S-1: General form of registration statement for all companies including face-amount certificate companies
Published on March 21, 2008
As
filed with the Securities and Exchange Commission on March 21, 2008
Registration
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
EMCORE
Corporation
New
Jersey
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3674
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22-2746503
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(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
Number)
|
EMCORE
Corporation
10420
Research Road, SE
Albuquerque,
New Mexico 87123
(505-332-5000)
Agent For
Service
KEITH
J. KOSCO, ESQ.
EMCORE
Corporation
14020
Research Road, SE
Albuquerque,
New Mexico 87123
(505-332-5000)
With
Copies To:
TOBIAS
L. KNAPP, ESQ.
Jenner
& Block LLP
919
Third Avenue
37th
Floor
New
York, New York 10022
(212-891-1600)
Approximate date of commencement of
proposed sale to the public: From time to time after this
registration statement becomes effective.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. x
If this
form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, 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 this
form is a post-effective amendment filed pursuant to Rule 462(d) 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. ¨
Large
accelerated filer o
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Accelerated
filer x
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Non-accelerated
filer o
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Smaller
reporting company o
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CALCULATION
OF REGISTRATION FEE
Title
of Each Class of
Securities
to be
Registered
|
Amount
to be
Registered
|
Proposed
Maximum
Offering
Price
Per
Share
|
Proposed
Maximum
Aggregate
Offering
Price(1)
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Amount
of
Registration
Fee
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Common
Stock, no par value
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9,400,003
shares(1)(2)
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$6.32(3)
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$59,408,018.96
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$2,334.74
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(1)
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Includes
1,400,003 shares issuable upon exercise of
warrants
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(2)
|
In
accordance with Rule 416(a) under the Securities Act, the Registrant is
also registering hereunder an indeterminate number of shares that may be
issued and resold resulting from stock splits, stock dividends or similar
transactions
|
(3)
|
Estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(c) under the Securities Act of 1933 and based on the average
of the high and low sale prices reported on The NASDAQ Global Market on
March 20, 2008
|
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 Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. Neither we
nor the selling stockholders named in this prospectus may sell the securities
described in this document until the registration statement filed with the
Securities and Exchange Commission is declared effective. This prospectus is not
an offer to sell these securities and neither we nor the selling stockholders
are soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
PRELIMINARY
PROSPECTUS
SUBJECT
TO COMPLETION, DATED MARCH 21, 2008
9,400,003
Shares
Common
Stock
This
prospectus relates to the registration for resale of up to 9,400,003 shares of
our common stock.
The
9,400,003 shares of common stock relate to (i) 8,000,000 shares of common stock;
and (ii) 1,400,003 shares of common stock issuable upon exercise of
warrants. We issued the common stock and warrants to the selling
stockholders named in this prospectus in a private placement that closed on
February 20, 2008.
This
prospectus will be used by the selling stockholders to resell their common
stock. We will not receive any proceeds from this offering, though we may
receive proceeds from any cash exercise of warrants by the selling stockholders.
The registration of these securities does not necessarily mean that the selling
stockholders will offer or sell all or any of these securities. We will incur
the expenses in connection with the registration of these shares.
The
selling stockholders from time to time may offer and resell the shares held by
them directly or through agents or broker-dealers on terms to be determined at
the time of sale. To the extent required, the names of any agent or
broker-dealer and the applicable commissions or discounts and any other required
information with respect to any particular offer will be set forth in a
prospectus supplement that will accompany this prospectus. A prospectus
supplement may also add, update or change information contained in this
prospectus.
Our
common stock is traded on The NASDAQ Global Market under the symbol
“EMKR.” The last reported sale price of our common stock on The
NASDAQ Global Market on March 20, 2008 was $6.17 per share.
Investing
in our common stock involves risks.
See
“Risk Factors” beginning on page 5.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The
date of this prospectus
is ,
2008
You
should rely only on the information contained or incorporated by reference in
this prospectus. We have not authorized anyone to provide you with
additional information or information different from that contained in this
prospectus. Each selling stockholder is offering to sell, and seeking offers to
buy, shares of our common stock only in jurisdictions where those offers and
sales are permitted. The information contained or incorporated by reference 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 shares of common
stock offered by this prospectus.
In this
prospectus, the “Company,” “EMCORE,” “we,” “us,” and “our” refer to EMCORE
Corporation and its subsidiaries. Our fiscal year ends on September
30 of each calendar year. For example, fiscal year 2007 refers to the
year ended September 30, 2007. EMCORE is a registered trademark of
EMCORE Corporation. This prospectus contains product names, trade names and
trademarks of EMCORE and other organizations.
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ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we have filed with the
Securities and Exchange Commission, or SEC, using a “shelf” registration
process. This means the securities described in this prospectus may be offered
and sold using this prospectus from time to time as described in the “Plan of
Distribution.” You should carefully read this prospectus and the information
described under the heading “Where You Can Find More Information.” Under no
circumstances should the delivery to you of this prospectus or any offering or
sales made pursuant to this prospectus create any implication that the
information contained in this prospectus is correct as of any time after the
date of this prospectus.
PROSPECTUS SUMMARY
This
summary highlights information about EMCORE Corporation and the offering
contained elsewhere in this prospectus and is qualified in its entirety by the
more detailed information and financial statements included elsewhere in this
prospectus or otherwise incorporated by reference. You should carefully read the
entire prospectus and other information incorporated by reference before making
an investment decision, especially the information presented under the heading
“Risk Factors.” In this prospectus, except as otherwise indicated or as the
context may otherwise require, all references to “EMCORE”, “we”, “us” and “our”
refer to EMCORE Corporation and its subsidiaries.
Business
Overview
We are a
provider of compound semiconductor-based components and subsystems for the
broadband, fiber optic, satellite and terrestrial solar power
markets. We were established in 1984 as a New Jersey corporation. We
have two reporting segments: Fiber Optics and Photovoltaics. Our
Fiber Optics segment offers optical components, subsystems and systems that
enable the transmission of video, voice and data over high-capacity fiber optic
cables for high-speed data and telecommunications, cable television (“CATV”) and
fiber-to-the-premises (“FTTP”) networks. Our Photovoltaics segment
provides solar products for satellite and terrestrial applications. For
satellite applications, we offer high-efficiency compound semiconductor-based
gallium arsenide (“GaAs”) solar cells, covered interconnect cells (“CICs”) and
fully integrated solar panels. For terrestrial applications, we offer
Concentrating Photovoltaic Systems (“CPV”) for utility scale solar applications
as well as our high-efficiency GaAs solar cells and CPV components for use in
solar power concentrator systems.
Our
headquarters and principal executive offices are located at 10420 Research Road,
SE, Albuquerque, New Mexico, 87123, and our telephone number is (505)
332-5000. For specific information about our company, our products or the
markets we serve, please visit our website at http://www.emcore.com. The
information contained in or connected to our website is not part of this
prospectus.
Strategy
With
several strategic acquisitions and divestures in the past few years, EMCORE has
developed a strong business focus and comprehensive product portfolio in two
main sectors: Fiber Optics and Photovoltaics. Our principal objective
is to maximize shareholder value by leveraging our expertise in advanced
compound semiconductor technologies to be a leading provider of
high-performance, cost-effective product solutions in each of the markets that
we serve. Key elements of our strategy include:
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·
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Enhance Our Technology and
Expand Our Product Leadership While Lowering Production
Costs.
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Through
substantial investment in research and development and product engineering, we
seek to expand our technological leadership position in compound
semiconductor-based fiber optics and photovoltaics solutions. We work
with our customers to enhance the performance of our processes, materials
science and design expertise to develop new low-cost components, modules,
subsystems and systems. In each product line, we offer our customers advanced
cost-competitive solutions, which allows them to be leaders of technology and
product solutions.
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·
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Continue to Target Large Growth
Market Opportunities.
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We target
market opportunities that we believe have large potential growth and where the
favorable performance characteristics of our products and high volume production
efficiencies may give us a competitive advantage over our competitors. We
believe that as production costs continue to be reduced, existing and new
customers will be compelled to increase their use of our products because of
attractive performance characteristics and superior value.
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·
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Penetrate the Terrestrial Solar
Power Market.
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We
are adapting our high-efficiency solar cell technology, developed for
satellite space power, for terrestrial applications. We believe that solar
concentrator systems assembled using our compound semiconductor-based
solar cells will be competitive with silicon-based solar power generation
systems because our products are more efficient than silicon and, when
combined with the advantages of concentration, they will result in a lower
cost of power generated.
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·
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Expand Our Customer
Relationships and the Breadth of Our Customer
Base.
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We are
devoted to working directly with our customers from initial product design,
product qualification and manufacturing to product delivery. Our customer base
includes many of the largest telecommunication and data communication equipment
manufacturers, computer manufacturing companies, and aerospace companies in the
world. We intend to further strengthen our existing customer relationships
and expand our customer base in each of our reporting segments. We work closely
with many of our customers to anticipate their current and future needs through
a collaborative process to develop next-generation technologies to help them
achieve their product development objectives and seek to develop long-term
relationships with leading companies in each of the markets that we
serve.
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·
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Pursue Strategic Acquisitions,
Investments, and
Partnerships.
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We are
committed to the ongoing evaluation of strategic opportunities that can expand
our addressable markets and strengthen our competitive position. Where
appropriate, we will acquire additional products, technologies, or businesses
that are complementary to, or broaden the markets in which we operate. We plan
to pursue strategic acquisitions, investments, and partnerships to increase
revenue and allow for higher overhead absorption that will improve our gross
margins. We will also consider strategic options to maximize
shareholder value by separating Fiber Optics and Solar Photovoltaics when they
are scaled to a level where they can operate profitably on a standalone
basis.
The
Offering
This
prospectus covers the resale of up to 9,400,003 shares of our common
stock. We issued and sold 8,000,000 shares of our common stock and
warrants exercisable for 1,400,003 shares of our common stock to the selling
stockholders in a private placement that closed on February 20, 2008. The
summary below describes the principal terms of the offering. The
“Description of Common Stock to be Registered” section of this prospectus
contains a more detailed description of our common stock.
Issuer
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EMCORE
Corporation, a New Jersey corporation.
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Selling
stockholders
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The
shares of our common stock to be offered and sold using this prospectus
will be offered and sold by the selling stockholders named in this
prospectus or in any supplement to this prospectus. See
“Principal and Selling Stockholders.”
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Common
stock offered
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9,400,003
shares of our common stock, no par value.
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Common
stock outstanding after this offering
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73,492,906
shares (this figure does not include shares issuable upon the exercise of
the warrants or any outstanding options for the purchase of our common
stock).
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Registration
rights
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Pursuant
to a registration rights agreement that we entered into with the selling
stockholders in connection with the private placement of the common stock
and warrants, we have filed with the SEC a registration statement, of
which this prospectus is a part. We are obligated under the registration
rights agreement to keep the registration statement effective until the
earlier of (1) the date on which the selling stockholders shall have sold
all of the shares of common stock registered pursuant to the registration
statement and (2) the first date as of which all of the shares of common
stock registered pursuant to the registration statement may be sold
without restriction pursuant to Rule 144 under the Securities Act (the
“Registration Period”). We will be required to pay liquidated
damages to the holders of the common stock if we fail to comply with our
obligations to register the common stock within the specified time period
and if we fail to keep this registration statement effective for the
duration of the Registration Period. See “Description of Common
Stock to be Registered —Registration Rights.”
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No
proceeds
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We
will not receive any proceeds from the sale by any selling stockholder of
the common stock. Upon any exercise of the warrants by payment
of cash, however, we will receive the exercise price of the warrants,
which will be used for general corporate purposes.
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Trading
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Our
common stock is listed on the NASDAQ Global Market under the symbol
“EMKR.”
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Risk
factors
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See
“Risk Factors” beginning on page 5 of this prospectus and other
information contained, or incorporated by reference, in this prospectus
for a discussion of factors you should consider carefully before deciding
to invest in the common stock.
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RISK FACTORS
Risks
Related to Our Business
We
have a history of incurring significant net losses and our future profitability
is not assured.
We
commenced operations in 1984 and as of September 30, 2007, we had an accumulated
deficit of $343.6 million. We incurred a net loss of $58.7 million in fiscal
2007, net income of $54.9 million in fiscal 2006 and a net loss of $13.5 million
in fiscal 2005. Fiscal 2006 results include the sale of our GELcore
joint venture that resulted in a net gain, before tax, of $88.0
million. Our operating results for future periods are subject to
numerous uncertainties and we cannot assure you that we will not continue to
experience net losses for the foreseeable future. Although our
revenue has grown in recent years, we may be unable to sustain such growth rates
in light of potential changes in market or economic conditions. In
addition, if we are not able to increase revenue and reduce our costs, we may
not be able to achieve profitability.
Our
future revenue is inherently unpredictable. As a result, our
operating results are likely to fluctuate from period to period, which may cause
volatility in our stock price and may cause our stock price to
decline.
Our
quarterly and annual operating results have fluctuated substantially in the past
and are likely to fluctuate significantly in the future due to a variety of
factors, some of which are outside of our control. Factors that could
cause our quarterly or annual operating results to fluctuate
include:
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•
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market
acceptance of our products;
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market
demand for the products and services provided by our
customers;
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disruptions
or delays in our manufacturing processes or in our supply of raw materials
or product components;
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changes
in the timing and size of orders by our
customers;
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cancellations
and postponements of previously placed
orders;
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reductions
in prices for our products or increases in the costs of our raw materials;
and
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•
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the
introduction of new products and manufacturing
processes.
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In
addition, the limited lead times with which several of our customers order our
products restrict our ability to forecast revenue. We may also
experience a delay in generating or recognizing revenue for a number of
reasons. For example, orders at the beginning of each quarter
typically represent a small percentage of expected revenue for that quarter and
are generally cancelable at any time. We depend on obtaining orders during each
quarter for shipment in that quarter to achieve our revenue objectives. Failure
to ship these products by the end of a quarter may adversely affect our results
of operations.
As a
result of the foregoing, we believe that period-to-period comparisons of our
results of operations should not be relied upon as indications of future
performance. In addition, our results of operations in one or more
future quarters may fail to meet the expectations of securities analysts or
investors, which would likely result in a decline in the trading price of our
common stock.
We
enter into long-term firm fixed-price contracts in our Photovoltaics division,
which could subject us to losses if we have cost overruns.
Many of
our contracts in our Photovoltaics division are contracted on a firm fixed-price
basis. While firm fixed-price contracts allow us to benefit from cost
savings, they also expose us to the risk of cost overruns. If the initial
estimates we used to determine the contract price and the cost to perform the
work prove to be incorrect, we could incur losses. In addition, some of our
contracts have specific provisions relating to cost, schedule, and performance.
If we fail to meet the terms specified in those contracts, then our cost to
perform the work could increase or our price could be reduced, which would
adversely affect our financial condition. These programs have risk for
reach-forward losses if our estimated costs exceed our estimated
price.
Fixed-price
development work inherently has more uncertainty than production contracts and,
therefore, more variability in estimates of the cost to complete the work. Many
of these development programs have very complex designs. As technical or quality
issues arise, we may experience schedule delays and cost impacts, which could
increase our estimated cost to perform the work or reduce our estimated price,
either of which could adversely affect our financial condition. Some fixed-price
development contracts include initial production units in their scope of work.
Successful performance of these contracts depends on our ability to meet
production specifications and delivery rates. If we are unable to
perform and deliver to contract requirements, our contract price could be
reduced through the incorporation of liquidated damages, termination of the
contract for default, or other financially significant exposure. Management uses
its best judgment to estimate the cost to perform the work and the price we will
eventually be paid on fixed-price development programs. While we believe the
cost and price estimates incorporated in the financial statements are
appropriate, future events could result in either favorable or unfavorable
adjustments to those estimates.
Our
ability to achieve operational and material cost reductions and to realize
production efficiencies for our operations is critical to our ability to achieve
long-term profitability.
We have
implemented a number of operational and material cost reductions and
productivity improvement initiatives, particularly with regards to our Fiber
Optics segment. Cost reduction initiatives often involve facility consolidation
and re-design of our products, which requires our customers to accept and
qualify the new designs, potentially creating a competitive disadvantage for our
products. These initiatives can be time-consuming and disruptive to
our operations and costly in the short-term. Successfully
implementing these and other cost-reduction initiatives throughout our
operations is critical to our future competitiveness and ability to achieve
long-term profitability. However, there can be no assurance that these
initiatives will be successful.
We
are substantially dependent on a small number of customers and the loss of any
one of these customers could adversely affect our business, financial condition
and results of operations.
