As filed with the Securities and Exchange Commission on May 19, 1998
Registration No. ______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BLONDER TONGUE LABORATORIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 52-1611421
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Jake Brown Road
Old Bridge, New Jersey 08857
Telephone (732) 679-4000
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
James A. Luksch, Chief Executive Officer
Blonder Tongue Laboratories, Inc.
One Jake Brown Road
Old Bridge, New Jersey 08857
Telephone (732) 679-4000
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Gary P. Scharmett, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
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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 this prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum Amount of
Title of class of securities Amount to be offering price aggregate offering registration
to be registered registered per share (1)(2) price (1) fee (2)
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<S> <C> <C> <C> <C>
Common Stock,
$.001 par value per share 317,889 shares $10.1875 $3,238,495 $956
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</TABLE>
(1) Estimated solely for the purpose of determining the registration fee.
(2) Pursuant to Rule 457(c), the average of the high and low prices per share
of the Common Stock reported on the American Stock Exchange on May 13, 1998
has been used to determine the registration fee.
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.
<PAGE>
BLONDER TONGUE LABORATORIES, INC.
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
Form S-3 Item Heading in the Prospectus
------------- -------------------------
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus..... Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus........................ Inside Front Cover Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges......... The Company; Risk Factors;
Not Applicable
4. Use of Proceeds............................ Use of Proceeds
5. Determination of Offering Price ........... Not Applicable
6. Dilution................................... Not Applicable
7. Selling Security Holders................... Selling Security Holders
8. Plan of Distribution....................... Plan of Distribution
9. Description of Securities to be
Registered................................. Not Applicable
10. Interests of Named Experts and Counsel..... Legal Matters
11. Material Changes........................... Not Applicable
12. Incorporation of Certain Information by
Reference.................................. Incorporation of Certain
Documents by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ Not applicable.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 19, 1998
PROSPECTUS
BLONDER TONGUE LABORATORIES, INC.
317,889 Shares of Common Stock
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This Prospectus relates to 150,000 shares of common stock, par value $.001
per share (the "Common Stock"), of Blonder Tongue Laboratories, Inc., a Delaware
corporation (the "Company"), underlying a certain warrant (the "Warrant"), and
167,889 shares of outstanding Common Stock, which may be offered for sale from
time to time by certain security holders of the Company (the "Selling Security
Holders"), or by their pledgees, donees, transferees or other successors in
interest, to or through underwriters or directly to other purchasers or through
brokers or agents in one or more transactions at varying prices determined at
the time of sale or at fixed or negotiated prices. See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
317,889 shares of Common Stock (the "Shares") offered hereby by the Selling
Security Holders. The Company will receive the proceeds from the issuance and
sale of the shares underlying the Warrant. The expenses of the registration of
the Shares under the Securities Act of 1933, as amended (the "Securities Act"),
and the registration or qualification of the Shares under any applicable state
securities laws will be paid by the Company. The aggregate proceeds to the
Selling Security Holders will be the offering price of the Shares sold, less the
applicable agents' commissions and underwriting discounts, if any.
The Common Stock is listed on the American Stock Exchange ("AMEX") under
the symbol "BDR." On May 14, 1998 the reported last sale price of the Common
Stock on AMEX was $10.50 per share.
--------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
===================================================================================================
Price to Underwriting Discounts Proceeds to Proceeds to Selling
Public (1) and Commissions(2) Company(3) Security Holders(4)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share........... $10.50 -- -- $10.50
Total .............. $3,337,835 -- -- $3,337,835
===================================================================================================
</TABLE>
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(1) The Shares will initially be offered at market price on AMEX and,
therefore, the Price to Public cannot be determined with certainty at this
time. As a result, the Price to Public has been estimated based upon the
last reported sale price per share of the Common Stock on AMEX on May 14,
1998.
(2) Cannot be estimated at this time.
(3) The Company will pay estimated expenses of $40,000 in connection with the
offering of the Shares by the Selling Security Holders.
(4) Before applicable underwriting discounts or commissions, which cannot be
estimated at this time.
The date of this Prospectus is May __, 1998.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representation other than those contained in or
incorporated by reference in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any date subsequent to the date
hereof. This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any securities offered hereby by anyone in any jurisdiction
in which such offer or solicitation is not authorized or in which the person
making such offer or solicitation is not qualified to do so or to anyone to whom
it is unlawful to make such offer or solicitation.
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TABLE OF CONTENTS
Page
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AVAILABLE INFORMATION....................................................... 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................. 3
THE COMPANY................................................................. 4
RISK FACTORS................................................................ 4
USE OF PROCEEDS............................................................. 9
SELLING SECURITY HOLDERS.................................................... 9
PLAN OF DISTRIBUTION........................................................ 9
LEGAL MATTERS............................................................... 10
EXPERTS..................................................................... 10
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FORWARD-LOOKING STATEMENTS
In addition to historical information, this Prospectus contains
forward-looking statements relating to such matters as anticipated financial
performance, business prospects, technological developments, new products,
research and development activities and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. In order to comply with the terms of the safe harbor, the Company
notes that a variety of factors could cause the Company's actual results and
experience to differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements. The risks
and uncertainties that may affect the operation, performance, development and
results of the Company's business include, but are not limited to, those matters
discussed herein in the sections entitled "The Company" and "Risk Factors." The
words "believe," "expect," "anticipate," "project" and similar expressions
identify forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof. Readers should also carefully
review the risk factors described in other documents the Company files from time
to time with the Commission.
