AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 30, 2003
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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VIEWPOINT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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DELAWARE 7373 95-4102687
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
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498 SEVENTH AVENUE, SUITE 1810
NEW YORK, NEW YORK 10018
(212) 201-0800
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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BRIAN J. O'DONOGHUE, ESQ.
SECRETARY AND GENERAL COUNSEL
VIEWPOINT CORPORATION
498 SEVENTH AVENUE, SUITE 1810
NEW YORK, NEW YORK 10018
(212) 201-0800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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WITH A COPY TO:
MILBANK, TWEED, HADLEY & MCCLOY LLP
ONE CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10005
(212) 530-5000
ATTENTION: ALEXANDER M. KAYE, ESQ.
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement until all
the shares hereunder have been sold.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please 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, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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AMOUNT PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE
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Common Stock, par value $.001 per share...... 7,037,066 $1.135 $7,987,069.91 $734.81
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(1) This prospectus generally covers the resale of at least that number of
shares of common stock equal to 130% of the number of shares of common stock
issuable upon conversion of the convertible notes, as interest shares on the
convertible notes and upon exercise of the related warrants, determined as
if the outstanding convertible notes and warrants were converted or
exercised, as applicable, in full and the interest shares for the entire
term of the convertible notes are issued, in each case, as of the trading
day immediately preceding the date this registration statement was initially
filed with the Commission. Pursuant to Rule 416(a) of the Securities Act, as
amended, this registration statement also registers such additional shares
of the registrant's common stock as may become issuable to prevent dilution
as a result of stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee, based on the average of the high and low prices for
Viewpoint Corporation's common stock as reported on the Nasdaq National
Market on January 28, 2003 in accordance with Rule 457(c) under the
Securities Act.
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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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
PROSPECTUS SUBJECT TO COMPLETION, DATED JANUARY 30, 2003
VIEWPOINT CORPORATION
7,037,066 SHARES OF COMMON STOCK
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" REFERENCED ON PAGES 1-5 IN
DETERMINING WHETHER TO PURCHASE VIEWPOINT CORPORATION COMMON STOCK.
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The selling stockholders identified on page 7 of this prospectus are
offering shares of common stock of Viewpoint Corporation. The selling
stockholders may offer shares through public or private transactions, at
prevailing market prices or at privately negotiated prices. For additional
information on the methods of sale, you should refer to the section entitled
"Plan of Distribution" on pages 8-9. Viewpoint will not receive any portion of
the proceeds from the sale of these shares.
Viewpoint's common stock is quoted on the Nasdaq National Market under
the symbol "VWPT."
On January 28, 2003, the last reported closing price of the common stock
on the Nasdaq National Market was $1.148 per share.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed on the
adequacy or accuracy of the disclosures in the prospectus. Any representation to
the contrary is a criminal offense.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE 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.
THE DATE OF THIS PROSPECTUS IS , 2003.
TABLE OF CONTENTS
PAGE
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VIEWPOINT................................................... 1
RISK FACTORS................................................ 1
FORWARD-LOOKING STATEMENTS.................................. 6
USE OF PROCEEDS............................................. 6
PRIVATE PLACEMENT OF CONVERTIBLE NOTES AND WARRANTS......... 6
SELLING STOCKHOLDERS........................................ 7
PLAN OF DISTRIBUTION........................................ 8
LEGAL MATTERS............................................... 9
EXPERTS..................................................... 9
INCORPORATION OF DOCUMENTS BY REFERENCE..................... 10
WHERE YOU CAN FIND MORE INFORMATION......................... 10
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THE SELLING STOCKHOLDERS ARE OFFERING TO SELL, AND
SEEKING OFFERS TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS
AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK.
NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES TO
PERMIT A PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF
THIS PROSPECTUS IN THAT JURISDICTION. PERSONS WHO COME INTO POSSESSION OF THIS
PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES ARE REQUIRED TO INFORM
THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THIS OFFERING AND THE
DISTRIBUTION OF THIS PROSPECTUS APPLICABLE TO THAT JURISDICTION.
VIEWPOINT
We are a leading provider of e-commerce visualization solutions for the
World Wide Web. Our technology, which we call Viewpoint Experience Technology,
is designed to make the use of rich media on the web, particularly
photo-realistic 3D, practical and widespread.
Our principal executive offices are located at 498 Seventh Avenue, Suite
1810, New York, New York 10018, and our telephone number is (212) 201-0800.