In fiscal
2007, 2006 and 2005, our top five customers accounted for 49%, 39%, and 49%,
respectively of our total annual consolidated revenue. There can be
no assurance that we will continue to achieve historical levels of sales of our
products to our largest customers. The loss of or a reduction in
sales to one or more of our largest customers could have a material adverse
affect on our business, financial condition and results of
operations.
The
market for utility-scale applications of our terrestrial solar technology may
take time to develop.
We have
invested and intend to continue to invest significant resources in the
adaptation of our high-efficiency compound semiconductor-based GaAs solar cell
products for terrestrial applications, and in mid-2006, we established a
wholly-owned subsidiary, EMCORE Solar Power, Inc. (“ESP”) to conduct this
business. ESP is in the development stages and the terrestrial solar
power business will require substantial additional funding for the hiring of
employees, research and development and investment in capital
equipment. Factors such as changes in energy prices or the
development of new and efficient alternative energy technologies could limit
growth in or reduce the market for terrestrial solar power
products. In addition, we may experience difficulties in applying our
satellite-based solar products to terrestrial applications in competing with new
and emerging terrestrial solar power products, an in obtaining financing for
utility-scale projects utilizing our technology. The sale of
concentrated photovoltaic (“CPV”) systems involve the design, manufacture and
installation of large and complex structures intended for outdoor operation,
regarding which the Company has had no previous experience. In
addition, it is expected that much of the market for our CPV systems will be
outside the U.S. and will involve partnering with non-U.S. entities and
evaluation and compliance with non-U.S. laws, regulations, and government
electric supply contracts, which are also new areas for the
Company. There can be no assurance that our bids on solar power
installations will be accepted, that we will win any of these bids or that our
solar power concentrator systems will be qualified for these
projects. If our terrestrial solar cell products are not cost
competitive or accepted by the market, our business, financial condition and
results of operations may be materially and adversely affected.
We
are a party to several significant U.S. Government contracts, which are subject
to unique risks.
In 2007,
13% of our revenue was derived from U.S. Government contracts. In addition to
normal business risks, our contracts with the U.S. Government are subject to
unique risks, some of which are beyond our control. We
have had government contracts modified, curtailed or terminated in the past and
we expect this will continue to happen from time to time.
The funding of U.S. Government
programs is subject to congressional appropriations. Many of the U.S.
Government programs in which we participate may extend for several years;
however, these programs are normally funded annually. Long-term government
contracts and related orders are subject to cancellation if appropriations for
subsequent performance periods are not made. The termination of funding for a
U.S. Government program would result in a loss of anticipated future revenue
attributable to that program, which could have a material adverse effect on our
operations.
The U.S. Government may modify,
curtail, or terminate our contracts. The U.S. Government may modify,
curtail, or terminate its contracts and subcontracts without prior notice at its
convenience upon payment for work done and commitments made at the time of
termination. Modification, curtailment or termination of our major programs or
contracts could have a material adverse effect on our results of operations and
financial condition.
Our contract costs are subject to
audits by U.S. Government agencies. U.S. Government representatives may
audit the costs we incur on our U.S. Government contracts, including allocated
indirect costs. Such audits could result in adjustments to our contract costs.
Any costs found to be improperly allocated to a specific contract will not be
reimbursed, and such costs already reimbursed must be refunded. We have recorded
contract revenue based upon costs we expect to realize upon final audit.
However, we do not know the outcome of any future audits and adjustments and we
may be required to reduce our revenue or profits upon completion and final
negotiation of audits. If any audit uncovers improper or illegal activities, we
may be subject to civil and criminal penalties and administrative sanctions,
including termination of contracts, forfeiture of profits, suspension of
payments, fines and suspension or prohibition from doing business with the U.S.
Government. We have been audited in the past by the U.S. Government
and expect that we will be in the future.
Our business is subject to potential
U.S. Government review. We are sometimes subject to certain U.S.
Government reviews of our business practices due to our participation in
government contracts. Any such inquiry or investigation could potentially result
in a material adverse effect on our results of operations and financial
condition.
Our U.S. Government business is also
subject to specific procurement regulations and other requirements. These
requirements, although customary in U.S. Government contracts, increase our
performance and compliance costs. These costs might increase in the future,
reducing our margins, which could have a negative effect on our financial
condition. Failure to comply with these regulations and requirements could lead
to suspension or debarment, for cause, from U.S. Government contracting or
subcontracting for a period of time and could have an adverse effect on our
reputation and ability to secure future U.S. Government contracts.
If
we do not keep pace with rapid technological change, our products may not be
competitive.
We
compete in markets that are characterized by rapid technological change,
frequent new product introductions, changes in customer requirements, evolving
industry standards, continuous improvement in products and the use of our
existing products in new applications. We may not be able to develop
the underlying core technologies necessary to create new products and
enhancements at the same rate as or faster than our competitors, or to license
the technology from third parties that is necessary for our
products.
Product
development delays may result from numerous factors, including:
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changing
product specifications and customer
requirements;
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unanticipated
engineering complexities;
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expense
reduction measures we have implemented and others we may
implement;
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difficulties
in hiring and retaining necessary technical personnel;
and
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•
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difficulties
in allocating engineering resources and overcoming resource
limitations.
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We cannot
assure you that we will be able to identify, develop, manufacture, market or
support new or enhanced products successfully, if at all, or on a timely, cost
effective or repeatable basis. Our future performance will depend on our
successful development and introduction of, as well as market acceptance of, new
and enhanced products that address market changes as well as current and
potential customer requirements and our ability to respond effectively to
product announcements by competitors, technological changes or emerging industry
standards. Because it is generally not possible to predict the amount of time
required and the costs involved in achieving certain research, development and
engineering objectives, actual development costs may exceed budgeted amounts and
estimated product development schedules may be extended. If we incur budget
overruns or delays in our research and development efforts, our business,
financial condition and results of operations may be materially adversely
affected.
The
competitive and rapidly evolving nature of our industry has in the past resulted
and is likely in the future to result in reductions in our product prices and
periods of reduced demand for our products.
We face
substantial competition in each of our reporting segments from a number of
companies, many of which have greater financial, marketing, manufacturing and
technical resources than us. Larger-sized competitors often spend more on
research and development, which could give those competitors an advantage in
meeting customer demands and introducing technologically innovative products
before we do. We expect that existing and new competitors will improve the
design of their existing products and will introduce new products with enhanced
performance characteristics.
The
introduction of new products and more efficient production of existing products
by our competitors has resulted and is likely in the future to result in price
reductions and increases in expenses and reduced demand for our
products. In addition, some of our competitors may be willing to
provide their products at lower prices, accept a lower profit margin or expend
more capital in order to obtain or retain business. Competitive
pressures have required us to reduce the prices of some of our products. These
competitive forces could diminish our market share and gross margins, resulting
in a material adverse affect on our business, financial condition and results of
operations.
New
competitors may also enter our markets, including some of our current and
potential customers who may attempt to integrate their operations by producing
their own components and subsystems or acquiring one of our competitors, thereby
reducing demand for our products. In addition, rapid product
development cycles, increasing price competition due to maturation of
technologies, the emergence of new competitors in Asia with lower cost
structures and industry consolidation resulting in competitors with greater
financial, marketing and technical resources could result in lower prices or
reduced demand for our products.
Expected
and actual introductions of new and enhanced products may cause our customers to
defer or cancel orders for existing products and may cause our products to
become obsolete. A slowdown in demand for existing products ahead of a new
product introduction could result in a write-down in the value of inventory on
hand related to existing products. We have in the past experienced a slowdown in
demand for existing products and delays in new product development and such
delays may occur in the future. To the extent customers defer or cancel orders
for existing products due to a slowdown in demand or in anticipation of a new
product release or if there is any delay in development or introduction of our
new products or enhancements of our products, our business, financial condition
and results of operations could be materially adversely
affected.
We
may not be successful in implementing our growth strategy if we are unable to
identify and acquire suitable acquisition targets. In addition, our
acquisitions may not have the anticipated effect on our financial
results.
Finding
and consummating acquisitions is an important component of our growth strategy.
Our continued ability to grow by acquisition is dependent upon the availability
of suitable acquisition candidates and may be dependent on our ability to obtain
acquisition financing on acceptable terms. We experience competition from larger
companies with significantly greater resources in making acquisitions. There can
be no assurance that we will be able to procure the necessary funds to
effectuate our acquisition strategy on commercially reasonable terms, or at
all.
Future
acquisitions by us may involve the following:
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use
of significant amounts of cash;
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potentially
dilutive issuances of equity securities on potentially unfavorable terms;
and
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incurrence
of debt on potentially unfavorable
terms.
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In
addition, acquisitions involve numerous risks, including:
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inability
to achieve anticipated synergies;
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difficulties
in the integration of the operations, technologies, products and personnel
of the acquired company;
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diversion
of management’s attention from other business
concerns;
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risks
of entering markets in which we have limited or no prior
experience;
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potential
loss of key employees of the acquired company or of us;
and
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risk
of assuming unforeseen liabilities or becoming subject to
litigation.
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If these
factors limit our ability to integrate the operations of our acquisitions
successfully or on a timely basis, our expectations of future results of
operations may not be met. In addition, our growth and operating strategies for
businesses we acquire may be different from the strategies that such business
currently is pursuing. If our strategies are not the proper strategies for a
company we acquire, it could materially adversely affect our business, financial
condition and results of operations. Further, there can be no assurance that we
will be able to maintain or enhance the profitability of any acquired business
or consolidate the operations of any acquired business to achieve cost
savings.
In
addition, there may be liabilities that we fail, or are unable, to discover in
the course of performing due diligence investigations on each company, business
or asset we have already acquired or may acquire in the future. Such liabilities
could include those arising from employee benefits contribution obligations of a
prior owner or non-compliance with, or liability pursuant to, applicable
federal, state or local environmental requirements by prior owners for which we,
as a successor owner, may be responsible. In addition, there may be additional
costs relating to acquisitions including, but not limited to, possible purchase
price adjustments. We cannot assure you that rights to indemnification by
sellers of assets to us, even if obtained, will be enforceable, collectible or
sufficient in amount, scope or duration to fully offset the possible liabilities
associated with the business or property acquired. Any such liabilities,
individually or in the aggregate, could materially adversely affect our
business, financial condition and results of operations.
In the
past several years we have completed several acquisitions, which have broadened
our product lines within our target markets and increased the level of vertical
integration within those product lines. However, if customer demand in these
markets does not meet current expectations, our revenue could be significantly
reduced and we could suffer a material adverse affect on our business, financial
condition and results of operations.
The
market price for our common stock has experienced significant price and volume
volatility and is likely to continue to experience significant volatility in the
future. This volatility may impair our ability to finance strategic
transactions with our stock and otherwise harm our business.
The
closing price of our common stock fluctuated from a low of $3.84 per share to a
high of $12.65 per share during the fiscal year ended September 30,
2007. Our stock price is likely to experience significant volatility
in the future as a result of numerous factors outside our
control. Significant declines in our stock price may interfere with
our ability to raise additional funds through equity financing or to finance
strategic transactions with our stock. We have historically used
equity incentive compensation as part of our overall compensation
arrangements. The effectiveness of equity incentive compensation in
retaining key employees may be adversely impacted by volatility in our stock
price. In addition, there may be increased risk of securities
litigation following periods of fluctuations in our stock
price. These and other consequences of volatility in our stock price
could have the effect of diverting management’s attention and could materially
harm our business.
Our
products are difficult to manufacture. Our production could be
disrupted and our results will suffer if our production yields are low as a
result of manufacturing difficulties.
We
manufacture many of our wafers and devices in our own production facilities.
Difficulties in the production process, such as contamination, raw material
quality issues, human error or equipment failure, can cause a substantial
percentage of wafers and devices to be nonfunctional. Lower-than-expected
production yields may delay shipments or result in unexpected levels of warranty
claims, either of which can materially adversely affect our results of
operations. We have experienced difficulties in achieving planned yields in the
past, particularly in pre-production and upon initial commencement of full
production volumes, which have adversely affected our gross margins. Because the
majority of our manufacturing costs are fixed, achieving planned production
yields is critical to our results of operations. Because we manufacture many of
our products in a single facility, we have greater risk of interruption in
manufacturing resulting from fire, natural disaster, equipment failures, or
similar events than we would if we had back-up facilities available for
manufacturing these products. We could also incur significant costs
to repair and/or replace products that are defective and in some cases costly
product redesigns and/or rework may be required to correct a
defect. Additionally, any defect could adversely affect our
reputation and result in the loss of future orders.
We
face lengthy sales and qualifications cycles for our new products and, in many
cases, must invest a substantial amount of time and funds before we receive
orders.
Most of
our products are tested by current and potential customers to determine whether
they meet customer or industry specifications. The length of the qualification
process, which can span a year or more, varies substantially by product and
customer, and thus can cause our results of operations to be unpredictable.
During a given qualification period, we invest significant resources and
allocate substantial production capacity to manufacture these new products prior
to any commitment to purchase by customers. In addition, it is difficult to
obtain new customers during the qualification period as customers are reluctant
to expend the resources necessary to qualify a new supplier if they have one or
more existing qualified sources. If we are unable to meet applicable
specifications or do not receive sufficient orders to profitably use the
allocated production capacity, our business, financial condition and results of
operations could be materially adversely affected.
Our
historical and future budgets for operating expenses, capital expenditures,
operating leases and service contracts are based upon our assumptions as to the
future market acceptance of our products. Because of the lengthy lead times
required for product development and the changes in technology that typically
occur while a product is being developed, it is difficult to accurately estimate
customer demand for any given product. If our products do not achieve an
adequate level of customer demand, our business, financial condition and results
of operations could be materially adversely affected.
If
our contract manufacturers fail to deliver quality products at reasonable prices
and on a timely basis, our business, financial condition and results of
operations could be materially adversely affected.
We are
increasing our use of contract manufacturers located outside of the U.S. as a
less-expensive alternative to performing our own manufacturing of certain
products. Contract manufacturers in Asia currently manufacture a
substantial portion of our high-volume parts. If these contract
manufacturers do not fulfill their obligations to us, or if we do not properly
manage these relationships and the transition of production to these contract
manufacturers, our existing customer relationships may suffer. For example, in
the past, we experienced difficulties filling orders in our
fiber-to-the-premises business due to capacity limitations at one of our
contract manufacturers. In addition, by undertaking these activities, we run the
risk that the reputation and competitiveness of our products and services may
deteriorate as a result of the reduction of our ability to oversee and control
quality and delivery schedules.
The use
of contract manufacturers located outside of the U.S. also subjects us to the
following additional risks that could significantly impair our ability to source
our contract manufacturing requirements internationally, including:
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unexpected
changes in regulatory requirements;
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legal
uncertainties regarding liability, tariffs and other trade
barriers;
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inadequate
protection of intellectual property in some
countries;
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greater
incidence of shipping delays;
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greater
difficulty in hiring talent needed to oversee manufacturing operations;
and
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potential
political and economic instability.
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Prior to
our customers accepting products manufactured at our contract manufacturers,
they must requalify the product and manufacturing processes. The qualification
process can be lengthy and expensive, with no guarantee that any particular
product qualification process will lead to profitable product sales. The
qualification process determines whether the product manufactured at our
contract manufacturer achieves our customers’ quality, performance and
reliability standards. Our expectations as to the time periods required to
qualify a product line and ship products in volumes to customers may be
erroneous. Delays in qualification can impair the expected timing of the
transfer of a product line to our contract manufacturer and may impair the
expected amount of sales of the affected products. We may, in fact, experience
delays in obtaining qualification of products produced by our contract
manufacturers and, therefore, our operating results and customer relationships
could be materially adversely affected.
Our
supply chain and manufacturing processes rely on accurate forecasting to provide
us with optimal margins and profitability. Because of market uncertainties,
forecasting is becoming much more difficult. In addition, as we come to rely
more heavily on contract manufacturers, we may have fewer personnel with
expertise to manage these third-party arrangements.
Protecting our trade secrets and
obtaining patent protection is critical to our ability to effectively
compete.
Our
success and competitive position depend on protecting our trade secrets and
other intellectual property. Our strategy is to rely on trade secrets and
patents to protect our manufacturing and sales processes and products. Reliance
on trade secrets is only an effective business practice if trade secrets remain
undisclosed and a proprietary product or process is not reverse engineered or
independently developed. We take measures to protect our trade secrets,
including executing non-disclosure agreements with our employees, customers and
suppliers. If parties breach these agreements or the measures we take are not
properly implemented, we may not have an adequate remedy. Disclosure of our
trade secrets or reverse engineering of our proprietary products, processes, or
devices could materially adversely affect our business, financial condition and
results of operations.
