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As filed with the Securities and Exchange Commission on October ___, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ACCESS BEYOND, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
52-1987873
(I.R.S. Employer Identification Number)
1300 Quince Orchard Boulevard
Gaithersburg, Maryland 20878
(Address of Principal Executive Offices)
Amended and Restated 1996 Long Term Incentive Plan
Amended and Restated 1996 Non-employee Directors' Stock Option Plan
(Full Title of Plans)
Copy to:
Mark Fields Stephen I. Budow, Esq.
Acting Chief Financial Officer Morrison Cohen Singer & Weinstein, LLP
1300 Quince Orchard Blvd. 750 Lexington Avenue
Gaithersburg, MD 20878 New York, New York 10022
(301) 921-8600 (212) 735-8600
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this registration statement.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class of Securities Amount to be Proposed Maximum Offering Proposed Maximum Amount of
to be Registered Registered (1) Price per Share Aggregate Offering Price Registration Fee
==================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock Purchase Options 695,500 $ 6.625(2) $ 4,614,313 $1,398.28
Common Stock, $.01 par value 695,500 $ 6.625(2) $ 4,614,313 $ 0(4)
Common Stock Purchase Options 211,500 $ 4.00(2) $ 1,246,000 $ 377.58
Common Stock, $.01 par value 211,500 $ 4.00(2) $ 1,246,000 $ 0(4)
Common Stock Purchase Options 20,000 $ 7.00(2) $ 140,000 $ 42.42
Common Stock, $.01 par value 20,000 $ 7.00(2) $ 140,000 $ 0(4)
Common Stock Purchase Options 100,000 $7.7375(2) $ 773,750 $ 234.47
Common Stock, $.01 par value 100,000 $7.7375(2) $ 773,750 $ 0(4)
Common Stock Purchase Options 38,900 $ 4.75(2) $ 184,775 $ 55.99
Common Stock, $.01 par value 38,900 $ 4.75(2) $ 184,775 $ 0(4)
Common Stock Purchase Options 1,164,100 $ 6.25(3) $ 7,275,625 $2,204.73
Common Stock, $.01 par value 1,164,100 $ 6.25(3) $ 7,275,625 $ 0(4)
Common Stock Purchase Options 20,000 $ 5.625(2) $ 112,500 $ 34.09
Common Stock, $.01 par value 20,000 $ 5.625(2) $ 112,500 $ 0(4)
Total...................... -- -- $14,346,963 $4,347.56
</TABLE>
(1) This Registration Statement also includes an indeterminable number of
shares of Common Stock which may be issued under the antidilution
provisions of the plans.
(2) Stated solely for purposes of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as
amended, and constitutes the per share exercise price of the options.
(3) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as
amended, and constitutes the average of the bid and asked price of
the Common Stock as reported on the Nasdaq National Market on
October 21, 1997.
(4) No additional filing fee is required with respect to the shares of
Common Stock to be offered for resale.
<PAGE> 2
EXPLANATORY NOTE
This Registration Statement contains two parts. The first part
contains a prospectus prepared in accordance with the requirements of Part I of
Form S-3 (in accordance with Section C of the General Instructions to Form S-8)
which covers reoffers and resales of shares of Common Stock of the Registrant
which shall be issued upon the exercise of options granted pursuant to
Registrant's Amended and Restated 1996 Long Term Incentive Plan and Registrant's
Amended and Restated 1996 Non-Employee Directors' Stock Option Plan. The second
part contains information required pursuant to Part II of Form S-8 and certain
items required pursuant to Part II of Form S-3. Pursuant to the Note to Part I
of Form S-8, the Plan Information specified by Part I is being separately
provided to Registrant's employees, officers, directors and consultants as
specified in Rule 428(b)(1) and is not being filed with the Securities and
Exchange Commission.
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500,000 SHARES
ACCESS BEYOND, INC.
COMMON STOCK
(Par Value $.01 Per Share)
This Prospectus relates to 500,000 shares (the "Shares") of common
stock, par value $0.01 per share (the "Common Stock"), of Access Beyond, Inc., a
Maryland corporation (the "Company" or "Access Beyond"), which may be sold from
time to time by the selling stockholders named herein (the "Selling
Stockholders"). The Shares have been issued or are issuable to the Selling
Stockholders pursuant to options (the "Options") granted under two stock option
plans of the Company. The Company will receive various amounts ranging from
approximately $4.00 to $7.00 for each Share issued upon the exercise of the
Options. The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders. All expenses of registration incurred in
connection with this offering are being borne by the Company; all selling and
other expenses incurred by the Selling Stockholders in connection with the sale
of the Shares will be borne by the Selling Stockholders. The Company is not
aware of any underwriting arrangements with respect to the sale of any of the
Shares by the Selling Stockholders.
The Common Stock is quoted on the National Association of Securities
Dealers Automated Quotations/National Market System (NASDAQ/NMS) under the
symbol "ACCB." The closing price per share reported on the NASDAQ/NMS on October
24, 1997 was $5.5625.
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in the distribution
of the Shares, may be deemed "underwriters," as that term is defined in the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
received by them and any profit on the resale of the Shares purchased by them
may be deemed underwriting commissions or discounts under the Securities Act.
The Shares to be offered by the Selling Stockholders may be offered in one or
more transactions in the over-the-counter market or in negotiated transactions
or a combination of such methods of sale, at market prices prevailing at the
time of sale, the prices related to such prevailing market prices or at
negotiated prices. The Shares to be offered by the Selling Stockholders may be
sold either (a) to a broker or dealer as principal for resale by such broker or
dealer for its account pursuant to this Prospectus (for example, in transactions
with a "market maker") or (b) in brokerage transactions, including transactions
in which the broker solicits purchasers. See "Selling Stockholders" and "Plan of
Distribution."
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 6 HEREOF.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY SUCH STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS OCTOBER __, 1997
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All dealers effecting transactions in the securities offered hereby
may be required to deliver a copy of this Prospectus.
No dealer, salesperson or other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus and, if given or made, such information or representations 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 any offer to buy any
security other than the securities offered hereby, nor does it constitute an
offer to sell or a solicitation of an offer to buy the securities 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 any person to whom it is unlawful to make such offer or solicitation. Neither
the delivery of this Prospectus nor any offer or 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.
AVAILABLE INFORMATION
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 Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copies may be obtained at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices
of the Commission at Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such information may also be obtained by mail from the Public
Reference Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Commission maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The Commission's web
site can be accessed at http://www.sec.gov. Any such reports, proxy statements
and other information filed or to be filed by the Company may also be inspected
at the offices of the National Association of Securities Dealers, Inc., Market
Listing Section, 1735 K Street, N.W., Washington, D.C. 20006. The Common Stock
is traded on NASDAQ/NMS, and the Company's reports (and proxy and information
statements when filed) may be inspected at the offices of The Nasdaq Stock
Market, Inc., located at 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on
Form S-8 and amendments thereto (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), of which this
Prospectus is a part. This Prospectus does not contain all of the information
set forth in the Registration Statement and the exhibits and schedules thereto.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to herein are not necessarily complete. In each
instance, for a more complete description of the matter involved, reference is
made to such contract, agreement or other document filed as an exhibit to the
Registration Statement, and the Registration Statement shall be deemed qualified
in its entirety by such reference.