2
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act with respect to the Shares of Common Stock
offered by this Prospectus. This Prospectus, filed as part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information about
the Company and the Common Stock, reference is made to the Registration
Statement and to the exhibits and schedules filed therewith. Statements
contained in this Prospectus or in any document incorporated by reference herein
as to the contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement or
in any document incorporated by reference herein, each such statement being
qualified in all respects by such reference. A copy of the Registration
Statement may be inspected without charge at the Commission's principal offices,
and copies of all or any part of the Registration Statement may be obtained from
such office upon the payment of the fees prescribed by the Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company with the Commission can be inspected at the Public Reference section of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
7 World Trade Center, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, the Commission maintains a Web site that contains reports, proxy
statements and other information regarding the Company which are filed
electronically with the Commission at http://www.sec.gov.
The Common Stock is traded on AMEX under the symbol "BDR. " Reports, proxy
statements and other information regarding the Company may be inspected at the
offices of AMEX at 86 Trinity Place, New York, New York 10006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents and information previously filed with the
Commission pursuant to the Exchange Act or the Securities Act are, as of their
respective dates, hereby incorporated by reference into this Prospectus: (1) the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997; (2) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998; (3) the Company's Current Report on Form 8-K filed with the
Commission on April 6, 1998; (4) the Company's Proxy Statement for the Annual
Meeting of Stockholders held on May 7, 1998; (5) all other reports filed by the
Company pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of
the fiscal year covered by the annual report referred to above; and (6) the
description of the Common Stock contained in the Company's Registration
Statement on Form 8-A originally filed with the Commission on December 11, 1995,
including any amendment or report filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to
termination of the offering made hereunder shall be deemed to be incorporated by
reference into this Prospectus and to be a part of this Prospectus from the
respective dates of the filing of such documents. Any statement contained in a
document incorporated by reference 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 document subsequently filed and incorporated
herein by reference modifies or supersedes such prior statement. Any statement
so modified or superseded shall not be deemed, except as modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon
written or oral request of such person, a copy of any or all information that
has been incorporated by reference in this Prospectus, other than exhibits to
such information that are not specifically incorporated by reference into such
information. Requests for information incorporated by reference in this
Prospectus should be made in writing or by telephone to Blonder Tongue
Laboratories, Inc., One Jake Brown Road, Old Bridge, New Jersey 08857, Attn.:
Peter Pugielli, Chief Financial Officer, telephone number (732) 679-4000.
3
<PAGE>
THE COMPANY
Blonder Tongue is a designer, manufacturer and supplier of a comprehensive
line of communications products used in the acquisition, conversion,
distribution and protection of television signals. The Company's products have
gained a dominant position within the private cable market ("Private Cable")
which services multiple dwelling units such as apartment complexes and
condominiums ("MDU"), hotels, motels and resorts within the lodging industry
("Lodging"), and other facilities including schools, hospitals, prisons and
marinas. The Company is currently leveraging its strategic relationships and
expertise gained in the Private Cable market to aggressively expand into the
franchised cable market ("CATV"). To this end, on March 25, 1998, the Company
acquired all of the assets and technology rights of the interdiction product
line of Scientific-Atlanta, Inc. ("Scientific") which has been engineered
primarily for, and is currently being sold in, the CATV market.
Blonder Tongue's product line can be separated, according to function, into
the following categories: (i) headend products used by a system operator for
signal acquisition, processing and manipulation for further transmission
("Headend Products"), (ii) distribution products used to permit signals to
travel to their ultimate destination in a home, apartment unit, hotel room,
office or other terminal location ("Distribution Products"), (iii) subscriber
products (which include interdiction products) used to control access to
programming at the subscriber's location and to split and amplify incoming
signals for transmission to multiple sites and for multiple television sets
within a site ("Subscriber Products") and (iv) microwave products used to
transmit the output of Headend Products to multiple locations using
point-to-point communication links in the 18 Ghz range of frequencies
("Microwave Products"). The Company's principal customers are system
integrators, primarily in the Private Cable market, which design, package,
install and in most instances operate cable systems.
Blonder Tongue is a recognized leader in the Private Cable market, offering
Private Cable integrators "one-stop shop" convenience in the form of a complete
range of high performance, quality products at reasonable prices as well as
product engineering, design and support. The Company offers its customers all
components necessary to build a cable system, from Headend Products which serve
as the core of any system, to ancillary components of the system which transmit,
distribute and control access to cable signals.
The Company was incorporated in November, 1988, under the laws of the State
of Delaware as a successor to a New Jersey corporation operating under the same
name, which was originally founded by Ben H. Tongue and Isaac S. Blonder in
1950. The Company's principal executive offices are located at One Jake Brown
Road, Old Bridge, New Jersey 08857. Its telephone number is (732) 679-4000.
Except as otherwise indicated, as used in this Prospectus, the "Company" and
"Blonder Tongue" refer to Blonder Tongue Laboratories, Inc. and its
subsidiaries.
RISK FACTORS
In evaluating the Company's business and in making a decision to purchase
Common Stock, prospective investors should carefully consider the following
factors in addition to the other information contained in and incorporated into
this Prospectus before purchasing the Common Stock offered hereby.
Dependence on Certain Large Customers
Approximately 46%, 39% and 40% of the Company's revenues in fiscal years
1995, 1996 and 1997, respectively, were derived from sales of products to the
Company's five largest customers. In 1997, sales to OpTel, Inc. and LodgeNet
Entertainment Corporation each accounted for approximately 16 % of the Company's
revenues. For the first three months of 1998, the Company's five largest
customers accounted for approximately 55% of the Company's revenues. There can
be no assurance that any sales to these customers, individually or as a group,
will reach or exceed historical levels in any future period. However, the
Company anticipates that these customers will continue to account for a
significant portion of the Company's revenues in future periods, although none
of them is obligated to purchase any specified amount of products (beyond
outstanding purchase orders) or to provide the Company with binding forecasts of
product purchases for any future period.
