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Filed Pursuant to
Rule 424(b)(3)
File No. 333-82635
2,053,182 SHARES
[LOGO]
BOLDER TECHNOLOGIES CORPORATION
COMMON STOCK
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This Prospectus covers 2,053,182 shares of common stock of BOLDER
Technologies Corporation. The selling stockholders identified in this Prospectus
may sell these shares of common stock from time to time on terms to be
determined at the time of sale. We will not receive any of the proceeds from the
sale of shares by the selling stockholders.
Our shares trade on The NASDAQ National Market under the symbol "BOLD."
On July 8, 1999, the closing sale price of the common stock, as reported on The
NASDAQ National Market, was $8.375.
The selling stockholders may sell the shares of common stock described
in this Prospectus in public or private transactions, on or off The NASDAQ
National Market, at prevailing market prices, or at privately negotiated prices.
The selling stockholders may sell shares directly to purchasers or through
brokers or dealers. Brokers or dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders. We have
agreed to indemnify the selling stockholders and certain other persons against
certain liabilities, including liabilities under the Securities Act of 1933.
We will not be paying any underwriting commissions or discounts in the
offering of these shares. We will, however be paying for the expenses incurred
in the offering of the shares. For their shares, the selling stockholders will
receive the purchase price of the shares sold less any agents' commissions and
underwriters' discounts and other related expenses. More information is provided
in the section titled "Plan of Distribution" on page 17.
Our address and telephone number are: BOLDER Technologies Corporation.,
4403 Table Mountain Parkway, Golden, Colorado 80403, (303) 215-7200.
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THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD ACQUIRE
SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.
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.
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August 5, 1999
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TABLE OF CONTENTS
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Where You Can Find More Information................................. 2
The Company......................................................... 4
Forward-Looking Statements.......................................... 5
Risk Factors........................................................ 6
Use of Proceeds..................................................... 14
Selling Stockholders................................................ 15
Plan of Distribution................................................ 17
Description of Capital Stock........................................ 18
Legal Matters....................................................... 21
Experts............................................................. 22
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
BOLDER Technologies Corporation files reports, proxy statements and
other information with the Securities and Exchange Commission. You may inspect
and copy such material at the public reference facilities maintained by the SEC
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's
regional offices at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and at Seven World Trade Center, New York, New
York 10048. You can also inspect such materials at The National Association of
Securities Dealers, 1735 K Street, N.W., Washington, D.C.
Please call the SEC at 1-800-SEC-0330 for more information on the
public reference rooms. You can also find our SEC filings at the SEC's web site,
"http://www.sec.gov."
The SEC allows BOLDER Technologies Corporation to "incorporate by
reference" the information that 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. Information in this Prospectus supercedes information incorporated
by reference which we filed with the SEC prior to the date of this Prospectus.
Information that we file later with the SEC will automatically update and
supercede this information. We incorporate by reference the documents listed
below and any future filings we make with the SEC to under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
o Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
o Quarterly Report on Form 10-Q for the period ended March 31, 1999;
o Definitive Proxy Statement dated April 30, 1999; and
o The description of common stock contained in BOLDER Technologies
Corporation's Registration Statement on Form 8-A declared
effective by the Commission on April 29, 1996, including any
amendment or reports filed for the purpose of updating such
description.
2.
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You may request a copy of these filings (excluding exhibits which are
not specifically incorporated by reference into this Prospectus), at no cost to
you, by writing or telephoning BOLDER Technologies Corporation at:
BOLDER Technologies Corporation
4403 Table Mountain Parkway
Golden, Colorado 80403
Attention: Investor Relations
Telephone: (303) 215-7200
http://www.boldertmf.com
This Prospectus constitutes a part of a registration statement on Form
S-3 that has been filed with the SEC. SEC rules permit us to omit certain of the
information contained in the registration statement. For such information,
please refer to the registration statement on file with the SEC, including the
exhibits to the registration statement. The information contained on our Web
site does not constitute a part of this Prospectus.
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YOU SHOULD RELY ONLY UPON THE INFORMATION CONTAINED IN THIS DOCUMENT OR
DOCUMENTS TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THIS PROSPECTUS.
3.
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THE COMPANY
BOLDER Technologies Corporation ("Bolder" or the "Company") is an
energy technology company that is developing and commercializing advanced, high
power, rechargeable battery systems based on its patented thin metal film
("TMF") technology. The Company's TMF battery uses proven lead acid
electrochemistry in a proprietary configuration that has higher power density
than any other commercially available battery system. The Company believes that
its TMF batteries are attractive for many existing battery-powered applications
that require very large bursts of power, and will enable new applications that
could not previously be powered by batteries. The Company believes that the
combination of the following characteristics of its prototype TMF battery
systems offers advantages over commercially available rechargeable batteries in
a broad range of current and future applications:
o HIGH POWER. The Company believes its TMF batteries can deliver
higher sustained power density than any other commercially
available battery technology. This is important in existing
applications such as high power/pulse power tools, specialty
standby power, power quality and engine starting, and may enable
new applications ranging from high performance hybrid electric
vehicles to an automotive starting battery that weighs
substantially less than conventional automotive starting
batteries.
o COST EFFECTIVE. TMF batteries are manufactured using inexpensive,
readily available raw materials. In addition, the Company believes
its manufacturing process will be cost effective at high volumes.
o NO MEMORY EFFECT. TMF batteries do not suffer from the memory
effect that reduces the capacity of nickel cadmium ("NiCd")
batteries if they are partially discharged and recharged
repeatedly.
o SMALL SIZE. In high power applications, such as high power/pulse
power tools, automotive starting and standby power, TMF batteries
can do the same amount of work as much larger conventional
rechargeable batteries. Since the battery system typically
accounts for a significant part of the physical volume and weight
of these products, TMF technology can make such products easier to
use and/or less expensive to manufacture by enabling reductions in
product size.
o FASTER RECHARGE. TMF batteries can be recharged to full capacity
in less than five minutes with an appropriate charger, allowing
the device to be back to work quickly, thus increasing the "up
time" of the device.
o STABLE DISCHARGE VOLTAGE. In some applications, notably standby
power, electronic circuits must be used to compensate for the
voltage drop during discharge of other types of rechargeable
batteries. TMF batteries have very stable voltage during high rate
discharge, and thus provide more consistent performance and
potentially reduce the need for and cost of voltage regulation.
o COOL OPERATION. High power operation of batteries typically
generates significant heat that must be accommodated in the design
of products, such as standby power systems or professional power
tools. The low impedance of TMF batteries greatly reduces the
amount of heat generated by the battery, thus simplifying product
design.
o SUPERIOR COLD TEMPERATURE OPERATION. All batteries lose capacity
as the temperature drops. TMF batteries lose much less of their
room temperature capacity at lower temperatures than do
conventional batteries.
o EXTREMELY RAPID RESPONSE. TMF batteries deliver energy when
requested much more rapidly than conventional batteries.
o EASY TO RECYCLE. Environmental concerns have made recycling of
batteries increasingly important. Unlike many existing and
emerging battery technologies, TMF batteries are readily handled
by the well developed recycling process that is currently used to
recycle approximately 90 percent of the lead acid batteries in the
United States.
