As filed with the Securities and Exchange Commission on December 6, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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REGISTRATION STATEMENT
ON
FORM S-3
UNDER THE SECURITIES ACT OF 1933
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ODETICS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-2588496
(State or other jurisdiction of (I.R.S. Employer
incorporation ) Identification Number)
1515 SOUTH MANCHESTER AVENUE
ANAHEIM, CALIFORNIA 92802
(714) 774-5000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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JOEL SLUTZKY
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
ODETICS, INC.
1515 SOUTH MANCHESTER AVENUE
ANAHEIM, CALIFORNIA 92802
(714) 774-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
ELLEN S. BANCROFT, ESQ.
ELIZABETH T. HALL, ESQ.
BROBECK, PHLEGER & HARRISON LLP
38 TECHNOLOGY DRIVE
IRVINE, CALIFORNIA 92618
(949) 790-6300
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
===================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE
---------------------------------------------------------------------------------------------------
Class A common stock,
$0.10 par value per share 1,979,449 shares $1.20 $2,375,339 $567.71
(including associated
preferred stock purchase
rights)
===================================================================================================
(1) Estimate based upon the average of the high and low sales prices of the
Registrant's Class A common stock on December 3, 2001, as reported by
the Nasdaq National Market, pursuant to Rule 457(c) promulgated under
the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
PROSPECTUS
1,979,449 SHARES
ODETICS, INC.
CLASS A COMMON STOCK
This prospectus relates to the public offering, which is not being
underwritten, of a total of 1,979,449 shares of the Class A Common Stock of
Odetics, Inc. by the selling stockholders listed on page 16. The prices at which
the selling stockholders may sell the shares will be determined by the
prevailing market price for the shares or in negotiated transactions. We will
not receive any of the proceeds from the sale of these shares.
We have two classes of common stock outstanding -- the Class A common stock
and the Class B common stock. The rights, preferences and privileges of each
class of common stock are identical in all respects except for voting rights. As
of the date of this prospectus, the holders of the Class A common stock are
entitled to elect 25% of the Board of Directors rounded up to the nearest whole
number, or two directors, and the holders of the Class A common stock and the
Class B common stock, voting together as a single class, are entitled to elect
the balance of the Board, or six directors. On all other matters to be addressed
by a stockholder vote, the holders of Class A common stock have one-tenth of one
vote per share held and the holders of Class B common stock have one vote per
share held.
Our Class A common stock and our Class B common stock are quoted on the
Nasdaq National Market under the symbol "ODETA" and "ODETB," respectively. On
December 3, 2001, the last reported sale price for the Class A common stock was
$1.20 per share and the last reported sale price for the Class B common stock
was $1.49 per share.
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YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 2 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE CLASS A COMMON STOCK OFFERED BY THIS
PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is December 6, 2001.
ODETICS
Odetics, Inc. is engaged in the development of communication and technology
companies that may be spun-off to its stockholders. Our companies develop
software and hardware-based solutions for the intelligent transportation
systems, telecommunications, video security and television broadcast markets.
We define our business segments as ITS, video products and telecom
products. The ITS segment consists of our majority-owned subsidiary, Iteris,
Inc. The video products segment includes our wholly-owned subsidiaries,
Broadcast, Inc. and MAXxess Systems, Inc. (previously known as Gyyr
Incorporated). The telecom products segment consists of Zyfer, Inc., our
wholly-owned subsidiary (formerly known as our Communications division). In
April 2001, Gyyr separated its operations into two divisions, the Gyyr CCTV
Products division, which manufactures analog and digital storage solutions, and
the Gyyr Electronic Access Control division, which manufactures enterprise
security management systems. In September 2001, we sold substantially all of the
assets and certain liabilities of the Gyyr CCTV Products division. In connection
with the sale, we changed the name of Gyyr to MAXxess Systems, Inc. to reflect
the focus of the business on Electronic Access Control systems.
Our principal executive offices are located at 1515 South Manchester
Avenue, Anaheim, California 92802, and our telephone number is (714) 774-5000.
RISK FACTORS
Our business is subject to a number of risks, some of which are discussed
below. Other risks are presented elsewhere in this prospectus and in the
information incorporated by reference into the prospectus. You should consider
the following risks carefully in addition to the other information contained in
this prospectus (including the information incorporated by reference) before
purchasing the shares of our common stock. The risks and uncertainties described
below are not the only ones facing our company. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may
also affect our business operations. If any of these risks actually occur, our
business, financial condition or results of operations could be seriously
harmed. In that event, the market price for our common stock could decline and
you may lose all or part of your investment.
Before deciding to invest in our company or to maintain or increase your
investment, you should carefully consider the risks described below, in addition
to the other information contained in this Prospectus and in our other filings
with the SEC, including our Annual Report on Form 10-K/A for the year ended
March 31, 2001, as well as our subsequent reports on Forms 10-Q and 8-K.
WE HAVE EXPERIENCED SUBSTANTIAL LOSSES AND EXPECT FUTURE LOSSES. We
experienced net losses of $22.9 million for the six months ended September 30,
2001, $49.8 million for the year ended March 31, 2001, and $38.7 million for the
year ended March 31, 2000. In January 2001, we announced the reorganization of
our business in order to reduce our operating expenses and negative cash flow,
which included the downsizing of our operations in Gyyr and Broadcast, and a 25%
reduction in our total work force. In the second fiscal quarter of 2001, we
experienced
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further downsizing in connection with our sale of the Gyyr CCTV Products
division and the discontinuation of the business of our Mariner Networks
subsidiary. We cannot assure you that our efforts to downsize our operations
will improve our financial performance, or that we will be able to achieve
profitability on a quarterly or annual basis in the future. Most of our expenses
are fixed in advance, and we generally are unable to reduce our expenses
significantly in the short-term to compensate for any unexpected delay or
decrease in anticipated revenues. As a result, we may continue to experience
losses, which would make it difficult to fund our operations and achieve our
business plan, and could cause the market price of our common stock to decline.