There is
also no assurance that any patents will afford us commercially significant
protection of our technologies or that we will have adequate financial resources
to enforce our patents. Nor can there be any assurance that the
significant number of patent applications that we have filed and are pending, or
those we may file in the future, will result in patents being
issued. In addition, the laws of certain other countries may not
protect our intellectual property to the same extent as U.S.
laws.
Our
failure to obtain or maintain the right to use certain intellectual property may
materially adversely affect our business, financial condition and results of
operations.
The
compound semiconductor, optoelectronics and fiber optic communications
industries are characterized by frequent litigation regarding patent and other
intellectual property rights. From time to time we have received, and may
receive in the future, notice of claims of infringement of other parties’
proprietary rights and licensing offers to commercialize third party patent
rights. Although we are not currently involved in any litigation relating to
claims of infringement from other parties’ intellectual property, there can be
no assurance that:
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infringement
claims (or claims for indemnification resulting from infringement claims)
will not be asserted against us or that such claims will not be
successful;
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future
assertions will not result in an injunction against the sale of infringing
products, which could significantly impair our business and results of
operations;
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any
patent owned or licensed by us will not be invalidated, circumvented or
challenged; or
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we
will not be required to obtain licenses, the expense of which may
adversely affect our results of operations and
profitability.
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In
addition, effective copyright and trade secret protection may be unavailable or
limited in certain foreign countries. Litigation, which could result in
substantial cost and diversion of our resources, may be necessary to defend our
rights or defend us against claimed infringement of the rights of
others. In certain circumstances, our intellectual property rights
associated with government contracts may be limited.
In
our Fiber Optics business, we generally do not have long-term contracts with our
customers and we typically sell our products pursuant to purchase orders with
short lead times. As a result, our customers could stop purchasing
our products at any time and we must fulfill orders in a timely manner to keep
our customers.
Generally,
we do not have long-term contracts with customers that purchase our fiber optic
products. As a result, our agreements with our customers do not
provide any assurance of future sales. Risks associated with the
absence of long-term contracts with our customers include the
following:
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our
customers can stop purchasing our products at any time without
penalty;
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our
customers may purchase products from our competitors;
and
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our
customers are not required to make minimum
purchases.
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We
generally sell our products pursuant to individual purchase orders, which often
have extremely short lead times. If we are unable to fulfill these
orders in a timely manner, it is likely that we will lose sales and
customers. In addition, we sell some of our products to the U.S.
Government and governmental entities. These contracts are generally
subject to termination for convenience provisions and may be cancelled at any
time.
We
have significant international sales, which expose us to additional risks and
uncertainties.
Sales to
customers located outside the U.S. accounted for approximately 27% of our
consolidated revenue in fiscal 2007, 24% of our revenue in fiscal 2006 and 17%
of our revenue in fiscal 2005. Sales to customers in Asia represent the majority
of our international sales. We believe that international sales will continue to
account for a significant percentage of our revenue and we are seeking
international expansion opportunities. Because of this, the following
international commercial risks may materially adversely affect our
revenue:
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political
and economic instability or changes in U.S. Government policy with respect
to these foreign countries may inhibit export of our devices and limit
potential customers’ access to U.S. dollars in a country or region in
which those potential customers are
located;
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we
may experience difficulties in the timeliness of collection of foreign
accounts receivable and be forced to write off these
receivables;
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tariffs
and other barriers may make our devices less cost
competitive;
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the
laws of certain foreign countries may not adequately protect our trade
secrets and intellectual property or may be burdensome to comply
with;
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potentially
adverse tax consequences to our customers may damage our cost
competitiveness;
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currency
fluctuations may make our products less cost competitive, affecting
overseas demand for our products;
and
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language
and other cultural barriers may require us to expend additional resources
competing in foreign markets or hinder our ability to effectively
compete.
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In
addition, certain foreign laws and regulations place restrictions on the
concentration of certain hazardous materials, including, but not limited to,
lead, mercury and cadmium, in our products. Failure to comply with such laws and
regulations could subject us to future liabilities or result in the limitation
or suspension of the sale or production of our products. These regulations
include the European Union’s (“EU”) Restrictions on Hazardous Substances,
Directive on Waste Electrical and Electronic Equipment and the directive on End
of Life for Vehicles. Failure to comply with environmental and health and safety
laws and regulations may limit our ability to export products to the EU and
could materially adversely affect our business, financial condition and results
of operations.
We
will lose sales if we are unable to obtain government authorization to export
our products.
Exports
of our products are subject to export controls imposed by the U.S. Government
and administered by the U.S. Departments of State and Commerce. In certain
instances, these regulations may require pre-shipment authorization from the
administering department. For products subject to the Export
Administration Regulations (“EAR”) administered by the Department of Commerce’s
Bureau of Industry and Security, the requirement for a license is dependent on
the type and end use of the product, the final destination and the identity of
the end user. Virtually all exports of products subject to the
International Traffic in Arms Regulations (“ITAR”) regulations administered by
the Department of State’s Directorate of Defense Trade Controls require a
license. Most of our fiber optics products and our terrestrial solar
power products are subject to EAR; however, certain fiber optics products and
all of our commercially available solar cell satellite power products are
currently subject to ITAR.
Given the
current global political climate, obtaining export licenses can be difficult and
time-consuming. Failure to obtain export licenses for product
shipments could significantly reduce our revenue and could materially adversely
affect our business, financial condition and results of operations. Compliance
with U.S. Government regulations may also subject us to additional fees and
costs. The absence of comparable restrictions on competitors in those countries
may adversely affect our competitive position.
Our
operating results could be harmed if we lose access to sole or limited sources
of materials, components or services.
We
currently obtain some materials, components and services used in our products
from limited or single sources. We generally do not carry significant
inventories of any raw materials. Because we often do not account for a
significant part of our suppliers’ businesses, we may not have access to
sufficient capacity from these suppliers in periods of high demand. For example,
in the past, we experienced difficulties filling orders in our
fiber-to-the-premises business due to limited available capacity of one of our
contract manufacturers. In addition, since we generally do not have guaranteed
supply arrangements with our suppliers, we risk serious disruption to our
operations if an important supplier terminates product lines, changes business
focus, or goes out of business. Because some of these suppliers are located
overseas, we may be faced with higher costs of purchasing these materials if the
U.S. dollar weakens against other currencies. If we were to change any of our
limited or sole source suppliers, we would be required to re-qualify each new
supplier. Re-qualification could prevent or delay product shipments that could
materially adversely affect our results of operations. In addition, our reliance
on these suppliers may materially adversely affect our production if the
components vary in quality or quantity. If we are unable to obtain timely
deliveries of sufficient components of acceptable quality or if the prices of
components for which we do not have alternative sources increase, our business,
financial condition and results of operations could be materially adversely
affected.
A
failure to attract and retain technical and other key personnel could reduce our
revenue and our operational effectiveness.
Our
future success depends, in part, on our ability to attract and retain certain
key personnel, including scientific, operational, financial, and managerial
personnel. The competition for attracting and retaining these employees
(especially scientists, technical and financial personnel) is intense. Because
of this competition for skilled employees, we may be unable to retain our
existing personnel or attract additional qualified employees in the future. If
we are unable to retain our skilled employees and attract additional qualified
employees to the extent necessary to keep up with our business demands and
changes, our business, financial condition and results of operations may be
materially adversely affected.
We
depend on senior management and key personnel to manage our business effectively
and may not be successful in attracting and retaining such
personnel.
We depend
on the performance of our senior management team and other key employees. Our
success also depends on our ability to attract, integrate, train, retain and
motivate these individuals and additional highly skilled technical and sales and
marketing personnel, both in the United States and abroad. The loss
of the services of any of our senior management team or other key employees or
failure to attract, integrate, train, retain and motivate additional key
employees could harm our business.
Failure
to comply with environmental and safety regulations, resulting in improper
handling of hazardous raw materials used in our manufacturing processes, could
result in costly remediation fees, penalties or damages.
We are
subject to laws and regulations and must obtain certain permits and licenses
relating to the use of hazardous materials. Our production activities involve
the use of certain hazardous raw materials, including, but not limited to,
ammonia, gallium, phosphine and arsine. If our control systems are unsuccessful
in preventing a release of these materials into the environment or other adverse
environmental conditions or human exposures occur, we could experience
interruptions in our operations and incur substantial remediation and other
costs or liabilities. In addition, certain foreign laws and
regulations place restrictions on the concentration of certain hazardous
materials, including, but not limited to, lead, mercury and cadmium, in our
products. Failure to comply with such laws and regulations could subject us to
future liabilities or result in the limitation or suspension of the sale or
production of our products. These regulations include the European Union’s
(“EU”) Restrictions on Hazardous Substances, Directive on Waste Electrical and
Electronic Equipment and the directive on End of Life for Vehicles. Failure to
comply with environmental and health and safety laws and regulations may limit
our ability to export products to the EU and could materially adversely affect
our business, financial condition and results of operations.
We
are subject to risks associated with the availability and coverage of
insurance.
For
certain risks, the Company does not maintain insurance coverage because of cost
and/or availability. Because the Company retains some portion of its insurable
risks, and in some cases self-insures completely, unforeseen or catastrophic
losses in excess of insured limits may have a material adverse effect on the
Company’s results of operations and financial position.
We
are increasing operations in China, which exposes us to risks inherent in doing
business in China.
In May
2007, EMCORE Hong Kong, Ltd. a wholly owned subsidiary of EMCORE
Corporation, announced the opening of a new manufacturing facility in Langfang,
China. Our new company, Langfang EMCORE Optoelectronics Co. Ltd., is located
approximately 30 miles southeast of Beijing and currently occupies a space of
22,000 square feet with a Class-10,000 clean room for optoelectronic device
packaging. Another 60,000 square feet is available for future
expansion. We have begun the transfer of our most cost sensitive
optoelectronic devices to this facility. This facility, along with a
strategic alignment with our existing contract-manufacturing partners, should
enable us to improve our cost structure and gross margins across product lines.
We expect to develop and provide improved service to our global customers by
having a local presence in Asia. As we continue to consolidate
our manufacturing operations, we will incur additional costs to transfer product
lines to our China facility, including costs of qualification testing with our
customers, which could have a material adverse impact on our operating results
and financial condition.
Our
China-based activities are subject to greater political, legal and economic
risks than those faced by our other operations. In particular, the
political, legal and economic climate in China (both at national and regional
levels) is extremely fluid and unpredictable. Our ability to operate in China
may be adversely affected by changes in Chinese laws and regulations, such as
those relating to taxation, import and export tariffs, environmental
regulations, land use rights, intellectual property and other matters, which
laws and regulations remain highly underdeveloped and subject to change, with
little or no prior notice, for political or other reasons. Moreover, the
enforceability of applicable existing Chinese laws and regulations is
uncertain. In addition, we may not obtain the requisite legal permits
to continue to operate in China and costs or operational limitations may be
imposed in connection with obtaining and complying with such permits. Our
business could be materially harmed by any changes in the political, legal or
economic climate in China or the inability to enforce applicable Chinese laws
and regulations.
As a
result of a government order to ration power for industrial use, operations in
our China facility may be subject to possible interruptions or shutdowns,
adversely affecting our ability to complete manufacturing commitments on a
timely basis. If we are required to make significant investments in generating
capacity to sustain uninterrupted operations at our facility, we may not realize
the reductions in costs anticipated from our expansion in China. In addition,
future outbreaks of avian influenza, or other communicable diseases, could
result in quarantines or closures of our facility, thereby disrupting our
operations and expansion in China.
We intend
to export the majority of the products manufactured at our facilities in China.
Accordingly, upon application to and approval by the relevant governmental
authorities, we will not be subject to certain Chinese taxes and are exempt from
customs duty assessment on imported components or materials when the finished
products are exported from China. We are, however, required to pay income taxes
in China, subject to certain tax relief. As the Chinese trade regulations are in
a state of flux, we may become subject to other forms of taxation and duty
assessments in China or may be required to pay for export license fees in the
future. In the event that we become subject to any increased taxes or new forms
of taxation imposed by authorities in China, our results of operations could be
materially and adversely affected.
Our
corporate or business strategy may change.
We
continuously evaluate our assets on an ongoing basis with a view to maximizing
their value to us and determining which are core to our
operations. We also regularly evaluate our corporate and business
strategies, and they are influenced by factors beyond our control, including
changes in the competitive landscape we face. Our corporate and
business strategies are, therefore, subject to change.
In
December 2007, we announced that we were conducting a strategic value review
involving, among other things, the status of our Fiber Optics
and Solar Photovoltaics business, and this review is
continuing. The purpose of the review is to determine whether there
exists the potential for unlocking additional stockholder value with respect to
these strategic assets through some type of separation transaction. A
separation may take the form of a spin-off transaction or a public offering of
securities, and we may have discussions from time-to-time with third
parties involving these possibilities. There can be no assurances
that our strategic review will lead to the completion of any separation
transactions or as to the impact of these transactions on stockholder value or
on us.
Our
business and operations would be adversely impacted in the event of a failure of
our information technology infrastructure.
We rely
upon the capacity, reliability and security of our information technology
hardware and software infrastructure and our ability to expand and update this
infrastructure in response to our changing needs. We are constantly updating our
information technology infrastructure. Any failure to manage, expand and update
our information technology infrastructure or any failure in the operation of
this infrastructure could harm our business.
Despite
our implementation of security measures, our systems are vulnerable to damages
from computer viruses, natural disasters, unauthorized access and other similar
disruptions. Any system failure, accident or security breach could result in
disruptions to our operations. To the extent that any disruptions or security
breach results in a loss or damage to our data, or inappropriate disclosure of
confidential information, it could harm our business. In addition, we may be
required to incur significant costs to protect against damage caused by these
disruptions or security breaches in the future.
If
we fail to remediate deficiencies in our current system of internal controls, we
may not be able to accurately report our financial results or prevent fraud. As
a result, our business could be harmed and current and potential investors could
lose confidence in our financial reporting, which could have a negative effect
on the trading price of our debt and equity securities.
The
Company is subject to the ongoing internal control provisions of Section 404 of
the Sarbanes-Oxley Act of 2002. These provisions provide for the identification
of material weaknesses in internal control over financial reporting, which is a
process to provide reasonable assurance regarding the reliability of financial
reporting for external purposes in accordance with U.S. GAAP. If we
cannot provide reliable financial reports or prevent fraud, our brand, operating
results and the market value of our equity securities could be harmed. We have
in the past discovered, and may in the future discover, areas of our internal
controls that need improvement. In fiscal 2006 and 2007, the Company
identified deficiencies in our internal controls over financial
reporting.
We have
devoted significant resources to remediate and improve our internal controls. We
have also been monitoring the effectiveness of these remediated measures. We
cannot be certain that these measures will ensure adequate controls over our
financial processes and reporting in the future. We intend to continue
implementing and monitoring changes to our processes to improve internal
controls over financial reporting. Any failure to implement required new or
improved controls, or difficulties encountered in their implementation,
could harm our operating results or cause us to fail to meet our reporting
obligations.
Inadequate
internal controls could also cause investors to lose confidence in our reported
financial information, which could have a negative effect on the trading price
of our equity securities. Further, the impact of these events could also make it
more difficult for us to attract and retain qualified persons to serve on our
Board of Directors or as executive officers, which could harm our business. The
additions of our manufacturing facility in China and acquisitions increase the
burden on our systems and infrastructure, and impose additional risk to the
ongoing effectiveness of our internal controls, disclosure controls, and
procedures. Consequently, we expect to expend significant resources
and effort in this regard, but are not certain that our efforts will be
successful.
Our
cost reduction programs may be insufficient to achieve long-term
profitability.
We are
undertaking cost reduction measures intended to reduce our expense structure at
both the cost of goods sold and the operating expense levels. We believe these
measures are a necessary response to, among other things, declining average
sales prices across our product lines. These measures may be unsuccessful in
creating profit margins sufficient to sustain our current operating structure
and business.
Shifts
in industry-wide demands and inventories could result in significant inventory
write-downs.
The life
cycles of some of our products depend heavily upon the life cycles of the end
products into which our products are designed. Products with short life cycles
require us to manage production and inventory levels closely. We evaluate our
ending inventories on a quarterly basis for excess quantities, impairment of
value and obsolescence. This evaluation includes analysis of sales levels by
product and projections of future demand based upon input received from our
customers, sales team and management estimates. If inventories on hand are in
excess of demand, or if they are greater than 12-months old, appropriate
reserves are provided. In addition, we write off inventories that are considered
obsolete based upon changes in customer demand, manufacturing process changes
that result in existing inventory obsolescence or new product introductions,
which eliminate demand for existing products. Remaining inventory balances are
adjusted to approximate the lower of our manufacturing cost or market
value.