RISK FACTORS
An investment in Viewpoint involves a high degree of risk. You should
consider carefully the following information about these risks, together with
the other information contained or incorporated by reference in this prospectus,
before you decide to invest in Viewpoint. If any of the following risks actually
occur, our business, financial condition or results of operations would likely
suffer. In this case, the market price of our common stock could decline, and
you could lose all or part of your investment.
WE HAVE A LIMITED OPERATING HISTORY THAT MAKES AN EVALUATION OF OUR BUSINESS
DIFFICULT
We have been developing e-commerce visualization solutions for the Web
since our acquisition of Real Time Geometry Corp. in December 1996.
Additionally, the e-commerce market is relatively new and evolving rapidly.
Accordingly, we have a relatively short operating history in this market on
which you can evaluate our business and prospects. You should consider our
prospects in light of the risks and difficulties frequently encountered by early
stage online companies, including, but not limited to:
-- we have an evolving and unpredictable business model;
-- we must establish and develop broad market acceptance of our
products, technologies and services;
-- we must continue to develop new products, technologies and
enhancements;
-- we must respond quickly to rapidly changing market developments,
customer demands and industry standards;
-- we must attract, train and retain qualified employees; and
-- we must effectively manage our growth.
If we are not successful in addressing these risks and challenges, we
will not be able to grow our business, compete effectively or achieve
profitability.
WE HAVE A HISTORY OF LOSSES AND EXPECT TO INCUR LOSSES IN THE FUTURE
We have had significant quarterly and annual operating losses since our
inception, and as of September 30, 2002, we had an accumulated deficit of
approximately $216,760,000. We changed the focus of our business in early 2000
from prepackaged graphics software products to e-commerce visualization
solutions. We believe that, despite this change in our strategic focus, we will
continue to incur operating losses for the foreseeable future.
OUR FUTURE REVENUES MAY BE UNPREDICTABLE AND MAY CAUSE OUR QUARTERLY RESULTS TO
FLUCTUATE
As a result of our limited operating history and the rapidly changing
nature of the markets in which we compete, we may be unable to forecast our
quarterly and annual revenues accurately. If our future quarterly operating
results fall below the expectations of securities analysts or investors, the
trading price of our common stock will likely drop. Our quarterly operating
results have fluctuated significantly in the past and may continue to fluctuate
in the future as a result of many factors, including:
-- our ability to retain existing customers, attract new customers, and
satisfy our customers' demands;
-- market acceptance of our products, technologies and services;
1
-- introduction or enhancement of new products, technologies or services
by us or our competitors;
-- changes in prices for our products, technologies and services or our
competitors' products, technologies and services;
-- changes in usage of the Internet and online services and consumer
acceptance of the Internet and e-commerce;
-- costs of litigation and intellectual property protection;
-- industry transitions to new business and information delivery models;
-- growth in Internet use;
-- emergence of new competition;
-- varying operating costs and capital expenditures related to the
expansion of our business operations and infrastructure; and
-- technical difficulties with our technologies.
Based on these and other factors, we believe our revenues, expenses and
operating results could vary significantly in the future and period-to-period
comparisons should not be relied upon as indications of future results.
Our staffing and other operating expenses are based in large part on
anticipated revenues. It would be difficult for us to adjust our spending to
compensate for any unexpected shortfall. If we are unable to reduce our spending
following any such shortfall, our results of operations would be adversely
affected.
WE MAY BE UNABLE TO MEET OUR FUTURE CAPITAL REQUIREMENTS
We believe that our current cash, cash equivalents, and marketable
securities balances and cash provided by future operations, if any, are
sufficient to meet our operating cash flow needs and anticipated capital
expenditure requirements through at least the next 12 months. We may seek
additional funds before that time through public or private equity financing or
from other sources to fund our operations and pursue our growth strategy. We
have no commitment for additional financing (other than from the selling
stockholders under the terms of the transactions described herein) and we may
experience difficulty in obtaining additional financing on favorable terms, if
at all. Any financing we obtain may contain covenants that restrict our freedom
to operate our business or may have rights, preferences, or privileges senior to
our common stock and may dilute our current shareholders' ownership interest in
Viewpoint.
OUR STOCK PRICE IS VOLATILE AND MAY CONTINUE TO FLUCTUATE IN THE FUTURE
The market price of our common stock has fluctuated significantly in the
past. The price at which our common stock will trade in the future will depend
on a number of factors including:
-- our historical and anticipated operating results;
-- general market and economic conditions;
-- our announcement of new products, technologies or services;
-- actual or anticipated fluctuations in our operating results; and
-- developments regarding our products, technologies or services, or
those of our competitors.
