-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HJdOWI5kkyYJ09xakqulBdpVBpA1G3OHQx+lxuplxF2cFNd0Y8xnr0Nxpp6ytzAQ 56wjKKS3ZUoQYaek9CirGw== 0000897101-99-000101.txt : 19990210 0000897101-99-000101.hdr.sgml : 19990210 ACCESSION NUMBER: 0000897101-99-000101 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19990209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL BIOMETRICS INC CENTRAL INDEX KEY: 0000868373 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 411545069 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-72031 FILM NUMBER: 99526302 BUSINESS ADDRESS: STREET 1: 5600 ROWLAND RD CITY: MINNETONKA STATE: MN ZIP: 55343 BUSINESS PHONE: 6129320888 MAIL ADDRESS: STREET 2: 5600 ROWLAND RD CITY: MINNETONKA STATE: MN ZIP: 55343 S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FEBRUARY 9, 1999 REGISTRATION NO. 333-______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------------- DIGITAL BIOMETRICS, INC. (Exact name of registrant as specified in charter) DELAWARE 3571 41-1545069 (State or other jurisdiction (Primary Standard Industrial (I.R.S. employer of incorporation or Classification Code Number) identification number) organization) 5600 ROWLAND ROAD MINNETONKA, MINNESOTA 55343 (612) 932-0888 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) COPY TO: MR. JOHN J. METIL PHILIP J. TILTON, ESQ. DIGITAL BIOMETRICS, INC. MASLON EDELMAN BORMAN & BRAND, LLP 5600 ROWLAND ROAD 3300 NORWEST CENTER MINNETONKA, MINNESOTA 55343 MINNEAPOLIS, MINNESOTA 55402-4140 (612) 932-0888 (612) 672-8200 APPROXIMATE DATE OF THE COMMENCEMENT OF PROPOSED DISTRIBUTION: From time to time after the effective date of this Registration Statement. 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, 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. [ ] CALCULATION OF REGISTRATION FEE
- --------------------------- ----------------- -------------------- ---------------------- -------------------- TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF TO BE REGISTERED REGISTERED(1) PER SHARE PRICE(2) REGISTRATION FEE - --------------------------- ----------------- -------------------- ---------------------- -------------------- common stock, par value $.01 per share 886,660 $1.50 $1,329,990 $392.00 - --------------------------- ----------------- -------------------- ---------------------- --------------------
(1) Includes 464,441 shares of common stock issuable upon exercise of outstanding warrants. (2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 of the Securities Act based upon a $1.50 per share average of bid and asked prices of the Registrant's common stock on the Nasdaq National Market on February 4, 1999. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. =============================================================================== INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED FEBRUARY 9, 1999 SELLING STOCKHOLDER OFFERING PROSPECTUS DIGITAL BIOMETRICS, INC. 886,660 SHARES OF COMMON STOCK ----------------------------------------- The shares of common stock of Digital Biometrics, Inc. offered by this Prospectus include 422,219 shares sold to certain investors in a private placement on January 8, 1999 and an equal number of shares issuable to such investors upon exercise of warrants issued in the same transaction, and 42,222 shares issuable upon exercise of warrants issued to certain owners of an investment banking firm in connection with the private placement. The afore- mentioned investors and investment banking firm owners are referred to collectively in this Prospectus as the "Selling Stockholders." The Company will not receive any proceeds from the sale of shares by the Selling Stockholders. The Company's common stock (the "Common Stock") is listed on the Nasdaq National Market under the symbol "DBII." On February 8, 1999, the last sale price for the Common Stock as reported on the Nasdaq National Market was $1.469. This investment involves a high degree of risk. You should purchase shares only if you can afford a complete loss. See "Risk Factors" beginning on page 4. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is February 9, 1999. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). You may read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on public reference rooms. Our SEC filings are also available to the public from the SEC's web site at http://www/sec/gov. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this Prospectus, and later information that we file with the SEC will automatically update and replace this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the Selling Stockholder sells all the common stock. This Prospectus is part of a registration statement we filed with the SEC (Registration No. 333-_________). * Annual Report on Form 10-K for the year ended September 30, 1998, as amended by Form 10-K/A filed with the SEC on January 28, 1999. * The description of our Common Stock contained in our registration statement on Form 8-A, as amended. * Future Filings You may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Digital Biometrics, Inc. 5600 Rowland Road Minnetonka, Minnesota 55343 Attention: Chief Financial Officer You should rely only on the information incorporated by reference or provided in this Prospectus or any supplement. We have not authorized anyone else to provide you with different information. The Selling Stockholders will not make any offer of the Common Stock in any state where the offer is not permitted. You should not assume that the information on this Prospectus or any supplement is accurate as of any date other than the date on the front of those documents. 