WE WILL NEED TO RAISE ADDITIONAL CAPITAL IN THE FUTURE AND MAY NOT BE ABLE
TO SECURE ADEQUATE FUNDS ON TERMS ACCEPTABLE TO US, OR AT ALL. We have generated
significant net losses in recent periods, and have experienced negative cash
flows from operations in the amount of $11.6 million for the six months ended
September 30, 2001, and $20.1 million for the year ended March 31, 2001. We may
need to raise additional capital in the future. Our $16.0 million promissory
note with Castle Creek Technology Partners LLC is due and payable in May 2002
and is secured by our real property in Anaheim, California that comprises our
principal facilities. Our Iteris subsidiary also currently maintains a $5.0
million line of credit which expires in August 2004. Substantially all of the
assets of Iteris have been pledged to the lender to secure the outstanding
indebtedness under this facility ($0.6 million was outstanding at October 31,
2001). Even though we retired our bank line of credit in this quarter, we also
incurred cash obligations in the amount of $3.0 million payable over the next 12
months related to our discontinuation of Mariner Networks and the reorganization
of our European operations. We may need to sell or refinance our real property
or raise additional capital in the near future, either through bank borrowings,
other debt or equity financings, or the divestiture of business units or select
assets. We cannot assure you that any additional capital will be available on a
timely basis, on acceptable terms, or at all. These conditions, together with
our recurring losses and cash requirements, raise substantial doubt about our
ability to continue as a going concern.
Our capital requirements will depend on many factors, including:
- our ability to control costs;
- market acceptance of our products and the overall level of sales of
our products;
- our ability to generate operating income;
- increased research and development funding, and required investments
in our business units;
- increased sales and marketing expenses;
- technological advancements and our competitors' response to our
products;
- capital improvements to new and existing facilities;
- potential acquisitions of businesses and product lines;
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- our relationships with customers and suppliers; and
- general economic conditions including the effects of the current
economic slowdown and international conflicts.
If our capital requirements are materially different from those currently
planned, we may need additional capital sooner than anticipated. If additional
funds are raised through the issuance of equity or convertible debt securities,
the percentage ownership of our stockholders will be reduced and such securities
may have rights, preferences and privileges senior to our common stock.
Additional financing may not be available on favorable terms or at all. If
adequate funds are not available or are not available on acceptable terms, we
may be unable to develop or enhance our products, expand our sales and marketing
programs, take advantage of future opportunities or respond to competitive
pressures.
THE TRADING PRICE OF OUR COMMON STOCK IS VOLATILE AND OUR COMMON STOCK
COULD BE DELISTED FROM THE NASDAQ NATIONAL MARKET. The trading price of our
common stock has been subject to wide fluctuations in the past. Since January
2000, our Class A common stock has traded at prices as low as $1.05 per share
and as high as $29.44 per share. If our stock price declines below $1.00 for an
extended period of time or if our net tangible assets remain below $4.0 million,
our common stock may be delisted from the Nasdaq National Market and we may be
forced to seek another market for our stock. As such, you may not be able to
resell your shares of common stock at or above the price you paid for them. The
market price of our common stock could continue to fluctuate in the future in
response to various factors, including, but not limited to:
- quarterly variations in operating results;
- our ability to control costs and improve cash flow;
- shortages announced by suppliers;
- announcements of technological innovations or new products by our
competitors, customers or us;
- acquisitions or businesses, products or technologies;
- changes in pending litigation or new litigation;
- changes in investor perceptions;
- our ability to spin-off any business unit;
- applications or product enhancements by us or by our competitors; and
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- changes in earnings estimates or investment recommendations by
securities analysts.
The stock market in general has recently experienced volatility, which has
particularly affected the market prices of equity securities of many high
technology companies. This volatility has often been unrelated to the operating
performance of these companies. These broad market fluctuations may adversely
affect the market price of our common stock. In the past, companies that have
experienced volatility in the market price of their securities have been the
subject of securities class action litigation. If we were to become the subject
of a class action lawsuit, it could result in substantial losses and divert
management's attention and resources from other matters.
WE ARE EXPOSED TO THE RISKS ASSOCIATED WITH THE RECENT WORLDWIDE ECONOMIC
SLOWDOWN AND RELATED UNCERTAINTIES. Concerns about inflation, decreased consumer
confidence, reduced corporate profits and capital spending, and recent
international conflicts and terrorist and military actions have resulted in a
downturn in worldwide economic conditions, particularly in the United States. As
a result of these unfavorable economic conditions, we have experienced a
slowdown in customer orders, cancellations and rescheduling of backlog and
higher overhead costs. In addition, recent political and social turmoil related
to international conflicts and terrorist acts can be expected to put further
pressure on economic conditions in the U.S. and worldwide. These political,
social and economic conditions make it extremely difficult for our customers,
our suppliers and us to accurately forecast and plan future business activities.
If such conditions continue or worsen, our business, financial condition and
results of operations will likely be materially and adversely affected.
OUR QUARTERLY OPERATING RESULTS FLUCTUATE AS A RESULT OF MANY FACTORS. Our
quarterly revenues and operating results have fluctuated and are likely to
continue to vary from quarter to quarter due to a number of factors, many of
which are not within our control. Factors that could affect our revenues
include, among others, the following:
- our ability to raise additional capital or monetize our real property;
- our significant investment in research and development for our
subsidiaries and business units;
- our ability to control costs;
- international conflicts and acts of terrorism;
- our ability to develop, introduce, market and gain market acceptance
- of new products applications and product enhancements in a timely
manner;
- the size, timing, rescheduling or cancellation of significant customer
orders;
- the introduction of new products by competitors;
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- the availability of components used in the manufacture of our
products;
- changes in our pricing policies and the pricing policies by our
suppliers and competitors, pricing concessions on volume sales, as
well as increased price competition in general;
- the long lead times associated with government contracts or required
by vehicle manufacturers;
- our success in expanding and implementing our sales and marketing
programs;
- the effects of technological changes in our target markets;
- our relatively small level of backlog at any given time;
- the mix of sales among our business units;
- deferrals of customer orders in anticipation of new products,
applications or product enhancements;
- the risks inherent in our acquisitions of technologies and businesses;
- risks and uncertainties associated with our international business;
- currency fluctuations and our ability to get currency out of certain
foreign countries; and
- general economic and political conditions.