In addition, the stock market has experienced extreme price and volume
fluctuations recently. This volatility has had a substantial effect on our stock
price, as well as the stock prices of other software companies, particularly
Internet companies. These broad market and industry fluctuations may adversely
affect the market price of our common stock. As a result, the market price of
our common stock may continue to fluctuate.
2
Also, securities class action litigation has often been brought against
companies following periods of volatility in the market price of its securities.
We may in the future be the target of similar litigation. Securities litigation
could result in substantial costs and divert management's attention and
resources, which could have a material adverse effect on our business, financial
condition, operating results and cash flows.
THE SELLING STOCKHOLDERS MAY CONVERT THEIR NOTES AND EXERCISE THEIR WARRANTS AT
ANY TIME AND SELL A SUBSTANTIAL NUMBER OF THEIR SHARES OF COMMON STOCK IN THE
PUBLIC MARKET AFTER THIS OFFERING, WHICH COULD DEPRESS OUR STOCK PRICE
Sales of a substantial number of shares of common stock in the open
market after this offering on conversion of notes and exercise of warrants by
the selling stockholders, or the perception that such sales could occur, could
adversely affect the trading price of our common stock. Taking into account
potential future issuances of convertible notes and warrants under the existing
agreements between us, the selling stockholders would be able to sell 8,456,777
shares of common stock, representing approximately 21% of the outstanding shares
of our common stock, plus shares of common stock that may be issued in payment
of interest on the convertible notes. A decision by the selling stockholders to
sell shares of our common stock could adversely affect the trading price of our
common stock.
IF THE INTERNET DOES NOT BECOME A MORE WIDESPREAD COMMERCE MEDIUM, DEMAND FOR
OUR PRODUCTS AND TECHNOLOGIES MAY DECLINE SIGNIFICANTLY
The market for our products, technologies and services is new and
evolving rapidly. Growth in this market depends, in large part, on increased use
of the Internet for e-commerce. If the rate of adoption of the Internet as a
method for e-commerce slows, the market for our products, technologies and
services may not grow, or may develop more slowly than expected.
It may be reasonable to believe that increased Internet use may depend on
the availability of greater bandwidth or data transmission speeds or on other
technological improvements, and we are largely dependent on third party
companies to provide or facilitate these improvements.
The e-commerce market is relatively new and evolving. Licensing of our
products and technologies depends in large part on the development of the
Internet as a viable commercial marketplace. There are now substantially more
users and much more "traffic" over the Internet than ever before, use of the
Internet is growing faster than anticipated, and the technological
infrastructure of the Internet may be unable to support the demands placed on it
by continued growth. Delays in development or adoption of new technological
standards and protocols, or increased government regulation, could also affect
Internet use. In addition, issues related to use of the Internet, such as
security, reliability, cost, ease of use and quality of service, remain
unresolved and may affect the amount of business that is conducted over the
Internet and in other digital media.
OUR MARKET IS CHARACTERIZED BY RAPIDLY CHANGING TECHNOLOGY, AND IF WE DO NOT
RESPOND IN A TIMELY MANNER, OUR PRODUCTS AND TECHNOLOGIES MAY NOT SUCCEED IN THE
MARKETPLACE
The market for e-commerce visualization is characterized by rapidly
changing technology. As a result, our success depends substantially upon our
ability to continue to enhance our products and technologies and to develop new
products and technologies that meet customers' increasing expectations.
Additionally, we may not be successful in developing and marketing enhancements
to our existing products and technologies or introducing new products and
technologies on a timely basis. Our new or enhanced products and technologies
may not succeed in the marketplace.
In addition, the industry is subject to rapidly changing methods and
models of information delivery. If a general market migration to a method of
information delivery that is not conforming with our technologies were to occur,
our business and financial results would be adversely impacted.
3
UNDETECTED ERRORS IN OUR PRODUCTS AND TECHNOLOGIES COULD RESULT IN ADVERSE
PUBLICITY, REDUCED MARKET ACCEPTANCE OR LAWSUITS BY CUSTOMERS
We offer complex software products and technologies, which may contain
undetected errors. If errors are found in our products or technologies after we
have commercially released them, we could likely experience adverse publicity,
reduced market acceptance or lawsuits by customers. This would adversely affect
our business.