If future
demand or market conditions are less favorable than our estimates, inventory
write-downs may be required. We cannot assure investors that obsolete or excess
inventories, which may result from unanticipated changes in the estimated total
demand for our products and/or the estimated life cycles of the end products
into which our products are designed, will not affect us beyond the inventory
charges that we have already taken.
Certain
provisions of New Jersey law and our charter may make a takeover of EMCORE
difficult even if such takeover could be beneficial to some of our
shareholders.
New
Jersey law and our certificate of incorporation, as amended, contain certain
provisions that could delay or prevent a takeover attempt that our shareholders
may consider in their best interests. Our Board of Directors is divided into
three classes. Directors are elected to serve staggered three-year terms and are
not subject to removal except for cause by the vote of the holders of at least
80% of our capital stock. In addition, approval by the holders of 80% of our
voting stock is required for certain business combinations unless these
transactions meet certain fair price criteria and procedural requirements or are
approved by two-thirds of our continuing directors. We may in the future adopt
other measures that may have the effect of delaying or discouraging an
unsolicited takeover, even if the takeover were at a premium price or favored by
a majority of unaffiliated shareholders. Certain of these measures may be
adopted without any further vote or action by our shareholders and this could
depress the price of our common stock.
Additional
litigation may arise in the future relating to our historical stock option
practices and other issues.
Although
we have entered into a settlement that has received preliminary court approval
of the three derivative actions which were filed against certain of
our current and former directors and officers relating to historical stock
options practices, and the SEC has indicated that is has terminated its
investigation of the matters, additional securities-related litigation
(including possible litigation involving employees) may still
arise. Additional lawsuits, regardless of their underlying merit,
could become time consuming and expensive, and if they result in unfavorable
outcomes, there could be material adverse effect on our business, financial
condition, results of operations and cash flows. We may be required
to pay substantial damages or settlement costs in excess of our insurance
coverage related to these matters, which would have a further material adverse
effect on our financial condition or results of operations.
In
addition, subject to certain limitations, we are obligated to indemnify our
current and former directors, officers and employees in connection with certain
types of expenses, including certain litigation-related expenses.
It
may be difficult or costly to obtain director and officer insurance coverage as
a result of our historical stock option granting practices.
Although
we have recently renewed our directors and officer insurance coverage on what we
believe to be favorable terms, it may become more difficult to obtain director
and officer insurance coverage in the future. If we are able to obtain
this coverage, it could be significantly more expensive than in the past, which
would have an adverse effect on our financial results and cash flow. As a result
of this and related factors, our directors and officers could face increased
risks of personal liability in connection with the performance of their duties.
As a result, we may have difficultly attracting and retaining qualified
directors and officers, which could adversely affect our
business.
We
may not be able to obtain additional capital in the future, and failure to do so
may harm our business.
We
believe that our current liquidity should be sufficient to meet our cash needs
including working capital, capital expenditures and research and development
costs through the next twelve months. If cash generated from operations and cash
on hand are not sufficient to satisfy EMCORE’s liquidity requirements, EMCORE
will seek to obtain additional equity or debt financing. Due to the
unpredictable nature of the capital markets, particularly in the technology
sector, we cannot assure you that we will be able to raise additional capital if
and when it is required, especially if we experience disappointing operating
results. If adequate funds are not available or not available on
acceptable terms, our ability to continue to fund expansion, develop and enhance
products and services, or otherwise respond to competitive pressures may be
severely limited. Such a limitation could have a material adverse effect on
EMCORE’s business, financial condition, results of operations, and cash
flow.
If
the recent weakness in credit markets conditions continues or worsens, it could
adversely impact our investment portfolio.
We have
historically invested in U.S. government agencies, municipal notes which may
have an auction reset feature, corporate notes and bonds, commercial paper,
money market funds meeting certain criteria. Certain of these investments are
subject to general credit, liquidity, market and interest rate risks, which may
be exacerbated by U.S. sub-prime mortgage defaults that have affected various
sectors of the financial markets and caused credit and liquidity issues. There
may be declines in the value of these investments, which we may determine to be
other-than-temporary. These market risks associated with our investment
portfolio may have a negative adverse effect on our results of operations,
liquidity and financial condition.
At
February 29, 2008, we held approximately $5.4 million of investments with an
auction reset feature (“auction rate securities”) whose underlying assets are
generally student loans which are substantially backed by the federal government
and AAA rated municipality and corporate securities. On February 19, 2008
auctions failed in the markets for these particular auction rate
securities. Further, we have not been able to obtain current market
values for these securities as pricing mechanisms are traditionally dependent on
successful auctions, none of which have occurred subsequent to the initial
auction failure. An auction failure means that the parties wishing to
sell securities could not. If the issuers are unable to successfully close
future auctions and their credit ratings deteriorate, we may in the future be
required to record an impairment charge on these investments. We believe we will
be able to liquidate our investment without significant loss within the next
year, and we currently believe these securities are not significantly impaired,
primarily due to the government guarantee of the underlying securities for the
$1.4 million backed by student loans and the triple AAA rating of the remaining
$4.0 million. However, it could take until the final maturity
of the underlying notes (up to 30 years) to realize our investments’ recorded
value. We may never fully realize the value of our investment if the
underlying securities are determined to be impaired. As a result of this
uncertainty, we have reclassified these amounts from current assets to
non-current assets on our balance sheet. Based on our expected
operating cash flows, and our other sources of cash, we do not anticipate the
potential lack of liquidity on these investments will affect our ability to
execute our current business plan. We are in the process of seeking
alternative pricing mechanisms for utilization in the close of our second
quarter period ending March 31, 2008.
Risks
Related to this Offering
If our stock
price fluctuates after this offering, you could lose a significant part of your
investment
The
market price of our stock may be influenced by many factors, some of which are
beyond our control, including those described above under “Risks Related to Our
Business” and the following:
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·
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the
failure of securities analysts to cover our common stock or changes in
financial estimates by analysts;
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·
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the
inability to meet the financial estimates of analysts who follow our
common stock;
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·
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announcements
by us or our competitors of significant contracts, productions,
acquisitions or capital
commitments;
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·
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variations
in quarterly operating results;
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·
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general
economic conditions;
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·
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terrorist
acts;
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·
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future
sales of our common stock and/or debt financing;
and
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·
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investor
perception of us and the industries in which we
operate.
|
As a
result of these factors, investors in our common stock may not be able to resell
their shares at or above the offering price. These broad market and industry
factors may materially reduce the market price of our common stock, regardless
of our operating performance.
Our
stock price could be adversely affected by the issuance of preferred
stock.
Our Board
of Directors is authorized to issue up to 5,882,352 shares of preferred stock
with such dividend rates, liquidation preferences, voting rights, redemption and
conversion terms and privileges as our Board of Directors, in its sole
discretion, may determine. The issuance of shares of preferred stock may result
in a decrease in the value or market price of our common
stock. Additionally, our Board of Directors could use the preferred
stock to delay or discourage hostile bids for control of us in which
shareholders may receive premiums for their common stock or to make the possible
sale of EMCORE or the removal of our management more difficult. The issuance of
shares of preferred stock could adversely affect the voting and other rights of
the holders of common stock and may depress the price of our common
stock.
We
do not intend to pay cash dividends on our common stock in the foreseeable
future, and therefore only appreciation of the price of our common stock will
provide a return to our shareholders.
We
currently anticipate that we will retain all future earnings, if any, to finance
the growth and development of our business. We do not intend to pay cash
dividends in the foreseeable future. As a result, only appreciation of the price
of our common stock, which may not occur, will provide a return to our
shareholders.
Shares eligible
for future sale may cause the market price of our common stock to drop
significantly, even if our business is doing well.
The
market price of our common stock could decline as a result of sales of a large
number of shares of our common stock in the market after this offering or the
perception that these sales could occur. These sales, or the possibility that
these sales may occur, also might make it more difficult for us to sell equity
securities in the future at a time and at a price that we deem
appropriate.
If
we need to sell or issue additional common shares to finance future
acquisitions, our existing shareholder ownership could be diluted.
Part of
our business strategy is to expand into new markets and enhance our position in
existing markets both domestically and internationally through the merging and
acquiring of complementary businesses. We have in the past financed acquisitions
in whole or in part by issuing shares of our common stock, including our recent
issuance of $10 million in shares of our common stock to pay a portion of the
purchase price in our acquisition of the telecom portion of the Intel
Corporation’s Optical Platform Division. To successfully fund and
complete future potential acquisitions, we may issue additional equity
securities that have the potential to dilute our earnings per share and our
existing shareholder ownership.
SPECIAL
NOTE REGARDING FORWARD LOOKING STATEMENTS
In
addition to the other information contained or incorporated by reference in this
prospectus, you should carefully consider the risk factors beginning on page 5
of this prospectus in evaluating whether to purchase our common stock. Some of
the statements in this prospectus and the documents incorporated herein by
reference constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. These statements are based
largely on our current expectations and projections about future events and
financial trends affecting the financial condition of our business, relate to
future events or our future financial performance and involve known and unknown
risks, uncertainties and other factors that may cause the actual results, levels
of activity, performance or achievements of our business or our industry to be
materially different from those expressed or implied by any forward-looking
statements. Such statements include, in particular, projections about our future
results included in our Exchange Act reports, statements about our plans,
strategies, business prospects, changes and trends in our business and the
markets in which we operate as described in this prospectus and the documents
incorporated herein by reference. These forward-looking statements
may be identified by the use of terms and phrases such as “expects,”
“anticipates,” “intends,” “plans,” believes,” “estimates,” “targets,” “can,”
“may,” “could,” “will,” and variations of these terms and similar phrases. The
information contained or incorporated by reference in this prospectus includes
forward-looking statements concerning:
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our
ability to remain competitive and a leader in our industry and the future
growth of the company, the industry, and the economy in
general;
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our
ability to achieve structural and material cost reductions without
impacting product development or manufacturing
execution;
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expected
improvements in our product and technology development
programs;
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our
ability to successfully develop, introduce, market and qualify new
products, including our terrestrial solar
products;
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·
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our
ability to identify and acquire suitable acquisition targets and
difficulties in integrating recent or future acquisitions into our
operations;
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·
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other
risks and uncertainties described in our filings with the SEC such as:
cancellations, rescheduling, or delays in product shipments; manufacturing
capacity constraints; lengthy sales and qualification cycles; difficulties
in the production process; changes in semiconductor industry growth;
increased competition; delays in developing and commercializing new
products; and other factors.
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Neither
management nor any other person assumes responsibility for the accuracy and
completeness of the forward-looking statements. All forward-looking statements
in this prospectus are made as of the date hereof, based on information
available to us as of the date hereof, and we caution you not to rely on these
statements without also considering the risks and uncertainties associated with
these statements and our business that are addressed in this prospectus. Certain
of the information included in this prospectus may supersede or supplement
forward-looking statements in our Exchange Act reports incorporated herein by
reference. We assume no obligation to update any forward-looking
statement.
USE OF PROCEEDS
We will
not receive any proceeds from the sale of shares of common stock by the selling
stockholders in this offering, although upon any exercise of warrants by payment
of cash, we will receive the exercise price of the warrants, which will be used
for general corporate purposes. We cannot guarantee that the selling
stockholders will exercise any warrants.
CAPITALIZATION
The following table shows our
capitalization as of December 31, 2007, and as adjusted to reflect the private
placement of 8,000,000 shares of our common stock and warrants exercisable into
1,400,003 shares of our common stock and to give effect to the conversion of our
convertible subordinated notes due 2011 (the “Notes”).
You
should refer to “Selected Consolidated Financial Data,” “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and our condensed
consolidated financial statements and the notes thereto incorporated by
reference in this prospectus in evaluating the material presented
below.
As
of December 31, 2007
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||||||||
Actual
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Adjusted
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|||||||
Long-term
Debt
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||||||||
Convertible
subordinated notes
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$ | 85,012 | $ | - | (1) | |||
Stockholders’
Equity
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||||||||
Common
Stock, no par value, 100,000,000 shares authorized, 52,351,000 shares
issued and 52,192,000 shares outstanding as of December 31,
2007
|
453,358 | 638,370 | (1)(2) | |||||
Accumulated
deficit
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(358,309 | ) | (358,309 | ) | ||||
Accumulated
other comprehensive loss
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(10 | ) | (10 | ) | ||||
Treasury
stock, at cost; 159,000 shares
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(2,083 | ) | (2,083 | ) | ||||
Total
stockholders’ equity
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92,956 | 277,968 | ||||||
Total
capitalization
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$ | 177,968 | $ | 277,968 |
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(1)
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In
January and February 2008, the Company converted its outstanding
convertible subordinated notes for 12,186,656 shares of common
stock.
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(2)
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Adjusted
to reflect the private placement of 8,000,000 shares of common stock and
1,400,003 warrants for common stock for $100 million, including the fair
value of warrants issued of $9.8
million.
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CERTAIN
U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S.
HOLDERS
The
following is a discussion of the material U.S. federal income tax considerations
generally applicable to the purchase, ownership and disposition of our common
stock by non-U.S. holders. This discussion assumes that our common stock is held
as a capital asset. This discussion does not cover all aspects of
U.S. federal income taxation that may be relevant to the purchase, ownership or
disposition of our common stock by prospective investors in light of their
particular circumstances. In particular, this discussion does not address all of
the tax considerations that may be relevant to certain types of investors
subject to special treatment under U.S. federal income tax laws, such
as:
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dealers
in securities or currencies;
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financial
institutions;
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regulated
investment companies;
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real
estate investment trusts;
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tax-exempt
entities;
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insurance
companies;
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cooperatives;
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persons
holding common stock as part of a hedging, integrated, conversion or
constructive sale transaction or a
straddle;
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·
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traders
in securities that elect to use a mark-to-market method of accounting for
their securities holdings;
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U.S.
expatriates; or
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·
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partnerships
or entities or arrangements treated as a partnership or other pass-through
entity for U.S. federal tax purposes (or investors
therein).
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Furthermore,
this discussion is based upon the provisions of the Internal Revenue Code of
1986, as amended (the “Code”), the Treasury regulations promulgated thereunder
and administrative and judicial interpretations thereof, all as of the date
hereof. Such authorities may be repealed, revoked, modified or subject to
differing interpretations, possibly on a retroactive basis, so as to result in
U.S. federal income tax consequences different from those discussed below. We
have not received a ruling from the Internal Revenue Service (the “IRS”) with
respect to any of the matters discussed herein. This discussion does not address
any state, local or non-U.S. tax considerations.
If
you are considering the purchase of our common stock, we urge you to consult
your own tax advisors concerning the particular U.S. federal income tax
consequences to you of the purchase, ownership and disposition of our common
stock, as well as any consequences to you arising under state, local and
non-U.S. tax laws.
Consequences
to Non-U.S. Holders
The
following discussion applies only to non-U.S. holders. A “non-U.S. holder” is a
beneficial owner of our common stock (other than a partnership or an entity or
arrangement treated as a partnership for U.S. federal income tax purposes) that
is not, for U.S. federal income tax purposes one of the following:
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a
citizen or an individual resident of the United
States;
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a
corporation (or other entity taxable as a corporation) created or
organized in or under the laws of the United States or any state thereof
or the District of Columbia;
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·
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an
estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
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a
trust if it (i) is subject to the primary supervision of a court within
the United States and one or more U.S. persons have the authority to
control all substantial decisions of the trust or (ii) has a valid
election in effect under applicable U.S. Treasury regulations to be
treated as a U.S. person.
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Special
rules may apply to you if you are a “controlled foreign corporation” or a
“passive foreign investment company” or are otherwise subject to special
treatment under the Code. Any such holders should consult their own tax advisors
to determine the U.S. federal income, state, local and non-U.S. tax consequences
that may be relevant to them.
Dividends
Although
we do not currently intend to pay cash dividends on our common stock in the
foreseeable future, dividends paid to you (to the extent paid out of our current
or accumulated earnings and profits, as determined for U.S. federal income tax
purposes) generally will be subject to U.S. federal withholding tax at a 30%
rate or such lower rate as may be specified by an applicable income tax
treaty. Generally, if you wish to claim the benefit of an applicable
treaty rate for dividends paid on our common stock, you must provide the
withholding agent with a properly executed IRS Form W−8BEN, claiming an
exemption from or reduction in withholding under the applicable income tax
treaty. If you are eligible for a reduced rate of U.S. federal
withholding tax pursuant to an applicable income tax treaty, you may obtain a
refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
Dividends
that are effectively connected with a trade or business you conduct within the
United States (and, if certain tax treaties apply, are attributable to a
permanent establishment in the United States), are not subject to the U.S.
federal withholding tax but, instead, are subject to regular U.S. federal income
tax on a net income basis at applicable graduated rates. Corporate holders may
also be subject to “branch profits tax.”