2 TABLE OF CONTENTS NAME OF ITEM OR CAPTION PAGE - ---------------------------------------------------------------------- ------ WHERE YOU CAN FIND MORE INFORMATION................................... 1 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE....................... 2 RISK FACTORS.......................................................... 4 Continuing losses and general business risks............... 4 Working capital and liquidity.............................. 4 Local government credit considerations..................... 4 Law enforcement agency characteristics..................... 5 Reliance on a limited number of customers.................. 5 Need to upgrade products and develop new technologies...... 6 New business ventures...................................... 6 Effect of Year 2000 on computer systems.................... 6 Limited protection of proprietary technology............... 7 Dependence on suppliers.................................... 7 Reliance on key personnel.................................. 7 Competition................................................ 8 Dependence on OEM relationships............................ 8 No cash dividends.......................................... 8 Shares eligible for future sale............................ 8 Volatility of market price of common stock................. 9 Delaware anti-takeover laws and stockholders' rights plan.. 9 FORWARD-LOOKING STATEMENTS............................................ 9 THE COMPANY........................................................... 10 USE OF PROCEEDS....................................................... 10 SELLING STOCKHOLDERS.................................................. 10 PLAN OF DISTRIBUTION.................................................. 12 LEGAL MATTERS......................................................... 13 EXPERTS............................................................... 13 3 RISK FACTORS An investment in the Common Stock is very risky. You may lose the entire amount of your investment. Prior to making an investment decision, you should carefully read this entire Prospectus and consider the following risk factors: CONTINUING LOSSES AND GENERAL BUSINESS RISKS We have not yet recorded a profit for We have incurred a loss in each quarter any quarter, and we may not be since the Company was founded. As of profitable for the foreseeable future September 30, 1998, we had generated a cumulative net loss of $40,211,231. We incurred a net loss of $4,888,432 for the year ended September 30, 1998. Although we expect to break even or earn a profit for the year ending September 30, 1999, it is possible that the Company will continue to lose money for such period and for the foreseeable future. Our future operating results will depend on many factors, including, without limitation, the demand for our products and services, our ability to control costs, our ability to develop and market new products and service, our ability to create and maintain satisfactory distribution and other relationships with appropriate third parties, and our success in attracting and retaining key personnel. WORKING CAPITAL AND LIQUIDITY The Company may have to raise As a result of our continued operating additional working capital to losses, we have relied on outside continue its operations. capital to fund our business. We believe our existing resources will be sufficient to satisfy our foreseeable working capital needs. However, our belief is subject to a number of uncertainties beyond our control. Such uncertainties include, among others, the continued availability of bank and vendor credit, and our ability to satisfy our customer requirements to insure payment of our accounts receivable. The Company has previously experienced difficulties in meeting certain customer requirements, particularly with respect to orders involving the connectivity of new products with legacy systems. If the Company requires additional financing, it may not be available on acceptable terms or at all. LOCAL GOVERNMENT CREDIT CONSIDERATIONS Collection of accounts receivable A substantial majority of our sales and from government agencies may be accounts receivable are attributable to problematic. government agencies. The Company's contracts with these agencies often include technical requirements which may not be fully known at the time of 4 the order. Such contracts may also specify performance criteria which must be satisfied before the customer accepts our products or services. Collection of our accounts receivable may, in some instances, require the investment of additional resources which may be uncompensated by our customers. LAW ENFORCEMENT AGENCY CHARACTERISTICS Revenues from our primary customers Our primary customers, law enforcement may be erratic and are subject to agencies, are subject to both political various contingencies. and budgetary constraints. These factors, coupled with the nature of government procurement processes, result in irregular and unpredictable revenue cycles for the Company. In addition, many of our customers' procurements are dependent upon the availability of government grants and general tax funding. To the extent these funding sources are unavailable to our customers, the Company's revenues will suffer accordingly. Finally, future revenues from