IN ORDER TO INCREASE MARKET AWARENESS OF OUR PRODUCTS AND GENERATE INCREASED
REVENUE, WE NEED TO EXPAND OUR SALES AND MARKETING CAPABILITIES
We expanded our sales force in 2002 and may be required to continue to
expand our sales and marketing operations to increase market awareness of our
products and generate increased revenue. We cannot be certain that we will be
successful in these efforts. In addition, market acceptance of our current and
future products will depend on continued market development for Internet
products and services and the commercial adoption of standards on which our
technology products are based. Our products and services require a sophisticated
sales effort targeted at the senior management of our prospective clients and
newly hired employees require training and take time to achieve full
productivity. We cannot be certain that our recent hires will become as
productive as necessary, that we will be able to hire enough qualified
individuals or that we will be able to retain existing employees in the future.
WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS AND WE MAY BE
LIABLE FOR INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS
Our success and ability to compete substantially depend on the uniqueness
or value of our products and technologies. We rely on a combination of
copyright, trademark, patent, trade secret laws, and employee and third-party
nondisclosure agreements to protect our intellectual and proprietary rights,
products, and technologies. Policing unauthorized use of our products and
technologies is difficult and the steps we take may not prevent the
misappropriation or infringement of technology or proprietary rights. In
addition, litigation may be necessary to enforce our intellectual property
rights. Such misappropriation or litigation could result in substantial costs
and diversion of resources and the potential loss of intellectual property
rights, any of which would adversely impair our business.
Our products and technologies may be the subject of infringement claims
in the future. This could result in costly litigation and could require us to
obtain a license to the intellectual property of third parties. We may be unable
to obtain licenses from these third parties on favorable terms, if at all. Even
if a license is available, we may have to pay substantial royalties to obtain
it. If we cannot obtain necessary licenses on reasonable terms, our business
would be adversely affected.
WE MAY NEED TO ENTER INTO BUSINESS COMBINATIONS AND STRATEGIC ALLIANCES WHICH
COULD BE DIFFICULT TO INTEGRATE AND MAY DISRUPT OUR BUSINESS
We may continue to expand our operations or market presence by entering
into other business combinations, investments, joint ventures or other strategic
alliances with other companies. These transactions create risks such as:
-- difficulty assimilating the operations, technology and personnel of
the combined companies;
-- disruption of our ongoing business;
-- problems retaining key technical and managerial personnel;
-- expenses associated with amortization of purchased intangible assets;
-- additional operating losses and expenses of acquired businesses; and
-- impairment of relationships with existing employees, customers and
business partners.
4
OUR REVENUES COULD BE NEGATIVELY AFFECTED BY THE LOSS OF STRATEGIC PARTNERS AND
RESELLERS AND IF WE FAIL TO ESTABLISH, MAINTAIN OR EXPAND OUR STRATEGIC
RELATIONSHIPS FOR THE INTEGRATION OF OUR TECHNOLOGY WITH THE SERVICES OF THIRD
PARTIES, THE GROWTH OF OUR BUSINESS MAY CEASE OR DECLINE
For the year ended December 31, 2001 and the nine months ended September
30, 2002, we recorded revenues totaling 17% and 56%, respectively, of total
revenues related to certain agreements with two stockholders who have
representatives on our board of directors. The loss of any strategic partner
could significantly reduce our revenues, which could have a material adverse
effect on our financial condition, operating results and business.
In order to expand our business, we must generate, maintain and
strengthen strategic relationships with third parties. Currently, we have
relationships with AOL and Adobe, through which they integrate our technology
into their products and services. We may need to establish additional strategic
relationships in the future. If these parties do not provide sufficient,
high-quality service or integrate and support our technology correctly, or if we
are unable to enter into successful new strategic relationships, our revenues
and growth may suffer. We cannot be assured that the time and effort spent on
developing or maintaining strategic relationships will produce significant
benefits to us.
CLIENTS THAT ACCOUNT FOR LARGE PORTIONS OF OUR REVENUES IN ONE PERIOD MAY NOT
GENERATE SIMILAR AMOUNTS OF REVENUE IN SUBSEQUENT PERIODS
A large portion of our revenues are generated from a small number of
clients. These clients may not retain our services for the same amount of work
in the future. Any cancellation, deferral or significant reduction in our work
performed for these clients could have a material adverse effect on our
business, financial condition and results of operations.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO IDENTIFY, HIRE, TRAIN AND RETAIN
HIGHLY QUALIFIED TECHNICAL AND MANAGERIAL EMPLOYEES
Our future success depends on our continuing ability to identify, hire,
train and retain other highly qualified technical and managerial employees. The
competition for these employees is intense, and we have experienced difficulty
in identifying and hiring qualified engineering personnel. If we do not succeed
in attracting and retaining necessary technical and managerial employees in the
future, our business would be adversely affected.