The complement of leading customers may shift as the most efficient and
better financed integrators grow more rapidly than others. The Company believes
that many integrators will grow rapidly, and, as such, the Company's success
will depend in part on the viability of those customers and on the Company's
ability to maintain its position in the overall marketplace by shifting its
emphasis to those customers with the greatest growth and growth prospects. Any
substantial decrease or delay in sales to one or more of the Company's leading
customers, the financial failure of any of these entities, or the Company's
inability to develop solid relationships with the integrators which may replace
the present leading customers, could have a material adverse effect on the
Company's results of operations and financial condition.
4
<PAGE>
Need to Manage Growth; Scientific Acquisition
The Company has recently experienced a period of significant growth which
has placed, and could continue to place, a significant strain on the Company's
resources, including its working capital. Cash flow from operations has been
insufficient to finance this growth and the Company has relied upon a line of
credit to supplement cash generated from operations to finance working capital
requirements. The Company's ability to manage growth effectively will require it
to continue to improve and expand its operations, including its financial and
management information systems and its manufacturing operations and to recruit
and retain executive staff and key employees. There can be no assurance that the
Company's operations will generate sufficient cash flow or that adequate
financing will be available to finance continued growth. The Company's inability
to obtain needed equity or debt financing could have a material adverse effect
on the Company's results of operations and financial condition. In addition,
there can be no assurance that the Company will be able to continue to improve
and expand its operations or to recruit and retain high quality executives and
key employees. The failure to manage growth effectively would have a material
adverse effect on the Company's results of operations and financial condition.
In March, 1998, the Company acquired Scientific's interdiction business,
including its interdiction product line (the "Acquisition"). The total purchase
price consisted of (i) $19 million in cash, (ii) 67,889 shares of the Company's
Common Stock, (iii) a Warrant to purchase 150,000 additional shares of the
Company's Common Stock at an exercise price of $14.25 per share and (iv)
assumption by the Company of certain obligations under executory contracts with
vendors and customers and certain warranty obligations and other current
liabilities of Scientific's interdiction business. As a result of the
Acquisition, the Company acquired a new interdiction product line (the "SMI
Product Line") which the Company believes will complement its current
interdiction products and will enable it to increase sales in the CATV market.
The success of the SMI Product Line will, however, be dependent upon the
Company's ability to timely integrate the new products into the Company's
existing operations, obtain manufacturing efficiencies, and maintain and
increase market share in the CATV market. There can be no assurance that the new
products will be successfully integrated by the Company or that such integration
will not strain the Company's available management, manufacturing, financial and
other resources. There can be no assurance that the Company will maintain the
level of sales of the SMI Product Line in the CATV market or that increased
sales of the SMI Product Line will not decrease sales of the Company's other
products, including the Company's VideoMask(TM) interdiction product line. The
Company's inability to integrate the SMI Product Line in a timely manner could
have a material adverse effect on the Company's results of operations and
financial condition.
The Company currently has no commitments with respect to any future
acquisitions. The Company, however, frequently evaluates the strategic
opportunities available to it and, as part of its strategy to increase growth
through acquisition, may in the future pursue acquisitions of additional
complementary products, technologies and businesses. Such acquisitions by the
Company may result in the diversion of management's attention from the
day-to-day operations of the Company's business and may include numerous other
risks, including difficulties in the integration of the operations and products,
integration and retention of personnel of the acquired companies and certain
financial risks. Future acquisitions by the Company may result in dilutive
issuances of equity securities, the incurrence of additional debt, reduction of
existing cash balances, amortization expenses related to goodwill and other
intangible assets and other charges to operations that could have a material
adverse effect on the Company's results of operations and financial condition.
Changes in Technologies, Industry Standards and Customers' Needs
Both the Private Cable industry and the CATV industry are characterized by
the continuing advancement of technology, evolving industry standards and
changing customer needs. To be successful, the Company must anticipate the
evolution of industry standards and changes in customer needs, through the
timely development and introduction of new products, enhancement of existing
products and licensing of new technology from third parties. Although the
Company depends primarily on its own research and development efforts to develop
new products and enhancements to its existing products, the Company has and may
continue to seek licenses for new technology from third parties when the Company
believes that it can obtain such technology more quickly and/or cost-effectively
from such third parties than the Company could otherwise develop on its own, or
when the desired technology has already been patented by a third party. There
can, however, be no assurance that new technology or such licenses will be
available on terms acceptable to the Company. There can be no assurance that the
Company will anticipate the evolution of industry standards in Private Cable,
CATV or the communications industry generally, changes in the market and
customer needs, or that technologies and applications under development by the
Company will be successfully developed, or if they are successfully developed,
that they will achieve market acceptance. If the Company is unable for
technological or other reasons to develop and introduce products and
applications or to obtain licenses for new technologies from third parties in a
timely manner in response to changing market conditions or customer
requirements, the Company's results of operations and financial condition would
be materially adversely affected.
5
<PAGE>
Highly Competitive Market Place
All aspects of the Company's business are highly competitive. The Company
competes with national, regional and local manufacturers and distributors,
including companies larger than itself which have substantially greater
resources. Various manufacturers who are suppliers to the Company sell directly
as well as through distributors into the CATV and Private Cable marketplaces.