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The Company has focused its initial product development efforts on its
sub-C cell, which was introduced in October 1998. The sub-C cell can be used as
a modular building block for battery packs that can be used in a variety of
applications. The Company has also introduced its TMF REBELTM rechargeable
battery packs. Based on the core product sub-C cell, the high power TMF REBEL
product line includes battery modules ranging from 6 to 24 volts. The sub-C cell
is produced on an automated production line located in the Company's 127,000
square foot leased facility in Golden, Colorado. This facility has been designed
to accommodate multiple production lines and two research and development lines,
as well as all of the Company's other operations. The qualification of the
Company's first high-volume production line was completed in September 1998, and
the Company is currently producing a few thousand sub-C cells per month that are
being used as samples, to fulfill small orders, and as experiments to improve
the product and the production process. The Company does not expect significant
volume shipments to begin prior to the second half of 1999.
An integral part of the Company's strategy is to work with OEM
customers and strategic partners to develop market opportunities and leverage
its resources. For example, the Company intends to channel a portion of its
sales through value added partners ("VAPs"), and the Company has established
agreements with five VAPs to market TMF batteries throughout North America and
Europe. The Company believes that VAP sales will help the Company develop new
applications and market segments.
The Company is also seeking opportunities to increase the share of
value it obtains from those applications that can uniquely benefit from the
capabilities of TMF batteries. Consistent with this strategy, the Company has
announced that it will introduce a line of end-user products based on TMF
batteries during the second half of 1999, including emergency starting products
for cars, trucks, and other engine powered vehicles. These products will be
designed and produced by the Company and sold to end users through various sales
channel partners. The Company expects these products to be attractive because
they will be small and lighter and perform better than existing products used
for this function. The Company does not expect a significant volume of product
shipments and resulting revenues prior to the second half of 1999.
During 1998, the Company completed a technology transfer program with
Johnson Controls, Inc. ("JCI"), one of the world's leading suppliers of
automotive batteries. The Company has licensed JCI to produce and sell TMF
batteries for certain specific market segments.
The Company was incorporated in Colorado in 1991 and reincorporated in
Delaware in 1993. The Company's executive offices are located at 4403 Table
Mountain Drive, Golden, Colorado 80403, and its telephone number is (303)
215-7200.
References in this Prospectus to the "Company," "Bolder," "we," "our,"
and "us" refer to BOLDER Technologies Corporation, a Delaware corporation.
Information contained in BOLDER Technologies Corporation's web site does not
constitute part of this Prospectus.
FORWARD-LOOKING STATEMENTS
Statements about our expectations and all other statements made in this
registration statement or incorporated by reference hereby, other than
historical facts, are forward-looking statements. Those statements include words
such as "anticipate," "estimate," "project," "intend" and similar expressions
which we have used to identify these statements as forward-looking statements.
These statements appear throughout this Prospectus and are statements regarding
our intent, belief, or current expectations, primarily with respect to the
operations of BOLDER Technologies Corporation or related industry developments.
You are cautioned that any such forward-looking statements do not guarantee
future performance and involve risks and uncertainties, and that actual results
could differ materially from those discussed here and in the documents
incorporated by reference in this Prospectus. These factors, as and when
applicable, are discussed in BOLDER Technologies Corporation's filings with the
Securities and Exchange Commission (the "Commission"), including its most recent
annual report on Form 10-K, a copy of which may be obtained from BOLDER
Technologies Corporation without charge. See "Where You Can Find More
Information."
5.
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RISK FACTORS
An investment in the shares of our common stock being offered by this
Prospectus involves a high degree of risk. The risks and uncertainties described
below are not the only ones we face. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may also impair our
business.
If any of the events described in the following risks actually occur,
our business, financial condition and operating results could be materially
adversely affected. In such case, the trading price of our common stock could
decline, and you may lose all or part of your investment.
WE ARE A DEVELOPMENT STAGE COMPANY, HAVE A LIMITED OPERATING HISTORY AND ARE
SUBJECT TO MANY RISKS APPLICABLE TO A YOUNG COMPANY.
Since our inception in 1991, we have been principally engaged in
research and development activities relating to our TMF batteries. To date, our
revenues have been derived solely from technology transfer services, license
fees, federal Small Business Innovation Research research and development
agreements, customer funded research and development agreements and limited
sales of prototype batteries for evaluation purposes only. Since inception, we
have generated revenues of only $335,000 from sales of our batteries. We did not
commence initial, limited commercial production of its TMF batteries until
October 1998. We do not expect a significant volume of product shipments and
resulting product sales revenues prior to the second half of 1999. The market
for our products is unproven.
We will encounter the risks and difficulties frequently encountered by
development stage companies in new and evolving markets. We may not successfully
address any of these issues.
WE HAVE A HISTORY OF LOSSES, WE EXPECT TO LOSE MONEY IN THE FUTURE AND WE MAY
NOT ACHIEVE OR SUSTAIN PROFITABILITY.
We have not achieved profitability or material revenues from the sale
of battery products. As of March 31, 1999, we had an accumulated deficit of
$35.7 million. We do not expect to have material product revenues until the
second half of 1999 at the earliest. We do not expect to have a profitable
quarter in 1999 or 2000. We expect to incur significant losses as we continue to
incur significant sales and marketing, research and development and general and
administrative expenses. We may never be profitable. Even if we do achieve
profitability, we may not sustain or increase profitability on a quarterly or
annual basis in the future.
MARKET ACCEPTANCE OF OUR TMF BATTERIES IS UNCERTAIN.
The market for our battery products is unproven and our products have
not achieved any degree of market acceptance. To achieve market acceptance, our
TMF batteries must offer significant price and/or performance advantages over
other current and potential alternative battery technologies in a broad range of
applications. We cannot guarantee that our rechargeable TMF batteries will
achieve or sustain any such advantages. Even if our rechargeable TMF batteries
provide meaningful price or performance advantages, we cannot be certain that
they will achieve or maintain market acceptance in any potential market
application. The success of our products also will depend upon the level of
market acceptance of OEMs' and other customers' end products which incorporate
our TMF batteries, over which we have no control. We expect that our future
financial performance will depend significantly on the successful sales,
implementation and market acceptance of the Company's battery products, which
may not occur on a timely basis or at all.
OUR SUCCESS WILL DEPEND ON OUR ABILITY TO MEET OEM CUSTOMER REQUIREMENTS.
Our success will depend significantly on our ability to meet OEM
customer requirements by developing and introducing on a timely basis new
products and enhanced or modified versions of our existing products. OEMs often
require unique configurations or custom designs for battery systems which must
be developed and integrated in the OEM's product well before the product is
launched by the OEM. As a result, a substantial lead time often
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exists between the commencement of design efforts for a customized battery
system and the commencement of volume shipments of the battery system to the
OEM.
If we are unable to design, develop and introduce products that meet
OEMs' exacting requirements on a timely basis, our business, operating results
and financial condition will be materially adversely affected.
WE ARE NOT EXPERIENCED IN THE RETAIL MARKETING OF END-USER PRODUCTS. WE WILL
DEPEND UPON OUTSIDE SALES REPRESENTATIVES AND RESELLERS TO DEVELOP THE RETAIL
SALES CHANNEL FOR OUR END-USER PRODUCTS.
We have announced plans to introduce a line of end-user products based
on TMF batteries during the second half of 1999. We expect that end-user
products will account for a significant portion of our product revenues. We
intend to market these products in retail stores and other consumer distribution
outlets. We do not have any experience in the promotion, advertising and
distribution of retail products to consumers, and our efforts to develop a
retail sales channel may be unsuccessful.