OUR CHARTER DOCUMENTS COULD MAKE IT MORE DIFFICULT FOR AN UNSOLICITED THIRD
PARTY TO ACQUIRE US
Our certificate of incorporation and by-laws are designed to make it
difficult for an unsolicited third party to acquire control of us, even if a
change in control would be beneficial to stockholders. For example, our
certificate of incorporation authorizes our board of directors to issue up to
5,000,000 shares of "blank check" preferred stock. Without stockholder approval,
the board of directors has the authority to attach special rights, including
voting and dividend rights, to this preferred stock. With these rights,
preferred stockholders could make it more difficult for an unsolicited third
party to acquire our company.
In addition, we must receive a stockholders' proposal for an annual
meeting within a specified period for that proposal to be included on the
agenda. Because stockholders do not have the power to call meetings and are
subject to timing requirements in submitting stockholder proposals for
consideration at an annual or special meeting, any third-party takeover not
supported by the board of directors would be subject to significant delays and
difficulties.
5
FORWARD-LOOKING STATEMENTS
In addition to historical information, this prospectus contains
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially from the results suggested in these
forward-looking statements. Factors that might cause or contribute to such
differences include, but are not limited to, those discussed in the section
entitled "Risk Factors." You should carefully review the risks described in
other documents we file from time to time with the Commission, including any
future reports to be filed in 2003 and our Annual Report on Form 10-K for 2001.
When used in this report, the words "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "targets," "estimates," and similar expressions
are generally intended to identify forward-looking statements. You should not
place undue reliance on these forward-looking statements, which speak only as of
the date of this prospectus. We undertake no obligation to publicly release any
revisions to the forward-looking statements or reflect events or circumstances
after the date of this document.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock offered by the selling stockholders under this prospectus.
PRIVATE PLACEMENT OF CONVERTIBLE NOTES AND WARRANTS
On December 31, 2002, we issued to the selling stockholders $7.0 million
aggregate principal amount of our 4.95% convertible notes due December 31, 2007
and warrants to purchase 726,330 shares of our common stock in return for an
aggregate consideration of $7.0 million. Within the next six months we have the
right, if we satisfy certain financial and other conditions, to require the
selling stockholders to buy an additional $7.0 million aggregate principal
amount of notes and warrants to purchase 726,330 shares of our common stock. In
addition, the selling stockholders have the right within the next year to buy an
additional $2.8 million aggregate principal amount of notes and warrants to
purchase 290,533 shares of our common stock. Furthermore, if we satisfy certain
financial and other conditions we may choose to issue shares of common stock
rather than cash to pay interest on the notes.
The notes and warrants issued on December 31, 2002 are convertible and
exercisable, respectively, at a price of $2.26 per share of common stock,
subject to adjustment in the event of dilution of the common stock. The notes
and warrants that may be issued after December 31, 2002 will be convertible and
exercisable, respectively, at a price of $2.71 per share of common stock,
subject to adjustment in the event of dilution of the common stock.
6
SELLING STOCKHOLDERS
The shares of common stock being offered by the selling stockholders are
issuable upon conversion of the convertible notes, upon exercise of the warrants
and, if we elect to pay interest in shares of common stock, as interest on the
convertible notes. For additional information regarding the convertible notes
and warrants, see "Private Placement of Convertible Notes and Warrants" above.
We are registering the shares of common stock in order to permit the selling
stockholders to offer the shares for resale from time to time. Except for the
ownership of the convertible notes and the warrants, the selling stockholders
have not had any material relationship with us within the past three years.
The table below lists the selling stockholders and other information
regarding the beneficial ownership of the common stock by each of the selling
stockholders. The second column lists the number of shares of common stock
beneficially owned by each selling stockholder, based on its ownership of the
convertible notes and the warrants, as of January 28, 2003, assuming conversion
of all convertible notes and exercise of the warrants held by the selling
stockholders on that date, without regard to any limitations on conversions or
exercise.