Because of the convergence of the cable, telecommunications and computer
industries and rapid technological development, new competitors may seek to
enter the principal markets served by the Company. Many of these potential
competitors have significantly greater financial, technical, manufacturing,
marketing, sales and other resources than the Company. The Company expects that
direct and indirect competition will increase in the future. Additional
competition could have a material adverse effect on the Company's results of
operations and financial condition through price reductions, loss of market
share and delays in the timing of customer orders and an inability to increase
its penetration into the CATV market.
Dependence on Cable Industry Capital Spending
The Company estimates that approximately 80% of its revenues in fiscal
years 1995, 1996 and 1997 came from worldwide sales of its products for use
primarily in Private Cable systems. Demand for the Company's products depends to
a large extent upon capital spending on Private Cable systems and specifically
by Private Cable operators for constructing, rebuilding, maintaining or
upgrading their systems. Capital spending by Private Cable operators and,
therefore, the Company's sales and profitability, are dependent on a variety of
factors, including access by Private Cable operators to financing, demand for
their cable services, availability of alternative video delivery technologies,
and general economic conditions. In addition, since a principal strategy of the
Company's growth plan anticipates deeper penetration into the CATV market, the
Company's sales and profitability may in the future be more dependent on capital
spending by traditional franchise cable system operators as well as by new
entrants to this market planning to over-build existing cable system
infrastructures, for constructing, rebuilding, maintaining and upgrading their
systems. There can be no assurance that system operators in Private Cable or
CATV will continue capital spending for constructing, rebuilding, maintaining,
or upgrading their systems. Any substantial decrease or delay in capital
spending by Private Cable or CATV operators would have a material adverse effect
on the Company's results of operations and financial condition.
Dependence on Single Manufacturing Facility
The Company operates out of one manufacturing facility in Old Bridge, New
Jersey (the "Old Bridge Facility"). While the Company maintains a limited amount
of business interruption insurance, a casualty that results in a lengthy
interruption of the ability to manufacture at that facility would have a
material adverse effect on the Company's results of operations and financial
condition.
Dependence on Third Party Suppliers
The Company purchases several products from sole suppliers for which
alternative sources are not available, such as the VideoCipher(R) and
DigiCipher(R) encryption systems manufactured by General Instrument Corporation,
which are standard encryption methodology employed on United States C-Band and
Ku-Band transponders, certain components of EchoStar digital satellite receiver
decoders, which are specifically designed to work with the DISH Network(TM), and
certain components of Hughes Network Systems digital satellite receivers which
are specifically designed to work with DIRECTV(R) programming. Presently, the
subscriber modules used in the Company's SMI Product Line acquired from
Scientific in March, 1998, are manufactured for the Company by Matsushita
Electronic Components Co., Ltd. pursuant to a supply contract. While the Company
intends to develop this capability, there are no assurances that it will
successfully be able to do so. An inability to timely obtain sufficient
quantities of these components could have a material adverse effect on the
Company's results of operations and financial condition. In addition, results of
operations and financial condition could be materially adversely affected by
receipt of a significant number of defective components, an increase in
component prices or the inability of the Company to obtain lower component
prices in response to competitive pressures on the pricing of the Company's
products.
Dependence on Internal Sales Force
The Company historically maintained contractual relationships with numerous
independent sales representatives; however, in February, 1998, the Company
terminated almost all of its contractual relationships with its independent
sales representatives. The Company intends to retain independent sales
representatives only in particular geographic areas, such as the European
market, or targeted to specific customer prospects. While management believes
its internal sales force has the capacity to maintain or increase sales formerly
made through independent sales representatives without the necessity of paying
sales commissions, there can be no assurance that the internal sales force can
maintain the historic levels of sales formerly made through the independent
sales representatives or that additional employees will not need to be hired by
the Company to expand the internal sales force. The Company's results of
operations and financial condition could be
6
<PAGE>
materially adversely affected if the internal sales force cannot maintain and
increase the amount of sales formerly produced by the independent sales
representatives.
Risks of International Operations
Sales to customers outside of the United States represented approximately
9%, 5% and 3% of the Company's revenues in fiscal years 1995, 1996 and 1997,
respectively. Such sales are subject to certain risks such as changes in foreign
government regulations and telecommunications standards, export license
requirements, tariffs and taxes, other trade barriers, fluctuations in foreign
currency exchange rates, difficulties in staffing and managing foreign
operations, and political and economic instability. Fluctuations in currency
exchange rates could cause the Company's products to become relatively more
expensive to customers in a particular country, leading to a reduction in sales
or profitability in that country. There can be no assurance that sales to
customers outside the United States will reach or exceed historical levels in
the future, or that international markets will continue to develop or that the
Company will receive additional contracts to supply its products for use in
systems and equipment in international markets. The Company's results of
operations and financial condition could be materially adversely affected if
international markets do not continue to develop, the Company does not continue
to receive additional contracts to supply its products for use in systems and
equipment in international markets or the Company's international sales are
affected by the other risks of international operations.
Limited Proprietary Protection
Other than the SMI Product Line acquired by the Company from Scientific,
the underlying technology for which is covered by numerous U.S. and
international patents, the Company possesses limited patent or registered
intellectual property rights with respect to its technology. The Company relies
on a combination of contractual rights and trade secret laws to protect its
proprietary technology and know-how. There can be no assurance that the Company
will be able to protect its technology and know-how or that third parties will
not be able to develop similar technology independently. Therefore, existing and
potential competitors may be able to develop similar products which compete with
the Company's products. Such competition could adversely affect the prices for
the Company's products or the Company's market share and could have a material
adverse effect upon the Company's results of operations and financial condition.