The Company intends to furnish to holders of Common Stock for each
fiscal year an annual report which contains consolidated financial statements
prepared in accordance with United States generally accepted accounting
principles and audited and reported on, with an opinion expressed by, an
independent public accounting firm, and such other reports as may be required by
law.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
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THIS PROSPECTUS MAY CONTAIN ESTIMATES, PROJECTIONS AND OTHER
FORWARD-LOOKING STATEMENTS. THESE STATEMENTS ARE SUBJECT TO CERTAIN RISKS,
TRENDS AND OTHER UNCERTAINTIES, INCLUDING THOSE DISCUSSED IN THIS PROSPECTUS
THAT COULD CAUSE ACTUAL RESULTS TO VARY FROM THOSE PROJECTED. INVESTORS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS, WHICH ARE
BASED ONLY ON CURRENT JUDGMENTS AND CURRENT KNOWLEDGE.
INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed below are incorporated by reference in this
Registration Statement, and all documents concurrently and subsequently filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which de-registers all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such document.
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1997; and
(2) The description of the Company's Common Stock contained in the
Company's Registration on Form 8- A, declared effective by the
Commission on November 18, 1996.
For purposes of this Registration Statement, any statement contained
in a document incorporated by or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute part of this Registration Statement.
The Company shall furnish without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
which are incorporated by reference herein (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents). Written or telephone requests for such documents should be
directed to Mark Fields, Access Beyond, Inc., 1300 Quince Orchard Boulevard,
Gaithersburg, Maryland 20878, and the phone number is (301) 921-8600.
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SPECIAL NOTE
The Company has included the following special note to inform
potential investors of a transaction that, if consummated, will be material to
the operations of the Company. Unless otherwise indicated, all references to the
operations of the Company in this Prospectus shall include the operations of the
Remote Access Business (the developing and marketing of products which enable
local, remote or mobile users to access network resources) of Penril DataComm
Networks, Inc. ("Penril") prior to November 18, 1996. Portions of this
Prospectus contain certain "forward looking" statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward looking statements. Factors that might cause
such a difference include, but are not limited to, market acceptance of the
Company's products and services, other factors discussed in the Registration
Statement as well as factors discussed in other filings made with the Securities
and Exchange Commission. Although the Company believes that the assumptions
underlying the forward looking statements contained herein are reasonable, any
of the assumptions could prove inaccurate, and therefore, there can be no
assurance that the forward looking statements included herein will prove to be
accurate.
On July 29, 1997, the Company and Hayes Microcomputer Products, Inc.,
a Georgia Corporation (with its subsidiaries, "Hayes") entered into an Agreement
and Plan of Reorganization (the "Merger Agreement") pursuant to which H & A
Merger Sub, Inc., a Georgia corporation ("Subsidiary") and a wholly-owned
subsidiary of Access Beyond, Inc., a Delaware corporation (the "Company" or
"Access Beyond"), will merge (the "Merger") with Hayes. As a result of the
Merger, Hayes will become a wholly-owned subsidiary of the Company, and the
shareholders of Hayes at the time the Merger becomes effective (the "Effective
Time") will own approximately 79% of the outstanding equity securities of the
Company. After giving effect to the Merger and assuming that (x) all then vested
and exercisable options and warrants to purchase Hayes common stock are
exercised and (y) none of the then vested and exercisable options to purchase
Access Beyond's common stock are exercised, the Hayes shareholders will own
approximately 80.15% of the issued and outstanding securities of the Company. At
the Effective Time, (a) each outstanding share of Hayes (i) common stock, $.01
par value per share ("Hayes Common Stock"), will be converted into a right to
receive such number of shares of the Company's common stock, $.01 par value per
share ("Common Stock") as is equal to the Conversion Ratio (as defined below),
(ii) Series A Preferred Stock, no par value ("Hayes Series A Preferred Stock"),
will be converted into the right to receive such number of shares of the
Company's Common Stock as is equal to the Conversion Ratio multiplied by the
number of shares of Hayes Common Stock into which such shares of Hayes Series A
Preferred Stock is then convertible, and (iii) Series B Preferred Stock, no par
value ("Hayes Series B Preferred Stock"), will be converted into the right to
receive such number of shares of the Company's Series A Preferred Stock (the
"Series A Preferred Stock") as is equal to the Conversion Ratio multiplied by
the number of shares of Hayes Common Stock into which such shares of Hayes
Series B Preferred Stock is then convertible; (b) the Company will amend its
certificate of incorporation to (i) change its name to Hayes Communications
Inc., (ii) increase the number of authorized shares of capital stock and (iii)
create the Series A Preferred Stock; (c) the Board of Directors of the Company
will be increased to seven members, five of whom will be designated by the Hayes
shareholder; and (d) the obligations of Hayes under the Hayes Option Plan will
be assumed by the Company. Based on the number of Hayes and Company shares
outstanding as of September 30, 1997, the Conversion Ratio would equal 4.6292
Company shares for each Hayes share. There can be no assurance that the Merger
will be consummated.
The Conversion Ratio is equal to the percentage ownership immediately
following the closing of the Merger of the issued and outstanding shares of
Common Stock and Series A Preferred Stock (together, the "Securities") that the
holders of all classes of Hayes stock, in the aggregate, are entitled to receive
in the Merger (which the Company and Hayes have agreed is 79%), multiplied by a
ratio, the numerator of which is the number of shares of the Securities issued
and outstanding on a fully diluted basis (excluding stock options) prior to the
Effective Date, and the denominator of which is .21, all divided by the number
of shares of Hayes common and preferred stock issued and outstanding on a fully
diluted basis (excluding all outstanding options and warrants) prior to the
Effective Date.
No fractional shares of the Securities will be issued in connection
with the Merger. In lieu of any fractional shares, the record holder of any
shares of Hayes stock who would otherwise be entitled to receive a fraction of a
share of the Company, upon aggregation of all shares and fractional shares of
the same class or series owned by such holder,
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will receive from the Company promptly after the Merger, cash equal to the per
share market value of the Common Stock, which market value shall be the closing
sale price of the Common Stock on the last trading day prior to the Closing Date
(as defined below), as quoted on the Nasdaq National Market multiplied by such
fraction of a share of the Company to which such holder would otherwise be
entitled. The Closing Date means such mutually agreeable date, no later than the
fifth business day after all of the conditions to the obligations of the parties
to consummate the transactions contemplated by the Merger have been satisfied or
waived (where permissible).
RISK FACTORS
Investors should be aware that ownership of the Common Stock of the
Company involves certain risks, including those described below, which could
adversely affect the value of their holdings of Common Stock. The Company does
not make, nor has it authorized any other person to make, any representation
about the future market value of the Company's Common Stock. In addition to the
other information contained in this Prospectus, the following factors should be
considered carefully in evaluating an investment in the Shares offered hereby.
