares of common stock where the original 102,671 warrants have
been
exercised.
(18)
Represents 155,720 shares of common stock.
(19)
Represents shares of common stock where the original 102,671 warrants have
been
exercised.
(20)
Represents (i) 120,974 shares of common stock and (ii) 42,857 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(21)
Represents (i) 67,208 shares of common stock and (ii) 23,809 shares of
common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
(22)
Represents (i) 13,443 shares of common stock and (ii) 4,762 shares of common
stock underlying warrants that are currently exercisable until January
2009 at
an exercise price of $1.05 per share.
The
selling stockholders and any of their respective pledgees, donees, assignees
and
other successors-in-interest may, from time to time, sell any or all of
their
shares of common stock on any stock exchange, market or trading facility
on
which the shares are traded or in private transactions. These sales may
be at
fixed or negotiated prices. The selling stockholders may use any one or
more of
the following methods when selling shares:
o
ordinary brokerage transactions and transactions in which the broker-dealer
solicits the purchaser;
o
block
trades in which the broker-dealer will attempt to sell the shares as agent
but
may position and resell a portion of the block as principal to facilitate
the
transaction;
o
purchases by a broker-dealer as principal and resale by the broker-dealer
for
its account;
o
an
exchange distribution in accordance with the rules of the applicable exchange;
o
privately-negotiated transactions;
o
short
sales that are not violations of the laws and regulations of any state
or the
United States;
o
broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
o
through
the writing of options on the shares
o
a
combination of any such methods of sale; and
o
any
other method permitted pursuant to applicable law.
The
selling stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus. The selling stockholders
shall have the sole and absolute discretion not to accept any purchase
offer or
make any sale of shares if they deem the purchase price to be unsatisfactory
at
any particular time.
The
selling stockholders may also engage in short sales against the box, puts
and
calls and other transactions in our securities or derivatives of our securities
and may sell or deliver shares in connection with these trades.
The
selling stockholders or their respective pledgees, donees, transferees
or other
successors in interest, may also sell the shares directly to market makers
acting as principals and/or broker-dealers acting as agents for themselves
or
their customers. Such broker-dealers may receive compensation in the form
of
discounts, concessions or commissions from the selling stockholders and/or
the
purchasers of shares for whom such broker-dealers may act as agents or
to whom
they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers
and
block purchasers purchasing the shares will do so for their own account
and at
their own risk. It is possible that a selling stockholder will attempt
to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price.
The
selling stockholders cannot assure that all or any of the shares offered
in this
prospectus will be issued to, or sold by, the selling stockholders. The
selling
stockholders and any brokers, dealers or agents, upon effecting the sale
of any
of the shares offered in this prospectus, may be deemed to be "underwriters"
as
that term is defined under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, or the rules and regulations
under
such acts. In such event, any commissions received by such broker-dealers
or
agents and any profit on the resale of the shares purchased by them may
be
deemed to be underwriting commissions or discounts under the Securities
Act.
We
are
required to pay all fees and expenses incident to the registration of the
shares, including fees and disbursements of counsel to the selling stockholders,
but excluding brokerage commissions or underwriter discounts.
The
selling stockholders, alternatively, may sell all or any part of the shares
offered in this prospectus through an underwriter. No selling stockholder
has
entered into any agreement with a prospective underwriter and there is
no
assurance that any such agreement will be entered into.
The
selling stockholders may pledge their shares to their brokers under the
margin
provisions of customer agreements. If a selling stockholders defaults on
a
margin loan, the broker may, from time to time, offer and sell the pledged
shares. The selling stockholders and any other persons participating in
the sale
or distribution of the shares will be subject to applicable provisions
of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
under
such act, including, without limitation, Regulation M. These provisions
may
restrict certain activities of, and limit the timing of purchases and sales
of
any of the shares by, the selling stockholders or any other such person.
In the
event that the selling stockholders are deemed affiliated purchasers or
distribution participants within the meaning of Regulation M, then the
selling
stockholders will not be permitted to engage in short sales of common stock.
Furthermore, under Regulation M, persons engaged in a distribution of securities
are prohibited from simultaneously engaging in market making and certain
other
activities with respect to such securities for a specified period of time
prior
to the commencement of such distributions, subject to specified exceptions
or
exemptions. In regards to short sells, the selling stockholder can only
cover
its short position with the securities they receive from us upon conversion.
In
addition, if such short sale is deemed to be a stabilizing activity, then
the
selling stockholder will not be permitted to engage in a short sale of
our
common stock. All of these limitations may affect the marketability of
the
shares.
We
have
agreed to indemnify the selling stockholders, or their transferees or assignees,
against certain liabilities, including liabilities under the Securities
Act of
1933, as amended, or to contribute to payments the selling stockholders
or their
respective pledgees, donees, transferees or other successors in interest,
may be
required to make in respect of such liabilities.
If
the
selling stockholders notify us that they have a material arrangement with
a
broker-dealer for the resale of the common stock, then we would be required
to
amend the registration statement of which this prospectus is a part, and
file a
prospectus supplement to describe the agreements between the selling
stockholders and the broker-dealer.
COMMON
STOCK
We
are
authorized to issue up to 200,000,000 shares of Common Stock, par value
$.001.
As of July 26, 2005, there were 82,956,300 shares of common stock outstanding.