Risk of Patent Infringement Claims
While the Company does not believe that its products (including products
and technologies licensed from others) infringe the proprietary rights of any
third parties, there can be no assurance that infringement or invalidity claims
(or claims for indemnification resulting from infringement claims) will not be
asserted against the Company or its customers. Damages for violation of third
party proprietary rights could be substantial, in some instances are trebled,
and could have a material adverse effect on the Company's financial condition
and results of operation. Regardless of the validity or the successful assertion
of any such claims, the Company would incur significant costs and diversion of
resources with respect to the defense thereof which could have a material
adverse effect on the Company's financial condition and results of operations.
If the Company is unsuccessful in defending any claims or actions that are
asserted against the Company or its customers, the Company may seek to obtain a
license under a third party's intellectual property rights. There can be no
assurance, however, that under such circumstances, a license would be available
under reasonable terms or at all. The failure to obtain a license to a third
party's intellectual property rights on commercially reasonable terms could have
a material adverse effect on the Company's results of operations and financial
condition.
Risks of Governmental Regulation
Private Cable (estimated by the Company to represent approximately 80% of
its business), while in some cases subject to certain FCC licensing
requirements, is not presently burdened with extensive government regulations.
It is possible, however, that regulations could be adopted in the future which
impose burdensome restrictions on Private Cable operators resulting in, among
other things, barriers to the entry of new competitors or limitations on capital
expenditures by Private Cable operators. Any such regulations, if adopted, could
have a material adverse effect on the Company's results of operations and
financial condition.
Operators in the CATV market (estimated by the Company to represent
approximately 20% of its business) had been subject to extensive government
regulation pursuant to the Cable Television Consumer Protection and Competition
Act of 1992, which among other things provided for rate rollbacks for basic tier
cable service, further rate reductions under certain circumstances and
limitations on future rate increases. The Telecommunications Act of 1996 has
deregulated many aspects of CATV system operation and has opened the door to
competition among cable operators and telephone companies in each of their
respective industries. The Company believes that this legislation will increase
the base of potential customers for the Company's products. It is possible,
however, that regulations could be adopted in the future which would re-impose
burdensome restrictions on CATV operators resulting in, among other things, the
grant of exclusive rights or franchises within certain geographical areas. Any
increased regulation of CATV could have a material adverse effect on the
Company's results of operations and financial condition.
7
<PAGE>
Environmental Regulations
The Company is subject to a variety of federal, state and local
governmental regulations related to the storage, use, discharge and disposal of
toxic, volatile or otherwise hazardous chemicals used in its manufacturing
processes. The Company does not anticipate material capital expenditures during
the remainder of its current fiscal year or during 1999, for compliance with
federal, state and local environmental laws and regulations. There can be no
assurance, however, that changes in environmental regulations will not result in
the need for additional capital expenditures or otherwise impose additional
financial burdens on the Company. Further, such regulations could restrict the
Company's ability to expand its operations. Any failure by the Company to obtain
required permits for, control the use of, or adequately restrict the discharge
of, hazardous substances under present or future regulations could subject the
Company to substantial liability or could cause its manufacturing operations to
be suspended. Such liability or suspension of manufacturing operations could
have a material adverse effect on the Company's results of operations and
financial condition.
Dependence on Key Personnel
The Company's future success depends in large part on the continued service
of its key executives and technical and management personnel, including James A.
Luksch, Chief Executive Officer and President, and Robert J. Palle, Executive
Vice President and Chief Operating Officer. The Company maintains and is the
beneficiary of $1,000,000 of key man life insurance on each of Mr. Luksch and
Mr. Palle. The Company's future success also depends on its ability to continue
to attract and retain highly-skilled engineering, manufacturing, marketing and
managerial personnel. The competition for such personnel is intense, and the
loss of key employees, in particular the principal members of its management and
technical staff, could have a material adverse effect on the Company's results
of operations and financial condition.
Control of the Company by Principal Stockholders, Officers and Directors
Immediately following this offering, the Company's principal stockholders,
officers and directors will beneficially own approximately 63% of the
outstanding shares of the Company's Common Stock. As a result, such persons,
acting together, would have the ability to control all matters requiring
stockholder approval. The concentration of ownership could have the effect of
discouraging offers to acquire the Company or otherwise inhibiting a change in
control of the Company, and as a result, may deprive stockholders of an
opportunity to sell their stock at higher prices.
Potential Issuance of Preferred Stock and other Anti-Takeover Measures
The Board of Directors has the authority to issue up to 5,000,000 shares of
undesignated Preferred Stock, to determine the powers, preferences and rights
and the qualifications, limitations or restrictions granted to or imposed upon
any unissued series of undesignated Preferred Stock and to fix the number of
shares constituting any series and the designation of such series, without any
further vote or action by the Company's stockholders. The Preferred Stock could
be issued with voting, liquidation, dividend and other rights superior to the
rights of the Common Stock. Furthermore, such Preferred Stock may have other
rights, including economic rights, senior to the Common Stock, and as a result,
the issuance of such stock could have a material adverse effect on the market
value of the Common Stock. In addition, the Company's Restated Certificate of
Incorporation eliminates the right of stockholders to act without a meeting,
does not provide cumulative voting for the election of directors or the right of
stockholders to call special meetings, provides for a classified board of
directors, and imposes various procedural requirements which could make it
difficult for such stockholders to affect certain corporate actions. These
provisions and the Board's ability to issue Preferred Stock may have the effect
of deterring hostile takeovers or offers from third parties to acquire the
Company, preventing stockholders from receiving a premium for their shares of
the Company's Common Stock, or delaying or preventing changes in control or
management of the Company. The Company is also afforded the protection of
Section 203 of the Delaware General Corporation Law, which could delay or
prevent a change in control of the Company, impede a merger, consolidation or
other business combination involving the Company or discourage a potential
acquiror from making a tender offer or otherwise attempting to obtain control of
the Company. Any of these provisions which may have the effect of delaying or
preventing a change in control of the Company could have a material adverse
effect on the market value of the Company's Common Stock.