ABSENCE OF PROFITABLE OPERATIONS; LIQUIDITY
The Company, and the Remote Access Business as conducted by Penril,
have not been profitable in the past three fiscal years. Penril posted a net
loss from continuing operations of $4.6 million for fiscal 1995, and $20.7
million for fiscal 1996 and the Company posted a net loss of $13.9 million for
fiscal 1997. Such losses have been due, in part, to decreased revenues caused by
a declining market for certain Penril products that began in fiscal 1995,
non-recurring restructuring costs in connection with operations that were
discontinued due to decline in market demand, costs related to the Penril/Bay
Merger, which occurred during fiscal 1996, costs associated with development of
the Remote Access Business and the spinning off of the Company from Penril
during the year ended July 31, 1997. In addition, during fiscal 1997, the
Company's revenues including, in particular, its revenues from the "Access
Beyond" product family, have been insufficient for the Company to be profitable.
The Company has executed a term sheet for a $10.0 million private placement in
the Company and, upon the closing of the Merger, an additional $30.0 million
investment. There can be no assurance that the Company will achieve
profitability, or that the Company will be able to increase sales of its
products to an amount which will generate adequate cash for operational and
capital needs, or that any or all of such proposed private placements will be
consummated.
Hayes has not been profitable for the past three fiscal years. On
November 15, 1994, Hayes filed a petition for relief under Chapter 11 of the
United States Bankruptcy Code due to its inability to pay its debts on a current
basis. Although Hayes consummated a court approved Reorganization Plan on April
16, 1996, it has accumulated losses of approximately $26.5 million since such
date.
The Company and Hayes have financed their loss from operations in the
past three years (or shorter period with respect to the Company) primarily
though private sales of equity securities, borrowings under credit facilities
and sale of assets, including assets from discontinued operations. On a combined
basis the Company and Hayes had a working capital deficit of approximately $38
million at June 30, 1997.
At the Effective Time, only a limited amount of cash will be
available for working capital from credit facilities of the combined companies.
Both the Company and Hayes are relying on anticipated cash from private
placements totaling $40.0 million prior to the Effective Time to provide working
capital following the Merger. In July 1997, Hayes entered into a letter of
intent with a prospective investor (the "Investor Letter of Intent") to purchase
1,350,743 of Series C Preferred Stock from Hayes for a purchase price of $30.0
million. If such purchase is consummated, these shares will be converted into
6,252,454 shares of Common Stock upon the Effective Time and the Hayes
shareholders, including such investor, will own 80.997%, instead of 79%, of the
issued and outstanding securities of the Company. The prospective investor
subsequently proposed to purchase additional shares of Hayes Common Stock from
certain Hayes shareholders for an aggregate purchase price of $10.0 million.
Negotiations with this prospective investor are continuing,
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and Hayes is also pursuing discussion with other potential sources of capital
funding. In the event that neither the Company's proposed $10.0 million private
placement, nor Hayes' proposed $30.0 million private placement is consummated,
cash provided by future operations and available borrowings under the Company's
and Hayes' credit facilities or lines of credit will be insufficient to meet the
Company's working capital requirements. There can be no assurance that any of
such private placements will be consummated prior to or subsequent to the
Effective Time.
LIMITED TRADING HISTORY OF THE COMMON STOCK
The Common Stock has a limited history as a publicly traded security.
The price for the Common Stock is determined in the market place and may be
influenced by many factors, including the operating performance of the Company,
the depth and liquidity of the market for the Common Stock, investor perception
of the Company and general economic and market conditions. There can be no
assurance that an orderly market for the Common Stock will be sustained, and the
prices at which the Common Stock is traded may fluctuate significantly.
LIMITED OPERATING HISTORY
The Company began operations on November 18, 1996 for the purpose of
receiving certain lines of business which were to be spun off from Penril. The
Company, as a separate entity, has a limited operating history. The Remote
Access Business, as conducted by Penril prior to the distribution of the Common
Stock to Penril shareholders in November 1996, had an operating history
consisting of the development and sale of local area network ("LAN") and host
access products (the "LAN and Host Access Products") and the development of a
new product family called "Access Beyond." See " - Relationship with Penril" and
"BUSINESS OF THE COMPANY - Principal Products."
DEPENDENCE ON KEY MANAGEMENT
If the Company is to be successful, its success will be due in large
part to the performance of Messrs. Dennis Hayes, Ronald Howard and P.K. Chan,
and, to a lesser extent, other key management personnel. Although the Company
will have employment agreements with Messrs. Hayes, Howard and Chan which
provide for their continued employment, no assurance can be given that the
Company will be able to retain their services or the services of any other key
management personnel. The loss of the services of one or more of the Company's
senior management following the Merger could have a material adverse effect upon
the Company's business, operating results and financial condition. See
"MANAGEMENT OF HAYES - Executive Compensation" and "MANAGEMENT OF HAYES -
Employment Agreements."
RISKS RELATING TO THE MERGER AND INTEGRATION OF THE BUSINESSES
There can be no assurance that the Merger with Hayes will be
consummated. If the Merger with Hayes is consummated, there can be no assurance
that the economies which the Company and Hayes expect to realize as a result of
the combination of the businesses will be achieved, or that the personnel from
the two companies will be successfully integrated.
TECHNOLOGICAL CHANGES
The market for networking and modem products is subject to rapid
technological change, evolving industry standards and frequent new product
introductions and, therefore, requires a high level of expenditures for research
and development. The Company may be required to incur significant expenditures
to develop new integrated product offerings. There can be no assurance that
customer demand for products integrating network connectivity and remote access
technologies will grow at the rate expected by the Company, that the Company
will be successful in developing, manufacturing and marketing new products or
product enhancements that respond to these customer demands or to evolving
industry standards and technological change, that the Company will not
experience difficulties that could delay or prevent the successful development,
introduction, manufacture and marketing of these products (especially in light
of the increasing design and manufacturing complexities associated with the
integration of technologies), or that its new
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products and product enhancements will adequately meet the requirements of the
marketplace and achieve market acceptance. The Company's business, operating
results and financial condition may be materially and adversely affected if the
Company encounters delays in developing or introducing new products or product
enhancements or if such product enhancements do not gain market acceptance. In
order to maintain a competitive position, the Company must also continue to
enhance its existing products and there is no assurance that it will be able to
do so. The Company will be required to continue to make significant investment
in research and development to refine Hayes' products and its products and to
continue to develop additional products. A major portion of future revenues is
expected to come from new products and services. The Company cannot determine
the ultimate effect that new products will have on its revenues or earnings.
POSSIBLE LOSS OF TECHNOLOGY
The Company acquired technology and intellectual property rights
relating to certain open remote dial access cards used in its Hawk products
principally in consideration of the issuance of the Shares. If the Company fails
to use its best efforts to maintain the effectiveness of the Registration
Statement of which this Prospectus is a part then such technology and rights
could be lost which loss could have a material adverse effect on the Company.