In addition, our sales in any quarter may consist of a relatively small
number of large customer orders. As a result, the timing of a small number of
orders may impact our quarter to quarter results. The loss of or a substantial
reduction in orders from any significant customer could seriously harm our
business, financial condition and results of operations.
Due to all of the factors listed above and other risks discussed in this
prospectus, our future operating results could be below the expectations of
securities analysts or investors. If that happens, the trading price of our
common stock could decline. As a result of these quarterly variations, you
should not rely on quarter-to-quarter comparisons of our operating results as an
indication of our future performance.
OUR OPERATING STRATEGY FOR DEVELOPING COMPANIES IS EXPENSIVE AND MAY NOT BE
SUCCESSFUL. Our business strategy historically has required us to make
significant investments in our business units, both for research and
development, and also to develop a separate infrastructure for certain of our
business units, sufficient to allow the unit to function as an independent
company. We expect to continue to invest in the development of certain of our
business units with the goal of achieving profitability in each of our business
units, and to a lesser extent, to monetize those business units for the benefit
of our stockholders through an initial public offering, spin-off or sale to a
strategic buyer. We may not recognize the benefits of
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these investments for a significant period of time, if at all. Our ability to
achieve profitability in any business unit, to complete any private or public
offerings of securities by any of our business units, and/or to spin-off our
interest in the business unit to our stockholders will depend upon many factors,
including:
- the overall performance and results of operations of the particular
business unit;
- the potential market for our business unit;
- our ability to assemble and retain a qualified management team for the
business unit;
- our financial position and cash requirements;
- the business unit's customer base and product line;
- the current tax treatment of spin-off and sale transactions, and our
ability to obtain favorable determination letters from the Internal
Revenue Service; and
- general economic and market conditions, including the receptiveness of
the stock markets to initial public offerings and private placements.
We may not be able to achieve profitability in our business units, to
complete a successful private or public offering or to spin-off of any of our
business units in the near future, or at all. During fiscal 2001, we attempted
to complete the initial public offering of Iteris, but withdrew the offering due
to adverse market conditions. Even if we are able to achieve profitability and
the market is receptive to public offerings, we may decide not to complete any
further offerings, spin-off a particular business unit, or to delay the spin-off
until a later date.
WE MUST KEEP PACE WITH RAPID TECHNOLOGICAL CHANGE TO REMAIN COMPETITIVE.
Our target markets are in general characterized by the following factors:
- rapid technological advances;
- downward price pressure in the marketplace as technologies mature;
- changes in customer requirements;
- frequent new product introductions and enhancements; and
- evolving industry standards and changes in the regulatory environment.
Our future success will depend upon our ability to anticipate and adapt to
changes in technology and industry standards, and to effectively develop,
introduce, market and gain broad acceptance of new products and product
enhancements incorporating the latest technological advancements.
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We believe that we must continue to make substantial investments to support
ongoing research and development in order to remain competitive. We need to
continue to develop and introduce new products that incorporate the latest
technological advancements in hardware, storage media, operating system software
and applications software in response to evolving customer requirements. Our
business and results of operations could be adversely affected if we do not
anticipate or respond adequately to technological developments or changing
customer requirements. We cannot assure you that any such investments in
research and development will lead to any corresponding increase in revenue.
OUR FUTURE SUCCESS DEPENDS ON THE SUCCESSFUL DEVELOPMENT AND MARKET
ACCEPTANCE OF NEW PRODUCTS. We believe our revenue growth and future operating
results will depend on our ability to complete development of new products and
enhancements, introduce these products in a timely, cost-effective manner,
achieve broad market acceptance of these products and enhancements, and reduce
our product costs. We may not be able to introduce any new products or any
enhancements to our existing products on a timely basis, or at all. In addition,
the introduction of any new products could adversely affect the sales of our
certain of our existing products.
Our future success will also depend in part on the success of several
recently introduced products including CommSync II, a Zyfer solution for secure,
high speed, point-to-point communications; AutoVue, our lane departure warning
system; and Airo 9.0, our broadcast automation solution. Market acceptance of
our new products depends upon many factors, including our ability to accurately
predict market requirements and evolving industry standards, our ability to
resolve technical challenges in a timely and cost-effective manner and achieve
manufacturing efficiencies, the perceived advantages of our new products over
traditional products and the marketing capabilities of our independent
distributors and strategic partners. Our business and results of operations
could be seriously harmed by any significant delays in our new product
development. Certain of our new products could contain undetected design faults
and software errors or "bugs" when first released by us, despite our testing. We
may not discover these faults or errors until after a product has been installed
and used by our customers. Any faults or errors in our existing products or in
any new products may cause delays in product introduction and shipments, require
design modifications or harm customer relationships, any of which could
adversely affect our business and competitive position.
We currently outsource the manufacture of our AutoVue product line to a
single manufacturer. This manufacturer may not be able to produce sufficient
quantities of this product in a timely manner or at a reasonable cost, which
could materially and adversely affect our ability to launch or gain market
acceptance of AutoVue.
WE HAVE SIGNIFICANT INTERNATIONAL SALES AND ARE SUBJECT TO RISKS ASSOCIATED
WITH OPERATING IN INTERNATIONAL MARKETS. International sales represented 13% of
our net sales and contract revenues for the six months ended September 30, 2001,
20% for the fiscal year ended March 31, 2001, and 19% for the fiscal year ended
March 31, 2000. During the three months ended September 30, 2001, we reorganized
our European operations, which included the discontinuation of our Odetics
Europe Ltd., Gyyr Europe Ltd., Mariner France and Mariner Europe Ltd.
operations, and the transition of our Broadcast and MAXxess international
operations to branch office operations with the intent of lowering our
international costs. This
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reorganization may result in significantly lower international sales in future
periods, unanticipated liabilities related to the closures, and may not achieve
the anticipated cost savings. We may also face challenges in managing and
transitioning our international operations as we have not traditionally operated
through branch offices. In addition, the recent terrorist attacks in the United
States and heightened security may adversely impact our international sales and
could make our international operations more expensive.