law enforcement agencies will depend on our ability to satisfy public contract requirements, certain of which may be uneconomical to meet. RELIANCE ON A LIMITED NUMBER OF CUSTOMERS The Company's sales are A majority of our sales have been concentrated in a attributable to a relatively small relatively small number of customers. Sales to two number of customers customers accounted for 16 percent and 12 percent of total sales for the fiscal year ended September 30, 1998. Sales to three customers accounted for 17 percent, 14 percent and 12 percent of total sales for the year ended September 30, 1997. This concentration of sales among a few customers is expected to continue for the foreseeable future. If one or more of our large-volume customers were to discontinue doing business with us, our results of operations would be materially and adversely affected. In addition, the irregular timing of large orders and their materiality to our total revenues for any given reporting period has caused, and is expected to cause, substantial volatility in the Company's operating results. 5 NEED TO UPGRADE PRODUCTS AND DEVELOP NEW TECHNOLOGIES Our success requires continuous Our ability to compete successfully investment in new technologies. depends, in part, on our ability to develop and market new products and services. The continuous upgrading of the Company's technology requires the investment of resources that may not be available to the Company. Even if a reasonable amount of resources are available for investment, we may not be successful in keeping pace with technological developments in our industry. NEW BUSINESS VENTURES The Company's new During 1998, we joined with Grand business ventures may Casinos, Inc. to form a joint venture not be profitable. called TRAK 21 Development, LLC ("TRAK 21"). The purpose of TRAK 21 is to develop and market a blackjack wagering data capture and player tracking system. Also during 1998, we started a systems integration business currently operated through a wholly owned subsidiary called "Integral Partners, Inc." The ultimate success of each of these ventures is subject to the same uncertainties faced by any new business, including the viability of the products and services offered within their target markets. It is possible that either or both of TRAK 21 and Integral Partners, Inc. will not be profitable for the Company. EFFECT OF YEAR 2000 ON COMPUTER SYSTEMS We are subject to unforeseen We have dedicated a portion of our difficulties and costs associated resources to address so-called "Year with the Year 2000 phenomenon. 2000" issues in our products, internal management systems and among our vendors. The actual costs to be incurred by the Company in connection with these efforts may differ significantly from our estimates. Unforeseen implementation problems may arise, and problems experienced by our suppliers might adversely affect our own systems. Such problems may cause the Company to expend substantially more than the current budget for Year 2000 issues. 6 LIMITED PROTECTION OF PROPRIETARY TECHNOLOGY Our efforts to protect the Company's The Company is dependent upon proprietary technology may not be proprietary technology. We rely upon a sufficient. We may also be compelled combination of patents, copyrights, to defend against infringement claims trademarks and trade secrets to brought by others. establish and protect the proprietary technology used in our products and services. The steps taken by the Company to protect its technology may not be sufficient to prevent misappropriation by others. Moreover, the laws of some foreign countries do not protect our proprietary rights on a level commensurate with that of the United States. The Company's competitors may seek to challenge, invalidate or circumvent our patents and trade secrets. Alternatively, our competitors may independently develop technology that is equivalent to, or better than, our own technology. It is also possible that the Company's competitors may obtain patent protection covering technology currently incorporated in our products. The Company has incurred substantial costs in attempts to enforce its patents and could incur substantial costs in defending against patent infringement claims brought by others. If we lose or decline to defend ourselves against any such claims, we may be required to license technology from others (which may not be made available to us on reasonable or any terms) in order to continue to offer our products and services. DEPENDENCE ON SUPPLIERS We are dependent upon a single Certain key components used in our supplier for many components of our products are sourced from a single products. supplier. The loss of any of these suppliers or a significant increase in the prices charged by these suppliers would likely have a negative effect on our profitability. Moreover, the loss of these suppliers may result in our incurring substantial costs to identify and obtain replacement suppliers. RELIANCE ON KEY PERSONNEL We rely heavily on the services of Digital Biometrics, Inc. is highly our employees dependent on the continued services of its President and Chief Executive Officer, other executive officers and many of its technical, sales, administrative and operations personnel. The Company does not have employment agreements with any of these individuals. The loss of one or more of these employees may have a negative effect on our business and future prospects. 