Dividends Unlikely
The Company intends to retain its earnings to finance the growth of its
business and therefore does not intend to pay dividends on its Common Stock in
the foreseeable future.
Potential Volatility of Stock Price
Factors such as announcements of technological innovations or new products
by the Company, its competitors or third parties, quarterly variations in the
Company's actual or anticipated results of operations, failure of revenues or
earnings in any quarter to meet the investment community's expectations, and
market conditions for emerging growth stocks
8
<PAGE>
or cable industry stocks in general may cause the market price of the Company's
Common Stock to fluctuate significantly. The stock price may also be affected by
broader market trends unrelated to the Company's performance. These fluctuations
may adversely affect the market price of the Company's Common Stock.
Risk of Labor Negotiations
All of the Company's direct labor employees are members of the
International Brotherhood of Electrical Workers Union, Local 2066, under a
collective bargaining agreement which expires in February, 1999. Delays or
difficulties in negotiating and executing a new agreement, which may result in
work stoppages, could have a material adverse effect on the Company's results of
operations and financial condition.
Shares Eligible for Future Sale; Possible Adverse Effect on Market Price
Sales of a substantial number of shares of Common Stock in the public
market after this offering could adversely affect the market price of the Common
Stock and could impair the Company's future ability to raise capital through an
offering of its equity securities. Each of the Company's principal stockholders
holds a significant portion of the Company's outstanding Common Stock, and a
decision by one or more of these stockholders to sell a significant portion of
his shares could adversely affect the market price of the Common Stock.
Following the offering, an additional 317,889 shares will be immediately
available for resale in the public market without restriction, unless such
shares are held by "affiliates" of the Company, as that term is defined in
Rule 144 under the Securities Act.
USE OF PROCEEDS
The net proceeds from the sale of the Shares will be received by the
Selling Security Holders. The Company will not receive any of the proceeds from
the sale of the Shares by the Selling Security Holders. The Company will receive
up to approximately $2,137,500 from the issuance and sale of the Shares
underlying the Warrant upon its exercise. The Company intends to use any such
proceeds for working capital and general corporate purposes.
SELLING SECURITY HOLDERS
The table below sets forth information as of May 15, 1998 with respect to
each of the Selling Security Holders, their respective names, holdings of shares
of the Company's Common Stock before the offering of the Shares, the number of
Shares being offered for each of their respective accounts, and the number of
shares of Common Stock to be owned by each of the Selling Security Holders
immediately following the sale of the Shares, assuming all of the offered Shares
are sold.
<TABLE>
<CAPTION>
Shares of Common
Shares of Common Stock Owned After
Name of Selling Stock Owned Before Shares of Common the Offering
Security Holders Offering Stock Being Offered (percentage of class)
- ---------------- ------------------ ------------------- ---------------------
<S> <C> <C> <C>
Scientific-Atlanta, Inc. 217,889(1) 217,889(1) 0
Sherleigh Associates, Inc. 231,200(2) 100,000 131,200(1.5%)(2)
Profit Sharing Plan
Jack Silver, Trustee
</TABLE>
- -----------------
(1) Includes 150,000 Shares underlying the Warrant.
(2) Excludes 73,600 shares of Common Stock beneficially owned by Sherleigh
Associates LLC. Jack Silver is the President of Sherleigh Associates LLC.
PLAN OF DISTRIBUTION
Any distribution of the Shares offered hereby may be effected from time to
time in one or more of the following transactions: (a) to underwriters who will
acquire such Shares for their own account and resell them in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale; (b) through brokers,
acting as principal or agent, in transactions (which may involve block
transactions) on AMEX or on one or more exchanges on which the Shares are then
listed, in special offerings, exchange distributions pursuant to the rules of
the applicable exchanges or in the over-the-counter market, or otherwise, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices; (c) directly
or through brokers or agents in private sales at negotiated prices; or (d) by
any other legally available means. The Selling Security Holders also reserve the
right to sell the Shares pursuant to Rule 144 under the Securities Act in lieu
of selling such Shares pursuant to this Registration Statement.
9
<PAGE>
The Company will not receive any proceeds from the sale of the Shares
offered hereby. The aggregate proceeds to the Selling Security Holders from the
Shares offered hereby will be the offering price less the underwriting discounts
and commissions set forth on the cover page to this Prospectus. There is no
assurance that the Selling Security Holders will sell any of the Shares offered
hereby.