International business operations are also subject to other inherent risks,
including, among others:
- unexpected changes in regulatory requirements, tariffs and other trade
barriers or restrictions;
- longer accounts receivable payment cycles;
- difficulties in managing and staffing international operations;
- potentially adverse tax consequences;
- the burdens of compliance with a wide variety of foreign laws;
- import and export license requirements and restrictions of the United
States and each other country in which we operate;
- exposure to different legal standards and reduced protection for
intellectual property rights in some countries;
- currency fluctuations and restrictions; and
- political, social and economic instability.
We believe that international sales will continue to represent a
significant portion of our revenues, and that continued growth and profitability
may require further expansion of our international operations. Nearly all of our
international sales from this point on are denominated in U.S. dollars. As a
result, an increase in the relative value of the dollar could make our products
more expensive and potentially less price competitive in international markets.
We do not engage in any transactions as a hedge against risks of loss due to
foreign currency fluctuations.
Any of these factors may adversely effect our future international sales
and, consequently, effect our business, financial condition and operating
results. Furthermore, if we increase our international sales, our total revenues
may also be affected to a greater extent by seasonal fluctuations resulting from
lower sales that typically occur during the summer months in Europe and other
parts of the world.
WE NEED TO MANAGE GROWTH AND THE INTEGRATION OF OUR ACQUISITIONS. Over the
past few years, we have expanded our operations and made several substantial
acquisitions of diverse businesses, including Intelligent Controls, Inc.,
International Media Integration Services, Ltd., Meyer Mohaddes Associates, Inc.,
Viggen Corporation, and certain assets of the Transportation
9
Systems business of Rockwell International. A key element of our business
strategy involves expansion through the acquisition of complementary businesses,
products and technologies. Acquisitions may require significant capital
infusions and, in general, acquisitions also involve a number of special risks,
including:
- potential disruption of our ongoing business and the diversion of our
resources and management's attention;
- the failure to retain or integrate key acquired personnel;
- the challenge of assimilating diverse business cultures, and the
difficulties in integrating the operations, technologies and
information system of the acquired companies;
- increased costs to improve managerial, operational, financial and
administrative systems and to eliminate duplicative services;
- the incurrence of unforeseen obligations or liabilities;
- potential impairment of relationships with employees or customers as a
result of changes in management; and
- increased interest expense and amortization of acquired intangible
assets.
Acquisitions may also materially and adversely affect our operating results
due to large write-offs, contingent liabilities, substantial depreciation,
deferred compensation charges or goodwill amortization, or other adverse tax or
audit consequences.
Our competitors are also soliciting potential acquisition candidates, which
could both increase the price of any acquisition targets and decrease the number
of attractive companies available for acquisition. We cannot assure you that we
will be able to consummate any additional acquisitions, successfully integrate
any acquisitions or realize the benefits anticipated from any acquisition.
To the extent we complete any additional acquisitions, such acquisitions
are expected to place a significant strain on our resources. To accommodate
acquisitions, we anticipate that we will be required to implement a variety of
new and upgraded operational and financial systems, procedures and controls,
including the improvement of our accounting and other internal management
systems. All of these updates will require substantial additional expense as
well as management effort. Our failure to manage growth and integrate our
acquisitions successfully could adversely affect our business, financial
condition and results of operations.
WE DEPEND ON GOVERNMENT CONTRACTS AND SUBCONTRACTS AND FACE ADDITIONAL
RISKS RELATED TO FIXED PRICE Contracts. A significant portion of the sales by
Iteris and a portion of our sales by Zyfer were derived from contracts with
governmental agencies, either as a general contractor, subcontractor or
supplier. Government contracts represented approximately 25% and 26% of our
total net sales and contract revenues for the years ended March 31, 2000 and
2001,
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respectively, and 35% for the three months ended September 30, 2001. We
anticipate that revenue from government contracts will continue to increase in
the near future. Government business is, in general, subject to special risks
and challenges, including:
- long purchase cycles or approval processes;
- competitive bidding and qualification requirements;
- performance bond requirements;
- delays in funding, budgetary constraints and cut-backs; and
- milestone requirements and liquidated damage provisions for failure to
meet contract milestones.
In addition, a large number of our government contracts are fixed price
contracts. As a result, we may not be able to recover for any cost overruns.
These fixed price contracts require us to estimate the total project cost based
on preliminary projections of the project's requirements. The financial
viability of any given project depends in large part on our ability to estimate
these costs accurately and complete the project on a timely basis. In the event
our costs on these projects exceed the fixed contractual amount, we will be
required to bear the excess costs. These additional costs adversely affect our
financial condition and results of operations. Moreover, certain of our
government contracts are subject to termination or renegotiation at the
convenience of the government, which could result in a large decline in our net
sales in any given quarter. Our inability to address any of the foregoing
concerns or the loss or renegotiation of any material government contract could
seriously harm our business, financial condition and results of operations.
THE MARKETS IN WHICH WE OPERATE ARE HIGHLY COMPETITIVE AND HAVE MANY MORE
ESTABLISHED COMPETITORS. We compete with numerous other companies in our target
markets and we expect such competition to increase due to technological
advancements, industry consolidations and reduced barriers to entry. Increased
competition is likely to result in price reductions, reduced gross margins and
loss of market share, any of which could seriously harm our business, financial
condition and results of operations. Many of our competitors have far greater
name recognition and greater financial, technological, marketing and customer
service resources than we do. This may allow them to respond more quickly to new
or emerging technologies and changes in customer requirements. It may also allow
them to devote greater resources to the development, promotion, sale and support
of their products than we can. Recent consolidations of end users, distributors
and manufacturers in our target markets have exacerbated this problem. As a
result of the foregoing factors, we may not be able to compete effectively in
our target markets and competitive pressures could adversely affect our
business, financial condition and results of operations.