COMPETITION
The networking industry is highly competitive and competition is
expected to intensify. There are numerous companies competing in various
segments of the network management and remote access markets. Competitors
include Ascend Communications, Shiva Corporation, Cisco Systems, Inc., 3 Com
Corporation ("3Com"), Microcom, Inc. ("Microcom") and Bay Networks, Inc., among
others. Many of the Company's competitors have greater name recognition, more
extensive engineering, manufacturing and marketing capabilities and greater
financial, technological and personnel resources than those available to the
Company. In addition, certain companies in the networking industry have expanded
their product lines or technologies in recent years as a result of acquisitions.
There can be no assurance that the Company will be able to compete successfully
in the future with existing or new competitors.
Hayes' business products compete with the business products of 3Com,
AT&T, Microcom, Multitech, Telebit and others. 3Com is one of Hayes' most
significant competitors in the retail modem market. Other competitors of Hayes
in the retail modem market include GVC, Boca Research, Inc. ("Boca"), Zoom
Telephonics, Inc., Diamond Multimedia Systems, Inc. and others.
There are many other companies engaged in the research, development
and commercialization of products similar to the Hayes modem, network and
broadband products. Some of the Company's competitors and potential competitors
possess significantly greater capital, marketing, technical and other
competitive resources than Hayes or the Company following the Merger. As a
result, they may be able to adapt more quickly to new or emerging technologies
and changes in customer requirements, to devote greater resources to the
promotion and sale of their products, or to devote greater resources to the
development of new products than can the Company.
Hayes' products are subject to significant price competition, and
management expects that it will face increasing pricing pressures from
competitors. Accordingly, there can be no assurance that following the Merger
the Company will be able to provide products that compare favorably with the
products of the Company's competitors or that competitive pressures will not
require the Company to reduce its prices. Any material reduction in the price of
the Company's products would negatively affect net margins as a percentage of
net revenues and would require the Company to increase sales to maintain or
increase net income.
IMPORTANT CONSIDERATIONS RELATED TO FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward looking statement within the
meaning of Section 27A of the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that all
forward looking statements involve risks and
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uncertainty, including without limitation, the ability of the Company to
implement its strategy and identify new market and product opportunities,
product development costs, future return rates of the Company's products, the
dependence of the Company on certain customers and manufacturers, as well as
general market conditions, competition and pricing. Although the Company
believes that the assumptions underlying the forward looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward looking statements
included in this Prospectus will prove to be accurate. In light of the
significant uncertainties inherent in the forward looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
OPTION PLANS - SHARES ELIGIBLE FOR FUTURE SALE AND DILUTION
In March 1997, the stockholders of the Company, at an Annual Meeting,
approved and ratified two stock option plans of the Company - the Incentive Plan
and the Amended and Restated 1996 Non-employee Directors' Stock Option Plan (the
"Directors' Plan"). The Company is authorized to issue options to purchase up to
an aggregate of 2,000,000 shares of Common Stock under the Incentive Plan and
options to purchase an aggregate of 250,000 shares of Common Stock under the
Directors' Plan. As of October 16, 1997, the Company had issued options to
purchase an aggregate of 1,469,000 shares under the Incentive Plan and options
to purchase an aggregate of 125,000 shares under the Directors' Plan. As a
result of the Merger, all outstanding options will become fully vested. Holders
of Common Stock could experience dilution in earnings per share in the event
that a large number of options are exercised. Furthermore, the Company expects
to register the resale of the shares of Common Stock issuable upon the exercise
of options granted under the Incentive Plan and the Directors' Plan, which
registration would allow such shares to be freely tradeable in the public market
immediately following exercise of such options, subject to certain volume
limitations for options exercised by directors and executive officers of the
Company.
In addition, at the Effective Time, each outstanding option to
purchase Hayes Common Stock (the "Hayes Options") granted under the Hayes Stock
Option Plan, adopted on June 4, 1996, as amended effective October 22, 1996 (the
"Hayes Option Plan"), and each warrant to purchase Hayes capital stock
(collectively the "Hayes Warrants") will be assumed by the Company in accordance
with the terms of such option or warrant, and converted into rights to purchase
shares of the Company's Securities. Hayes Options and Hayes Warrants for
5,690,074 shares and 1,851,560 shares of Common Stock, respectively, will be
assumed by the Company. At the Effective Time, Hayes Options to purchase
1,597,664 shares of Company Common Stock and Hayes Warrants to purchase
1,851,560 shares of Company Common Stock will be exercisable. Holders of Common
Stock could experience dilution in possible future earnings per share in the
event that a large number of Hayes Options or Hayes Warrants of options are
exercised. The Company expects to register the resale of the shares of Common
Stock issuable upon the exercise of the Hayes Options and the Hayes Warrants,
which registration would allow such shares to be freely tradeable in the public
market immediately following exercise of such Hayes Options and Hayes Warrants,
subject to certain volume and other limitations for Hayes Options and Hayes
Warrants, by directors and executive officers of the Company following the
Merger.
OTHER ISSUANCES - SHARES ELIGIBLE FOR FUTURE SALE AND DILUTION
The Company may use shares of its Common Stock to acquire assets,
technology, license rights and/or other companies to develop and expand its
product lines. Future issuances of Common Stock in connection with such
acquisitions could, individually or in the aggregate, adversely affect the
market price of the Common Stock.
PRODUCT PROTECTION AND INTELLECTUAL PROPERTY
The Company, like many other companies in the network access
industry, anticipates that it will rely upon rights granted through licenses
from third parties for a substantial amount of proprietary information used to
develop its products; however, some companies may decide not to grant such
licenses and may seek to protect their proprietary rights in such technological
information. Accordingly, there can be no assurance that the Company will be
able to continue obtaining additional rights to utilize proprietary
technological information necessary to develop its products. Because of the
existence of a large number of patents in the networking field and the rapid
rate of issuance of new patents, it is
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<PAGE> 11
not economically practical to determine in advance whether a product or any of
its components infringe patent rights of others. In the event of any
infringement, the Company believes that, based upon industry practice, necessary
licenses or rights under such patents may be obtained on terms that should not
have a material adverse effect on the Company's consolidated financial position
or results of operations. However, there can be no assurance in this regard.
Hayes relies on a combination of patent, trade secret, copyright and
trademark laws, nondisclosure and other contractual provisions and technical
measures to protect its proprietary and intellectual property rights in its
products. Hayes receives from time to time, and may receive in the future,
communications from third parties asserting intellectual property rights
relating to its products and technologies. There can be no assurance that these
protections will be adequate to protect Hayes' proprietary rights or that
following the Merger, the Company's competitors will not independently develop
products that are substantially equivalent or superior to the Company's
products. There can be no assurance that third parties will not assert
infringement claims against the Company following the Merger. The loss of
proprietary technology or a successful claim against the Company could have a
material adverse effect on the Company's financial condition or results of
operations.