To develop the retail sales channel, we will depend upon outside sales
representatives, distributors, resellers and retail operators. It is likely that
our agreements with such persons will not be exclusive, will not have minimum
purchase or resale requirements, and may be terminated by either party without
cause. These persons may carry products that are competitive with our products,
may not give a high priority to the marketing of our products, or may not
continue to carry our products. They may give a higher priority to other
products, including the products of competitors. We may not be able to obtain or
retain the sales representatives, distributors, resellers or retailers needed to
develop the retail sales channel.
WE WILL RELY ON ORIGINAL EQUIPMENT MANUFACTURERS AND NEED TO DEVELOP THIS SALES
CHANNEL. IF OUR ORIGINAL EQUIPMENT MANUFACTURER CHANNEL DOES NOT PERFORM
ADEQUATELY, OUR BUSINESS COULD BE SERIOUSLY HARMED.
We expect that product sales to OEMs will account for a significant
portion of our product revenues. We may fail to implement this strategy. We are
currently investing, and intend to continue to invest, resources to develop this
sales channel. Such investments could seriously harm our operating margins. We
depend on our OEMs' abilities to develop product enhancements or new products on
a timely and cost-effective basis that will meet changing customer needs and
respond to emerging industry standards and other technological changes. Our OEMs
may not effectively meet these technological challenges. These original
equipment manufacturers:
o Are not within our control;
o May incorporate into their products the technologies of other
companies in addition to or in place of our technologies; and
o Are not obligated to purchase our products.
Our OEMs may not continue to carry our products. Our inability to
recruit, or our loss of, important original equipment manufacturers could
seriously harm our business.
WE ARE DEPENDENT UPON EFFECTIVE STRATEGIC RELATIONSHIPS.
We expect to rely on a limited number of strategic relationships to
accelerate the commercialization of our products by assisting in the design and
development of products for certain applications, as well as to provide
manufacturing and marketing expertise. We currently have strategic relationships
with Johnson Controls and five VAPs located throughout North America and Europe.
We may be unable to enter into any other such partnerships and existing
relationships may not achieve their goals. The success of any strategic
partnership is dependent upon the following:
o the general business condition of the partner;
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o its commitment to the strategic partnership;
o the skills and experience of its employees responsible for the
strategic partnership; and
o the partner's timely and satisfactory performance of its obligations
under the partnership.
To the extent we enter into strategic partnerships, the terms of the
partnerships may require us and our partners to share revenues and/or expenses
from certain activities or for us to grant to our partners licenses to
manufacture, market and/or sell products based upon our TMF technology, which
could adversely affect our business, operating results and financial condition.
WE ARE DEPENDENT ON OUR VALUE ADDED PARTNER NETWORK.
We intend to channel a significant portion of our sales through VAPs in
the future. We currently have a VAP network of five distributors throughout
North America and Europe. Our VAP agreements are subject to minimum performance
criteria and standard termination provisions. VAPs may sell competitive
products. Although we have established multiple sources for VAP services for our
products, any disruption of operations at certain of our VAPs or the loss of
certain of our VAPs could materially adversely affect our business, operating
results and financial condition.
WE ARE IN THE EARLY STAGES OF MANUFACTURING AND MUST CONTINUE TO DEVELOP OUR
MANUFACTURING CAPABILITIES.
The difficulties and risks related to the implementation of our
manufacturing line and new process technology have in the past and may in the
future materially and adversely affect our operating results.
We did not commence initial commercial production of our TMF batteries
until October 1998. We are currently producing only a limited number of
batteries per month that are being used as samples, to fulfill small orders, and
as experiments to improve the product and the production process. Although our
initial automated production line is installed, qualified and functional, we
have not yet operated this line at full capacity over an extended period of
time.
A key determinant of our current and future production capacity and
profitability is the production yield of our manufacturing process. Failure to
achieve acceptable yields of commercial quality batteries in commercial
quantities, and thereby reduce our unit manufacturing costs, would negatively
affect our profitability. In addition, failure to continue volume manufacturing
on a timely basis could damage customer relationships and result in lost
opportunities. Any such failure would have a material adverse effect on our
business, operating results and financial condition.
In order to continue to scale up our manufacturing capacity, we will
need to complete fabrication, installation and qualification of our additional
automated production lines. In addition, as part of our manufacturing ramp-up,
we will need to hire and train a substantial number of new manufacturing
workers. The availability of skilled and unskilled workers in the Denver
metropolitan area, the site of our manufacturing facility, is limited due to a
relatively low unemployment rate. The continued implementation of our
manufacturing facility will continue to require substantial engineering work and
expenses and is subject to significant risks, including risks of cost overruns
and significant delays.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY IF WE FAIL TO KEEP PACE WITH RAPIDLY
CHANGING BATTERY TECHNOLOGIES.
The battery industry has experienced, and is expected to continue to
experience, rapid technological change. Various companies are seeking to enhance
traditional battery technologies, such as lead acid and NiCd, and other
companies have recently introduced or are developing rechargeable batteries
based on nickel metal hydride, lithium and other emerging and potential
technologies. If competing technologies that outperform our batteries are
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developed and successfully introduced, our business, operating results and
financial condition will be materially adversely affected.
WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL CAPITAL TO FUND OUR OPERATIONS WHEN
NEEDED.
We will require substantial funds to build and operate commercial
manufacturing facilities, to market our products and to conduct the necessary
research and development and testing of our products. We believe that our
current cash reserves and cash flows from operations should be adequate to fund
our operations at least through year-end 1999. In order to continue planned
operations beyond 1999 and to provide funds for future production lines, we will
need to access additional sources of equity capital or debt. If our capital
requirements or revenue vary materially from our current plans or if unforeseen
circumstances occur, we may require additional financing sooner than we
anticipate. We are unable to predict the precise amount of future capital that
we may require. Additional financing may not be available when we require it,
and the form and terms of any such available financing may not be acceptable.
If we cannot obtain adequate funds on acceptable terms, then:
o we may have to delay, scale back or eliminate one or more of our
development programs;
o we may have to delay, scale back or eliminate any substantial
expansion of fully-automated manufacturing capacity;
o we may have to curtail or otherwise discontinue the development,
manufacture or sale of our TMF battery systems;
o we may have to sell additional securities on terms that could be
dilutive to our stockholders;
o we may be unable to take advantage of strategic opportunities or
respond to competitive pressures;
o we may be unable to develop or enhance our products; and
o we may have to seek a merger partner or suspend operations.
Any of these failures could have a material adverse effect on our
business, operating results and financial condition.
INTENSE COMPETITION EXISTS IN THE BATTERY INDUSTRY AND WE EXPECT COMPETITION TO
CONTINUE TO INTENSIFY.
Competition in the battery industry is intense. We expect that
competition will continue to intensify.
We believe that our primary competitors are existing suppliers of NiCd
and lead acid suppliers. In applications such as portable tools and appliances
and certain electronic and medical products, our primary competitors are
suppliers of NiCd batteries, including:
o SANYO Energy (USA) Corporation;
o Panasonic Industrial Company, a division of Matsushita Electric
Corporation of America;
o Energizer Power Systems, a division of Eveready Battery Company; and
o SAFT America, Inc.
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In applications such as car starting, standby power, very small
batteries for engine starting and a few medical and electronics applications,
our primary competitors are suppliers of lead acid batteries:
o Suppliers of small lead acid batteries used in non-automotive
applications include Yuasa Exide, Inc., Exide Corporation,
Matsushita Electric Corporation of America, Hawker Energy Products,
Inc., CSB Battery of America Corp. and GS Battery USA, Inc., a
division of Japan Storage Battery Co., Limited; and
o Suppliers of automotive batteries include Johnson Controls, Inc.,
Exide Corporation, GNB Inc. and Delphi Automotive Systems
Corporation, formerly a division of General Motors Corporation.