7 COMPETITION The markets in which we operate are There is significant and increasing highly competitive. competition in the market for biometric identification devices, and the market for live-scan systems in particular. Some of the companies presently providing AFIS systems may develop a live-scan product or source a live-scan product for distribution by them from one of our competitors. Our competitors may have greater financial, technical, marketing and other resources than we. We may not be able to compete successfully against these other companies. Our operating results and financial condition will likely deteriorate in response to competitors' development of new technologies, new products or price reductions imposed to gain or retain market share. DEPENDENCE ON OEM RELATIONSHIPS We depend on existing and potential We have established marketing and other strategic relationships for much of strategic relationships with numerous our sales volume. other businesses. A significant amount of our revenues to date have been achieved through these relationships. We continue to pursue other strategic partnerships as a means of generating new sales opportunities. We may not be successful in this regard, and it is possible that the Company will lose one or more of its existing strategic relationships. Either of these occurrences may have a negative effect on our future operating results and financial position. NO CASH DIVIDENDS We do not intend to pay dividends on We have not yet paid any dividends on the Common Stock for the foreseeable our common stock, and we do not intend future. to do so in the foreseeable future. To date, the Company has not generated a profit. Future earnings, if any, will be used to fund the Company's operations and growth. SHARES ELIGIBLE FOR FUTURE SALE Large quantities of additional shares Approximately 3,816,458 shares of Common of Common Stock may be issued and Stock are issuable upon conversion or offered in the market at the same exercise of currently outstanding time, causing the market price debentures, options and warrants. of the Common Stock to decline. Substantially all of these shares will be freely tradable upon issuance. If large quantities of these shares are offered in the market at the same time, the market price of our stock may be depressed. 8 VOLATILITY OF MARKET PRICE OF COMMON STOCK The market price of our Common During the fiscal year ended September Stock is highly volatile and subject 30, 1998, the closing market price of to many factors beyond our control. our common stock has varied substantially, from $2.66 to $0.97 per share. Fluctuations in the market price of the Common stock may result from many factors, such as widely varying operating results, general market conditions, significant events in the Company's industry and the activities of various governmental agencies. These factors are generally beyond the control of the Company. DELAWARE ANTI-TAKEOVER LAWS AND STOCKHOLDERS' RIGHTS PLAN Delaware law and our stockholder Section 203 of the Delaware General rights plan may each have the effect Corporation Law has the effect of of delaying, impeding or preventing restricting combinations between the transactions which could be Company and certain of its stockholders beneficial to stockholders. without the approval of the Company's Board of Directors. In addition, the Company has in place a stockholder rights plan, adopted in 1996, under which our stockholders are entitled to purchase additional shares of Common Stock at a discount from the market price under certain circumstances. These circumstances include the purchase of 15 percent or more of the outstanding shares of Common Stock by a person or group, or the announcement of a tender or exchange offer to acquire 15 percent or more of the outstanding Common Stock. The stockholder rights plan may have the effect of impeding or preventing certain types of transactions involving a change in control of the Company which could be beneficial to the stockholders. FORWARD-LOOKING STATEMENTS This Prospectus includes and incorporates by reference forward-looking statements within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," and similar terms and phrases, including references to assumptions. These statements are contained in sections entitled "Risk Factors," "The Company" and other sections of this Prospectus and in the documents incorporated by reference in this Prospectus. These forward-looking statements involve risks and uncertainties that may cause our actual future activities and results of operations to be materially different from those suggested or described in this 9 Prospectus. These risks include competition; industry conditions; operating risks; our structure as a holding company; our dependence on key personnel; the geographic concentration of our operations; and governmental regulations. Our risks are more specifically described in "Risk Factors" and in our Annual Report on Form 10-K (as amended by Form 10-K/A and Quarterly Reports on Form 10-Q, which are incorporated by reference in this Prospectus. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. THE COMPANY We are located in Minnetonka, Minnesota. We develop, manufacture and market computer-based equipment (and provide related services) used for the identification of individuals. We also participate in a joint venture called TRAK21 Development, LLC through which we intend to develop and market an automated wagering tracking system based on our existing technology. We are a leading provider of products employing "biometric" technology, the science of identifying individuals by measuring distinguishing biological characteristics. Our primary products are computer-based systems for "live-scan" fingerprint capture. Historically, these systems have been purchased primarily by law enforcement agencies. We also offer high-resolution, single-fingerprint capture products for commercial and governmental identification applications. Our strategy is to continue to market live-scan systems to law enforcement agencies, and to expand our product and service offerings, as well as the markets we serve. We believe there is increasing interest from other governmental and commercial markets to employ biometric identification technologies. USE OF PROCEEDS The Company will not receive any proceeds from the sale of the Common Stock by the Selling Stockholders. SELLING STOCKHOLDERS The following table sets forth the number of shares of Common Stock owned by each Selling Stockholder as of the date of this Prospectus, and on a basis assuming the shares included in this offering have been sold. The Company will not receive any proceeds from the sale of Common Stock by the Selling Stockholders. Except where otherwise noted, each person in the following table has, to our knowledge, sole voting and investment power with respect to the shares beneficially owned.
Shares Shares Beneficially Owned Shares to Beneficially Owned Prior to the Offering be Sold After the Offering(1) --------------------- in the -------------------- Name of Selling Stockholder Number Percentage Offering Number Percentage - --------------------------- ------ ---------- -------- ------ ---------- KA Investments LDC 739,583(2) 4.999 361,904 -- -- Pyramid Partners, L.P. 270,634(4) 1.82 120,634 -- -- Industricorp & Co., Inc. FBO Twin City 120,634(3) * 120,634 -- -- Carpenters Pension Fund Piper Jaffray as Custodian FBO Richard C. 94,722(5) * 42,222 -- -- Perkins IRA Robert G. Allison 67,222(5) * 42,222 -- --
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Shares Shares Beneficially Owned Shares to Beneficially Owned Prior to the Offering be Sold After the Offering(1) --------------------- in the ------------------ Name of Selling Stockholder Number Percentage Offering Number Percentage - --------------------------- ------ ---------- -------- ------ ---------- David M. Westrum, TTEE FBO David M. 48,690(6) * 36,190 -- -- Westrum Revocable Living Trust U/A DTD 6-1-97 Piper Jaffray as Custodian FBO David H. 30,158(3) * 30,158 -- -- Potter IRA Piper Jaffray as Custodian FBO James G. 30,158(3) * 30,158 -- -- Peters IRA Piper Jaffray as Custodian FBO Patrice M. 30,158(3) * 30,158 -- -- Perkins IRA Piper Jaffray as Custodian FBO Daniel S. 30,158(3) * 30,158 -- -- Perkins IRA Paul R. Kuehn 62,708(7) * 15,833 -- -- David B. Johnson 62,708(7) * 15,833 -- -- Eldon C. Miller 20,903(8) * 5,278 -- -- Stanley D. Rohm 20,903(8) * 5,278 -- -- --------- ------- 1,629,339 886,660
- ------------------------- (1) Assumes that all shares of Common Stock beneficially owned by the Selling Stockholders are sold. (2) Includes (i) 180,952 shares of Common Stock issued in a private placement on January 8, 1999, and an equal number of shares of Common Stock issuable upon exercise of warrants issued in the same transaction, (ii) shares of Common Stock issuable upon conversion of $750,000 in aggregate principal amount of 8% Convertible Subordinated Debentures of the Company that are held by the Selling Stockholder (the "Debentures") and the payment of interest thereon in the form of shares of Common Stock, assuming conversion at the price in effect on February 5, 1999, and (iii) shares of Common Stock issuable upon exercise of warrants that are held by the Selling Stockholder and issued in previous private placements. Because the number of shares of Common Stock issuable upon conversion of the Debentures and as payment of interest thereon is dependent in part upon the market price of the Common Stock prior to a conversion, the actual number of shares of Common Stock that will be issued in respect of such conversions or interest payments, and consequently the number of shares of Common Stock that will be beneficially owned by the Selling Shareholder, will fluctuate daily and cannot be determined at this time. The Selling Shareholder has, however, contractually agreed to restrict its ability to convert the Debentures (and receive shares of Common Stock in payment of interest thereon) and exercise the warrants held by it to the extent that the number of shares of Common Stock held by it and its affiliates after such conversion or exercise exceeds 4.999% of the then issued and outstanding shares of Common Stock following such conversion or exercise. (3) Includes (i) shares of Common Stock issued in a private placement on January 8, 1999 and (ii) an equal number of shares of Common Stock issuable upon exercise of warrants issued in the same transaction. (4) Includes 60,317 shares of Common Stock issued in a private placement on January 8, 1999 and an equal number of shares of Common Stock issuable upon exercise of warrants issued in the same transaction. (5) Includes 21,111 shares of Common Stock issued in a private placement on January 8, 1999 and an equal number of shares of Common Stock issuable upon exercise of warrants issued in the same transaction. (6) Includes 18,095 shares of Common Stock issued in a private placement on