The third column lists the shares of common stock being offered by this
prospectus by the selling stockholders. In accordance with the terms of
registration rights agreements with the holders of the convertible notes and the
warrants, this prospectus generally covers the resale of at least that number of
shares of common stock equal to 130% of the number of shares of common stock
issuable upon conversion of the convertible notes, as interest shares on the
convertible notes and upon exercise of the related warrants, determined as if
the outstanding convertible notes and warrants were converted or exercised, as
applicable, in full and the interest shares for the entire term of the
convertible notes are issued, in each case, as of the trading day immediately
preceding the date this registration statement was initially filed with the
Commission. Because the conversion price of the convertible notes and the
exercise price of the warrants may be adjusted and the number of interest shares
depends on the market price of the common stock at the time of the interest
payment, the number of shares that will actually be issued may be more or less
than the 7,037,066 shares being offered by this prospectus. The fourth column
assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.
Under the terms of the convertible notes and the warrants, a selling
stockholder may not convert the convertible notes, or exercise the warrants, to
the extent such conversion or exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 4.99% of our outstanding common stock following such
conversion or exercise, excluding for purposes of such determination shares of
common stock issuable upon conversion of the convertible notes which have not
been converted and upon exercise of the warrants which have not been exercised.
The number of shares in the second column does not reflect this limitation. The
selling stockholders may sell all, some or none of their shares in this
offering. See "Plan of Distribution."
None of the selling stockholders beneficially owned any other shares of
the Company's common stock as of December 31, 2002.
MAXIMUM NUMBER OF SHARES TO
NUMBER SHARES BENEFICIALLY BE SOLD PURSUANT TO THIS NUMBER OF SHARES OWNED AFTER
OWNED BEFORE OFFERING PROSPECTUS OFFERING
-------------------------- --------------------------- ----------------------------
NAME
Smithfield Fiduciary LLC(1)... 1,420,223 2,613,767 0
Portside Growth &
Opportunity Fund(2)........... 1,092,479 2,010,591 0
Riverview Group LLC(3)........ 1,310,974 2,412,708 0
Total......................... 3,823,676 7,037,066
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(1) Highbridge Capital Management, LLC ("Highbridge") is the trading manager of
Smithfield Fiduciary LLC ("Smithfield") and consequently has voting control
and investment discretion over the shares of common stock held by
Smithfield. Glenn Dubin and Henry Swieca control Highbridge. Each of
7
Highbridge and Messrs. Dubin and Swieca disclaims beneficial ownership of
the shares held by Smithfield.
(2) Ramius Capital Group, LLC ("Ramius Capital") is the investment adviser of
Portside Growth & Opportunity Fund ("Portside") and consequently has voting
control and investment discretion over securities held by Portside. Ramius
Capital disclaims beneficial ownership of the shares held by Portside. Peter
A. Cohen, Morgan B. Stark and Thomas W. Strauss are the sole managing
members of C4S& Co., LLC, the sole managing member of Ramius Capital. As a
result, Messrs. Cohen, Stark and Strauss may be considered beneficial owners
of any shares deemed to be beneficially owned by Ramius Capital. Each of
Messrs. Cohen, Stark and Strauss disclaims beneficial ownership of the
shares held by Portside.
(3) The Chief Financial Officer of Riverview, who is currently Robert Williams,
has voting and dispositive power over the shares to be sold by Riverview.
PLAN OF DISTRIBUTION
We are registering the shares of common stock issuable on conversion of
the convertible notes, as interest shares on the convertible notes and on
exercise of the warrants to permit the resale of these shares of common stock by
the holders of the convertible notes, and the warrants from time to time after
the date of this prospectus. Other than as set forth in the following paragraph,
we will bear all reasonable fees and expenses incident to our obligation to
register the shares of common stock.
The selling stockholders may sell all or a portion of the common stock
beneficially owned by them and offered under this prospectus from time to time
directly or through one or more underwriters, broker-dealers or agents. If the
common stock is sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent's commissions. The common stock may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of the sale, at varying
prices determined at the time of sale, or at negotiated prices. These sales may
be effected in transactions, which may involve crosses or block transactions:
-- on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
-- in the over-the-counter market;
-- in transactions otherwise than on these exchanges or systems or in
the over-the-counter market;
-- through the writing of options, whether such options are listed on an
options exchange or otherwise; or
-- through the settlement of short sales.