CERTAIN ANTITAKEOVER EFFECTS
The Company's Certificate of Incorporation includes certain
provisions that are intended to prevent or delay the acquisition of the Company
by means of a tender offer, proxy contest or otherwise. Specifically, the
Certificate of Incorporation provides for a classified board of directors,
classified into three classes with terms of three years each. In addition, the
Certificate of Incorporation authorizes the Company Board to issue preferred
stock without further stockholder approval, which could have dividend,
redemption, liquidation, conversion, voting or other rights that could adversely
affect the voting power or other rights of the holders of Common Stock. Finally,
the Company is subject to Section 203 of the Delaware General Corporation Law
(the "DGCL") which limits transactions between a publicly held company and
"interested stockholders" (generally those stockholders who, together with their
affiliates and associates, own 15% or more of a company's outstanding capital
stock). Any one of, or a combination of, the above anti-takeover provisions
could discourage a third party from attempting to acquire control of the
Company. See "DESCRIPTION OF CAPITAL STOCK OF THE COMPANY." The Incentive Plan
and the Directors' Plan provide for acceleration of stock options upon a change
in control of the Company, which may have the effect of making an acquisition of
control of the Company more expensive. See "MANAGEMENT OF THE COMPANY -- The
Amended and Restated 1996 Incentive Option Plan" and "-- The Amended and
Restated 1996 Non-employee Directors Stock Option Plan." These plans may also
inhibit a change in control of the Company. In addition, certain Company
officers have severance compensation agreements with the Company that provide
for substantial cash payments and acceleration of other benefits in the event of
specified corporate changes related to the Company, including a change in
control of the Company. See "MANAGEMENT OF THE COMPANY -- Employment and
Consulting Agreements."
DIVIDENDS
The Company does not anticipate paying dividends on either its Common
Stock or Series A Preferred Stock in the foreseeable future. Holders of Series A
Preferred Stock are entitled to receive, as and when declared by the Company
Board, cumulative compounding dividends at the rate of 10% per annum of the
original issue price per share of the Series A Preferred Stock. No dividends may
be paid on the Common Stock unless all accrued and unpaid dividends on the
Series A Preferred Stock are paid.
Pursuant to a loan and security agreement dated October 2, 1997, the
Company may not declare or pay any dividends, except dividends payable solely in
shares of capital stock, or make any other payments on its capital stock,
without the consent of the lender.
RELATIONSHIP WITH PENRIL
The Company has a limited operating history as an independent public
company. The operations of the Company historically have relied on Penril for
certain necessary administrative services. As of November 18, 1996,
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<PAGE> 12
Penril and the Company entered into several agreements for purposes of governing
certain of the ongoing relationships between the two companies following the
Penril/Bay Merger, including indemnification obligations. Pursuant to the
Indemnification Agreement entered into between Penril and the Company (the
"Indemnification Agreement") in connection with Penril's transfer (the
"Transfer") to the Company of substantially all of its assets and liabilities,
other than those assets and liabilities related to Penril's modem business (the
"Modem Business"), the Company agreed to indemnify Penril against all expenses
and liabilities resulting from (i) the operation of the Company from and after
the Penril/Bay Merger, (ii) Penril's operations prior to the Transfer other than
those based upon, arising out of or in connection with (a) the Modem Business,
(b) the Penril/Bay Merger and transactions relating to the Penril/Bay Merger or
(c) the tax consequences of the Distribution, (iii) the termination of
employment of employees (other than those employees identified as remaining with
Penril after the Transfer) by Penril or (iv) information furnished by Penril or
the Company relating to the Company contained in the registration statement
filed by Bay in connection with the Penril/Bay Merger Prospectus. Included
within the potential liabilities against which the Company will indemnify Penril
are those referred to in "BUSINESS OF THE COMPANY - Legal Proceedings." Although
the Company is not aware of any pending or threatened material liability for
which the Company may become obligated to make payments in connection with its
obligation to indemnify Penril, there can be no assurance that such
indemnification obligations could not arise or that such indemnification
obligations would not be material to the Company. These agreements were
negotiated while the Company was owned by Penril and, consequently, are not the
result of arm's-length negotiations between independent parties. Nevertheless,
the Company believes that the agreements are fair to the parties and contain
terms which are generally comparable to those which would result from
arm's-length negotiations, although there can be no assurance thereof.
INTERNATIONAL SALES
In fiscal 1996, international sales of Hayes' products accounted for
approximately 25% of net sales. These sales were primarily to customers in
Europe and the Asia Pacific region. The Company anticipates that, following the
Merger, international sales will continue to account for a significant portion
of the Company's net sales in the foreseeable future. As a result, the Company's
operating results will be subject to risks inherent in international sales,
including tariffs or other barriers, difficulties in staffing and managing
international operations, fluctuations in foreign currency exchange rates,
compliance with international regulations, approval and market requirements, and
volatility of international economic conditions. One or more of these factors
may have a material adverse effect on the Company's future international sales
and, consequently, on the Company's operating results.
PRODUCT RETURNS, PRICE PROTECTION AND WARRANTY CLAIMS
Like other manufacturers of computer products, Hayes and the Company
are exposed to the risk of product returns from wholesale distributors,
resellers and retailers, either through contractual stock rotation privileges or
as a result of Hayes' and the Company's interest in assisting customers in
balancing inventories. Although Hayes and the Company attempt to monitor and
manage the volume of sales to wholesale distributors and retailers, large
shipments in anticipation of sales by wholesale distributors and retailers could
lead to substantial overstocking by their wholesale distributors and lead to
higher than normal returns. Moreover, the risk of product returns may increase
if demand for Hayes' or the Company's products declines. When Hayes and the
Company reduce their prices, Hayes and the Company credit their respective
wholesale distributors and retailers for the difference between the purchase
price of products remaining in their inventory and the reduced price for such
products on terms negotiated with Hayes and the Company, respectively, which
could have a material adverse effect on the operating results of Hayes and the
Company, respectively.
Hayes' standard two-year warranty permits customers to return any
product for repair or replacement if the product does not perform as warranted.
In the U.S. and Canada only, Hayes also offers its customers the option of an
additional three-year warranty upon completion of a registration card within 90
days of purchase. Some of the Practical Peripheral modems previously sold have a
lifetime warranty. Hayes to date has not encountered material warranty claims or
liabilities. Hayes has established and the Company following the Merger will
establish reserves for product returns, price protection and warranty claims
which management believes are adequate. There can be no assurance that product
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<PAGE> 13
returns, price protection and warranty claims will not have a material adverse
effect on future operating results of the Company.
DEPENDENCE ON SUPPLIERS
Material and components for the Company's products are purchased from
outside suppliers. While most components are available from several suppliers, a
few are provided from sole-source vendors. The Company believes that in most
cases alternative sources of supply could be obtained within a reasonable time
period; however, an interruption in the supply of such components could have a
temporary adverse effect on the Company's operations. The major components of
Hayes' products include silicon chips, printed circuit boards, microprocessors,
chipsets and other integrated circuits. Most of the components used in Hayes'
modem products are available from multiple sources. However, certain components
used in Hayes' products are custom manufactured and currently obtained from
single sources. In addition, although readily interchangeable items are
available from several suppliers, many of the components that are incorporated
in Hayes' products, such as integrated circuits and discrete components, are in
limited supply and are allocated throughout the industry. Like others in the
computer industry, Hayes has, from time to time, experienced difficulty in
obtaining certain components. While Hayes has entered into supply arrangements
with certain suppliers, including Lucent Technologies, Inc. and Rockwell
International Corporation ("Rockwell") regarding a supply of chips and chipsets,
there can be no assurance following the Merger that these suppliers will
continue to meet the Company's requirements. There can be no assurance that
severe shortages of components will not occur in the future which could increase
the cost or delay the shipment of products and have a material adverse effect on
the Company's operating results.