In addition, we have granted Johnson Controls certain license rights
which allow Johnson Controls to compete with us in lawn and garden starting,
motorcycle starting, HEV, standby power and, beginning July 1, 1999, in
emergency jump-starting batteries for lawn and garden starting, motorcycle
starting and automobile and truck starting.
We may not be able to compete successfully against our current or
future competitors. Many of our competitors have established positions in the
market, greater name recognition, financial, technical, marketing, sales,
manufacturing, distribution and other resources and long standing relationships
with OEMs and other customers. These factors may place us at a disadvantage when
we respond to our competitors' pricing strategies, technological advances and
other initiatives. Specifically, we may not be able to compete successfully with
Johnson Controls in the markets where Johnson Controls has a royalty-bearing
license from us. Additionally, our competitors may develop services that are
superior to ours or that achieve greater market acceptance. Our inability to
successfully respond to competitive pressures would have a material adverse
effect on our business, operating results and financial condition.
FAILURE TO MANAGE OUR GROWTH EFFECTIVELY COULD ADVERSELY AFFECT OUR BUSINESS.
Our transition from a development stage company to a manufacturing
company has strained and will continue to strain our managerial, operational and
financial resources. If our products achieve market acceptance, we will need to
further increase our number of employees and enhance our operating systems and
practices. We must effectively manage our operational and financial systems,
procedures and controls to manage this future growth. Further, our transition
from a research and development focused entity to a manufacturing and customer
focused entity will require new processes and activities that we have not done
before.
A NUMBER OF FACTORS COULD CAUSE OUR OPERATING RESULTS TO FLUCTUATE SIGNIFICANTLY
AND OUR STOCK PRICE TO FALL.
We expect our annual and quarterly operating results to fluctuate
significantly in the future. It is possible that in some future periods our
results may be below expectations of public market analysts and investors. If
this occurs, the trading price of our common stock could significantly decline.
Our operating results may fluctuate in the future due to a variety of factors,
not all of which are in our control. These factors include:
o the size and timing of individual purchase orders;
o the long sales cycle in the OEM markets for our products;
o market acceptance of our products;
o implementation of additional automated production lines;
o manufacturing yields and efficiency;
o changes in our operating expenses;
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o the mix of sales to OEMs and VAPs;
o product development programs; and
o general industry and economic conditions.
The success of our business depends on increasing revenues to offset
expenses. We cannot assure you that we will generate sufficient revenues to
offset our expenses. If our revenues are less than expected, or if we increase
our spending ahead of our revenue growth, our business, financial condition and
operating results will be materially and adversely affected. You should not rely
on annual or quarter-to-quarter comparisons of our operating results as an
indication of future performance.
WE ARE DEPENDENT ON OUR SUPPLIERS FOR RAW MATERIALS.
We are dependent on sole or limited source suppliers for certain key
raw materials used in our products, particularly thin lead foil, lead oxide,
molded components, separators, acid and expander components. We have qualified,
or we are in the process of qualifying, second sources for all primary product
components. We generally purchase sole or limited source raw materials pursuant
to purchase orders placed from time to time and we have no long-term contracts
or other guaranteed supply arrangements with our sole or limited source
suppliers. If our suppliers are unable to meet our quality and volume
requirements for raw materials in a timely manner and at an acceptable cost, it
could have a material adverse effect on our business, financial condition and
operating results.
OUR INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY MAY ADVERSELY AFFECT OUR
ABILITY TO COMPETE.
Patents, trade secrets and other proprietary rights are important to
our success and competitive position. Our efforts to protect our proprietary
rights may be inadequate and may not prevent others from claiming violations by
us of their proprietary rights.
We hold seven issued United States patents which expire beginning in
2008 and ending in 2016. The Company also has four issued foreign patents. In
addition, we have ten patents pending in the United States, as well as a number
of foreign patents pending. Patent applications in the United States are
maintained in secrecy until patents issue, and since publication of discoveries
in the scientific or patent literature tends to lag behind actual discoveries,
we cannot be certain that we are the first creator of inventions covered by
pending patent applications or the first to file patent applications on such
inventions.
We cannot be certain that our pending applications will result in
issued patents or that foreign patent applications related to issued United
States patents will issue. Because the status of patents involves complex legal
and factual questions and the breadth of claims issued is uncertain, we cannot
be certain that any of our issued patents will afford meaningful protection
against competitors with similar technology. In addition, with respect to
foreign patents, some foreign countries provide significantly less patent
protection than the United States.
In addition to patent protection, we rely on the law of unfair
competition and trade secrets to protect our proprietary rights.
The unauthorized misappropriation of our proprietary rights could have
a material adverse effect on our business, financial condition and operating
results. Other companies may infringe upon our patents and other proprietary
rights or may obtain patents that will require us to license or design around
such patents. If we resort to legal proceedings to enforce our proprietary
rights, the proceedings could be burdensome and expensive and the outcome could
be uncertain. To determine the priority of inventions, we may have to
participate in interference proceedings declared by the United States Patent and
Trademark Office or comparable proceedings in foreign patent offices, which
could result in substantial cost and may result in an adverse decision as to the
priority of our inventions.
11.
<PAGE> 12
WE ARE SUBJECT TO CLAIMS ALLEGING INTELLECTUAL PROPERTY INFRINGEMENT.
We may be subject to claims alleging that we have infringed third party
proprietary rights. If we were to discover that any of our products infringed
third party rights, we may not be able to obtain permission to use those rights
on commercially reasonable terms. If we resort to legal proceedings to enforce
our proprietary rights or defend against alleged infringements, the proceedings
could be burdensome and expensive and could involve a high degree of risk. Any
of these events could have a material adverse effect on our business, operating
results and financial condition.
WE MAY NOT BE ABLE TO SUCCESSFULLY OPERATE OUR BUSINESS IF WE LOSE KEY
PERSONNEL.
We believe that our success will depend on the continued services of
our senior management team and other key personnel. The loss of the services of
any of our senior management team or other key employees could materially
adversely affect our business, operating results and financial condition. In
addition, we rely on consultants and advisors to assist us in formulating our
research and development strategy. We do not have fixed term employment
contracts with any of our key executives. We maintain key person life insurance
on Mr. Lankford, Sandra D. Schreiber, our Senior Vice President--Systems and
Supply Chain, and Arthur S. Homa, our Senior Vice President--Technology and
Manufacturing.
OUR BUSINESS WILL SUFFER IF WE DO NOT ATTRACT AND RETAIN HIGHLY SKILLED
PERSONNEL.
In order to continue to pursue our product development and marketing
plans, our future success depends on our ability to identify, attract, hire and
train highly skilled scientific, manufacturing and sales and marketing
personnel. These requirements are also expected to demand the addition of
management personnel and the development of additional expertise by existing
management personnel. Our failure to attract and retain the necessary
scientific, manufacturing and sales and marketing personnel could materially
adversely affect our business, operating results and financial condition,
including our ability to conclude collaborations with additional corporate
partners.
OUR INABILITY TO COMPLY WITH ENVIRONMENTAL REGULATIONS MAY ADVERSELY AFFECT OUR
BUSINESS.