If the selling stockholders effect such transactions by selling shares of
common stock to or through underwriters, broker-dealers or agents, the
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal. These discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved. In connection
with sales of the common stock or otherwise, the selling stockholders may enter
into hedging transactions with broker-dealers, which may in turn engage in short
sales of the common stock in the course of hedging in positions they assume. The
selling stockholders may also sell shares of common stock short and deliver
shares of common stock covered by this prospectus to close out short positions.
The selling stockholders may also loan or pledge shares of common stock to
broker-dealers that in turn may sell such shares.
The selling stockholders may pledge or grant a security interest in some
or all of the convertible notes or shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the shares of common stock from time to time
under this prospectus or any amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending, if necessary, the
list of selling stockholders to include the pledgee,
8
transferee or other successors in interest as selling stockholders under this
prospectus. The selling stockholders also may transfer and donate the shares of
common stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.
The selling stockholders and any broker-dealer participating in the
distribution of the shares of common stock may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to any such broker-dealer may be deemed
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of common stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.
Under the securities laws of some states, the shares of common stock may
be sold in such states only through registered or licensed brokers or dealers.
There can be no assurance that any selling stockholder will sell any or
all of the shares of common stock registered pursuant to the registration
statement, of which this prospectus forms a part.
The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended and the rules and regulations under that statute,
including, without limitation, Regulation M. This may limit the timing of
purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
We will indemnify the selling stockholders against liabilities, including
some liabilities under the Securities Act, in accordance with the registration
rights agreements. We may be indemnified by the selling stockholders against
civil liabilities, including liabilities under the Securities Act, that may
arise from any written information they furnish to us specifically for use in
this prospectus, in accordance with the related registration rights agreements.
Once sold under the registration statement of which this prospectus forms
a part, the shares of common stock will be freely tradable in the hands of
persons other than our affiliates.
Each share of common stock is sold together with certain stock purchase
rights. These rights are described in the Amended and Restated Rights Agreement,
dated as of June 24, 1999, filed as Exhibit 4 to our registration statement
filed on Form 8-A (File No. 000-27168), which we filed with the Commission on
October 29, 1999, as amended by Amendment 1 to the Amended and Restated Rights
Agreement, dated as of November 28, 2000, filed as Exhibit 99.5 to our
registration statement filed on Form 8-A, which we filed with the Commission on
December 5, 2000. See "Incorporation of Documents by Reference" below.
LEGAL MATTERS
The validity of the common stock offered by this prospectus will be
passed on for us by Milbank, Tweed, Hadley & McCloy LLP, New York, New York.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K of Viewpoint Corporation for the
year ended December 31, 2001 have been so
9
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" in this prospectus
reports that we file with them, which means that we can disclose important
information to you by referring you to those reports. Accordingly, we are
incorporating by reference in this prospectus the documents listed below and any
future filings we make with the Commission under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act:
(1) our Annual Report on Form 10-K for the year ended December 31,
2001;
(2) our Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 2002, June 30, 2002 and September 30, 2002;
(3) our Current Report on Form 8-K dated January 2, 2003; and
(4) the description of our common stock set forth on our registration
statement filed on October 26, 1995 with the Commission on Form
8-A pursuant to Section 12 of the Exchange Act, including any
amendments or reports filed for the purpose of updating that
description.
The information incorporated by reference is deemed to be part of this
prospectus, except for any information superseded by information contained
directly in this prospectus. Any information that we file later with the
Commission will automatically update and supersede this information.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
documents with the Commission under the Securities Exchange Act. You may read
and copy any of those reports, proxy statements or other documents at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, NW, Washington, DC 20549. Please call the Commission at
1-800-SEC-0330 for further information on its public reference facilities. These
filings are also available to the public from commercial document retrieval
services and at the Commission's Web site at http://www.sec.gov. You may also
read and copy our annual and quarterly reports from our website at
http://www.viewpoint.com.
Our common stock is quoted on the Nasdaq National Market. Reports, proxy
statements and other information concerning Viewpoint can be inspected at the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006. In addition, we maintain a website at www.viewpoint.com
that contains additional information, including news releases, about our
business and operations. Information contained in this website does not
constitute, and shall not be deemed to constitute, part of this prospectus.