WE CANNOT BE CERTAIN OF OUR ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL AND
WE DO NOT HAVE EMPLOYMENT AGREEMENTS WITH ANY KEY PERSONNEL. Due to the
specialized nature of our business, we are highly dependent on the continued
service of our executive officers and other key management, engineering and
technical personnel, particularly Joel Slutzky, our Chief
11
Executive Officer and Chairman of the Board, and Gregory A. Miner, our Chief
Operating Officer and Chief Financial Officer. We do not have any employment
contracts with any of our four officers or key employees. Mr. Slutzky has
announced a phased succession plan for Odetics, pursuant to which he would turn
over his Chief Executive Officer position to Mr. Miner. Mr. Slutzky's retirement
or the loss of any of our key personnel could seriously harm our development and
marketing efforts, and could adversely affect our business. Our success will
also depend in large part upon our ability to continue to attract, retain and
motivate qualified engineering and other highly skilled technical personnel.
Competition for employees, particularly development engineers, is intense. We
may not be able to continue to attract and retain sufficient numbers of such
highly skilled employees. Our inability to attract and retain additional key
employees or the loss of one or more of our current key employees could
adversely affect upon our business, financial condition and results of
operations.
WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OR ENFORCE OUR INTELLECTUAL
PROPERTY RIGHTS. If we are not able to adequately protect or enforce the
proprietary aspects of our technology, competitors could be able to access our
proprietary technology and our business, financial condition and results of
operations will likely be seriously harmed. We currently attempt to protect our
technology through a combination of patent, copyright, trademark and trade
secret laws, employee and third party nondisclosure agreements and similar
means. Despite our efforts, other parties may attempt to disclose, obtain or use
our technologies or solutions. Our competitors may also be able to independently
develop products that are substantially equivalent or superior to our products
or design around our patents. In addition, the laws of some foreign countries do
not protect our proprietary rights as fully as do the laws of the United States.
As a result, we may not be able to protect our proprietary rights adequately in
the United States or abroad.
From time to time, we have received notices that claim we have infringed
upon the intellectual property of others. Even if these claims are not valid,
they could subject us to significant costs. We have engaged in litigation in the
past, and litigation may be necessary in the future to enforce our intellectual
property rights or to determine the validity and scope of the proprietary rights
of others. Litigation may also be necessary to defend against claims of
infringement or invalidity by others. An adverse outcome in litigation or any
similar proceedings could subject us to significant liabilities to third
parties, require us to license disputed rights from others or require us to
cease marketing or using certain products or technologies. We may not be able to
obtain any licenses on terms acceptable to us, or at all. We also may have to
indemnify certain customers or strategic partners if it is determined that we
have infringed upon or misappropriated another party's intellectual property.
Any of these results could adversely affect on our business, financial condition
and results of operations. In addition, the cost of addressing any intellectual
property litigation claim, both in legal fees and expenses, and the diversion of
management resources, regardless of whether the claim is valid, could be
significant and could seriously harm our business, financial condition and
results of operations.
WE ARE CONTROLLED BY CERTAIN OF OUR OFFICERS AND DIRECTORS. As of November
9, 2001, our officers and directors beneficially owned approximately 28% of the
total combined voting power of the outstanding shares of our Class A common
stock and Class B common stock. As a result of their stock ownership, our
management will be able to significantly influence the election of our directors
and the outcome of corporate actions requiring stockholder approval,
12
such as mergers and acquisitions, regardless of how our other stockholders may
vote. This concentration of voting control may have a significant effect in
delaying, deferring or preventing a change in our management or change in
control and may adversely affect the voting or other rights of other holders of
common stock.
OUR STOCK STRUCTURE AND CERTAIN ANTI-TAKEOVER PROVISIONS MAY AFFECT THE
PRICE OF OUR COMMON STOCK. Certain provisions of our certificate of
incorporation and our stockholder rights plan could make it difficult for a
third party to acquire us, even though an acquisition might be beneficial to our
stockholders. These provisions could limit the price that investors might be
willing to pay in the future for shares of our common stock. Our Class A common
stock entitles the holder to one-tenth of one vote per share and our Class B
common stock entitles the holder to one vote per share. The disparity in the
voting rights between our common stock, as well as our insiders' significant
ownership of the Class B common stock, could discourage a proxy contest or make
it more difficult for a third party to effect a change in our management and
control. In addition, our Board of Directors is authorized to issue, without
stockholder approval, up to 2,000,000 shares of preferred stock with voting,
conversion and other rights and preferences superior to those of our common
stock, as well as additional shares of Class B common stock. Our future issuance
of preferred stock or Class B common stock could be used to discourage an
unsolicited acquisition proposal.
In March 1998, we adopted a stockholder rights plan and declared a dividend
of preferred stock purchase rights to our stockholders. In the event a third
party acquires more than 15% of the outstanding voting control of our company or
15% of our outstanding common stock, the holders of these rights will be able to
purchase the junior participating preferred stock at a substantial discount off
of the then current market price. The exercise of these rights and purchase of a
significant amount of stock at below market prices could cause substantial
dilution to a particular acquiror and discourage the acquiror from pursuing our
company. The mere existence of a stockholder rights plan often delays or makes a
merger, tender offer or proxy contest more difficult.
WE DO NOT PAY CASH DIVIDENDS. We have never paid cash dividends on our
common stock and do not anticipate paying any cash dividends on either class of
our common stock in the foreseeable future.
WE MAY BE SUBJECT TO ADDITIONAL RISKS. The risks and uncertainties
described above are not the only ones facing our company. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may
also adversely affect our business operations.
13
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file with the SEC at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference Room. Our SEC
filings are also available to the public at the SEC's web site at
http://www.sec.gov.
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC. Pursuant to the SEC rules, this prospectus, which forms a
part of the registration statement, does not contain all of the information in
such registration statement. You may read or obtain a copy of the registration
statement from the SEC in the manner described above.
The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. The documents we
incorporate by reference are:
1. Our Annual Report on Form 10-K/A for the fiscal year ended March 31, 2001
filed with the SEC on July 30, 2001;
2. Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2001
filed with the SEC on November 14, 2001;
3. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 filed
with the SEC on August 14, 2001.