Our operations involve the storage, use and disposal of a number of
toxic and hazardous materials, including lead, lead oxide, sulfuric acid,
solvents and adhesives. As a result, we are required to maintain our research
and manufacturing operations in compliance with United States federal, state and
local laws and regulations, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, that govern the
storage, use and disposal of various chemicals used in and waste materials
produced by the manufacture of our TMF batteries.
For example, our manufacturing facilities each include an enclosed area
specifically designed for the mixing of lead oxide paste, the pasting of the
lead foil and the winding of the cells. Employees operating in these areas are
instructed in the use of safety equipment such as gloves, protective clothing
and respirators and are required under Occupational Safety and Health
Administration guidelines to submit to blood monitoring tests on a periodic
basis which are undertaken by an outside, independent agency.
We may be unable to operate in conformity with such laws and
regulations in the future. Additionally, changes in such regulations may require
us to incur substantial capital or operating costs to achieve or maintain
compliance. Any failure by us to adequately control the discharge of our
hazardous materials and wastes could also subject us to future liabilities,
which could be significant.
OUR BUSINESS COULD BE AFFECTED BY YEAR 2000 ISSUES.
Year 2000 issues refer generally to the problems that some software may
have in determining the correct century for the year. For example, software with
date-sensitive functions that is not Year 2000 compliant may not be able to
distinguish whether "00" means 1900 or 2000, which may result in failures or the
creation of erroneous results.
12.
<PAGE> 13
We rely upon software in our information systems and manufacturing
equipment. We have completed an inventory of our critical control systems,
computers, and application software. We plan on validating each of these systems
by September 30, 1999 through a combination of written vendor confirmations and
specific validation testing. We have contracted with third party vendors to
assist in planning tests and/or testing these systems.
We are not currently aware of any significant operational issues or
costs associated with preparing our internal information technology and
non-information technology systems for the Year 2000. However, we may experience
significant unanticipated problems and costs caused by undetected errors or
defects in the technology used in our internal information technology and
non-information technology systems.
We have funded our Year 2000 plan from cash balances and have not
separately budgeted for these costs in the past. To date, these costs have not
been significant. We will, however, incur additional costs related to the Year
2000 plan. In addition, we may experience material problems and costs with Year
2000 compliance that could seriously harm our business, financial condition and
results of operations.
We have not yet fully developed a contingency plan to address
situations that may result if we are unable to achieve Year 2000 readiness of
our critical operations. The cost of developing and implementing such a plan may
itself be significant. Finally, we are also subject to external forces that
might generally affect industry and commerce, such as utility or transportation
company interruptions caused by Year 2000 compliance failures.
We believe that our most likely risks from Year 2000 issues are
external, due to the difficulty of validating key third parties' readiness for
Year 2000. Even if we obtain Year 2000 compliance assurances from third parties,
there is still a risk that a major supplier of raw materials, or a major OEM
customer, could become unreliable due to Year 2000 problems.
OUR PRODUCT LIABILITY INSURANCE MAY NOT BE SUFFICIENT TO COVER PRODUCT LIABILITY
CLAIMS.
Lead acid batteries, including our TMF battery, may develop significant
internal pressures during severe overcharge conditions due to the release of
gases as a byproduct of the chemical reaction occurring in the cell. In order to
prevent potential pressure build up, our batteries incorporate a Bunsen pressure
relief valve which, under normal overcharge conditions, will allow the venting
of small amounts of gases, primarily hydrogen and oxygen. If the batteries are
subjected to abusive overcharge or overdischarge conditions, larger amounts of
these gases may be vented, which, when mixed with air, can cause explosions. In
addition, under such conditions, toxic gases and/or sulfuric acid spray may be
released. Sulfuric acid can cause burns. Such occurrences may result in product
liability claims against us.
Additionally, we intend to manufacture and retail end user products to
consumers, such as an emergency automotive jump start product. The sale of such
products may expose us to product liability claims from consumers.
Although we maintain product liability insurance in amounts which we
believe are reasonable given the associated risks, we cannot be certain that
such insurance will be adequate to cover any potential liability relating to one
or more claims of product liability, or that such insurance will be available at
an acceptable cost in the future.
CONTROL BY EXISTING STOCKHOLDERS MAY LIMIT YOUR ABILITY TO INFLUENCE THE OUTCOME
OF DIRECTOR ELECTIONS AND OTHER MATTERS REQUIRING STOCKHOLDER APPROVAL.
Approximately 38% of our outstanding stock is owned by two venture
capital funds. These stockholders may be able to significantly influence matters
that we require our stockholders to approve, including electing directors and
approving significant corporate transactions. This concentration of ownership
may also have the effect of delaying or preventing a change in control of us,
which could result in a lower stock price.
CERTAIN PROVISIONS IN OUR CORPORATE DOCUMENTS MAY DISCOURAGE OUR ACQUISITION BY
OTHERS AND THUS DEPRESS OUR STOCK PRICE.
Our corporate documents and Delaware law could make it more difficult
for a third party to acquire us, even if a change in control would be beneficial
to our stockholders. In particular, we adopted a stockholder rights
13.
<PAGE> 14
plan in 1998. These and other provisions might discourage, delay or prevent a
change in control of us or a change in our management. These provisions could
also limit the price that investors might be willing to pay in the future for
shares of common stock.
THE PRICE FOR OUR COMMON STOCK IS LIKELY TO BE HIGHLY VOLATILE, AND YOU MAY NOT
BE ABLE TO RESELL SHARES AT OR ABOVE THE OFFERING PRICE.
The market price of our common stock has been and is likely to be
highly volatile as the stock market in general, and the market for technology
companies in particular, has been highly volatile. Investors may not be able to
resell their shares of our common stock following periods of volatility because
the market reacts adversely to volatility.
Factors that could cause volatility in our stock price may include,
among other things:
o actual or anticipated variations in our quarterly operating results;
o if we or our competitors announce technological innovations or new
commercial products;
o changes in governmental regulation;
o developments in our patents or other proprietary rights or those of
our competitors, including litigation;
o developments in our relationships with current or future
collaborative partners;
o if securities analysts change their financial estimates for us or
for our competitors;
o general conditions or trends in the stock market;
o if we add or lose key personnel; and
o if our stockholders sell common stock.
Many of these factors are beyond our control. These factors may
materially adversely affect the market price of our common stock, regardless of
our operating performance.
FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD CAUSE OUR STOCK
PRICE TO FALL AND DECREASE THE VALUE OF YOUR INVESTMENT.
The market price of our common stock could fall if our stockholders
sell substantial amounts of common stock, including shares issued upon the
exercise of outstanding options and warrants and upon conversion of the
outstanding Series A Preferred Stock, in the public market following this
offering. Such sales might also make it more difficult for us to sell equity
securities in the future at a time and price that we deem appropriate.
Some stock and warrant holders are entitled to certain registration
rights. The exercise of such rights could adversely affect the market price of
our common stock.
USE OF PROCEEDS
BOLDER Technologies Corporation will not receive any proceeds from the
sale of common stock by the selling stockholders.
14.