January 8, 1999 and an equal number of shares of Common Stock issuable upon exercise warrants issued in the same transaction. (7) Includes 15,833 shares of Common Stock issuable upon exercise of warrants issued to an investment banking firm as compensation for services rendered in connection with the January 8, 1999 private placement. The remaining 46,875 shares listed are issuable upon exercise of warrants issued as compensation in connection with a prior private placement transaction. (8) Includes 5,278 shares of Common Stock issuable upon exercise of warrants issued to an investment banking firm as compensation for services rendered in connection with the January 8, 1999 private placement. The remaining 15,625 shares listed are issuable upon exercise of warrants issued as compensation in connection with a prior private placement transaction. * Less than one percent. From time to time, the Company may issue Prospectus Supplements to reflect certain additional information pertaining to the Selling Stockholders. Such information may include additional shares of Common Stock beneficially owned by them, the public offering price of shares to be sold, the names of any agent, dealer or underwriter employed by Selling Stockholders, or any applicable commission or discount relative to a particular offer. 11 PLAN OF DISTRIBUTION The Selling Stockholders and any of their pledgees, assignees and 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 purchasers; 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; o broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 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 may also engage in short sales against the box, puts and calls and other transactions in securities of the Company or derivatives of Company securities and may sell or deliver shares in connection with these trades. The Selling Stockholders may pledge their shares to their brokers under the margin provisions of customer agreements. If a Selling Stockholder defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares. Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. 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. The Company is required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the Selling Stockholders. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. 12 LEGAL MATTERS Certain legal matters in connection with the Common Stock offered hereby will be passed upon for the Company by Maslon Edelman Borman & Brand, LLP, Minneapolis, Minnesota. EXPERTS The financial statements and schedule of Digital Biometrics, Inc. as of September 30, 1998 and for each of the years in the three-year period ended September 30, 1998 have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. 13 ----------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. ----------------------------------- TABLE OF CONTENTS Additional information 1 Incorporation of certain documents by reference 2 Risk factors 4 Use of proceeds 9 Selling Stockholders 9 Plan of distribution 10 Legal matters 11 Experts 11 DIGITAL BIOMETRICS, INC. 886,660 SHARES OF COMMON STOCK --------------------- PROSPECTUS --------------------- FEBRUARY 9, 1999 14 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the estimated expenses, all of which are being paid by the Company, in connection with this offering Registration Fee......................... $ 392 --------- Accounting Fees.......................... 4,000 --------- Nasdaq Listing Fee....................... 17,500 --------- Legal Fees and Expenses.................. 10,000 --------- Miscellaneous............................ 2,000 ========= Total.................................... $ 33,892 ========= ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the General Corporation Law of Delaware allows a corporation to indemnify any person who was or is, or is threatened to be made a party to any threatened, pending or completed suit or proceeding. This applies whether the matter is civil, criminal, administrative or investigative because he or she is or was a director, officer, employee or agent of the corporation. A corporation may indemnify against expenses (including attorney's fees) and, except for an action by or in the name of the corporation, against judgments, fines and amounts paid in settlement as part of such suit or proceeding. This applies only if the person indemnified acted in good faith and in a manner he or she reasonably believed to be in the best interest of the corporation. In addition, with respect to any criminal action or proceeding, the person had no reasonable cause to believe his or her conduct was unlawful. In the case of an action by or in the name of the corporation, no indemnification of expenses may be made for any claim, as to which the person has been found to be liable to the corporation. The exception is if the court in which such action was brought determines that the person is reasonably entitled to indemnity for expenses. Section 145 of the General Corporation Law of Delaware further provides that if a director, officer, employee or agent of the corporation has been successful in the defense of any suit, claim or proceeding described above, he or she will be indemnified for expenses (including attorneys' fees) actually and reasonably incurred by him or her. Insofar as indemnification for liabilities arising under the Act is permitted as to directors, officers and controlling persons of the Company, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for II-1 indemnification against such liabilities (other than the payment by the Company in the successful defense of any action, suit or proceeding) is asserted, the Company 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. The Company will be governed by the final adjudication of such issue. ITEM 16. EXHIBITS. NUMBER DESCRIPTION - ------ ----------- 5 Opinion of Maslon Edelman Borman & Brand, LLP 23(1) Consent of KPMG Peat Marwick LLP 23(2) Consent of Maslon Edelman Borman & Brand, LLP (included in Exhibit 5) 24 Power of Attorney (included on Page II-3) - ---------------- ITEM 17. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-2 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Minnetonka, State of Minnesota, on February 5, 1999. DIGITAL BIOMETRICS, INC. Registrant By: /s/ James C. Granger ------------------------------------------ Name: James C. Granger Title: President and Chief Executive Officer By: /s/ John J. Metil ------------------------------------------ Name: John J. Metil Title: Chief Operating Officer and Chief Financial Officer POWER OF ATTORNEY KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints James C. Granger and John J. Metil, each or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to file the same with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below on the 5th day of February, 1999 by the following persons in the capacities indicated: SIGNATURE TITLE /s/ James C. Granger Chief Executive Officer and Director - ------------------------------- James C. Granger /s/ C. McKenzie Lewis III Chairman of the Board and Director - ------------------------------- C. McKenzie Lewis III II-3 /s/ Stephen M. Slavin Director - ------------------------------- Stephen M. Slavin /s/ George Latimer Director - ------------------------------- George Latimer /s/ John E. Haugo Director - ------------------------------- John E. Haugo II-4 EXHIBIT INDEX EXHIBIT DESCRIPTION OF DOCUMENT PAGE NO. 5 Opinion of Maslon Edelman Borman & Brand, LLP. 23(1) Consent of KPMG Peat Marwick LLP. 23(2) Consent of Maslon Edelman Borman & Brand, LLP (included in Exhibit 5). 24 Power of Attorney (included on Page II-3). II-5 EX-5 2 OPINION RE: LEGALITY EXHIBIT 5 February 8, 1999 Digital Biometrics, Inc. 5600 Rowland Road Minnetonka, MN 55343 RE: REGISTRATION STATEMENT ON FORM S-3 Gentlemen: We have acted as counsel to Digital Biometrics, Inc., a Delaware corporation (the "Company") in connection with the preparation of a registration statement on Form S-3 (the "Registration Statement") to be filed by the Company with the Securities and Exchange Commission on February 8, 1999 relating to the registration under the Securities Act of 1933, as amended (the "1933 Act", of 886,660 shares of the Company's common stock, $.01 par value (the "Shares"). This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the 1933 Act. In connection with the rendering of this opinion, we have examined and are familiar with originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement; (ii) the Certificate of Incorporation and the Bylaws of the Company, as amended, each as currently in effect; (iii) certain resolutions adopted by the Board of Directors of the Company relating to the issuance of the Shares, the preparation and filing of the Registration Statement and certain related matters; (iv) certain agreements, certificates of public officials, certificates of other officers or representatives of the Company or others; and (v) such other documents, certificates and records as we deemed necessary or appropriate as a basis for the opinions expressed herein. In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to me as certified, conformed or photostatic copies and the authenticity of the originals of such copies. As to any facts material to the opinions expressed herein which we have not independently established or verified, we have relied upon statements and representations of officers and other representatives of the Company and others. We are attorneys licensed to practice in the State of Minnesota and the opinions expressed herein are limited to the laws of the State of Minnesota and the Delaware General Corporation Law. Based upon and subject to the limitations, qualifications, exceptions and assumptions set forth herein, it is our opinion that: 1. The Company is a validly existing corporation in good standing under the laws of the State of Delaware. II-6 2. The Shares have been duly authorized and are validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to the reference to our name under the caption "Legal Matters" in the prospectus filed as part of the Registration Statement. This opinion is furnished to you in connection with the filing of the Registration Statement and, except as provided in the immediately preceding paragraph, is not to be used, circulated, quoted for any other purpose or otherwise referred to or relied upon by any other person without the express written permission of this firm. Very truly yours, /s/ MASLON EDELMAN BORMAN & BRAND, LLP II-7 EX-23.1 3 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S CONSENT EXHIBIT 23(1) Independent Certified Public Accountant's Consent The Board of Directors and Stockholders Digital Biometrics, Inc. We consent to the use of our report incorporated herein by reference and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG Peat Marwick LLP Minneapolis, Minnesota February 8, 1999 II-8 -----END PRIVACY-ENHANCED MESSAGE-----