4. Our definitive Proxy Statement filed with the SEC on August 13, 2001 in
connection with our 2001 Annual Meeting of Stockholders held on September
14, 2001;
5. Our Current Report on Form 8-K filed with the SEC on October 3, 2001;
6. Our Current Report on Form 8-K filed with the SEC on June 1, 2001;
7. The description of our Class A common stock contained in our registration
statement on Form 8-A filed with the SEC on October 14, 1987, including any
amendment or report filed for the purpose of updating such description; and
8. The description of our preferred stock purchase rights contained in our
registration statement on Form 8-A filed with the SEC on May 1, 1998,
including any amendment or report filed for the purpose of updating such
description.
In addition, we incorporate by reference all reports and other documents
that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the date
of this prospectus and prior to the termination of
14
this offering and all such reports and documents will be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement incorporated herein shall be deemed
to be modified or superseded for purposes of this prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.
We will provide without charge to each person to whom this prospectus is
delivered, upon written or oral request of such person, a copy of any or all of
the foregoing documents incorporated herein by reference. Requests for documents
should be submitted in writing to the Secretary, at Odetics, Inc., 1515 South
Manchester Avenue, Anaheim, California 92802, or by telephone at (714) 774-5000.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain forward-looking statements. These forward-looking statements
are based on our current expectations, estimates and projections about our
industry, management's beliefs and certain assumptions made by us. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates"
and variations of these words or similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that
are difficult to predict. Therefore, our actual results could differ materially
from those expressed or forecasted in any forward-looking statements as a result
of a variety of factors, including those set forth in "Risk Factors" above and
elsewhere in, or incorporated by reference into, this prospectus. We undertake
no obligation to update publicly any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future.
USE OF PROCEEDS
The shares of Class A common stock offered by this prospectus will be sold
by the selling stockholders, and the selling stockholders will receive all of
the proceeds from sales of such shares. We will not receive any proceeds from
sales of the shares offered by this prospectus. However, all of the shares
listed on page 16 as beneficially owned by Castle Creek Technology Partners LLC
("Castle Creek") are issuable upon exercise of currently outstanding warrants to
purchase Class A common stock held by such selling stockholder. We will receive
the proceeds from the exercise of such warrants by Castle Creek and those
proceeds will be used for our general corporate purposes.
15
SELLING STOCKHOLDERS
The following table sets forth the number of shares of our Class A common
stock beneficially owned by the selling stockholders as of November 29, 2001,
based on each selling stockholder's representations regarding its ownership. We
cannot estimate the number of shares that will be held by the selling
stockholders after completion of this offering because the selling stockholder
may sell all or some of the shares and because there currently are no
agreements, arrangements or understandings with respect to the sale of any of
the shares. Except as indicated in this section, we are not aware of any
material relationship between us and the selling stockholders within the past
three years other than as a result of the selling stockholders' beneficial
ownership of our common stock. On November 29, 2001, 10,650,190 shares of our
Class A common stock were outstanding.
BENEFICIALLY OWNED AFTER
OFFERING (2)
NUMBER OF SHARES NUMBER OF SHARES ----------------------------
BENEFICIALLY OWNED BEING OFFERED IN NUMBER OF
SELLING STOCKHOLDER PRIOR TO OFFERING OFFERING SHARES PERCENT(1)
-------------------------------- ------------------ ---------------- ---------- ----------
Abbas Mohaddes .................... 540,223 494,217 46,006 *
Michael P. Meyer .................. 564,323 494,217 70,106 *
Gary Hamrick ...................... 99,244 94,434 4,810 *
Viggen Davidian ................... 48,361 43,247 5,114 *
Castle Creek Technology Partners
LLC(3) ......................... 853,334 853,334 -- --
--------- --------- --------- -
Total ........................ 2,105,485 1,979,449 126,036 *
----------
* Represents beneficial ownership of less than 1% of the outstanding shares
of Class A common stock.
(1) Based on 10,650,190 shares of Class A common stock outstanding on November
29, 2001.
(2) This table assumes that all shares owned by the selling stockholders which
are offered by this prospectus are being sold. The selling stockholders
reserve the right to accept or reject, in whole or in part, any proposed
sale of shares. The selling stockholders also may offer and sell less than
the number of shares indicated. The selling stockholders are not making any
representation that any shares covered by this prospectus will or will not
be offered for sale.
(3) As investment manager under a management agreement, Castle Creek Partners,
LLC may exercise dispositive and voting power with respect to the shares
being offered by Castle Creek Technology Partners LLC in this prospectus.
Accordingly, Castle Creek Partners, LLC may be considered to beneficially
own such shares. Castle Creek Partners, LLC disclaims such beneficial
ownership. Mr. Daniel Asher is the managing member of Castle Creek
Partners, LLC. Mr. Asher also disclaims beneficial ownership of the shares
being offered by Castle Creek Technology Partners LLC.
16
Abbas Mohaddes and Michael Meyer are currently the President and Vice
President, respectively, of Meyer, Mohaddes Associates, Inc. ("MMA"), a
subsidiary of Iteris, Inc., and Gary Hamrick and Viggen Davidian are presently
employees of MMA. Abbas Mohaddes, Michael Meyer, Gary Hamrick and Viggen
Davidian (collectively, the "MMA Selling Stockholders") acquired the shares held
by them and offered by this prospectus in connection with the Agreement and Plan
of Reorganization, as amended, among us, Iteris, Inc. (formerly known as Odetics
ITS, Inc.), MMA Acquisition Corp., MMA and the MMA Selling Stockholders dated
October 16, 1998. Pursuant to this agreement, we agreed to effect a shelf
registration (of which this prospectus is a part) of all of these shares in
order to permit the MMA Selling Stockholders to sell these shares from time to
time in the public market or in privately-negotiated transactions. We have
agreed to prepare and file any amendments and supplements to the registration
statement relating to these shares as may be necessary to keep the registration
statement effective for at least six months following the effective date of this
registration statement.