Sale,
Exchange or Other Taxable Disposition of Common Stock
You
generally will not be subject to U.S. federal income tax with respect to gain
recognized on a sale, exchange or other taxable disposition of shares of our
common stock unless:
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the
gain is effectively connected with your conduct of a trade or business in
the United States (and, if certain tax treaties apply, is attributable to
a permanent establishment in the United
States);
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you
are present in the United States for 183 or more days in the taxable year
of the sale, and certain other conditions are
met;
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you
are subject to provisions applicable to certain United States expatriates;
or
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we
are or have been a United States real property holding corporation
(“USRPHC”) for U.S. federal income tax purposes at any time during the
shorter of the five-year period preceding such disposition and your
holding period in the common stock, and (i) you beneficially own, or have
owned, more than 5% of the total fair market value of our common stock at
any time during the five-year period preceding such disposition or (ii)
our common stock has ceased to be traded on an established securities
market prior to the beginning of the calendar year in which the sale or
disposition occurs, and certain other conditions are
met.
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If a
partnership or other entity or arrangement treated as a partnership for U.S.
federal income tax purposes holds our common stock, the U.S. federal income tax
treatment of a partner in such partnership will generally depend upon the status
of the partner and the activities of the partnership. If you are a partner of a
partnership holding our common stock, we urge you to consult your own tax
advisors.
U.S.
Federal Estate Tax
Shares of
our common stock held by an individual non-U.S. holder at the time of his or her
death will be included in such non-U.S. holder’s gross estate for U.S. federal
estate tax purposes, unless an applicable estate tax treaty provides
otherwise. Consequently, shareholders who are non-U.S. holders may be
subject to U.S. federal estate tax on all or a portion of the value of the
common stock owned at the time of their death.
Information
Reporting and Backup Withholding
You may
be subject to information reporting and backup withholding with respect to any
dividends on, and the proceeds from dispositions of, our common stock paid to
you unless you comply with certain reporting procedures (usually satisfied by
providing an IRS Form W−8BEN) or otherwise establish an exemption. Additional
rules relating to information reporting requirements and backup withholding with
respect to the payment of proceeds from the disposition of shares of our common
stock will apply as follows:
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If
the proceeds are paid to or through the U.S. office of a broker (U.S. or
foreign), they generally will be subject to backup withholding and
information reporting, unless you certify that you are not a U.S. person
under penalties of perjury (usually on an IRS Form W−8BEN) or otherwise
establish an exemption;
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If
the proceeds are paid to or through a non-U.S. office of a broker that is
not a U.S. person and is not a foreign person with certain specified U.S.
connections (a “U.S. Related Person”), they will not be subject to backup
withholding or information reporting;
or
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If
the proceeds are paid to or through a non-U.S. office of a broker that is
a U.S. person or a U.S. Related Person, they generally will be subject to
information reporting (but not backup withholding), unless you certify
that you are not a U.S. person under penalties of perjury (usually on an
IRS Form W−8BEN) or otherwise establish an
exemption.
|
In
addition, the amount of any dividends paid to you and the amount of tax, if any,
withheld from such payment generally must be reported annually to you and the
IRS. The IRS may make such information available under the provisions of an
applicable income tax treaty to the tax authorities in the country in which you
reside.
Backup
withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be allowed as a refund or a credit against your
U.S. federal income tax liability provided the required information is timely
furnished by you to the IRS. non-U.S. holders should consult their own tax
advisors regarding the filing of a U.S. tax return for claiming a refund of such
backup withholding.
PRINCIPAL AND SELLING STOCKHOLDERS
Selling
Stockholders
The
shares of common stock being offered by the selling stockholders are those
previously issued to the selling stockholders and those issuable to the selling
stockholders upon the exercise of the warrants. 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 shares of common stock 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 shares of common stock held by each of the selling
stockholders, as provided to us by representatives 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 shares of common stock and the warrants as of February 29, 2008, assuming
exercise of the warrants held by the selling stockholders on that date, without
regard to any limitations on 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 the
registration rights agreement with the holders of the shares of common stock and
the warrants, this prospectus generally covers the resale of the aggregate
number of shares of common stock equal to the number of shares of common stock
issued and the shares of common stock issuable upon exercise of the related
warrants, determined as if the outstanding warrants were exercised, as
applicable, in full, in each case, as of the trading day immediately preceding
the date this registration statement was initially filed with the
SEC. The fourth column assumes the sale of all of the shares offered
by the selling stockholders pursuant to this prospectus and that any other
shares of our common stock beneficially owned by these selling stockholders will
continue to be beneficially owned. Under the terms of the warrants, a
selling stockholder may not exercise the warrants, to the extent such 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 then outstanding shares of common stock following such exercise, excluding
for purposes of such determination shares of common stock issuable upon exercise
of the warrants which have not been exercised. The number of shares
in each of the second and third columns does not reflect this
limitation. The selling stockholders may sell all, some or none of
their shares in this offering. See “Plan of
Distribution.”
Name of Selling
Stockholder
|
Number of
Shares Owned
Prior to
Offering
|
Maximum Number of
Shares to be Sold
Pursuant to this
Prospectus
|
Number of
Shares Owned
After
Offering
|
|||||||||
Polar
Securities Inc. (1)
|
987,001 | 987,001 | - | |||||||||
The
Quercus Trust (2)
|
6,266,727 | 883,600 | 5,383,127 | |||||||||
Marathon
Global Equity Master Fund, Ltd. (3)
|
705,000 | 705,000 | - | |||||||||
UBS
O’Connor LLC F/B/O: O’Connor Pipes Corporate Strategies Master Limited
(4)
|
394,800 | 394,800 | - | |||||||||
UBS
O’Connor LLC F/B/O: O’Connor Global Convertible Arbitrage Master Limited
(5)
|
247,408 | 247,408 | - | |||||||||
UBS
O’Connor LLC F/B/O: O’Connor Global Convertible Arbitrage II Master
Limited (6)
|
15,792 | 15,792 | - | |||||||||
The
Tocqueville Fund (7)
|
599,250 | 599,250 | - | |||||||||
Highbridge
International LLC (8)
|
640,430 | 587,500 | 52,930 | |||||||||
Ardsley
Partners Fund II, L.P.(9)
|
502,238 | 148,638 | 353,600 | |||||||||
Ardsley
Partners Institutional Fund, L.P.(10)
|
324,115 | 96,115 | 228,000 | |||||||||
Ardsley
Partners Renewable Energy Fund, L.P. (11)
|
215,753 | 80,253 | 135,500 | |||||||||
Ardsley
Offshore Fund, Ltd. (12)
|
350,988 | 103,988 | 247,000 | |||||||||
Ardsley
Renewable Energy Offshore Fund, Ltd. (13)
|
368,318 | 136,418 | 231,900 | |||||||||
Marion
Lynton (14)
|
12,660 | 3,760 | 8,900 | |||||||||
HFR
HE (15)
|
50,930 | 18,330 | 32,600 | |||||||||
Hudson
Bay Fund LP (16)
|
392,920 | 392,920 | - | |||||||||
Hudson
Bay Overseas Fund, Ltd. (17)
|
641,080 | 641,080 | - | |||||||||
Portside
Growth and Opportunity Fund (18)
|
564,000 | 564,000 | - | |||||||||
Empire
Capital Partners, LTD (19)
|
728,978 | 169,905 | 559,073 | |||||||||
Empire
Capital Partners, LP (20)
|
773,768 | 182,595 | 591,173 | |||||||||
Capital
Ventures International (21)
|
352,500 | 352,500 | - | |||||||||
Iroquois
Master Fund Ltd. (22)
|
352,500 | 352,500 | - | |||||||||
Kingdon
Associates (23)
|
938,204 | 85,305 | 852,899 | |||||||||
M.
Kingdon Offshore Ltd. (24)
|
2,809,321 | 255,386 | 2,553,935 | |||||||||
Kingdon
Family Partnership, L.P. (25)
|
129,975 | 11,809 | 118,166 | |||||||||
Investcorp
Interlachen Multi-Strategy Master Fund Limited (26)
|
235,000 | 235,000 | - | |||||||||
CD
Investment Partners, Ltd. (27)
|
188,000 | 188,000 | - | |||||||||
Lagunitas
Partners LP (28)
|
164,650 | 113,975 | 50,675 | |||||||||
Gruber
& McBaine International (29)
|
22,200 | 8,225 | 13,975 | |||||||||
Jon
D & Linda W Gruber Trust (30)
|
79,775 | 65,800 | 13,975 | |||||||||
Cara
Castle Partners (31)
|
103,400 | 103,400 | - | |||||||||
MMCAP
International Inc SPC (32)
|
176,250 | 176,250 | - | |||||||||
Cranshire
Capital, L.P. (33)
|
141,000 | 141,000 | - | |||||||||
Enable
Growth Partners LP (34)
|
117,500 | 117,500 | - | |||||||||
Crestview
Capital Master, LLC (35)
|
117,500 | 117,500 | - | |||||||||
RHP
Master Fund, Ltd. (36)
|
117,500 | 117,500 | - |
(1)
Includes warrants exercisable for 147,001 shares of common stock at an exercise
price of $15.06. Bill Peckford has voting and investment control over
the securities held by Polar Securities Inc.
(2)
Includes warrants exercisable for 131,600 shares of common stock at an exercise
price of $15.06. David Gelbaum & Monica Chavez Gelbaum,
Co-Trustees of The Quercus Trust, have voting and investment control over the
securities owned by The Quercus Trust.
(3)
Includes warrants exercisable for 105,000 shares of common stock at an exercise
price of $15.06. Marathon Asset Management, LLC (“Marathon”) is
Investment Advisor to Marathon Global Equity Master Fund, Ltd.
(“MGEMF”). Marathon exercises investment discretion over any
securities held by MGEMF.
(4)
Includes warrants exercisable for 58,800 shares of common stock at an exercise
price of $15.06. This selling stockholder is a fund which cedes
investment control to UBS O’Connor LLC (the “Investment
Manager”). The Investment Manager makes all the investment/voting
decisions. UBS O’Connor LLC is a wholly owned subsidiary of UBS AG
which is listed and traded on the New York Stock Exchange.
(5)
Includes warrants exercisable for 36,848 shares of common stock at an exercise
price of $15.06. This selling stockholder is a fund which cedes
investment control to UBS O’Connor LLC (the “Investment
Manager”). The Investment Manager makes all the investment/voting
decisions. UBS O’Connor LLC is a wholly owned subsidiary of UBS AG
which is listed and traded on the New York Stock Exchange.
(6)
Includes warrants exercisable for 2,352 shares of common stock at an exercise
price of $15.06. This selling stockholder is a fund which cedes
investment control to UBS O’Connor LLC (the “Investment
Manager”). The Investment Manager makes all the investment/voting
decisions. UBS O’Connor LLC is a wholly owned subsidiary of UBS AG
which is listed and traded on the New York Stock Exchange.
(7)
Includes warrants exercisable for 89,250 shares of common stock at an exercise
price of $15.06. Tocqueville Asset Management L.P. is the investment
advisor to The Tocqueville Fund.
(8)
Includes warrants exercisable for 87,500 shares of common stock at an exercise
price of $15.06. Highbridge Capital Management, LLC is the trading
manager of Highbridge International LLC and has voting control and investment
discretion over the securities held by Highbridge International
LLC. Glenn Dubin and Henry Swieca control Highbridge Capital
Management, LLC and have voting control and investment discretion over the
securities held by Highbridge International LLC. Each of Highbridge
Capital Management, LLC, Glenn Dubin and Henry Swieca disclaims beneficial
ownership of the securities held by Highbridge International LLC.
(9)
Includes warrants exercisable for 22,138 shares of common stock at an exercise
price of $15.06. Philip J. Hempleman has voting and investment
control over the securities held by Ardsley Partners Fund II, L.P.
(10)
Includes warrants exercisable for 14,315 shares of common stock at an exercise
price of $15.06. Philip J. Hempleman has voting and investment
control over the securities held by Ardsley Partners Institutional Fund,
L.P.
(11)
Includes warrants exercisable for 11,953 shares of common stock at an exercise
price of $15.06. Philip J. Hempleman has voting and investment
control over the securities held by Ardsley Partners Renewable Energy Fund,
L.P.
(12)
Includes warrants exercisable for 15,488 shares of common stock at an exercise
price of $15.06. Philip J. Hempleman has voting and investment
control over the securities held by Ardsley Offshore Fund, Ltd.
(13)
Includes warrants exercisable for 20,318 shares of common stock at an exercise
price of $15.06. Philip J. Hempleman has voting and investment
control over the securities held by Ardsley Renewable Energy Offshore Fund,
Ltd.
(14)
Includes warrants exercisable for 560 shares of common stock at an exercise
price of $15.06. Philip J. Hempleman has voting and investment
control over the securities held by Marion Lynton.
(15)
Includes warrants exercisable for 2,730 shares of common stock at an exercise
price of $15.06. Philip J. Hempleman has voting and investment
control over the securities held by HFR HE.
(16)
Includes warrants exercisable for 58,520 shares of common stock at an exercise
price of $15.06. Sander Gerber, Yoav Roth and John Doscas share
voting and investment power over these securities. Each of Sander Gerber, Yoav
Roth and John Doscas disclaim beneficial ownership over the securities held by
Hudson Bay Fund LP. The selling stockholder acquired the securities offered for
its own account in the ordinary course of business, and at the time it acquired
the securities, it had no agreements, plans or understandings, directly or
indirectly to distribute the securities.
(17)
Includes warrants exercisable for 95,480 shares of common stock at an exercise
price of $15.06. Sander Gerber, Yoav Roth and John Doscas share
voting and investment power over these securities. Each of Sander Gerber, Yoav
Roth and John Doscas disclaim beneficial ownership over the securities held by
Hudson Bay Overseas Fund LTD. The selling stockholder acquired the securities
offered for its own account in the ordinary course of business, and at the time
it acquired the securities, it had no agreements, plans or understandings,
directly or indirectly to distribute the securities.
28
(18)
Includes warrants exercisable for 84,000 shares of common stock at an exercise
price of $15.06. Ramius LLC (“Ramius”) is the investment adviser of
Portside Growth and Opportunity Fund (“Portside”) and consequently has voting
control and investment discretion over securities held by
Portside. Ramius disclaims beneficial ownership of these
securities. C4S & Co., L.L.C. (“C4S”) is the managing member of
Ramius and may be considered the beneficial owner of any securities deemed to be
beneficially owned by Ramius. C4S disclaims beneficial ownership of
these securities. Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss
and Jeffrey M. Solomon are the sole managing members of C4S and may be
considered beneficial owners of any securities deemed to be beneficially owned
by C4S. Messrs. Cohen, Stark, Strauss and Solomon disclaim beneficial
ownership of these securities.
(19)
Includes warrants exercisable for 25,305 shares of common stock at an exercise
price of $15.06. Peter J. Richards and Scott A. Fine, Managing
Members of Empire Capital Management, LLC (investment manager to Empire Capital
Partners, LTD), exercise voting and investment control over securities held by
Empire Campital Partners, LTD.
(20)
Includes warrants exercisable for 27,195 shares of common stock at an exercise
price of $15.06. Peter J. Richards and Scott A. Fine, Managing
Members of Empire Capital Management, LLC (investment manager to Empire Capital
Partners, LP), exercise voting and investment control over securities held by
Empire Campital Partners, LP.
(21)
Includes warrants exercisable for 52,500 shares of common stock at an exercise
price of $15.06. Heights Capital Management, Inc., the authorized
agent of Capital Ventures International (“CVI”), has discretionary authority to
vote and dispose of the shares held by CVI and may be deemed to be the
beneficial owner of these shares. Martin Kobinger, in his capacity as
Investment Manager of Heights Capital Management, Inc., may also be deemed to
have investment discretion and voting power over the shares held by
CVI. Mr. Kobinger disclaims any such beneficial ownership of the
shares.
(22)
Includes warrants exercisable for 52,500 shares of common stock at an exercise
price of $15.06. Joshua Silverman has voting and investment control
over the shares held by Iroquois Master Fund Ltd. Mr. Silverman
disclaims beneficial ownership of these shares.
(23)
Includes warrants exercisable for 12,705 shares of common stock at an exercise
price of $15.06. Mark Kingdon, as Managing Member of Kingdon Capital
Management, LLC (investment manager to Kingdon Associates), exercises voting and
investment control over securities held by Kingdon Associates.