SALES CHANNEL RISKS
The Company's distribution channel is composed of value-added
resellers, original equipment manufacturers and distributors in more than 40
countries. Sales to end-user customers account for less than 10% of the
Company's revenues. Many of the Company's value-added resellers and other
distributors carry products which are complimentary to those of the Company, and
may choose to give higher priority to products of other suppliers or competitors
of the Company.
Hayes sells its products primarily through national, regional and
international wholesale distributors, national corporate resellers, computer
superstores and mail order. Sales to wholesale distributors accounted for a
significant share of Hayes net sales in fiscal 1996. The personal computer
distribution industry has been characterized by rapid change, including
consolidations and financial difficulties of wholesale distributors and the
emergence of alternative distribution channels. Hayes is dependent upon the
continued viability and financial stability of its wholesale distributors. The
loss or ineffectiveness of any of Hayes' largest wholesale distributors or a
number of its smaller wholesale distributors could have a material adverse
effect on the Company's operating results following the Merger. In addition, an
increasing number of vendors are competing for access to wholesale distributors
which could adversely affect the Company's ability to maintain Hayes' existing
relationships with its wholesale distributors or could negatively impact sales
to such distributors.
Hayes is dependent on the continued viability and financial stability
of its national resellers. The loss or ineffectiveness of any of Hayes' largest
national resellers or a number of its smaller national resellers could have a
material adverse effect on the Company's operating results following the Merger.
Due to increased competition for limited shelf space, retailers are
increasingly in a better position to negotiate favorable terms of sale,
including price discounts and product return policies. There can be no assurance
that Hayes will be able to sustain or increase its sales to retailers, which
could have a material adverse effect on the Company's operating results
following the Merger.
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<PAGE> 14
The OEM modem market has grown to approximately 50% of the overall
modem market. Hayes has not participated substantially in the OEM modem market
for the last two years and Hayes can give no assurance that it will be able to
successfully penetrate this market.
CONDITIONS TO THE MERGER
The obligations of the Company and Hayes to effect the Merger are
subject to a number of conditions including the receipt by each party of all
consents, assignments, waivers, authorizations or other certificates of third
parties for the continuation in full force and effect of any and all material
contracts and leases. Hayes has not received a consent from its lender CIT
Group/Credit Finance, Inc. ("CIT") for the continuation in full force and effect
of Hayes' credit facility with CIT following the Merger. If CIT does not consent
to the continuation of its credit facility following the Merger, each of Hayes
and the Company may determine to not effect the Merger. If the Merger is
consummated without CIT's consent to continue its credit facility with the
Company, it will be necessary for the Company to pursue additional equity or
debt financing to meet its cash requirements. See "HAYES' MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --
Liquidity and Capital Resources."
IMPLEMENTATION OF NEW INFORMATION SYSTEM
Hayes is currently involved in the replacement of its information
systems with software from Oracle Corporation which will be completed after the
Effective Time of the Merger. The implementation of a new information system
could cause disruption to work efficiency. There can be no assurance that the
project will be completed within the budgeted time schedule or costs. To the
extent that the project is not completed timely or within the budgeted costs,
the Company's business and financial condition could be adversely affected.
ELECTION OF DIRECTORS AND OTHER STOCKHOLDER MATTERS
As a result of the Shareholder's Agreement among each of the Hayes
Shareholders and Mr. Howard, certain shareholders who will own substantially
more than 50% of the Common Stock will control the election of a majority of the
directors, such agreement to remain effective for so long as certain
shareholders own at least ten (10%) percent of the outstanding shares of the
Company. Such persons will also be able to control the taking of action which
requires approval by stockholders, since they will own more than a majority of
the outstanding shares of the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the
Shares. However, the Company will receive aggregate proceeds of if all
options covering the Shares are exercised. The Company expects to use the
proceeds from the exercise of the options for working capital and other general
corporate purposes.
SELLING STOCKHOLDERS
The following table sets forth (i) the name of each Selling
Stockholder, (ii) the nature of any position, office or other material
relationship which each Selling Stockholder has had with the Company or any of
its affiliates within the last three years, (iii) the number of shares of Common
Stock owned by each Selling Stockholder prior to the offering, (iv) the number
of shares of Common Stock offered for each Selling Stockholder's account and (v)
the percentage owned by each Selling Stockholder after completion of the
offering.
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<PAGE> 15
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES PERCENTAGE
OWNED PRIOR TO OFFERED FOR ACCOUNT OWNED AFTER
SELLING STOCKHOLDER RELATIONSHIP TO COMPANY OFFERING (1) OF SELLING STOCKHOLDER OFFERING (2)
- ------------------- ----------------------- ---------------- ---------------------- ------------
<S> <C> <C> <C> <C>
Ronald A. Howard Mr. Howard has served as Chairman of the 1,230,603 305,000 7.1%
Board, President and Chief Executive Officer
of the Company since November 1996. Mr. Howard
served as President of the Datability Networks
Division of Penril from November 1994 to
November 1996, and as Co-President of that
division from May 1993 until November 1994. He
had held the position of Executive Vice
President of Penril from May 1993 until
November 1996.
John Howard Director 30,000 30,000 0
Barbara Perrier Dreyer Director 50,000(3) 30,000 *
James Gallagher Mr. Gallagher has served as Vice President of 75,000 75,000 0
Sales of the Company since November 1996. He
was Vice President -- Sales of the Datability
Networks Division of Penril from November 1994
until November 1996. From May 1993, when
Penril acquired Datability, Inc, until
November 1994, Mr. Gallagher was Vice
President, North and South American Sales of
the Datability Networks Division.
Arthur Samberg Director 1,955,000(4)(5) 30,000 14.8%
Paul Schaller Director 30,000 30,000 0
</TABLE>
- ---------------
* Represents less than 1% of the outstanding shares of Common Stock of the
Company
(1) Includes all shares of Common Stock issuable upon the exercise of
options held by such Selling Stockholder, whether or not such options
are currently exercisable.
(2) Based on 13,025,291 shares of Common Stock outstanding, including (i)
12,495,291 shares of Common Stock outstanding as of the date of this
Prospectus and (ii) 530,000 shares of Common Stock issuable to the
Selling Stockholders set forth above upon the exercise of their options.
(3) Mrs. Perrier Dreyer and her husband, John Dreyer, have shared voting and
dispositive power with respect to these shares.