All 853,334 shares listed above as beneficially owned by Castle Creek are
issuable upon exercise of warrants to purchase Class A common stock that were
originally issued to Castle Creek in May 2001. A warrant to purchase 426,667
shares of Class A Common Stock has an exercise price of $3.00 per share and
expires May 29, 2006. A warrant to purchase an additional 426,667 shares has an
exercise price of $1.28 per share and expires November 29, 2006. We agreed to
effect a shelf registration (of which this prospectus is a part) of these
853,334 shares in order to permit Castle Creek to sell these shares from time to
time in the public market or in privately-negotiated transactions.
The warrants were issued in connection with a securities purchase agreement
dated May 29, 2001 by and between us and Castle Creek. Pursuant to the terms of
the securities purchase agreement, we also sold to Castle Creek for $16,000,000
a one-year senior convertible promissory note secured by a deed of trust for the
real property located at 1515 S. Manchester Avenue, Anaheim, California. The
promissory note is convertible into shares of our Class A common stock under
certain circumstances. In the event that we do not pay, on or prior to May 29,
2002, all amounts due under the promissory note, we are obligated to issue to
Castle Creek another warrant to purchase the number of shares of our Class A
common stock equal to number of dollars resulting from dividing $1,600,000 by
110% of the average of the closing bid prices for the Class A common stock
during the ten consecutive trading days immediately preceding, but not
including, May 29, 2002 at an exercise price equal to 110% of such average of
closing bid prices.
This prospectus also covers any additional shares of Class A common stock
which become issuable in connection with the shares being registered by reason
of any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in an
increase in the number of our outstanding shares of Class A common stock. In
addition, this prospectus covers the preferred stock purchase rights which
currently trade with the Class A common stock and entitle the holder to purchase
additional shares of Class A common stock under certain circumstances.
17
PLAN OF DISTRIBUTION
We are registering the shares of Class A common stock covered by this
prospectus on behalf of the selling stockholders. We will not receive any of the
proceeds from sales of the shares by the selling stockholders. However, we will
receive proceeds from the exercise of the outstanding warrants by Castle Creek
and those proceeds will be used for our general corporate purposes.
The selling stockholders named in this prospectus, or pledgees, donees,
transferees or other successors-in-interest selling shares received from the
selling stockholder as a gift, partnership distribution or other non-sale
related transfer after the date of this prospectus, may sell these shares from
time to time. The selling stockholders will act independently of Odetics in
making decisions with respect to the timing, manner and size of each sale. The
sales may be made on one or more exchanges or in the over-the-counter market or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price or in negotiated transactions. The selling
stockholders may effect such transactions by selling the shares to or through
broker-dealers. The shares may be sold by one or more of, or a combination of,
the following:
- a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its account under this prospectus;
- an exchange distribution in accordance with the rules of such
exchange;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers; or
- in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in such resales.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with the selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out such short positions. The selling stockholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer such shares under this prospectus. The selling stockholders also may
loan or pledge the shares to a broker-dealer. The broker-dealer
18
may sell the shares so loaned, or upon a default the broker-dealer may sell the
pledged shares under this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders.
Broker-dealers or agents may also receive compensation from the purchasers of
the shares for whom they act as agents or to whom they sell as principals, or
both. Compensation as to a particular broker-dealer might be in excess of
customary broker-dealers or the selling stockholder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act of
1933, as amended (the "Securities Act"), in connection with sales of the shares.
Accordingly, any such commission, discount or concession received by them and
any profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because the
selling stockholder may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, the selling stockholder will be subject to
the prospectus delivery requirements of the Securities Act.
In addition, any securities covered by this prospectus which qualify for
sale under Rule 144 promulgated under the Securities Act may be sold under Rule
144 rather than under this prospectus. The selling stockholders have advised us
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their securities.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of shares by the selling stockholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition, each
selling stockholder will be subject to applicable provisions of the Exchange Act
and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchase and sales of
shares of our common stock by the selling stockholders. We will make copies of
this prospectus available to the selling stockholders and have informed them of
the need for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
We will file a supplement to this prospectus, if required, under Rule
424(b) under the Securities Act upon being notified by a selling stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale of shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer. Such supplement will
disclose:
- the name of each such selling stockholder and of the participating
broker-dealer(s),
19
- the number of shares involved,
- the price at which such shares were sold,
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,
- that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus, and
- other facts material to the transaction.
In addition, upon being notified by a selling stockholder that a donee or
pledgee intends to sell more than 500 shares, we will file a supplement to this
prospectus.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act. In addition, Odetics has
agreed to indemnify the selling stockholders and its affiliates and any
underwriter of the shares being offered by this prospectus against certain
liabilities, including liabilities arising under the Securities Act.
LEGAL MATTERS
The legality of the shares offered hereby will be passed upon for Odetics
by Brobeck, Phleger & Harrison LLP, Irvine, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K/A
for the year ended March 31, 2001, as set forth in their report (which contains
an explanatory paragraph describing conditions that raise substantial doubt
about our ability to continue as a going concern as described in Note 1 to our
consolidated financial statements), which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Our consolidated
financial statements and schedule are incorporated by reference in reliance on
Ernst & Young LLP's report, given on their authority as experts in accounting
and auditing.
20
We have not authorized any person to make a statement that differs from what is
in this prospectus. If any person does make a statement that differs from what
is in this prospectus, you should not rely on it. This prospectus is not an
offer to sell, nor is it seeking an offer to buy, these securities in any state
in which the offer or sale is not permitted. The information in this prospectus
is complete and accurate as of its date, but the information may change after
that date.
-----------------
TABLE OF CONTENTS
-----------------
Page
----
RISK FACTORS ............................................................. 2
WHERE YOU CAN FIND MORE INFORMATION ...................................... 14
FORWARD-LOOKING STATEMENTS ............................................... 15
USE OF PROCEEDS .......................................................... 15
SELLING STOCKHOLDERS ..................................................... 16
PLAN OF DISTRIBUTION ..................................................... 18
LEGAL MATTERS ............................................................ 20
EXPERTS .................................................................. 20
ODETICS, INC.