The Selling Security Holders and such underwriters, brokers, dealers or
agents, upon effecting a sale of Shares, may be considered "underwriters" as
that term is defined by the Securities Act. Sales effected through agents,
brokers or dealers will ordinarily involve payment of customary brokerage
commissions although some brokers or dealers may purchase such shares as agents
for others or as principals for their own account. The Selling Security Holders
will pay any sales commissions or other sellers' compensation applicable to such
transactions. A portion of any proceeds of sales and discounts, commissions or
other sellers' compensation may be deemed to be underwriting compensation for
purposes of the Securities Act.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares of Common Stock offered hereby may not
simultaneously engage in market making activities for the Common Stock for a
period of two business days prior to the commencement of such distribution. In
addition, each Selling Security Holder and any other person who participates in
a distribution of the Shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Rules l0b-2,
l0b-6 and l0b-7, which provisions may limit the timing of purchases and affect
the marketability of the Shares of Common Stock and the ability of any person to
engage in market making activities for the Shares of Common Stock.
The Company has agreed that it will bear all costs, expenses and
fees in connection with the registration or qualification of the Shares under
federal and state securities laws. The Company and each Selling Security Holder
have agreed to indemnify each other and certain other persons against certain
liabilities in connection with the offering of the Shares, including liabilities
arising under the Securities Act.
At the time a particular offering of Shares is made, to the extent
required, a Prospectus Supplement will be distributed which will set forth the
number of Shares being offered and the terms of the offering, including the
purchase price or public offering price, the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriter for Shares
purchased from the Selling Security Holders, any discounts, commissions and
other items constituting compensation from the Selling Security Holders and any
discounts, commissions or concessions allowed or reallowed or paid to dealers.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions, if required, only
through registered or licensed brokers or dealers.
The Company has agreed that it will bear all costs, expenses and fees in
connection with the registration or qualification of the Shares under federal
and state securities laws. The Company and each Selling Security Holder have
agreed to indemnify each other and certain other persons against certain
liabilities in connection with the offering of the Shares, including liabilities
arising under the Securities Act.
LEGAL MATTERS
Stradley, Ronon, Stevens & Young, LLP ("SRSY"), legal counsel to the
Company, has offered its opinion upon the legality of the Common Stock. Certain
attorneys at SRSY own shares of the Company's Common Stock with an aggregate
value in excess of $50,000. Gary P. Scharmett, Esquire, a partner of the firm,
is also a director of the Company and holds an option to purchase 10,000 shares
of Common Stock at a purchase price of $10.25 per share, which option may be
exercised for a 10-year period ending on July 16, 2006.
EXPERTS
The financial statements and schedule incorporated by reference in this
Prospectus have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the periods set forth in their reports
incorporated herein by reference, and are incorporated herein in reliance upon
such reports given upon the authority of said firm as experts in accounting and
auditing.
10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a list of the expenses the Registrant expects to pay in
connection with the issuance and distribution of the Shares registered hereby.
No portion of such expenses will be borne by the Selling Security Holders. All
amounts are estimated except the Securities and Exchange Commission Registration
Fee.
SEC Filing and Registration Fees ........................ $ 956
Legal Fees and Expenses ................................. $30,000
Cost of Printing ........................................ $ 1,000
Accounting Fees and Expenses ............................ $ 5,000
Blue Sky Filing Fees .................................... $ 1,000
Miscellaneous Expenses .................................. $ 2,044
-------
TOTAL ................................................... $40,000
=======
Item 15. Indemnification of Directors and Officers
The Company's Certificate of Incorporation provides that to the fullest
extent permitted by Delaware Law a Director of the Company shall not be liable
to the Company or its stockholders for monetary damages for breach of fiduciary
duty as a Director. Under current Delaware Law, liability of a director may not
be limited (i) for any breach of the director's duty of loyalty to the Company
or its stockholders, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii) in respect
of certain unlawful dividend payments or stock redemptions or repurchases and
(iv) for any transaction from which the director derives an improper personal
benefit. The effect of the provision of the Company's Certificate of
Incorporation is to eliminate the rights of the Company and its stockholders
(through stockholders' derivative suits on behalf of the Company) to recover
monetary damages against a director for breach of the fiduciary duty of care as
a director (including breaches resulting from negligent or grossly negligent
behavior) except in the situations described in clauses (i) through (iv) above.
This provision does not limit or eliminate the rights of the Company or any
stockholder to seek nonmonetary relief such as a injunction or rescission in the
event of a breach of a director's duty of care. In addition, the Company's
Bylaws provide that the Company shall indemnify its directors, officers
employees and agents to the fullest extent permitted by Delaware Law.
In addition, the Company has entered into agreements (the "Indemnification
Agreements") with each of the directors and certain officers of the Company
pursuant to which the Company agrees to indemnify such director or officer from
claims, liabilities, damages, expenses, losses, costs, penalties or amounts paid
in settlement incurred by such director or officer and arising out of his
capacity as a director, officer, employee and/or agent of the corporation of
which he is a director or officer to the maximum extent provided by applicable
law. In addition, such director or officer shall be entitled to an advance of
expenses to the maximum extent authorized or permitted by law to meet the
obligations indemnified against.
To the extent that the Board of Directors or the stockholders of the
Company may in the future wish to limit or repeal the ability of the Company to
indemnify directors, such repeal or limitation may not be effective as to
directors and officers who are currently parties to the Indenmification
Agreements, because their rights to full protection are contractually assured by
the Indemnification Agreements. It is anticipated that similar contracts may be
entered into, from time to time, with future directors of the Company.
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
5 Opinion of Stradley, Ronon, Stevens & Young, LLP
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Stradley, Ronon, Stevens & Young, LLP (contained in Exhibit 5 above)
24 Power of Attorney (contained in Signature Page hereof)
</TABLE>
II-1
<PAGE>
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) to file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
and
(iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that the undertakings contained in paragraphs (i)
and (ii) above do not apply if the information required in a post-effective
amendment is incorporated by reference from periodic reports filed by the
registrant under the Exchange Act;
(2) that, for the purpose of determining any liability under the Securities
Act, any such post-effective amendment to 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; and
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this registration statement
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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the
Commission 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 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 of 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-2
<PAGE>
SIGNATURE
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 of filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Old Bridge, State of New Jersey, on this 18th day of
May, 1998.