<PAGE> 15
SELLING STOCKHOLDERS
The following table sets forth the names of the selling stockholders,
the number of shares of common stock owned by each of them as of the date of
this Prospectus and the number of shares of common stock which may be offered
pursuant to this Prospectus. The selling stockholders may offer all, some or
none of their shares of common stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BEING SHARES BENEFICIALLY OWNED AFTER
NAME PRIOR TO OFFERING(1)(2) OFFERED OFFERING (2)
- ---- ------------------------- ------------ -------------------------------
NUMBER PERCENT NUMBER PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Entities associated with
Special Situations Private
Equity Fund, L.P. (3) -- -- 416,667 -- --
Lancaster Investment
Partners -- -- 200,000 -- --
Watson Investment
Partners, L.P. -- -- 50,000 -- --
Harbour Investments Ltd. -- -- 41,667 -- --
Robert G. Allison -- -- 4,250 -- --
Gary Bergren -- -- 4,250 -- --
Craig L. Campbell -- -- 4,250 -- --
Dennis D. Gonyea -- -- 4,250 -- --
James G. Peters IRA -- -- 4,000 -- --
Daniel S. Perkins IRA -- -- 4,000 -- --
Daniel S. Perkins TTEE
U/A Dated
5-12-88 -- -- 4,000 -- --
Patrice M. Perkins IRA -- -- 3,000 -- --
Patrice M. Perkins TTEE
U/A Dated
5-12-88 -- -- 4,000 -- --
David H. Potter IRA -- -- 4,000 -- --
Pyramid Partners, L.P. -- -- 50,000 -- --
Ellis Limited Partnership -- -- 10,000 -- --
Harold Roitenberg IRA -- -- 10,000 -- --
John F. Rooney -- -- 5,000 -- --
Donald M. Liddell 15,000 * 50,000 15,000 *
Jane H. Liddell -- -- 50,000 -- --
D. Roger B. Liddell 7,275 * 12,500 7,275 *
Trust under the will of
Edith S. Liddell 16,800 * 36,800 16,800 *
Florence W. Liddell 1,500 * 12,500 1,500 *
Torrey B. Liddell 8,500 * 12,500 8,500 *
</TABLE>
15.
<PAGE> 16
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BEING SHARES BENEFICIALLY OWNED AFTER
NAME PRIOR TO OFFERING(1)(2) OFFERED OFFERING (2)
- ---- ------------------------- ------------ -------------------------------
NUMBER PERCENT NUMBER PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Alice E.E. Liddell Trust
dated 8-12-97 7,500 * 15,000 7,500 *
Catherine H. Bass 5,500 * 12,000 5,500 *
Margot S. Bass 6,500 * 15,000 6,500 *
Steedman L. Bass 6,500 * 15,000 6,500 *
Jane L. Bass 2,000 * 12,500 2,000 *
Roscoe C. Ingalls, Jr. -- -- 8,500 -- --
Sylvia Keiser 1,600 * 33,500 1,600 *
Marjorie Ann Berger 4,000 * 10,000 4,000 *
John M. Armstrong 2,000 * 12,500 2,000 *
Ann M. Goodbody 5,000 * 20,000 5,000 *
John R. Twiss, Jr. 1,500 * 25,000 1,500 *
Mary Twiss -- -- 8,500 -- --
Richard N. Pierson III 1,800 * 8,500 1,800 *
Stephen F. Wilder 7,000 * 17,000 7,000 *
Albert C. England, Jr. 5,000 * 17,000 5,000 *
Ernst R. Habicht, Jr. 2,500 * 12,500 2,500 *
Michael J. Davies 2,000 * 8,500 2,000 *
Donald B. Brant, Jr. 4,000 * 6,000 4,000 *
Dan I. Abrams -- -- 10,000 -- --
John C. Beck -- -- 8,500 -- --
M. Gerald Sedam -- -- 8,500 -- --
John G. Kinnard & Co.,
Inc. (4) -- -- 8,333 -- --
Argosy Capital Group, L.P. -- -- 100,000 -- --
Stephen C. Marcus -- -- 15,000 -- --
EDJ Limited -- -- 50,000 -- --
Frorer Partners, L.P. -- -- 100,000 -- --
Losty Capital Management -- -- 30,000 -- --
VFT Special Ventures, Ltd. -- -- 75,000 -- --
Porter Partners, L.P. -- -- 100,000 -- --
TCMP 3 Partners, L.P. -- -- 30,000 -- --
Edward O. Thorp -- -- 50,000 -- --
Jeffrey Thorp IRA Rollover, -- -- 60,000 -- --
Bear Stearns SECS Corp
Custodian
George H. Dorion -- -- 7,500 -- --
Archimedes Overseas Ltd. -- -- 30,000 -- --
Stephen H. Paneyko -- -- 10,000 -- --
Florence K. Romanov -- -- 7,500 -- --
William N. Breger -- -- 7,500 -- --
New York School of Interior -- -- 28,572 -- --
Design
Lawton Lamb -- -- 7,500 -- --
Nathaniel P. Phillips, Jr. -- -- 15,000 -- --
William Reed Simmons -- -- 10,000 -- --
Kathie Plourde Simmons -- -- 7,500 -- --
Carole Maeder -- -- 7,500 -- --
Lew Walter -- -- 7,500 -- --
Stephen M. Pulsifer -- -- 7,143 -- --
</TABLE>
- ----------------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
issuable upon exercise of options currently exercisable, or exercisable
within 60 days of the date of this Prospectus, are deemed outstanding for
computing the percentage of the person holding such securities but are not
outstanding for computing the percentage of any other person. Subject to
community property laws where applicable, the persons named in the above
table have sole voting and investment power with respect to all shares of
common stock shown as beneficially owned by them.
(2) Although the selling stockholders have not expressed a specific intention
as to the number of shares of common stock to be sold, the table shows the
beneficial ownership that would result if all shares being offered hereby
were sold. Percentage calculations are based upon 11,005,127 shares of
common stock outstanding as of June 30, 1999.
(3) Includes 150,000 shares of common stock held by Special Situations Private
Equity Fund, L.P., 150,000 shares of common stock held by Special
Situations Fund III, L.P., 51,667 shares of common stock held by Special
Situations Cayman Fund, L.P. and 65,000 shares of common stock held by
Special Situations Technology Fund, L.P.
(4) During the three year period prior to the date of this registration
statement, John G. Kinnard & Co., Inc. has acted as a market maker with
respect to the Company's common stock. In addition, John G. Kinnard & Co.,
Inc. acted as the Company's financial advisor in connection with the
private placement of the Shares of common stock to the selling
stockholders.
16.
<PAGE> 17
PLAN OF DISTRIBUTION
The Company is registering the shares of common stock (the "Shares")
offered by the selling stockholders hereunder pursuant to covenants and
contractual registration rights contained in the Common Stock Purchase
Agreements, by and between the Company and the selling stockholders, dated as of
May 14, 1999, May 18, 1999 and July 9, 1999 (collectively, the "Purchase
Agreements"), and the Registration Rights Agreements, by and between the Company
and the selling stockholders, dated as of May 14, 1999, May 18, 1999 and July 9,
1999 (collectively, the "Registration Rights Agreements"). As used herein,
"selling stockholders" includes pledgees, donees and transferees selling shares
received from a named selling shareholder after the date of this Prospectus. All
costs, expenses and fees in connection with the registration of the Shares
offered hereby will be borne by the Company. Brokerage commissions and similar
selling expenses, if any, attributable to the sale of Shares will be borne by
the selling shareholders.
Sales of Shares may be effected by selling shareholders from time to
time in one or more types of transactions (which may involve one or more blocked
transactions) on The NASDAQ National Market, in privately negotiated
transactions, through put or call options transactions, through short sales of
Shares, or a combination of such methods of sale, at market prices prevailing at
the time of sale or at negotiated prices. Such transactions may or may not
involve brokers or dealers.