(4) Includes 787,100 shares of Common Stock owned by Pequot Partners Fund,
L.P., a Delaware limited partnership whose general partner and
investment manager is Pequot General Partners, LLC, a Connecticut
limited liability company ("General Partners") and 698,500 shares of
Common Stock owned by Pequot International Fund, Inc., a British Virgin
Islands corporation, whose investment manager is DS International
Partners, L.P., a Delaware limited partnership ("International
Partners"). (Pequot Partners Fund, L.P. and Pequot International Fund,
Inc. are together referred to as the "Funds"). Mr. Samberg is a General
Partner and senior portfolio manager of each of the Funds. General
Partners and International Partners (together, the "Partners") are the
beneficial owners, as such term is used in Rule 13d-3 of the Exchange
Act of the shares of Common Stock owned by the Fund for which they act
as investment manager, respectively. The Partners may be deemed to
constitute a group as such term is used in Section 13(d)(3) of the
Exchange Act. Each of the Partners disclaims beneficial ownership of the
Common Stock beneficially owned by the other Partners.
(5) Includes 86,500 shares of Common Stock owned by Dawson-Samberg Capital
Management, Inc., of which Mr. Samberg is President, and 352,900 shares
of Common Stock owned by Pequot Endowment Fund, L.P., a Delaware limited
partnership ("Endowment Fund") whose general partner and investment
manager is Pequot Endowment Partners, L.P., a Delaware limited
partnership. Mr. Samberg is a General Partner and senior portfolio
manager of Endowment Fund.
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<PAGE> 16
PLAN OF DISTRIBUTION
The sales of the Shares by the Selling Stockholders may be effected,
from time to time, on the NASDAQ/NMS or on any stock exchange on which the
Shares may be listed at the time of sale, in negotiated transactions, or through
a combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. The Selling Stockholders may
effect such transactions by selling Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions, or commissions from the Selling Stockholders and/or the purchasers
of Shares (which compensation as to a particular broker-dealer might be in
excess of customary commissions).
The Selling Stockholders and any broker-dealers that act in
connection with the sale of the Shares hereunder might be deemed to be
"Underwriters" within the meaning of Section 2(11) of the Securities Act; any
commissions received by them and any profit on the resale of Shares as principal
might be deemed to be underwriting compensation under the Securities Act.
Any broker-dealer acquiring Shares from a Selling Stockholder may
sell the Shares either directly, in its normal market-making activities, through
or to other brokers on a principal or agency basis, or to its customers. Any
such sales may be at prices then prevailing on the NASDAQ/NMS, at prices related
to such prevailing market prices, at negotiated prices, or a combination of such
methods.
The Company has advised the Selling Stockholders that
anti-manipulative Rules 10b-2, 10b-6 and 10b-7 under the Exchange Act may apply
to their sales in the market, has furnished the Selling Stockholders with a copy
of these Rules and has informed the Selling Stockholders of the possible need
for them to deliver copies of this Prospectus. The Selling Stockholders may
indemnify any broker-dealer that participates in transactions involving the sale
of the Shares against certain liabilities, including liabilities arising under
the Securities Act. Any commissions paid or any discounts or concessions allowed
to any such broker-dealers, and, if any such broker-dealers purchase Shares as
principal, any profits received on the resale of such Shares, may be deemed to
be underwriting discounts and commissions under the Securities Act.
Upon the Company's being notified by any Selling Stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
Shares through a cross or block trade, a supplemental prospectus will be filed
under Rule 424(c) under the Securities Act, setting forth the name of the
participating broker-dealer(s), the number of Shares involved, the price at
which such Shares were sold by the Selling Stockholder, the commissions paid or
discounts or concessions allowed by the Selling Stockholder to such
broker-dealer(s), and where applicable, that such broker-dealer(s) did not
conduct any investigation to verify the information set out in this Prospectus.
Any Shares which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under that Rule rather than pursuant to this
Prospectus.
There can be no assurances that the Selling Stockholders will sell
any or all of the Shares offered by them hereunder.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock offered hereby has been passed upon
by Morrison Cohen Singer & Weinstein, LLP, outside legal counsel to the Company.
The consolidated financial statements of the Company and its
subsidiaries as of July 31, 1997 and 1996 and for each of the three years in the
period ended July 31, 1997 have been incorporated herein by reference in
reliance upon the report of Deloitte & Touche LLP, independent auditors, given
upon their authority as experts in accounting and auditing.
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<PAGE> 17
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Delaware General Corporation Law, a corporation may
indemnify any director, officer, employee or agent against expense (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation to procure a judgment in its favor -- a "derivative action") if such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal proceeding, had no reasonable cause to believe that his or her
conduct was unlawful.
The Company's Certificate of Incorporation provides, among other
things, that the Company shall indemnify any person who is or was a director or
officer of the Company who is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company), by reason of the fact that he (i) is or was a
director or officer of the Company, or (ii) is or was serving at the request of
the Company as director, officer, employee, agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
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<PAGE> 18
TABLE OF CONTENTS
AVAILABLE INFORMATION............................................. 4
INCORPORATION OF DOCUMENTS
BY REFERENCE.................................................. 5
SPECIAL NOTE...................................................... 6
RISK FACTORS...................................................... 7
USE OF PROCEEDS................................................... 14
SELLING STOCKHOLDERS.............................................. 14
PLAN OF DISTRIBUTION.............................................. 16
INTERESTS OF NAMED EXPERTS
AND COUNSEL.................................................... 16
INDEMNIFICATION OF DIRECTORS AND
OFFICERS....................................................... 17
ACCESS BEYOND, INC.
500,000 SHARES OF COMMON STOCK
PROSPECTUS
OCTOBER , 1997
<PAGE> 19
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3 (Form S-8). Incorporation of Documents by Reference.
The documents listed below are incorporated by reference in this
Registration Statement, and all documents concurrently and subsequently filed by
Access Beyond, Inc. (the "Company") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which de-registers all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such document.
(1) The Company's Annual Report on Form 10-K for the fiscal
year ended July 31, 1997; and
(2) The description of the Company's Common Stock contained in
the Company's Registration on Form 8-A, declared effective
by the Commission on November 18, 1996.
Item 4 (Form S-8). Description of Securities.
Not applicable.
Item 5 (Form S-8). Interests of Named Experts and Counsel.
The validity of the Common Stock offered hereby has been passed
upon by Morrison Cohen Singer & Weinstein, LLP, outside legal counsel to the
Company.
The consolidated financial statements of the Company and its
subsidiaries as of July 31, 1997 and 1996 and for each of the three years in the
period ended July 31, 1997 have been incorporated herein by reference in
reliance upon the report of Deloitte & Touche LLP, independent auditors, given
upon their authority as experts in accounting and auditing.
Item 6 (Form S-8) and Item 15 (Form S-3). Indemnification of Directors and
Officers.
Under the Delaware General Corporation Law, a corporation may
indemnify any director, officer, employee or agent against expense (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation to procure a judgment in its favor -- a "derivative action") if such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal proceeding, had no reasonable cause to believe that his or her
conduct was unlawful.