Holders of the common stock are entitled to one vote per share on all
matters to
be voted upon by the stockholders. Holders of common stock are entitled
to
receive ratably such dividends, if any, as may be declared by the Board
of
Directors out of funds legally available therefore. Upon the liquidation,
dissolution, or winding up of our company, the holders of common stock
are
entitled to share ratably in all of our assets which are legally available
for
distribution after payment of all debts and other liabilities and liquidation
preference of any outstanding common stock. Holders of common stock have
no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of common stock are validly issued, fully paid and nonassessable.
We
have
engaged Continental Stock Transfer & Trust Company of New York, as
independent transfer agent and registrar.
PREFERRED
STOCK
We
are
authorized to issued up to 10,000,000 shares of preferred stock. The
shares of
preferred stock may be issued in series, and shall have such voting powers,
full
or limited, or no voting powers, and such designations, preferences and
relative
participating, optional or other special rights, and qualifications,
limitations
or restrictions thereof, as shall be stated and expressed in the resolution
or
resolutions providing for the issuance of such stock adopted from time
to time
by the board of directors. The board of directors is expressly vested
with the
authority to determine and fix in the resolution or resolutions providing
for
the issuances of preferred stock the voting powers, designations, preferences
and rights, and the qualifications, limitations or restrictions thereof,
of each
such series to the full extent now or hereafter permitted by the laws
of the
State of Delaware.
WARRANTS
On
January 9, 2004, we and several accredited institutional and private
investors
entered into a Securities Purchase Agreement whereby such investors purchased
an
aggregate of 3,333,363 shares of common stock for an aggregate purchase
price of
$4,200,039.
The
shares of common stock were priced at a 20% discount to the average closing
price of our common stock from December 30, 2003 to January 6, 2004,
which
ranged from $1.38 to $1.94 per share during the period for an average
closing
price of $1.58 per share, making the discounted price $1.26 per share.
In
addition, the investors received warrants to purchase an aggregate of
2,000,019
shares of common stock (subject to anti-dilution adjustments) exercisable
at a
price of $1.74 per share for a period of five (5) years, “A Warrants”. The
warrants were priced at a 10% premium to the average closing price of
our common
stock for the pricing period.
In
addition to the foregoing, we issued additional warrants to the investors
to
acquire an aggregate of 2,312,193 shares of common stock. 1,206,914 of
such
warrants were exercisable, within 6 months from the effective date of
the
registration statement covering these securities, at a price of $1.74
per share
(a 10% premium to the average closing price of the stock for the pricing
period), “B Warrants” and 1,105,279 of such warrants are exercisable within 12
months from the effective date of the registration statement covering
these
securities, at a price of $1.90 per share (a 20% premium to the average
closing
price of the stock for the pricing period), “C Warrants” . Of these warrants,
786,666 A Warrants, 1,206,914 B Warrants and 921,069 C Warrants have
been
exercised and 184,210 C Warrants have expired. As of July 26, 2005, 1,213,353
A
Warrants are the only warrants from this transaction currently
outstanding.
This
prospectus covers the resale by the investors of the above-referenced
common
stock and common stock underlying the warrants.
Sichenzia
Ross Friedman Ference LLP, New York, New York will issue an opinion with
respect
to the validity of the shares of common stock being offered hereby. A member
of
Sichenzia Ross Friedman Ference LLP, Richard Friedman, will receive up
to
200,000 shares of common stock, from eMagin, over the next 8 months for
general
corporate and litigation matters.
Eisner
LLP, Independent Registered Public Accountants, have audited, as set
forth in
their report thereon incorporated by reference herein,
our financial statements as of December
31, 2004
and for
the years ended December 31, 2004 and 2003. The financial statements
referred to
above are incorporated by reference in
this
prospectus with reliance upon the auditors' opinion based on their expertise
in
accounting and auditing.
PART II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
ITEM
14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table sets forth an itemization of all estimated expenses, all
of
which we will pay, in connection with the issuance and distribution of
the
securities being registered:
| SEC Registration fee |
|
$ |
852.89* |
|
| Accounting
fees and expenses |
|
|
25,000.00* |
|
| Legal
fees and expenses |
|
|
55,000.00* |
|
|
Total
|
|
$ |
80,852.89* |
|
*Previously
paid
ITEM
15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our
Articles of Incorporation, as amended and restated, provide to the fullest
extent permitted by Section 145 of the General Corporation Law of the State
of
Delaware, that our directors or officers shall not be personally liable
to us or
our shareholders for damages for breach of such director's or officer's
fiduciary duty. The effect of this provision of our Articles of Incorporation,
as amended and restated, is to eliminate our rights and our shareholders
(through shareholders' derivative suits on behalf of our company) to recover
damages against a director or officer for breach of the fiduciary duty
of care
as a director or officer (including breaches resulting from negligent or
grossly
negligent behavior), except under certain situations defined by statute.
We
believe that the indemnification provisions in our Articles of Incorporation,
as
amended, are necessary to attract and retain qualified persons as directors
and
officers.
Our
By
Laws also provide that the Board of Directors may also authorize the company
to
indemnify our employees or agents, and to advance the reasonable expenses
of
such persons, to the same extent, following the same determinations and
upon the
same conditions as are required for the indemnification of and advancement
of
expenses to our directors and officers. As of the date of this Registration
Statement, the Board of Directors has not extended indemnification rights
to
persons other than directors and officers.
Insofar
as indemnification for liabilities arising under the Securities Act of
1933 may
be permitted to directors, officers or persons controlling us pursuant
to the
foregoing provisions, or otherwise, we have been advised that in the opinion
of
the Securities and Exchange Commission, such indemnification is against
public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
ITEM
16. EXHIBITS