The selling stockholders may effect such transactions by selling the
Shares to or through broker-dealers, which may act as agents or principals. Such
broker-dealers may receive compensation in the form of discounts, concession or
commissions from the selling stockholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agent or to whom they sell as principal,
or both (which compensation to a particular broker-dealer might be in excess of
customary commission).
At any time a particular offer of Shares is made, the specific Shares
of common stock to be sold, the names of the selling stockholders, the
respective purchase prices and public offering prices, the names of any agent,
dealer or underwriter, and any applicable commissions or discounts with respect
to a particular offer will be set forth in an accompanying Prospectus supplement
or, if appropriate, a post-effective amendment to the registration statement of
which this Prospectus is a part.
The selling stockholders and any broker-dealers who act in connection
with the sale of Shares hereunder may be deemed to be "underwriters" as that
term is defined in the Securities Act of 1933 (the "Securities Act"), and any
commissions received by them and profit on any resale of the Shares as principal
might be deemed to be underwriting discounts and commissions under the
Securities Act.
Any or all of the sales or other transactions involving the Shares
described above, whether effected by the selling stockholders, any broker-dealer
or others, may be made pursuant to this Prospectus. In addition, any Shares that
qualify for sale pursuant to Rule 144 under the Act may be sold under Rule 144
rather than pursuant to this Prospectus.
In order to comply with the securities laws of certain states, if
applicable, the Shares may be sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, in certain states the Shares may
not be sold unless they have been registered or qualified for sale or an
exemption from registration or qualification requirements is available and is
complied with.
Pursuant to the terms of the Registration Rights Agreements, the
Company has agreed to use its best efforts to cause the registration statement
to which this Prospectus related to become effective by August 16, 1999 for the
resale of the Shares and to remain effective until the earlier of the expiration
of the Effectiveness Target Date (as defined in the Registration Rights
Agreements, copies of which are attached as exhibits hereto) or the date a
Subsequent Shelf Registration (as defined in the Registration Rights Agreements)
covering all of the Shares of common stock has been declared effective under the
Securities Act. The Company will be permitted to suspend the use of the
Prospectus which is a part of such registration statement during certain periods
of time and under certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events. The Company
will pay all expenses of such registration statement, provide to each registered
holder
17.
<PAGE> 18
requesting to sell the Shares copies of such Prospectus, notify each registered
holder when such registration statement has become effective and take certain
other actions as are required to permit, subject to the foregoing, unrestricted
resales of such securities. A holder who sells such securities pursuant to such
registration statement generally will be required to be named as a selling
stockholder in the related Prospectus and to deliver a Prospectus to purchasers
and will be bound by the provisions of the Registration Rights Agreements which
are applicable to such holder (including certain indemnification provisions). If
a registration statement covering the Shares is not effective, such Shares may
not be sold or otherwise transferred except in accordance with the provisions
set forth under an exemption from registration under federal and state
securities laws. The Registration Rights Agreements provide for
cross-indemnification of the selling stockholders and the Company to the extent
permitted by law, for losses, claims, damages, liabilities and expenses arising
under certain circumstances, out of any registration of the Shares.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 25,000,000 shares of
common stock, $.001 par value per share, and 5,000,000 shares of preferred
stock, $.001 par value per share, of which 336,200 are designated Series A
Preferred Stock and 250,000 are designated Series B Junior Participating
Preferred Stock. As of June 22, 1999, there were approximately 280 record
holders of the Company's common stock.
COMMON STOCK
The holders of the Company's common stock are entitled to one vote for
each share held of record on all matters submitted to a vote of the
stockholders. The holders of common stock are not entitled to cumulative voting
rights with respect to the election of directors, and as a consequence, minority
stockholders will not be able to elect directors on the basis of their votes
alone. Subject to preferences that may be applicable to any then outstanding
shares of preferred stock, holders of common stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of the Company, holders of the common stock are entitled to share
ratably in all assets remaining after payment of liabilities and the liquidation
preference of any then outstanding preferred stock. Holders of common stock have
no preemptive rights and no right to convert their common stock into any other
securities. There are no redemption or sinking fund provisions applicable to the
common stock. All outstanding shares of common stock are, and all shares of
common stock to be outstanding upon completion of this offering will be, fully
paid and nonassessable.
SHAREHOLDER RIGHTS PLAN
Each share of common stock has associated with it one right (a "Right")
to purchase one one-hundredth of a share of Series B Junior Participating
Preferred Stock (or in certain cases other securities) of the Company. The terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement") dated
as of January 23, 1998, between the Company and American Stock Transfer & Trust
Company, as Rights Agent. Prior to the occurrence of certain specified future
events, the rights will not be represented by separate certificates and will be
transferable with and only with the associated common stock.
Pursuant to the Rights Agreement, in the event that, among other
things, a third party acquires beneficial ownership of 15% or more of the
outstanding shares of the common stock, each holder of Rights will be entitled
to purchase securities of the Company having a market value equal to twice the
purchase price thereof. In addition, Rights held by an Acquiring Person (as
defined in the Rights Agreement) will become null and void, nontransferable and
nonexercisable.
Subject to certain limitations, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right. The Rights will expire on
January 23, 2008, unless earlier redeemed by the Company.
The Company's Shareholder Rights Plan may have the effect of
discouraging unsolicited takeover attempts.
18.
<PAGE> 19
The foregoing summary of certain terms of the Rights does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, the Rights Agreement, a copy of which is on file with the Commission.
PREFERRED STOCK
The Board of Directors of the Company is empowered, without approval of
the stockholders, to cause shares of preferred stock to be issued in one or more
series and to establish the number of shares to be included in each such series
and the rights, powers, preferences and limitations of each series. Because the
Board of Directors has the power to establish the preferences and rights of each
series, it may afford the holders of any series of preferred stock preferences,
powers and rights, voting or otherwise, senior to the rights of holders of
common stock or other series of preferred stock. The issuance of the preferred
stock could have the effect of delaying or preventing a change in control of the
Company. The Board of Directors has no present plans to issue any of the
preferred stock, other than the Series A Preferred Stock which was issued by the
Company in October 1997. In connection with the Company's Shareholder Rights
Plan, the Company would be obligated to issue shares of Series B Junior
Participating Preferred Stock if such rights become exercisable.
The Series A Preferred Stock constitutes a single series of the
preferred stock of the Company consisting of 336,200 shares. All outstanding
shares of Series A Preferred Stock are duly authorized, validly issued, fully
paid and nonassessable, and the holders thereof will not have any preemptive
rights in connection therewith. The Series A Preferred Stock is not subject to
any sinking fund or other obligation of the Company to redeem or retire such
shares except as described below. Any Series A Preferred Stock converted,
redeemed or otherwise acquired by the Company will, upon cancellation of such
shares, have the status of authorized but unissued preferred stock subject to
issuance by the Board of Directors as shares of preferred stock of any one or
more other series but not as shares of Series A Preferred Stock.