The Company's Certificate of Incorporation provides, among other
things, that the Company shall indemnify any person who is or was a director or
officer of the Company who is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company), by reason of the fact that he (i) is or was a
director or officer of the Company, or (ii) is or was serving at the request of
the Company as director, officer, employee, agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct
19
<PAGE> 20
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
Item 8 (Form S-8) and Item 16 (Form S-3). Exhibits.
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Morrison Cohen Singer & Weinstein, LLP regarding
legality.
10.6 The Company's Amended and Restated 1996 Long-Term Incentive
Plan (filed as exhibit 10.9 to the Company's Form 10-K
filed October 16, 1997).
10.7 Form of Option Agreement for the grant of non-qualified
options under the Amended and Restated 1996 Long-Term
Incentive Plan (filed as exhibit 10.10 to the Company's
Form 10-K filed October 16, 1997).
10.8 The Company's Amended and Restated 1996 Non-Employee
Directors' Stock Option Plan (filed as exhibit 10.11 to the
Company's Form 10-K filed October 16, 1997).
10.9 Form of Option Agreement for the grant of options under the
Amended and Restated 1996 Non- Employee Directors' Stock
Option Plan (filed as exhibit 10.12 to the Company's Form
10-K filed October 16, 1997).
23.1 Consent of Morrison Cohen Singer & Weinstein, LLP
(contained in Exhibit 5.1 hereto).
23.2 Consent of Deloitte & Touche, LLP, independent public
accountants.
24.1 Power of Attorney (included on the signature page to this
Registration Statement).
Item 9 (Form S-8) and Item 17 (Form S-3). Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of 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. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered
(if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective Registration Statement.
20
<PAGE> 21
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic report filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) If the registrant is a foreign private issuer, to file
a post-effective amendment to the Registration Statement to include
any financial statements required by Rule 3-19 of this chapter at
the start of any delayed offering or throughout a continuous
offering. Financial statements and information otherwise required
by Section 10(a)(3) of the Act need not be furnished, provided,
that the registrant includes in the prospectus, by means of a
post-effective amendment, financial statements required pursuant to
this paragraph (a)(4) and other information necessary to ensure
that all other information in the prospectus is at least as current
as the date of those financial statements. Notwithstanding the
foregoing, with respect to registration statements on Form F-3, a
post-effective amendment need not be filed to include financial
statements and information required by Section 10(a)(3) of the Act
or Rule 3-19 of this chapter if such financial statements and
information are contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the 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.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
21
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Gaithersburg, State of Maryland, on October 29, 1997.
ACCESS BEYOND, INC.
By: /s/ Ronald A. Howard
_____________________________________
Ronald A. Howard
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ronald A. Howard and Mark Fields, or
either of them, each with the power of substitution, his or her
attorney-in-fact, to sign any amendments to this Registration Statement 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 attorney-in-fact, or his or her substitute, may
do or choose to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ronald A. Howard President and Chief Executive Officer October 29, 1997
________________________ (Principal Executive Officer) and
Ronald A. Howard Chairman of the Board
/s/ Mark Fields Controller and Acting Chief Financial October 29, 1997
________________________ Officer (Principal Financial and
Mark Fields Accounting Officer)
/s/ Barbara Perrier Dreyer Director October 29, 1997
________________________
Barbara Perrier Dreyer
/s/ John Howard Director October 29, 1997
________________________
John Howard
/s/ Arthur Samberg Director October 29, 1997
________________________
Arthur Samberg
/s/ Paul Schaller Director October 29, 1997
________________________
Paul Schaller
</TABLE>
22
<PAGE> 23
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Morrison Cohen Singer & Weinstein, LLP regarding
legality.
10.6 The Company's Amended and Restated 1996 Long-Term Incentive
Plan (filed as exhibit 10.9 to the Company's Form 10-K
filed October 16, 1997).
10.7 Form of Option Agreement for the grant of non-qualified
options under the Amended and Restated 1996 Long-Term
Incentive Plan (filed as exhibit 10.10 to the Company's
Form 10-K filed October 16, 1997).
10.8 The Company's Amended and Restated 1996 Non-Employee
Directors' Stock Option Plan (filed as exhibit 10.11 to the
Company's Form 10-K filed October 16, 1997).
10.9 Form of Option Agreement for the grant of options under the
Amended and Restated 1996 Non- Employee Directors' Stock
Option Plan (filed as exhibit 10.12 to the Company's Form
10-K filed October 16, 1997).
23.1 Consent of Morrison Cohen Singer & Weinstein, LLP
(contained in Exhibit 5.1 hereto).
23.2 Consent of Deloitte & Touche, LLP, independent public
accountants.
24.1 Power of Attorney (included on the signature page to this
Registration Statement).
<PAGE> 1
Exhibit 5.1
(212) 735-8600
October 29, 1997
Access Beyo d, Inc.
1300 Quince Orchard Boulevard
Gaithersburg, MD 20878
Re: Access Beyond, Inc. Registration Statement on Form S-8
Gentlemen:
As counsel to Access Beyond, Inc., a Delaware corporation (the
"Company"), we have been requested to render our opinion in connection with the
issuance of up to 2,250,000 shares of the Company's common stock, $.01 par value
(the "Shares") upon the exercise of options (the "Options") authorized in the
aggregate under the Company's Amended and Restated 1996 Long Term Incentive Plan
and Amended and Restated 1996 Non-Employee Directors' Stock Option Plan
(together, the "Plans"), pursuant to a registration statement on Form S-8 (the
"Registration Statement") being filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Act of 1933,
as amended.
In connection with the foregoing, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Certificate of
Incorporation of the Company, as amended, the By-laws of the Company, as
amended, the Plans, the forms of option agreements, and such other documents as
we have deemed necessary or appropriate as a basis for the opinions set forth
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to executed documents of all executed copies submitted to us as
conformed or photostatic copies. As to any facts material to such opinions which
we did not independently establish or verify, we have relied upon statements or
representations of officers and other representatives of the Company, public
officials or others.
<PAGE> 2
Access Beyond, Inc.
October 29, 1997
Page 2
Based upon the foregoing, we are of the opinion that:
The Shares have been duly authorized by the Board of Directors of the
Company and, when issued and paid for in accordance with the Plans and the
Options, will be validly issued, fully paid and non-assessable, and no personal
liability will attach to the ownership thereof.
We hereby consent to the inclusion of this opinion as Exhibit 5.1 to
the Registration Statement.
Very truly yours,
s/Morrison Cohen Singer & Weinstein, LLP
Morrison Cohen Singer & Weinstein, LLP
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Access Beyond,
Inc. on Form S-8 of our report dated August 29, 1997 (September 15, 1997 as to
Note 11), appearing in the Prospectus, which is part of this Registration
Statement, and of our report dated August 29, 1997 (September 15, 1997 as to
Note 11) relating to the financial statement schedule appearing elsewhere in
this Registration Statement.
We also consent to the reference to us under the heading "Expert" in
such Prospectus.
/s/ Deloitte & Touche LLP
Washington, D.C.
October 28, 1997