(24)
Includes warrants exercisable for 38,036 shares of common stock at an exercise
price of $15.06. Mark Kingdon, as Managing Member of Kingdon Capital
Management, LLC (investment manager to M. Kingdon Offshore Ltd.), exercises
voting and investment control over securities held by M. Kingdon Offshore
Ltd.
(25)
Includes warrants exercisable for 1,759 shares of common stock at an exercise
price of $15.06. Mark Kingdon, as Managing Member of Kingdon Capital
Management, LLC (investment manager to Kingdon Family Partnership, L.P.),
exercises voting and investment control over securities held by Kingdon Family
Partnership, L.P.
(26)
Includes warrants exercisable for 35,000 shares of common stock at an exercise
price of $15.06. Interlachen Capital Group LP is the trading manager of
Investcorp Interlachen Multi-Strategy Master Fund Limited and has voting and
investment discretion over securities held by Investcorp Interlachen
Multi-Strategy Master Fund Limited. Andrew Fraley, in his role as
Chief Investment Officer of Interlachen Capital Group LP, has voting control and
investment discretion over securities held by Investcorp Interlachen
Multi-Strategy Master Fund Limited. Andrew Fraley disclaims
beneficial ownership of the securities held by Investcorp Interlachen
Multi-Strategy Mater Fund Limited.
(27)
Includes warrants exercisable for 28,000 shares of common stock at an exercise
price of $15.06. Carpe Diem Capital Management LLC (“Carpe Diem
Capital”), as investment manager for CD Investment Partners, Ltd. (“CDIP”),
ZPII, L.P. (“ZP II”), as the manager and sole member of Carpe Diem Capital, C3
Management Inc. (“C3”), as the general partner of ZP II, and John D. Ziegelman,
as the Chairman of the Board, President and Treasurer and the beneficial owner
of 100% of the outstanding shares of common stock of C3, each may be deemed to
have beneficial ownership of the shares owned by CDIP which are being registered
hereunder.
(28)
Includes warrants exercisable for 16,975 shares of common stock at an exercise
price of $15.06. Gruber & McBaine Capital Management is the
general partner of Lagunitas Partners LP. The natural persons
with voting and investment control for this stockholder are Jon D. Gruber and J.
Patterson McBaine.
(29)
Includes warrants exercisable for 1,225 shares of common stock at an exercise
price of $15.06. Gruber & McBaine Capital Management is the
general partner of Gruber & McBaine
International. The natural persons with voting and investment
control for this stockholder are Jon D. Gruber and J. Patterson
McBaine.
(30)
Includes warrants exercisable for 9,800 shares of common stock at an exercise
price of $15.06. Jon D. Gruber has voting and investment control over
the securities held by the Jon D & Linda W Gruber Trust.
(31)
Includes warrants exercisable for 15,400 shares of common stock at an exercise
price of $15.06. Damien Quinn holds voting and investment control
over the securities held by Cara Castle Partners.
(32)
Includes warrants exercisable for 26,250 shares of common stock at an exercise
price of $15.06. The natural person with voting and investment
control for this stockholder is Matthew MacIsaac.
(33)
Includes warrants exercisable for 21,000 shares of common stock at an exercise
price of $15.06. Mitchell P. Kopin, President of Downsview Capital,
Inc., the General Partner of Cranshire Capital, L.P., has sole voting and
investment control over the shares.
(34)
Includes warrants exercisable for 17,500 shares of common stock at an exercise
price of $15.06. Mitch Levine holds voting and investment control
over the securities held by Enable Growth Partners LP.
(35)
Includes warrants exercisable for 17,500 shares of common stock at an exercise
price of $15.06. Crestview Capital Partners, LLC (“Crestview
Partners”) is the sole manager of Crestview, and as such has the power to direct
the vote and to direct the disposition of investments owned by Crestview and
thus may also be deemed to beneficially own the securities owned by
Crestview. Stewart Flink, Robert Hoyt and Daniel Warsh are the
managers of Crestview Partners, and as such may be deemed to share the power to
vote and to dispose of investments beneficially owned by Crestview Partners,
including the Company’s common stock. As a result, each of Messrs.
Flink, Hoyt and Warsh may also be deemed to beneficially own the above-described
shares of the Company’s common stock held by Crestview and Crestview Partners;
however each disclaims beneficial ownership of such shares.
(36)
Includes warrants exercisable for 17,500 shares of common stock at an exercise
price of $15.06. RHP Master Fund, Ltd. is a party to an investment
management agreement with Rock Hill Investment Management, L.P., a limited
partnership of which the general partner is RHP General Partner,
LLC. Pursuant to such agreement, Rock Hill Investment Management
directs the voting and disposition of shares owned by RHP Master
Fund. Messrs. Wayne Bloch and Peter Lockhart own all of the interests
in RHP General Partner. The aforementioned entities and individuals
disclaim beneficial ownership of the Company’s securities owned by the RHP
Master Fund.
Principal
Stockholders
The
following table sets forth certain information, as of February 29, 2008, with
respect to the beneficial ownership of our common stock by:
|
·
|
each
person or group that we know to be the beneficial owner of more than 5% of
the outstanding shares of any class of our voting
securities;
|
|
·
|
each
of our executive officers and directors;
and
|
|
·
|
our
executive officers and directors as a
group.
|
As of
February 29, 2008, a total of 73,492,906 shares of common stock were
outstanding. In the following table, (a) shares under “Outstanding
shares” include shares subject to options that were vested as of February 29,
2008 or will vest within 60 days of February 29, 2008 and (b) unless otherwise
noted, each person identified possesses, to our knowledge, sole voting and
investment power with respect to the shares listed, subject to community
property laws where applicable. Shares not outstanding but deemed
beneficially owned by virtue of the right of a person to acquire those shares
are treated as outstanding only for purposes of determining the number and
percent of shares of common stock owned by such person or
group. Unless otherwise indicated, the address of each of the
beneficial owners is c/o EMCORE Corporation, 10420 Research Road, SE,
Albuquerque, New Mexico 87123.
Prior
to Offering
|
After
Offering
|
|||||||||||||||
Shares
Beneficially Owned
|
Shares
Beneficially Owned
|
|||||||||||||||
Name
of Stockholder
|
Outstanding
Shares
|
%
|
Outstanding
Shares
|
%
|
||||||||||||
Executive
Officers and Directors
|
||||||||||||||||
Robert
Bogomolny
|
89,972 | * | 89,972 | * | ||||||||||||
Howard
W. Brodie
|
- | * | - | * | ||||||||||||
John
Gillen
|
29,242 | * | 29,242 | * | ||||||||||||
Adam
Gushard(1)
|
184,746 | * | 184,746 | * | ||||||||||||
Hong
Q. Hou (2)
|
387,500 | * | 387,500 | * | ||||||||||||
John
Iannelli(3)
|
80,452 | * | 80,452 | * | ||||||||||||
Keith
J. Kosco, Esq.(4)
|
6,000 | * | 6,000 | * | ||||||||||||
Reuben
F. Richards, Jr. (5)
|
977,054 | 1.3 | 977,054 | 1.3 | ||||||||||||
Thomas
J. Russell (6)
|
5,023,791 | 6.8 | 5,023,791 | 6.8 | ||||||||||||
Charles
Scott (7)
|
42,409 | * | 42,409 | * | ||||||||||||
Richard
A. Stall(8)
|
62,280 | * | 62,280 | * | ||||||||||||
Thomas
G. Werthan
|
16,266 | * | 16,266 | * | ||||||||||||
All
directors and executive officers as a group
(10
persons) (9)
|
6,809,432 | 9.3 | 6,809,432 | 9.3 | ||||||||||||
5%
Stockholders
|
||||||||||||||||
AMVESCAP
PLC (10)
|
4,000,005 | 5.4 | 4,000,005 | 5.4 | ||||||||||||
Kingdon
Capital Management (11)
|
3,877,500 | (12) | 5.3 | 3,525,000 | † | 4.7 | † | |||||||||
Kopp
Investment Advisors, LLC (13)
|
4,048,740 | 5.5 | 4,048,740 | 5.5 | ||||||||||||
The
Quercus Trust (14)
|
6,266,727 | (15) | 8.5 | 5,383,127 | † | 7.2 | † | |||||||||
Wachovia
Corporation (16)
|
5,162,966 | 7.0 | 5,162,966 | 7.0 | ||||||||||||
Invesco,
LTD (17)
|
4,817,145 | 6.6 | 4,817,145 | 6.6 |
*
|
Less
than 1.0%
|
†
|
This
assumes that all shares registered pursuant to the registration statement
are sold, including shares issuable upon the exercise of the
warrants.
|
(1)
|
Includes
options to purchase 166,098 shares.
|
(2)
|
Includes
options to purchase 283,125 shares.
|
(3)
|
Includes
options to purchase 72,131 shares and 2,989 shares held in a 401(k)
Plan.
|
(4)
|
Includes
options to purchase 6,000 shares.
|
(5)
|
Includes
options to purchase 297,500 shares and 175,000 shares held by
spouse.
|
(6)
|
Includes
2,280,035 shares held by The AER Trust.
|
(7)
|
Includes
30,409 shares owned by Kircal, Ltd.
|
(8)
|
Includes
548 shares held in a 401(k) Plan.
|
(9)
|
Includes
options to purchase 818,854 shares beneficially owned by Reuben Richards,
Jr., Chief Executive Officer; Hong Hou, President and Chief Operating
Officer; Adam Gushard, Interim Chief Financial Officer; and
John Iannelli, Chief Technology Officer. No options to purchase
shares were beneficially owned by the five non-employee directors
(including Thomas Werthan). Richard Stall and Howard Brodie
resigned from the Company prior to January 15, 2008 and are not included
in this total.
|
(10)
|
This
information is based solely on information contained in a Schedule 13G
filed with the SEC on February 14, 2007, by AMVESCAP PLC, a U.K. entity,
on behalf of itself and PowerShares Capital Management LLC, a U.S. entity
(“PowerShares”). The shares reported for AMVESCAP PLC represent the total
shares held by AMVESCAP PLC through PowerShares. The address of
AMVESCAP PLC is 30 Finsbury Square, London EC2A 1AG,
England. The address of AMVESCAP PLC is 30 Finsbury Square,
London EC2A 1AG, England.
|
(11)
|
This
information is based solely on information provided by representatives of
Kingdon Capital Management, LLC (“Kingdon Capital”) and Mark Kingdon
(“Kingdon”) in connection with the private placement transaction described
herein. Kingdon Capital and Kingdon report beneficially owning
a total of 3,877,500 shares and sharing voting and dispositive power with
respect to such shares. The address of Kingdon Capital and
Kingdon is 152 West 57th Street, 50th Floor, New York, New York
10019.
|
(12)
|
Includes
warrants to purchase 52, 500 shares.
|
(13)
|
This
information is based solely on information contained in a Schedule 13D
filed with the SEC on January 4, 2008, by Kopp Investment Advisors, LLC
(“KIA”), a wholly-owned subsidiary of Kopp Holding Company, LLC (“KHC”),
which is controlled by Mr. LeRoy C. Kopp (“Kopp”) (collectively, the “Kopp
Parties”). KIA reports beneficially owning a total of 4,048,740
shares including having sole voting power over 4,048,740 shares and shared
dispositive power over 2,469,665 shares. KHC reports
beneficially owning a total of 4,048,740 shares. Kopp reports
beneficially owning a total of 4,219,665 shares, including having sole
dispositive power over 1,750,000 shares. The address of the
Kopp Parties is 7701 France Avenue South, Suite 500, Edina, Minnesota
55435. The address of Kopp Investment Advisors, LLC is 7701 France Avenue
South, Suite 500, Edina, Minnesota 55435.
|
(14)
|
This
information is based solely on information contained in a Schedule 13D
filed with the SEC on March 6, 2008, by The Quercus Trust, David Gelbaum
and Monica Chavez Gelbaum. The Quercus Trust reports
beneficially owning a total of 6,266,727 shares and sharing voting and
dispositive power with respect to such shares. David Gelbaum,
Trustee, The Quercus Trust, reports beneficially owning a total of
6,266,727 shares and sharing voting and dispositive power with respect to
such shares. Monica Chavez Gelbaum, Trustee, The Quercus Trust,
reports beneficially owning a total of 6,266,727 shares and sharing voting
and dispositive power with respect to such shares. The address
of David Gelbaum, an individual, as co-trustee of the Quercus Trust and
Monica Chavez Gelbaum, an individual, as co-trustee of the Quercus Trust
is 2309 Santiago Drive, Newport Beach, California
92660.
|
(15)
|
Includes
warrants to purchase 131,600 shares.
|
(16)
|
This
information is based solely on information contained in a Schedule 13G
filed with the SEC on February 1, 2008, by Wachovia
Corporation. Wachovia Corporation reports beneficially owning a
total of 5,158,132 shares including having sole voting power over 139,917
shares and sole dispositive power over 2,878,097
shares. Wachovia reports having shared voting power of
2,280,035 shares. Wachovia Corporation is a parent holding
company and the relevant subsidiaries are Wachovia Securities, LLC (IA)
and Wachovia Bank, N.A. (B.K.). Wachovia Securities, LLC is an
investment advisor for clients; the securities reported by this subsidiary
are beneficially owned by such clients. Wachovia Bank, N.A.
(B.K.) holds the securities reported in a fiduciary capacity for its
respective customers. The address of Wachovia Corporation is
One Wachovia Center, Charlotte, North Carolina 28288.
|
(17)
|
This
information is based soley on information contained in a Schedule 13D
filed with the SEC on February 14, 2008 by Invesco Ltd. Invesco
Ltd. reports beneficially owning a total of 4,817,145 shares including
having sole voting power and sole dispositive power with respect to such
shares. Invesco Ltd. is a parent holding company and the
relevant subsidiaries are Invesco Institutional (N.A.), Inc. and
Powershares Capital Management LLC. Invesco through such
subsidiaries provides investment management services to institutional and
individual investors worldwide. The address of Invesco is 1360
Peachtree Street NE, Atlanta, GA
30309.
|
We are
registering the shares of common stock previously issued and the shares of
common stock issuable upon exercise of the warrants to permit the resale of
these shares of common stock by the holders of the common stock from time to
time after the date of this prospectus. We will not receive any of
the proceeds from the sale by the selling stockholders of the shares of common
stock. However, upon any exercise of the warrants by payment of cash,
we will receive the exercise price of the warrants. We will bear all
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 shares of common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the
shares of common stock are sold through underwriters or broker-dealers, the
selling stockholders will be responsible for underwriting discounts or
commissions or agent’s commissions. The shares of 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;
|
|
•
|
involving
ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
|
|
•
|
involving
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;
|
|
•
|
involving
purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
|
|
•
|
involving
an exchange distribution in accordance with the rules of the applicable
exchange;
|
|
•
|
involving
privately negotiated transactions;
|
|
•
|
involving
short sales;
|
|
•
|
involving
sales pursuant to Rule 144;
|
|
•
|
in
connection with which broker-dealers may agree with the selling
stockholders to sell a specified number of such shares at a stipulated
price per share;
|
|
•
|
involving
a combination of any such methods of sale;
and
|
|
•
|
involving
any other method permitted pursuant to applicable
law.
|
If the
selling stockholders effect such transactions by selling shares of common stock
to or through underwriters, broker-dealers or agents, such 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 (which 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 shares of 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 shares of 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 and to return borrowed shares in connection with such
short sales. 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 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 pursuant to this prospectus or any
amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act of 1933, as amended, amending, if necessary, the list of
selling stockholders to include the pledgee, 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 to be 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 or
amendment, 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. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied
with.
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 thereunder, including, without
limitation, Regulation M of the Exchange Act, which 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
pay all expenses of the registration of the shares of common stock pursuant to
the registration rights agreement, estimated to be $6.1 million in total,
including, without limitation, Securities and Exchange Commission filing fees
and expenses of compliance with state securities or “Blue Sky” laws; provided,
however, that a selling stockholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling
stockholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling stockholders will be entitled to contribution. We may be
indemnified by the selling stockholders against civil liabilities, including
liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling stockholder specifically for use in
this prospectus, in accordance with the related registration rights agreement,
or we may be entitled to contribution.
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.
DESCRIPTION
OF COMMON STOCK TO BE REGISTERED
The
following is a description of our common stock. It does not purport
to be complete and is subject to, and qualified in its entirety by, the
provisions of our Restated Certificate of Incorporation and By-Laws, forms of
which have previously been filed and are incorporated by reference into this
prospectus, and by the applicable provisions of New Jersey law.