The material rights, powers, preferences and limitations of the Series
A Preferred Stock are set forth below:
o Dividends. Holders of the Series A Preferred Stock are each
entitled to receive (and the Company is required to pay), when, as
and if declared by the Board of Directors, out of the funds of the
Company legally available therefor, a semi-annual dividend payable
in common stock (based upon the common stock's then fair market
value) or cash or a combination of common stock and cash, at the
Company's option, at an annual rate equal to (i) $4.00 per share to
the extent the dividend is paid in cash and (ii) $4.50 per share to
the extent the dividend is paid in common stock. If dividends are
paid in cash it could require the Company to pay $1,344,000
annually. If dividends are paid in common stock it will be dilutive
to the holders of common stock.
o Conversion Rights. Each share of Series A Preferred Stock is
convertible at the option of the holder thereof at any time, unless
previously redeemed, into that number of shares of common stock
equal to $50.00 divided by a conversion price per share equal to
$15.00, subject to certain adjustments.
o Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, the
holders of shares of Series A Preferred Stock are each entitled to
receive out of assets of the Company available for distribution to
stockholders, whether from capital surplus or earnings, before any
distribution of assets is made to holders of common stock and of any
other class of stock of the Company ranking junior to the Series A
Preferred Stock, liquidating distributions equal to the greater of
(i) $50.00 per share of such Series A Preferred Stock or (ii) the
amount per share of such Series A Preferred Stock that would have
been payable had each such share been converted into common stock
immediately prior to such event of liquidation, dissolution or
winding up, plus, in either case, accrued and unpaid dividends.
o Redemption Rights. Under certain circumstances, the shares of
Series A Preferred Stock are redeemable at the option of the
Company, in whole or in part, at any time or from time to time out
of funds legally available therefor, at $50.00 per share, plus in
each case an amount equal to accrued and unpaid dividends, if any,
to (and including) the redemption date, whether or not earned or
declared (the "Redemption Price"). The Redemption Price may be paid
in shares of common stock or cash, or in a
19.
<PAGE> 20
combination of common stock and cash, at the Company's option.
o Redemption at Option of Holder upon a Fundamental Change. If a
Fundamental Change (as defined in the Certificate of Designation of
the Series A Preferred Stock, a copy of which has previously been
filed with the Commission (the "Certificate of Designation"))
occurs, each holder of Series A Preferred Stock shall have the
right, at the holder's option, to require the Company to redeem all
of such holder's Series A Preferred Stock, or any portion thereof
that has an aggregate liquidation value that is a multiple of
$50.00, on the date selected by the Company that is not less than 10
nor more than 20 days after the Final Surrender Date (as defined in
the Series A Certificate of Designation), at a price per share equal
to the Redemption Price. The Company may, at its option, pay all or
any portion of the Redemption Price upon a Fundamental Change in
shares of common stock of the Company or any successor corporation.
o Voting Rights. The holders of Series A Preferred Stock have voting
rights on all matters subject to a vote of holders of common stock
on an as-converted basis. If the Series A Preferred Stock has not
been redeemed prior to October 8, 2003, the Board of Directors of
the Company shall be increased and the holders of Series A Preferred
Stock that have not been so redeemed shall be entitled, voting as a
separate class, to elect additional directors to the Board of
Directors of the Company so that the number of additional directors
to be elected by the Series A Preferred Stock shall constitute not
less than 20% (rounded to the nearest whole number) of the total
number of directors after giving effect to such increase. Such right
shall exist until the Series A Preferred Stock is redeemed.
OUTSTANDING REGISTRATION RIGHTS
Pursuant to an existing agreement between the Company and certain of
its stockholders, the holders (or their permitted transferees) of approximately
5,091,625 shares of common stock and 49,766 shares of common stock issuable upon
the exercise of warrants to purchase common stock (the "Holders") are entitled
to certain rights with respect to the registration of such shares under the
Securities Act. If the Company proposes to register any of its securities under
the Securities Act, either for its own account or for the account of other
security holders, the Holders are entitled to notice of the registration and are
entitled to include, at the Company's expense, such shares therein, provided,
among other conditions, that the underwriters have the right to limit the number
of such shares included in the registration. In addition, certain of the Holders
may require the Company, on not more than two occasions, to file a registration
statement under the Securities Act, at the Company's expense, with respect to
their shares of common stock, and the Company is required to use its best
efforts to effect the registration, subject to certain conditions and
limitations. However, the Holders may not require the Company to file any such
registration statement within 90 days of the effective date of any prior
registration statement covering the Company's common stock, and the Company may
defer the filing of such registration statement for up to 120 days. Further,
certain of the Holders may require the Company, at its expense, to register
their shares of common stock on a Form S-3, subject to certain conditions and
limitations.
DELAWARE ANTI-TAKEOVER LAW AND CHARTER PROVISIONS
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Delaware Law"), an anti-takeover law. In general, the
statute prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
For purposes of Section 203, a "business combination" includes a merger, asset
sale or other transaction resulting in a financial benefit to the interested
stockholder, and an "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years prior, did own) 15% or
more of the corporation's voting stock.
The Company's Certificate of Incorporation (the "Certificate of
Incorporation") also requires that any action required or permitted to be taken
by stockholders of the Company must be effected at a duly called annual or
special meeting of the stockholders and may not be effected by a consent in
writing; provided, however, that the holders of Series A Preferred Stock may,
until such time as the Series A Preferred Stock is registered pursuant to any
effective registration statement under Section 12 of the Securities Exchange Act
of 1934, as amended, act
20.
<PAGE> 21
by written consent so long as such action by written consent is solely being
taken by, and is only applicable to, the holders of Series A Preferred Stock.
Special meetings of the stockholders of the Company may be called only by the
Board of Directors, the Chairman of the Board or the Chief Executive Officer.
The Certificate of Incorporation also provides that the authorized number of
Directors may be changed only by resolution of the Board of Directors, and that
Directors can only be removed for cause by a majority vote of the stockholders.
In addition, the Certificate of Incorporation provides for the classification of
the Board of Directors into three classes, only one of which shall be elected at
any given annual meeting. These provisions may have the effect of delaying,
deterring or preventing a change in control of the Company, depressing the
market price of common stock or discouraging hostile takeover bids in which
stockholders of the Company could receive a premium for their shares of common
stock.
LIMITATION ON DIRECTORS' LIABILITY
The Certificate of Incorporation limits the liability of the Company's
directors to the Company or its stockholders (in their capacity as directors but
not in their capacity as officers) to the fullest extent permitted by Delaware
law. Specifically, directors of the Company will not be personally liable for
monetary damages for breach of a director's fiduciary duty as a director, except
for liability (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
which involve intentional misconduct or a knowing violation of the law, (iii)
for unlawful payments of dividends or unlawful stock repurchases or redemptions
as provided in Section 174 of the Delaware General Corporation Law or (iv) for
any transaction from which the director derived an improper personal benefit.
The inclusion of this provision in the Certificate of Incorporation may
have the effect of reducing the likelihood of derivative litigation against
directors and may discourage or deter stockholders or management from bringing a
lawsuit against directors for breach of their duty of care, even though such an
action, if successful, might otherwise have benefited the Company and its
stockholders.
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company acts as transfer agent and
registrar for the common stock and for the Series A Preferred Stock.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon for BOLDER Technologies Corporation by Cooley Godward LLP, Boulder,
Colorado.
EXPERTS
The financial statements of the Company incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
21.
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NO DEALER, SALES PERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITY
OTHER THAN THE NOTES OR CONVERSION SHARES OFFERED HEREBY, NOR DOES IT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE NOTES OR
CONVERSION SHARES TO ANYONE IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM,
IT WOULD BE UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR IMPLY THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
2,053,182 SHARES
BOLDER TECHNOLOGIES CORPORATION
COMMON STOCK
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PROSPECTUS
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August 5, 1999