BLONDER TONGUE LABORATORIES, INC.
By: /s/ James A. Luksch
-------------------------------------
James A. Luksch
President and Chief Executive Officer
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.
Each person whose signature appears below constitutes and appoints James A.
Luksch and Robert J. Palle, Jr., jointly and severally, his attorneys-in-fact,
each with the power of substitution, for him in any and all capacities to sign
any amendments to this Registration Statement on Form S-3, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ James A. Luksch Director, President and May 18, 1998
- ------------------------- Chief Executive Officer
James A. Luksch (Principal Executive Officer)
/s/ Peter Pugielli Senior Vice President - Finance, May 18, 1998
- ------------------------- Treasurer and Chief Financial Officer
Peter Pugielli (Principal Financial Officer and
Principal Accounting Officer)
/s/ Robert J. Palle, Jr. Director, Executive Vice May 18, 1998
- ------------------------- President and Chief Operating Officer
Robert J. Palle, Jr.
/s/ John E. Dwight Director, Senior Vice President May 18, 1998
- -------------------------
John E. Dwight
/s/ James H. Williams Director May 18, 1998
- -------------------------
James H. Williams
/s/ James F. Williams Director May 18, 1998
- -------------------------
James F. Williams
/s/ Robert B. Mayer Director May 18, 1998
- -------------------------
Robert B. Mayer
/s/ Gary P. Scharmett Director May 18, 1998
- -------------------------
Gary P. Scharmett
/s/ Robert E. Heaton Director May 18, 1998
- -------------------------
Robert E. Heaton
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
5 Opinion of Stradley, Ronon, Stevens & Young, LLP
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Stradley, Ronon, Stevens & Young, LLP (contained in Exhibit 5 above)
24 Power of Attorney (contained in Signature Page hereof)
</TABLE>
II-4
May 18, 1998
Blonder Tongue Laboratories, Inc.
One Jake Brown Road
Old Bridge, NJ 08857
Re: Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as counsel to and for Blonder Tongue Laboratories, Inc., a
Delaware corporation (the "Company"), in connection with the preparation and
filing of a Registration Statement on Form S-3 (the "Registration Statement"),
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Act"), and relating to 317,889 shares of its common
stock, par value $.001 per share (the "Common Stock"), of which 167,889 shares
of Common Stock are issued and outstanding (the "Outstanding Shares") and
150,000 shares are issuable upon exercise of the Warrant (hereinafter described)
(the "Underlying Shares").
In our capacity as counsel, we have been requested to render the opinion
set forth in this letter and in connection therewith, we have reviewed: (i)
Restated Certificate of Incorporation of the Company, as certified by the
Secretary of State of the State of Delaware on May 15, 1998, (ii) Restated
Bylaws of the Company, as certified by the Secretary of the Company on May 18,
1998, (iii) resolutions of the Board of Directors of the Company adopted at a
meeting held on May 18, 1998, as certified by the Secretary of the Company on
May 18, 1998, (iv) Asset Purchase Agreement dated March 1, 1998 (the "Asset
Purchase Agreement") between the Company and Scientific-Atlanta, Inc.
("Scientific"), (v) Warrant to Purchase 150,000 Shares of Common Stock of
Blonder Tongue Laboratories, Inc. dated March 1, 1998 between the Company and
Scientific (the "Warrant"), (vi) the Registration Statement and (vii) such other
documents, instruments and records as we deemed necessary or appropriate for
purposes of rendering the opinion set forth herein.
<PAGE>
Blonder Tongue Laboratories, Inc.
May 18, 1998
Page 2
In rendering this opinion, we have assumed and relied upon, without
independent investigation, (i) the authenticity, completeness, truth and due
authorization, execution and delivery of all documents submitted to us as
originals, (ii) the genuineness of all signatures on all documents submitted to
us as originals, (iii) the conformity to the originals of all documents
submitted to us as certified or photostatic copies, and (iv) the sufficient
legal capacity of Scientific to enter into the Warrant and exercise its rights
and obligations thereunder.
The law covered by the opinion expressed herein is limited to the Delaware
General Corporation Law, as amended.
This opinion letter is given only with respect to laws and regulations
presently in effect. We assume no obligation to advise you of any changes in law
or regulation which may hereafter occur, whether the same are retroactively or
prospectively applied, or to update or supplement this letter in any fashion to
reflect any acts or circumstances which hereafter come to our attention.
Based upon, and subject to, the foregoing, we are of the opinion that the
Outstanding Shares are validly issued, fully paid and non-assessable, and the
Underlying Shares, when issued upon proper exercise of the Warrant pursuant to
and in accordance with the terms of the Warrant, will be validly issued, fully
paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and we further consent to the reference to our firm under
the caption "Legal Matters" in the Prospectus which forms a part of the
Registration Statement.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By: /s/ Gary P. Scharmett
---------------------------------
Gary P. Scharmett, A Partner
CONSENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 20, 1998, except for Note 16
for which the date is March 25, 1998, relating to the consolidated financial
statements of Blonder Tongue Laboratories, Inc. appearing in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.
We also consent to the reference to us under the caption "Experts" in such
Prospectus.
/s/ BDO Seidman, LLP
Woodbridge, New Jersey
May 18, 1998