General
Matters
Our
authorized capital stock consists of 100,000,000 shares of common stock and
5,882,352 shares of preferred stock, no par value. Our board of
directors has approved, subject to shareholder approval, an increase in our
authorized shares of common stock from 100,000,000 to
200,000,000. The increase in our authorized shares of our common
stock will be presented to our shareholders for approval at our next annual
meeting of shareholders. Immediately prior to this offering, we had
73,492,906 shares of common stock issued and outstanding and no shares of
preferred stock issued and outstanding.
Common
Stock
Holders
of common stock are entitled to one vote per share on matters to be voted
upon by the shareholders of the Company. Subject to the preferences
that may be applicable to any outstanding shares of preferred stock, the
holders of common stock are entitled to receive ratably such dividends, if any,
as may be declared by the Board of Directors out of funds legally available
therefor. In the event of liquidation, dissolution or winding up of the
Company, the holders of common stock are entitled to share ratably in all
assets remaining after payment of liabilities, subject to the
prior liquidation rights of any outstanding shares of preferred stock. The
common stock has no preemptive, redemption, conversion or other subscription
rights. The outstanding shares of common stock are, and the shares offered
by the Company in the offering will be, when issued and paid for, fully
paid and nonassessable. The rights, preferences and privileges of holders
of common stock are subject to, and may be adversely affected by, the rights of
the holders of shares of any series of preferred stock currently
outstanding or which the Company may designate and issue in the
future.
Preferred
Stock
The Board
of Directors has the authority, without action by the stockholders, to designate
and issue preferred stock in one or more series and to designate the rights,
preferences and privileges of each series, which may be greater than the rights
of the common stock. It is not possible to state the actual effect of the
issuance of any shares of preferred stock upon the rights of holders of the
common stock until the board of directors determines the specific rights of the
holders of this preferred stock. However, the effects might include, among other
things:
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restricting dividends on the
common stock;
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diluting the voting power of the
common stock;
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impairing the liquidation rights
of the common stock; or
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delaying or preventing a change
in control of the company without further action by the
stockholders.
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No shares
of preferred stock are outstanding, and we have no present plans to issue any
shares of preferred stock.
Stock
Options, Warrants and Other
Obligations to Issue Capital Stock
As of
February 29, 2008, we had outstanding warrants to purchase an aggregate of
1,400,003 shares of our common stock. In addition, we had 4,868,159
shares of our common stock issuable upon the exercise of stock options
outstanding with a weighted average exercise price of $5.78 per share and
1,012,717 shares of our common stock reserved for future grant under our 2000
Stock Option Plan.
The
warrants were issued in connection with the private placement to the selling
stockholders that closed on February 20, 2008. In the private placement, we sold
8,000,000 shares of our common stock, at a price of $12.50 per share, and, for
no additional consideration, warrants to purchase up to 1,400,003 shares of
common stock, at an exercise price of $15.06 per share. The warrants are
immediately exercisable and remain exercisable until February 15,
2013.
The
warrants may be exercised in whole or in part. If a holder desires to exercise
its warrants, it must deliver an exercise notice to us at our principal office
that specifies the number of shares of common stock to be purchased upon
exercise. Unless the holder has elected a cashless exercise of the warrant, the
notice must also be accompanied by payment of an amount equal to the per share
exercise price multiplied by the number of shares for which the warrant is being
exercised. Pursuant to the terms of the warrants, the holder will not
have the right to exercise any portion of the warrants to the extent that after
giving effect to such exercise, the holder (together with the holder’s
affiliates), would beneficially own in excess of 4.99% (the “maximum
percentage”) of the number of shares of our common stock outstanding immediately
after giving effect to such exercise. By written notice to the
Company, the Holder may from time to time increase or decrease the maximum
percentage to any other percentage not in excess of 9.99% specified in such
notice; provided that (i) any such increase will not be effective until the
sixty-first (61st) day after such notice is delivered to the Company, and (ii)
any such increase or decrease will apply only to the holder delivering such
notice and not to any other holder of warrants.
The
exercise price of the warrants may be adjusted upon certain events, including
stock dividends, stock splits, recapitalizations and similar adjustments to the
number of shares of our common stock outstanding and dividends paid in cash, in
shares of our common stock or securities convertible into our common stock or in
kind.
Registration
Rights
Under a
registration rights agreement that we entered into on February 15, 2008, we
granted the selling stockholders registration rights with respect to the common
stock. We are obligated under the registration rights agreement to
use our commercially reasonable best efforts to cause the registration statement
of which this prospectus is a part to be declared effective by May 20, 2008, or,
in the event the registration statement is reviewed by the SEC, by June 19,
2008. We are also obligated under the registration rights agreement
to keep this registration statement effective for a period ending on the earlier
of (i) the date on which all shares of common stock registered pursuant to this
registration statement have been sold and (ii) the first date as of which all
shares of common stock registered pursuant to this registration statement may be
sold without restriction pursuant to Rule 144 (or any successor thereto)
promulgated under the Securities Act of 1933.
We will
be obligated under the registration rights agreement to pay liquidated damages
to the selling stockholders if any of the following default events
occurs:
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on
or prior to thirty (30) days following the date the private placement
transaction closed, a registration statement has not been filed with the
SEC (a “filing failure”);
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we
fail to use our commercially reasonable best efforts to cause such
registration statement to be declared effective by the SEC on or prior to
(1) ninety (90) days after the closing date of the private
placement transaction if there is no review of the registration statement
by the SEC or (2) one hundred twenty (120) days after the
closing date of the transaction if there is a review of the registration
statement by the SEC (an “effectiveness failure”);
or
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on
any day after the effective date of the registration statement sales of
all the common stock required to be included on such registration
statement cannot be made (other than as permitted during a grace period as
set forth in the registration rights agreement) pursuant to such
registration statement, including because of a failure to keep such
registration statement effective, to disclose such information as is
necessary for sales to be made pursuant to such registration statement or
to register sufficient a sufficient amount of common stock (a “maintenance
failure”); or
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after
the date six months following the closing of the private placement, we
fail to file any required reports under Section 12 or 15(d) of the 1934
Act such that we are not in compliance with Rule 144(c)(1) or a result of
which the purchasers in the private placement are unable to sell their
registrable securities without restriction under Rule 144 (or any
successor thereto) (a “current public information
default”).
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In these
events, the registration rights agreement requires us to pay as liquidated
damages for such failure to each holder of securities that are registrable
securities under the registration rights agreement an amount equal to 1.0% of
the aggregate purchase price of such registrable securities included in the
registration statement of which this prospectus is a part on each of the
following dates:
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the
day that a filing failure occurs and on every thirtieth day (pro rated for
shorter periods) thereafter until such filing failure is
cured;
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the
day that an effectiveness failure occurs and on every thirtieth day (pro
rated for shorter periods) thereafter until such effectiveness failure is
cured;
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the
initial day of a maintenance failure and on every thirtieth day (pro rated
for shorter periods) thereafter until such maintenance failure is cured;
and
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the
day that a current public information default occurs and on every
thirtieth day (pro rated for shorter periods) thereafter until such
current public information default is
cured.
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This
description of the registration rights agreement is intended to be a summary of
the terms of the agreement that are material to a purchaser of our common
stock. It does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the registration rights
provisions of the agreement.
Antitakeover
Effects of Provisions of our Articles of Incorporation and Bylaws
Our board
of directors is divided into three classes. As a result of this provision, at
least two annual meetings of shareholders may be required for shareholders to
change a majority of the Board of Directors. Our by-laws provide that the Board
of Directors shall consist of not less than six nor more than twelve members,
with the exact number to be determined by the vote of not less than 66 2/3 % of
the Board of Directors from time to time. Directors are elected to serve
staggered three-year terms and are not subject to removal except for cause by
the vote of the holders of at least 80% of our capital stock. Unless otherwise
required by law, vacancies on the Board of Directors, including vacancies
resulting from an increase in the number of directors or the removal of
directors, may only be filled by an affirmative vote of 66 2/3% of the directors
then in office. The classification of directors, the ability of the
Board of Directors to increase the number of directors, the inability of the
shareholders to remove directors without cause or fill vacancies on the Board of
Directors and the inability of holders of less than 80% of our capital stock to
remove directors even with cause will make it more difficult to change the Board
of Directors, and will promote the continuity of existing
management.
These and
other provisions also may have the effect of deterring, preventing or delaying
changes in control or management. These provisions are intended to enhance the
likelihood of continued stability in the composition of the board of directors
and in the policies furnished by the board of directors and to discourage types
of transactions that may involve an actual or threatened change of control.
These provisions are designed to reduce our vulnerability to an unsolicited
acquisition proposal. The provisions also are intended to discourage tactics
that may be used in proxy fights. However, such provisions could have the effect
of discouraging others from making tender offers for our shares and, as a
consequence, they also may inhibit fluctuations in the market price of our
shares that could result from actual or rumored takeover attempts. These
provisions also may have the effect of preventing changes in our
management.
New
Jersey Shareholders Protection Act
The New
Jersey Shareholders Protection Act, NJSA 14A:10A−1 et seq., which we refer to as
New Jersey Act, prohibits certain New Jersey corporations, such as us following
this offering, from entering into certain “business combinations” with an
“interested shareholder” (any person who is the beneficial owner of 10% or more
of such corporation’s outstanding voting securities) for five years after such
person became an interested shareholder, unless the business combination or the
interested shareholder’s acquisition of stock was approved by the corporation’s
board of directors prior to such interested shareholder’s stock acquisition
date. After the five-year waiting period has elapsed, a business combination
between such corporation and an interested shareholder will be prohibited unless
the business combination is approved by the holders of at least two-thirds of
the voting stock not beneficially owned by the interested shareholder, or unless
the business combination satisfies the New Jersey Act’s fair price provision
intended to provide that all shareholders (other than the interested
shareholders) receive a fair price for their shares.
The New
Jersey Act defines “business combination” to include the following transactions
between a corporation or a subsidiary and an interested shareholder or such
interested shareholder’s affiliates: (1) the merger or consolidation of the
corporation with the interested shareholder or any corporation that after the
merger or consolidation would be an affiliate or associate of the interested
shareholder; (2) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition to or with the interested shareholder, which has an aggregate market
value equal to 10% or more of the aggregate market value of all of the assets or
of the outstanding stock, or 10% or more of the income of the corporation or its
subsidiaries; (3) the issuance or transfer to the interested shareholder of any
stock of the corporation having an aggregate market value equal to or greater
than 5% of the corporation’s outstanding stock; (4) the adoption of a plan or
proposal for the liquidation or dissolution of the corporation proposed by the
interested shareholder; (5) any reclassification of securities proposed by the
interested shareholder that has the effect, directly or indirectly, of
increasing any class or series of stock that is owned by the interested
shareholder; and (6) the receipt by the interested shareholder of any loans or
other financial assistance from the corporation.
The New
Jersey Act does not apply to certain business combinations, including those with
persons who acquired 10% or more of the voting power of the corporation prior to
the time the corporation was required to file periodic reports pursuant to the
Exchange Act or prior to the time the corporation’s securities began to trade on
a national securities exchange.
Transfer
Agent and Registrar
The
Transfer Agent and Registrar for our common stock is American Stock Transfer
& Trust Company, New York, New York.
Listing
Our
shares of common stock are quoted on The Nasdaq National Market under the symbol
“EMKR.”
LEGAL MATTERS
The
validity of the shares of common stock offered hereby will be passed upon by
Jenner & Block LLP and, with respect to matters governed by New
Jersey law, by Dillon, Bitar & Luther, L.L.C.
EXPERTS
The
consolidated financial statements and management’s report on the effectiveness
of internal control over financial reporting incorporated in this registration
statement by reference from the Company’s Annual Report on Form 10-K for the
fiscal year ended September 30, 2007 have been audited by Deloitte & Touche
LLP, an independent registered public accounting firm, as stated in their
reports incorporated by reference in the Registration Statement (which reports
(1) express an unqualified opinion on the consolidated financial statements and
includes an explanatory paragraph relating to the adoption of Statement of
Financial Accounting Standards No. 123(R), Share-Based Payment,
effective October 1, 2005 and (2) express an unqualified opinion on management's
assessment regarding the effectiveness of internal control over financial
reporting, and on the effectiveness of internal control over financial
reporting), and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and
auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We file
annual, quarterly, and current reports and other information with the Securities
and Exchange Commission. You may read and copy any document that we file at the
Public Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C.
20549. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet
site at www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically, including
EMCORE. We are not incorporating the contents of the SEC website into this
prospectus. Certain of our filings may also be found on our website,
www.emcore.com, under the heading “Investor.” The information contained in or
connected to our website is not part of this prospectus.
We have
filed with the SEC a registration statement on Form S-1 (together with all
amendments and exhibits, the “registration statement”) under the Securities Act
of 1933, as amended with respect to the offering of common stock. This
prospectus, which constitutes part of the registration statement, does not
contain all of the information set forth in the registration statement. Certain
parts of the registration statement are omitted from the prospectus in
accordance with the rules and regulations of the SEC.
Our
common stock is listed on The NASDAQ Global Market and similar information can
be inspected and copied at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The SEC
allows us to incorporate by reference in this prospectus the information in
documents we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The
information in this prospectus updates (and, to the extent of any conflict,
supersedes) information incorporated by reference that we have filed with the
SEC prior to the date of this prospectus. You should read all of the
information incorporated by reference because it is an important part of this
prospectus.
The
following documents filed with the SEC are hereby incorporated by reference in
this prospectus:
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Annual
report on Form 10-K for the fiscal year ended September 30, 2007, filed
with the SEC on December 31, 2007, as amended by our Form 10-K/A filed
with the SEC on January 28, 2008.
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Our
Definitive Proxy Statement pursuant to Section 14(a) of the Exchange Act,
filed with the SEC on March 4,
2008.
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Quarterly
report on Form 10-Q for the quarter ended December 31, 2007, filed with
the SEC on February 11, 2008.
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Current
Reports on Form 8-K dated January 11, 2008, February 4, 2008, February 11,
2008, February 20, 2008, February 25, 2008 and March 4,
2008.
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We hereby
undertake to provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus is delivered, upon written or oral
request of any such person, a copy of any and all of the reports or documents
that have been incorporated by reference in this prospectus, other than exhibits
to such documents unless such exhibits have been specifically incorporated by
reference thereto. Requests for such copies should be directed to our Investor
Relations department, at the following address:
EMCORE
Corporation
14020
Research Road, SE
Albuquerque,
New Mexico 87123
EMCORE
CORPORATION
9,400,003
Shares
Common
Stock
,
2008
40
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution
The
following table sets forth the estimated costs and expenses of the sale and
distribution of the securities being registered, all of which are being borne by
the Registrant.
SEC
registration fee
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$ | 2,335 | ||
Printing
and engraving fees
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10,000 | |||
Legal
fees and expenses
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175,000 | |||
Accounting
fees and expenses
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75,000 | |||
Total
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$ | 262,335 |
Item
14. Indemnification of Directors and Officers
The
Company’s Restated Certificate of Incorporation and By-Laws include provisions
(i) to reduce the personal liability of the Company’s directors for monetary
damage resulting from breaches of their fiduciary duty, and (ii) to permit the
Company to indemnify its directors and officers to the fullest extent permitted
by New Jersey law. The Company has obtained directors’ and officers’ liability
insurance that insures such persons against the costs of defense, settlement, or
payment of a judgment under certain circumstances.
Subject
to certain limitations, we are obligated to indemnify our current and former
directors, officers and employees in connection with the investigation of our
historical stock option granting practices, related government investigation and
shareholder litigation. These obligations arise under the terms of our
certificate of incorporation, our bylaws, applicable contracts, and New Jersey
law. The obligation to indemnify generally means that we are required to pay or
reimburse the individuals’ reasonable legal expenses and possibly damages and
other liabilities incurred in connection with these matters. We are currently
paying or reimbursing legal expenses being incurred in connection with these
matters by a number of our current and former directors, officers and employees.
The maximum potential amount of future payments the Company could be required to
make under these indemnification agreements is unlimited; however, the Company
has a director and officer liability insurance policies that limits its exposure
and enables it to recover a portion of any future amounts paid.
Item
15. Recent Sales of Unregistered Securities
1. On
November 10, 2005, EMCORE entered into an exchange agreement with Alexandra
Global Master Fund Ltd. to exchange $14,425,000 aggregate principal amount of
EMCORE’s outstanding convertible subordinated notes due May 15, 2006 for
$16,580,460 aggregate principal amount of newly issued convertible senior
subordinated notes due May 15, 2011. The notes were converted into
shares of our common stock on January 29, 2008 in connection with the
transaction on this date described below.