1,979,449 SHARES
OF
CLASS A COMMON STOCK
------------------------------
PROSPECTUS
------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various costs and expenses to be paid by
us with respect to the sale and distribution of the securities being registered.
All of the amounts shown are estimates except for the SEC registration fee. In
addition, Odetics may be charged additional listing fees by the Nasdaq National
Market upon issuance of the shares being offered by this prospectus.
SEC Registration Fee ............................... $ 568
Printing Expenses .................................. 2,000
Legal Fees and Expenses ............................ 5,000
Accounting Fees and Expenses ....................... 5,000
Miscellaneous ...................................... 2,500
-------
Total .......................................... $15,068
=======
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholder will bear all commissions
and discounts, if any, attributable to the sales of the shares.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, Odetics can
indemnify its directors and officers against liabilities they may incur in such
capacities, including liabilities under the Securities Act. Odetics' bylaws
provide that Odetics will indemnify its directors and officers to the fullest
extent permitted by law and require Odetics to advance litigation expenses upon
receipt by Odetics of an undertaking by the director or officer to repay such
advances if it is ultimately determined that the director or officer is not
entitled to indemnification. The bylaws further provide that rights conferred
under such bylaws do not exclude any other right such persons may have or
acquire under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.
Odetics' certificate of incorporation provides that, under Delaware law,
its directors shall not be liable for monetary damages for breach of the
directors' fiduciary duty of care to Odetics and its stockholders. This
provision in the certificate of incorporation does not eliminate the duty of
care, and in appropriate circumstances equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to Odetics or its stockholders, for acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of law, for actions leading to improper personal benefit to the
director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws.
II-1
Odetics has entered into agreements to indemnify its directors, the
directors of certain of its subsidiaries and certain of its officers in addition
to the indemnification provided for in the certificate of incorporation and
bylaws. These agreements, among other things, indemnify Odetics' directors and
certain of its officers for certain expenses, attorneys' fees, judgments, fines
and settlement amounts incurred by such person in any action or proceeding,
including any action by or in the right of Odetics, on account of services as a
director or officer of Odetics, or as a director or officer of any other company
or enterprise to which the person provides services at the request of Odetics.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER
-------
4.1 Specimen of Class A common stock and Class B common stock certificates
(incorporated by reference to Exhibit 4.3 to Amendment No. 1 to Odetics'
Registration Statement on Form S-1 (Reg. No. 033-67932) as filed with the SEC on
September 30, 1993).
4.2 Form of rights certificate for Odetics' preferred stock purchase
rights (incorporated by reference to Exhibit A of Exhibit 4 to
Odetics' Current Report on Form 8-K as filed with the SEC on May 1,
1998).
4.3 Stock Purchase Warrant dated November 29, 2001 for 426,667 shares
of Class A common stock issued to Castle Creek Technology Partners
LLC.
4.4 Stock Purchase Warrant dated November 29, 2001 for 426,667 shares
of Class A common stock issued to Castle Creek Technology Partners
LLC.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included in signature page).
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;
(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 hereof) 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
II-2
high end of the estimated maximum offering price may be reflected in the
form of prospectus filed with the SEC under Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with the SEC by us pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this 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 herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act each filing of Odetics'
Annual Report under Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference into this registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Odetics
pursuant to the foregoing provisions, or otherwise, Odetics has been advised
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by Odetics of expenses incurred or paid by a director, officer or
controlling person of Odetics 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, Odetics will, unless in the
opinion of its counsel the question 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 Securities
Act and will be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Anaheim, State of California, on the
5th day of December, 2001.
ODETICS, INC.
By: /s/ JOEL SLUTZKY
------------------------------------
Joel Slutzky,
Chief Executive Officer, President
and Chairman of the Board
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Joel
Slutzky and Gregory A. Miner, jointly and severally, as attorneys-in-fact, each
with the power of substitution, for him in any and all capacities, to sign any
amendment to this Registration Statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting to said attorneys-in-fact, and each of them, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person hereby ratifying and confirming all
that said attorneys-in-fact or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JOEL SLUTZKY Chief Executive Officer, December 5, 2001
------------------------------ President and Chairman of the
Joel Slutzky Board
(principal executive officer)
/s/ GREGORY A. MINER Vice President, Director, Chief December 5, 2001
------------------------------ Operating Officer and Chief
Gregory A. Miner Financial Officer
(principal financial officer)
/s/ KEVIN C. DALY Director December 5, 2001
------------------------------
Kevin C. Daly
/s/ CRANDALL GUDMUNDSON Director December 5, 2001
------------------------------
Crandall Gudmundson
/s/ JERRY F. MUENCH Director December 5, 2001
------------------------------
Jerry F. Muench
/s/ JOHN W. SEAZHOLTZ Director December 5, 2001
------------------------------
John W. Seazholtz
/s/ THOMAS L. THOMAS Director December 5, 2001
------------------------------
Thomas L. Thomas
/s/ PAUL E. WRIGHT Director December 5, 2001
------------------------------
Paul E. Wright
/s/ GARY SMITH Vice President and Controller December 5, 2001
------------------------------ (principal accounting
Gary Smith officer)
INDEX OF EXHIBITS
EXHIBIT
NUMBER
-------
4.1 Specimen of Class A common stock and Class B common stock certificates
(incorporated by reference to Exhibit 4.3 to Amendment No. 1 to Odetics'
Registration Statement on Form S-1 (Reg. No. 033-67932) as filed with the SEC on
September 30, 1993).
4.2 Form of rights certificate for Odetics' preferred stock purchase
rights (incorporated by reference to Exhibit A of Exhibit 4 to
Odetics' Current Report on Form 8-K as filed with the SEC on May 1,
1998).
4.3 Stock Purchase Warrant dated November 29, 2001 for 426,667 shares
of Class A common stock issued to Castle Creek Technology Partners
LLC.
4.4 Stock Purchase Warrant dated November 29, 2001 for 426,667 shares
of Class A common stock issued to Castle Creek Technology Partners
LLC.
5.1 Opinion of Brobeck, Phleger & Harrison LLP
23.1 Consent of Independent Auditors
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included in signature page)