You may also request a copy of any of our filings with the Commission, or
any of the agreements or other documents that constitute exhibits to those
filings, at no cost, by writing or telephoning us at the following address or
phone number:
Corporate Secretary
Viewpoint Corporation
498 Seventh Avenue, Suite 1810
New York, New York 10018
(212) 201-0800
This prospectus constitutes a part of a registration statement on Form
S-3 filed by us with the Commission under the Securities Act. This prospectus
does not contain all the information that is contained in the registration
statement, some of which we are allowed to omit under the rules and regulations
of the Commission. We refer to the registration statement and to the exhibits
filed with the registration statement for further information with respect to
Viewpoint. Copies of the registration statement and the exhibits to the
10
registration statement are on file at the offices of the Commission and may be
obtained upon payment of the prescribed fee or may be examined without charge at
the public reference facilities of the Commission described above. Statements
contained in this prospectus concerning the provisions of documents are
summaries of the material provisions of those documents, and each of those
statements is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission. Since this prospectus may not
contain all of the information that you may find important, you should review
the full text of these documents.
11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and expenses, other
than the underwriting discounts and commissions, all of which are payable by
Viewpoint Corporation (the "Registrant"), in connection with the sale of the
common stock being offered by the selling stockholders.
Commission registration fee................................. $734.81
Legal fees and expenses..................................... 20,000.00
Accounting fees and expenses................................ 6,000.00
Printing expenses........................................... 5,000.00
Miscellaneous............................................... 1,500.00
Total............................................. $33,234.81
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") makes
provision for the indemnification of officers and directors in terms
sufficiently broad to indemnify officers and directors under certain
circumstances from liabilities (including reimbursement for expenses incurred)
arising under the Securities Act. Section 145 of the DGCL empowers a corporation
to indemnify its directors and officers and to purchase insurance with respect
to liability arising out of their capacity or status as directors and officers,
provided that this provision shall not eliminate or limit the liability of a
director: (1) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (2) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) arising
under Section 174 of the DGCL or (4) for any transaction from which the director
derived an improper personal benefit. The DGCL provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's bylaws, any agreement, a vote of stockholders or otherwise.
The Registrant's amended and restated certificate of incorporation
provides for indemnification of the Registrant's directors against liability to
the Registrant and its stockholders to the fullest extent permitted by the DGCL.
The Registrant's Bylaws provide that the Registrant shall indemnify its
directors and officers and may indemnify others to the fullest extent permitted
by law. The Registrant's Bylaws also permit the Registrant to secure insurance
on behalf of any officer, director, employee or other agent for any liability
arising out of his or her actions in such capacity, regardless of whether the
Bylaws would permit indemnification. The Registrant also maintains an insurance
policy insuring its directors and officers against liability for certain acts
and omissions while acting in their official capacities.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
5.1 Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect
to the validity of the securities being offered.
23.1 Consent of Milbank, Tweed, Hadley & McCloy LLP (included in
Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, independent certified
public accountants.
24 Power of Attorney (included on the signature page of this
registration statement).
II-1
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(c) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of this offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act of
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
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 provisions described under Item 15, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in New York, New York on January 29, 2003.
VIEWPOINT CORPORATION
By: /s/ Robert E. Rice
--------------------------------------
Name: Robert E. Rice
Title: President and Chief
Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated. Each person whose name appears below hereby constitutes and
appoints Robert E. Rice, acting alone, such person's true and lawful
attorney-in-fact, with full power of substitution, to sign for such person and
in such person's name and capacity indicated below, in connection with this
Registrant's registration statement on Form S-3, including to sign this
registration statement and any and all amendments to this registration
statement, including Post-Effective Amendments as well as any Registration
Statement under Rule 462(b), and to file the same with the Securities and
Exchange Commission, hereby ratifying and confirming such person's signature as
it may be signed by said attorney-in-fact to any and all amendments.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert E. Rice Chairman, President and Chief January 29, 2003
------------------------------------------------ Executive Officer
Robert E. Rice
/s/ Anthony L. Pane Senior Vice President, Chief January 29, 2003
------------------------------------------------ Accounting Officer and Chief
Anthony L. Pane Financial Officer
/s/ Thomas Bennett Director January 29, 2003
------------------------------------------------
Thomas Bennett
/s/ Bruce R. Chizen Director January 29, 2003
------------------------------------------------
Bruce R. Chizen
/s/ Samuel H. Jones, Jr. Director January 29, 2003
------------------------------------------------
Samuel H. Jones, Jr.
/s/ Lennert J. Leader Director January 29, 2003
------------------------------------------------
Lennert J. Leader
II-3
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
5.1 Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect
to the validity of the securities being offered.
23.1 Consent of Milbank, Tweed, Hadley & McCloy LLP (included in
Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, independent certified
public accountants.
24 Power of Attorney (included on the signature page of this
registration statement).