2. On
November 8, 2005, EMCORE entered into an asset purchase agreement with
Phasebridge, Inc., a privately held company located in Pasadena, California. In
connection with the asset purchase, based on a 10-trading day weighted average
price, EMCORE issued 128,205 shares of EMCORE common stock, no par value, that
were valued in the transaction at $0.7 million. The offer and sale
was made pursuant to Rule 506 of Regulation D under the Securities Act of 1933,
as amended (Securities Act), and without registration under the Securities Act,
in reliance on the exemption provided thereby. EMCORE relied upon the
representations, warranties, and agreements of Phasebridge, including its
agreement with respect to restrictions on resale, in support of the satisfaction
of the conditions of such exemption.
3. On
December 18, 2005, EMCORE entered into an asset purchase agreement with Force,
Inc., a privately held company located in Christiansburg, Virginia. In
connection with the asset purchase, EMCORE issued 240,000 shares of EMCORE
common stock, no par value, with a market value of $1.6 million at the
measurement date and $0.5 million in cash. The offer and sale was made pursuant
to Rule 506 of Regulation D under the Securities Act, and without registration
under the Securities Act, in reliance on the exemption provided
thereby. EMCORE relied upon the representations, warranties, and
agreements of Force, including its agreement with respect to restrictions on
resale, in support of the satisfaction of the conditions of such
exemption.
4. On
January 12, 2006, EMCORE entered into an Agreement and Plan of Merger with K2
Optronics, Inc., a privately held company located in Sunnyvale, California (K2)
and EMCORE Optoelectronics Acquisition Corporation, a wholly owned subsidiary of
EMCORE. In connection with the merger, EMCORE issued 548,688 shares of EMCORE
common stock, no par value, to K2’s shareholders.
5. On
January 29, 2008, EMCORE, in privately negotiated transactions, entered into
separate agreements with holders of approximately 97.5%, or approximately $83.3
million aggregate principal amount, of its outstanding 5.50% convertible senior
subordinated notes due 2011 (the “Notes”) pursuant to which this small number of
holders converted their Notes into the Company’s common stock. In
connection with the conversion of the Notes, the Company issued 11,884,937
shares of its common stock, based on a conversion price of $7.01, in accordance
with the terms of the Notes. The issuance of the Company’s common
stock upon conversion of the Notes is made in reliance on the exemption from the
registration requirements provided under Section 3(a)(9) of the Securities Act
of 1933. To incentivize the holders to convert their Notes, the
Company made cash payments to such holders equal to 4% of the principal amount
of the Notes converted, or $3.3 million, plus accrued interest of approximately
$1.0 million on the Notes converted. Subsequently, the
remaining $2.2 million in outstanding Notes were converted for 302,019 shares at
$7.01, in accordance with the terms of the Notes for a total of 12,186,656
shares.
6. On
February 20, 2008, we completed a private placement to accredited investors of
8,000,000 shares of our common stock, no par value, and warrants to purchase an
additional 1,400,003 shares of our common stock. The purchase price
was $12.50 per share, priced at the 20 day volume-weighted average
price. The warrants grant the holder the right to purchase one share
of our common stock at a price of $15.06 per share. The warrants are
immediately exercisable and remain exercisable for a period of 5 years from the
closing date.
7. On
February 22, 2008, EMCORE completed its previously announced acquisition of the
telecom portion of Intel Corporation’s Optical Platform Division. The
telecom assets acquired include intellectual property, assets and technology
comprised of tunable lasers, tunable transponders, 300-pin transponders, and
integrated tunable laser assemblies (ITLA). The purchase price was
$75 million in cash and $10 million in the Company’s common stock, priced at a
volume-weighted average price of $13.84 per share. Under the terms of
the Agreement, the purchase price of $85 million could be adjusted based on an
inventory true-up, plus specifically assumed liabilities.
Item
16. Exhibits and Financial Statement Schedules
(a)
Exhibits.
Exhibit
Number
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Description
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2.1
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Asset
Purchase Agreement, dated as of November 3, 2003, by and among Veeco St.
Paul Inc., Veeco Instruments Inc., and Registrant (incorporated by
reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K filed
on November 18, 2003).
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2.2
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Purchase
Agreement, dated as of May 27, 2005, between JDS Uniphase Corporation and
Registrant (incorporated by reference to Exhibit 2.1 to Registrant’s
Current Report on Form 8-K filed on June 3, 2005).
|
2.3
|
Merger
Agreement, dated January 12, 2006, by and among K2 Optronics, Inc., EMCORE
Corporation, and EMCORE Optoelectronics Acquisition Corp. (incorporated by
reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed
on January 19, 2006).
|
2.4
|
Asset
Purchase Agreement between IQE RF, LLC, IQE plc, and EMCORE Corporation,
dated July 19, 2006. (incorporated by reference to Exhibit 2.1 to
Registrant’s Current Report on Form 8-K filed on July 24,
2006).
|
2.5
|
Membership
Interest Purchase Agreement, dated as of August 31, 2006, by and between
General Electric Company, acting through the GE Lighting operations of its
Consumer and Industrial division, and EMCORE Corporation (incorporated by
reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed
on September 7, 2006).
|
2.6
|
Stock
Purchase Agreement, dated as of April 13, 2007, by and among Registrant,
Opticomm Corporation and the persons named on Exhibit 1 thereto
(incorporated by reference to Exhibit 2.1 to Registrant’s Current Report
on Form 8-K filed April 19, 2007).
|
2.7
|
Asset
Purchase Agreement, dated December 17, 2007, between Registrant and Intel
Corporation (incorporated by reference to Exhibit 2.1 to Registrant’s
Quarterly Report on Form 10-Q for the quarter ended December 31,
2007).
|
3.1
|
Restated
Certificate of Incorporation, dated December 21, 2000 (incorporated by
reference to Exhibit 3.1 to Registrant's Annual Report on Form 10-K for
the fiscal year ended September 30, 2000).
|
3.2
|
Amended
By-Laws, as amended through December 14, 2006 (incorporated by reference
to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed on
December 20, 2006).
|
4.1
|
Indenture,
dated as of February 24, 2004, between Registrant and Deutsche Bank Trust
Company Americas, as Trustee (incorporated by reference to Exhibit 4.3 to
Registrant's Annual Report on Form 10-K for the fiscal year ended
September 30, 2004).
|
4.2
|
Note
dated as of February 24, 2004, in the amount of $80,276,000 (incorporated
by reference to Exhibit 4.4 to Registrant's Annual Report on Form 10-K for
the fiscal year ended September 30, 2004).
|
4.3
|
Note,
dated as of November 16, 2005, in the amount of $16,580,460 (incorporated
by reference to Exhibit 4.5 to Registrant’s Annual Report on Form 10-K for
the fiscal year ended September 30, 2005).
|
4.4
|
Indenture,
dated as of November 16, 2005, between Registrant and Deutsche Bank Trust
Company Americas, as Trustee (incorporated by reference to Exhibit 4.6 to
Registrant’s Annual Report on Form 10-K for the fiscal year ended
September 30, 2005).
|
4.5
|
Specimen
certificate for shares of common stock (incorporated by reference to
Exhibit 4.1 to Amendment No. 3 to the Registration Statement on Form S-1
(File No. 333-18565) filed with the Commission on February 24,
1997).
|
4.6
|
First
Supplemental Indenture, dated as of April 9, 2007, by and between EMCORE
Corporation and Deutsche Bank Trust Company Americas, as trustee, amending
the Indenture, dated as of February 24, 2004, by and between Registrant
and Deutsche Bank Trust Company Americas, as trustee (incorporated by
reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed
on April 10, 2007).
|
4.7
|
First
Supplemental Indenture, dated as of April 9, 2007, by and between EMCORE
Corporation and Deutsche Bank Trust Company Americas, as trustee, amending
the Indenture, dated as of November 16, 2005, by and between Registrant
and Deutsche Bank Trust Company Americas, as trustee (incorporated by
reference to Exhibit 4.2 to Registrant’s Current Report on Form 8-K filed
on April 10, 2007).
|
5.1**
|
Opinion
of Jenner & Block LLP
|
5.2**
|
Opinion
of Dillon, Bitar & Luther, L.L.C.
|
10.1†
|
1995
Incentive and Non-Statutory Stock Option Plan (incorporated by reference
to Exhibit 10.1 to the Amendment No. 1 to the Registration Statement on
Form S-1 filed on February 6, 1997).
|
10.2†
|
1996
Amendment to Option Plan (incorporated by reference to Exhibit 10.2 to
Amendment No. 1 to the Registration Statement on Form S-1 filed on
February 6, 1997).
|
10.3†
|
MicroOptical
Devices 1996 Stock Option Plan (incorporated by reference to Exhibit 99.1
to the Registration Statement on Form S-8 filed on February 6,
1998).
|
10.4†
|
2000
Stock Option Plan, as amended and restated on February 13, 2006
(incorporated by reference to Exhibit 10.1 to Registrant’s Current Report
on Form 8-K filed on February 17, 2006).
|
10.5†
|
Amended
and Restated Section 2(n) of Amended and Restated EMCORE Corporation 2000
Stock Option Plan (incorporated by reference to Exhibit 99.1 to
Registrant’s Current Report on Form 8-K filed on April 19,
2007).
|
10.6†
|
2000
Employee Stock Purchase Plan, as amended and restated on February 13, 2006
(incorporated by reference to Exhibit 10.2 to Registrant’s Current Report
on Form 8-K filed on February 17, 2006).
|
10.7†
|
Directors’
Stock Award Plan (incorporated herein by reference to Exhibit 99.1 to
Registrant’s Original Registration Statement of Form S-8 filed on November
5, 1997), as amended by the Registration Statement on Form S-8 filed on
August 10, 2004.
|
10.8
|
Memorandum
of Understanding, dated as of September 26, 2007 between Lewis Edelstein
and Registrant regarding shareholder derivative litigation (incorporated
by reference to Exhibit 10.10 to Registrant’s Annual Report on Form 10-K
for the fiscal year ended September 20, 2006).
|
10.9†
|
Fiscal
2007 Executive Bonus Plan (incorporated by reference to Registrant’s
Current Report on Form 8-K filed on September 4, 2007).
|
10.10†
|
Executive
Severance Policy (incorporated by reference to Exhibit 10.2 to
Registrant’s Current Report on Form 8-K filed on April 19,
2007).
|
10.11†
|
Outside
Directors Cash Compensation Plan, as amended and restated on February 13,
2006 (incorporated by reference to Exhibit 10.3 to Registrant’s Current
Report on Form 8-K filed on February 17,
2006).
|
43
10.12
|
Exchange
Agreement, dated as of November 10, 2005, by and between Alexandra Global
Master Fund Ltd. and Registrant (incorporated by reference to Exhibit
10.15 to Registrant’s Annual Report on Form 10-K for the fiscal year ended
September 30, 2005).
|
10.13
|
Consent
to Amendment and Waiver, dated as of April 9, 2007, by and among EMCORE
Corporation and certain holders of the 2004 Notes party thereto
(incorporated by reference to Exhibit 10.1 to Registrant’s Current Report
on Form 8-K filed on April 10, 2007).
|
10.14
|
Consent
to Amendment and Waiver, dated as of April 9, 2007, by and between EMCORE
Corporation and the holder of the 2005 Notes (incorporated by reference to
Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on April 10,
2007).
|
10.15
|
Investment
Agreement between WorldWater and Power Corp. and Registrant, dated
November 29, 2006 (incorporated by reference to Exhibit 10.1 to
Registrant’s Current Report on Form 8-K filed on December 5,
2006).
|
10.16
|
Registration
Rights Agreement between WorldWater and Power Corp. and Registrant, dated
November 29, 2006 (incorporated by reference to Exhibit 10.1 to
Registrant’s Current Report on Form 8-K filed on December 5,
2006).
|
10.17
|
Letter
Agreement between WorldWater and Power Corp. and Registrant, dated
November 29, 2006 (incorporated by reference to Exhibit 10.3 to
Registrant’s Current Report on Form 8-K filed on December 5, 2006).
Confidential Treatment has been requested by the Company with respect to
portions of this document. Such portions are indicated by
“*****”.
|
10.18†
|
Dr.
Hong Hou Offer Letter dated December 14, 2006 (incorporated by reference
to Exhibit 10.1 to Registrant’s Current Report filed on December 20,
2006).
|
10.19
|
Stipulation
of Compromise and Settlement, dated as of November 28, 2007 executed by
the Company and the other defendants and the plaintiffs in the Federal
Court Action and the State Court Actions. (incorporated by reference to
Exhibit 10.19 to Registrant’s Annual Report on Form 10-K for the fiscal
year ended September 30, 2007).
|
10.20†
|
2007
Director’s Stock Award Plan (incorporated by reference to Exhibit 10.1 to
Registrant’s Quarterly Report on Form 10-Q for the quarter ended December
31, 2007).
|
10.21
|
Securities
Purchase Agreement dated February 15, 2008 by and among the Registrant and
the purchasers listed therein (incorporated by reference to Exhibit 10.1
to Registrant’s Current Report on Form 8-K filed on February 20,
2008).
|
10.22
|
Registration
Rights Agreement dated February 15, 2008 by and among the Registrant and
the purchasers listed therein (incorporated by reference to Exhibit 10.2
to Registrant’s Current Report on Form 8-K filed on February 20,
2008).
|
10.23
|
Form
of Warrant (incorporated by reference to Exhibit 10.3 to Registrant’s
Current Report on Form 8-K filed on February 20, 2008).
|
14.1
|
Code
of Ethics for Financial Professionals (incorporated by reference to
Exhibit 14.1 to Registrant’s Annual Report on Form 10-K for the fiscal
year ended September 30, 2003).
|
Subsidiaries
of the Registrant
|
|
23.1**
|
Consent
of Deloitte & Touche LLP
|
23.2**
|
Consent
of Jenner & Block LLP (contained in Exhibit 5.1)
|
23.3**
|
Consent
of Dillon, Bitar & Luther, L.L.C. (contained in Exhibit
5.2)
|
_________
* Filed herewith
**
To be filed by amendment
† Management contract or compensatory
plan
(b) Financial
Statement Schedules. Not
applicable.
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:
(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 this 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 this 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
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement;
(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, 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 the time shall be deemed to be the initial bona fide offering
thereof.
(3) The
undersigned registrant hereby undertakes 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.
(4) That,
for purposes of determining liability under the Securities Act to any
purchaser:
(i) Each
prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form
of prospectus is first used after effectiveness.
Provided, however, that no statement
made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such effective
date.
(5) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant, EMCORE
Corporation, has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Albuquerque, State of New Mexico, on the 21st day of March, 2008.
EMCORE
CORPORATION
|
||
Date:
March 21, 2008
|
By:
|
/s/
Reuben F. Richards, Jr.
|
Reuben
F. Richards, Jr.
|
||
Chief
Executive Officer
(Principal
Executive Officer)
|
POWER
OF ATTORNEY
Each
person whose signature appears below constitutes and appoints and hereby
authorizes Reuben F. Richards, Jr. and, severally, such person’s true and lawful
attorneys-in-fact, with full power of substitution or resubstitution, for such
person and in his name, place and stead, in any and all capacities, to sign on
such person’s behalf, individually and in each capacity stated below, any and
all amendments, including post-effective amendments to this Form S-1, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission granting unto said attorneys-in-fact, 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 such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Exchange Act of 1933, this registration
statement has been signed by the following persons on behalf of the registrant
in the capacities indicated, on March 21, 2008.
Signature
|
Title
|
|
/s/ Thomas J. Russell
|
||
Thomas
J. Russell, Ph.D.
|
Chairman
of the Board and Director
|
|
/s/
Reuben F. Richards, Jr.
|
||
Reuben
F. Richards, Jr.
|
Chief
Executive Officer and Director (Principal Executive
Officer)
|
|
/s/ Adam Gushard
|
||
Adam
Gushard
|
Interim
Chief Financial Officer (Principal Financial and Accounting
Officer)
|
|
/s/ Hong Q. Hou
|
||
Hong
Q. Hou, Ph.D.
|
President,
Chief Operating Officer, and Director
|
|
/s/ Charles T. Scott
|
||
Charles
T. Scott
|
Director
|
|
/s/ John
Gillen
|
||
John
Gillen
|
Director
|
|
/s/ Robert Bogomolny
|
||
Robert
Bogomolny
|
Director
|
|
/s/ Thomas G.
Werthan
|
||
Thomas
G. Werthan
|
Director
|
46