On 16 March 2000 CHY filed a "PRE14A" form with the SEC
which you can read here:
sec.gov
The form basically invites shareholders to the annual meeting
on 24 May 2000 but it also outlines various proposals (to be
put to the shareholders). Among these is a proposal to allow
certain debentures (company debts) to be converted to stock.
Generally, such shareholder approval would not be required;
but in this case it is because the holder (WPG Funds) owns
more than 1% of the company stock. This is not a big deal or
anything, and I believe it will be approved, but the filing
is full of interesting information... some of which I've
extracted below.
Tidbits snarfed from the above filing:
On February 7, 1997 the Company effected a one-for-three
reverse stock split of its Common Stock. The table above
reflects the one-for-three reverse stock split.
On March 1, 2000, 32,115,687 shares of Common Stock were
outstanding.
PROPOSAL TO RATIFY THE CONVERSION FEATURE OF SERIES B 8%
SUBORDINATED CONVERTIBLE DEBENTURES
PURCHASED BY THE WPG FUNDS
If this proposal is approved by the shareholders of the
Company, the Debentures purchased by the WPG Funds would be
eligible to convert, in whole or in part, at the sole
option of the WPG Funds, into an aggregate of 1,248,273
shares of Common Stock, representing approximately 3.89
percent (3.89%) of the Common Stock currently outstanding.
The approval of this proposal by the shareholders will not
necessarily result in the conversion of the Debentures
purchased by the WPG Funds into Common Stock. Approval of
this proposal will mean the Debentures purchased by the WPG
Funds are eligible to be converted into Common Stock if the
WPG Funds elect to convert them.
The Debentures totaling $6,452,000 are due December 31,
2003. Interest is payable quarterly at an annual rate of 8%
commencing October 1, 1999. The WPG Funds purchased an
aggregate of $1,960,000 of the Debentures. Until July
15, 2001, at the Company's sole option, all interest
payable, in whole or in part, may be satisfied by
increasing the amount of principal owed to include the
interest that is payable. As of December 31, 1999
approximately $68,000 of interest was paid to the WPG Funds
in the form of additional debentures issued by the Company.
The Debentures are convertible into whole shares of Common
Stock of the Company, at the option of the holder at any
time, at a rate of $1.625, the closing price of the Common
Stock reported by the NYSE, for the trading day
immediately preceding the initial issue date of the
Debentures. This conversion price shall be adjusted under
certain circumstances, including but not limited to, stock
splits and dividends. The Debentures will have no voting
rights unless converted into Common Stock.
As of March 1, 2000, an additional 4,570,739 shares of
Common Stock were reserved for issuance upon options
granted or to be granted pursuant to the Chyron 1999
Incentive Compensation Plan and issued and outstanding
warrants.
PRINCIPAL SHAREHOLDERS
Security Ownership of Certain Beneficial Owners
The following table sets forth, as of March 1, 2000, certain
information about all persons who, to the Company's
knowledge, were beneficial owners of 5% or more of Common
Stock of the Company(1).
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(2) Class(2)(3)
Philip Greer (4) 9,927,595 30.31%
Weiss, Peck & Greer, L.L.C.
One New York Plaza
New York, New York 10004
WPG PE Fund Advisor, L.P.(5) 5,870,868 18.07%
One New York Plaza
New York, New York 10004
London Merchant Securities plc(6) 4,025,620 12.31%
Carlton House
33 Robert Adam Street
London, W1M 5AH
England
WPG Venture Partners III, L.P.(7) 2,641,313 8.18%
One New York Plaza
New York, New York 10004
Christopher R. Kelly(8) 2,080,326 6.19%
800 Fifth Avenue, Suite 1400
Seattle, WA 98104
Security Ownership of Management
The following table sets forth, as of March 1, 2000, certain
information with respect to the beneficial ownership of each
class of the Company's equity securities by each director and
the named executive officer of the Company and all directors
and executive officers of the Company as a group(1).
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership (2) Total (2)(3)
Wesley W. Lang, Jr.(9) 9,947,594 30.35%
Michael I. Wellesley-Wesley(10) 2,284,813 7.11%
Christopher R. Kelly(8) 2,080,326 6.19%
Charles M. Diker(11) 596,718 1.85%
Alan J. Hirschfield(12) 472,752 1.47%
Roger Henderson(13) 165,324 *
Graham Pitman(14) 81,991 *
Eugene M. Weber(15) 40,382 *
James M. Paul(16) 39,999 *
Dawn R. Johnston(17) 23,333 *
Donald P. Greenberg(18) 16,666 *
Joseph A. Flaherty(19) 6,000 *
All directors and executive
officers as a group 15,755,898 45.47%
(12 persons)
INTERESTED PARTY TRANSACTIONS
Mr. Wellesley-Wesley has an arrangement with the Company,
pursuant to which he provides services in connection with
potential strategic alliances, mergers and business
opportunities for the Company, primarily in Europe. During
1999 he received approximately $58,000 as compensation and
benefits for such services.
=============================================================
As you can see... 56.56% of the CHY stock is held by WPG and
closely related parties. Altogether, virtually all of the
company stock is held by WPG and a few individuals. Wow!
[You'll need to read through the notes accompanying these
tables to fully sort out who owns what.]
Its also worth noting that the annual 10-K was filed on
9 March 2000 and you can read it here:
sec.gov
This annual report is worthwhile reading for all shareholders.
Here's just one tidbit: a description of their new product...
Clarinet: Clarinet is a broadcast-compliant streaming media
coder used to encode video and audio for use on the
Internet. Clarinet provides a simple solution for
applications such as webcasting a broadcast station's
output or an on-line corporate briefing for shareholders.
Available in a number of configurations, Clarinet has dual
power supplies with internal cooling and an integral liquid
crystal display ("LCD") screen for set-up, monitoring and
status information, all in a 2U rack-mounted frame. For
optimum audio quality, the Pro-Bel digital audio signal
processing module incorporates a moveable sharp low-pass
filter that reduces the effects of aliasing. It also
features automatic compression and limits the dynamic range
of the audio to eliminate the need for external signal
equalization. Clarinet's LCD screen also displays useful
navigational information including Internet Service
Provider ("ISP") target address, streaming rate and basic
digital signal processing parameters. Along with
broadcast-compliant inputs, Clarinet accepts professional
phono connections and can be used with a VGA and keyboard
for live event confidence monitoring. A simple HTML set-up
wizard is supplied for effortless system configuration.
Remote control facilities also enable security and
monitoring applications.
Its interesting to see that the top line remained fairly
constant from the good years (1995 & 1996) into the first
bad years (1997 & 1998)... but operating expenses increased
during those years so the bottom line turned from profits
to losses. In 1999, the top line got worse while operating
expenses stayed flat (relative to 1998) so the bottom line
got really bad... sigh. Lets hope that the various changes
at CHY this past 9 months will return the top line in 2000
to pre-1999 levels and cut the operating expenses in 2000
to pre-1997 levels, thus returning the company to profitability.
Here's a list of all the SEC filings by CHY.
sec.gov
Isn't the SEC just wonderful?
Rob |
