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As filed with the Securities and Exchange Commission on December 10, 1997
Registration No. 333-39083
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
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
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(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of
this registration statement.
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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 the 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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495,000 SHARES
ACCESS BEYOND, INC.
COMMON STOCK
(Par Value $.01 Per Share)
This Prospectus relates to 495,000 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
$4.00 to approximately $7.74 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
December 1, 1997 was $5.375.
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 5 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 DECEMBER 10, 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;
(2) Amendment No. 1 to the Company's Annual Report on Form 10-K/A
for the fiscal year ended July 31, 1997;
(3) The Company's Current Report on Form 8-K, as filed with the
Commission on November 17, 1997;
(4) The Company's Registration Statement on Form S-4 (Registration
No. 333-37993), and any amendments thereto; and
(5) 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.
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 (as subsequently amended, the "Merger Agreement")
pursuant to which H&A Merger Sub, Inc., a Georgia corporation ("Subsidiary")
and a wholly-owned subsidiary of the Company, 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, other than options and the Company's 6%
Convertible Stock and any shares of Common Stock issued or issuable upon
conversion thereof (such 6% Convertible Stock, together with such shares of
Common Stock, the "6% Securities"). 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 80.08% of the issued and outstanding
equity securities of the Company, excluding options and the 6% Securities. 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 provided 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 Corporation, (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
shareholders; and (d) the obligations of Hayes under the Hayes option plan will
be assumed by the Company. There can be no assurance that the Merger will be
consummated.
On December 4, 1997, the Company had 12,559,931 shares of Common Stock
and 9,730 shares of 6% Convertible Stock issued and outstanding. On December 4,
1997, Hayes had 4,991,750 shares of Hayes Common Stock, 4,900,000 shares of
Hayes Series A Preferred Stock and 263,113 shares of Hayes Series B Preferred
Stock issued and outstanding. At the Effective Time, the Conversion Ratio of
4.628924 (assuming no change in the number of such outstanding securities, other
than changes due to the issuance of shares of Common Stock upon conversion of
the 6% Convertible Stock) will be applied to the outstanding Hayes securities,
resulting in the issue of (i) 23,106,433 shares of the Company's Common Stock
for the 4,991,750 shares of Hayes Common Stock, (ii) 22,681,729 shares of the
Company's Common Stock for the 4,900,000 shares of Hayes Series A Preferred
Stock and (iii) 1,217,930 shares of the Company's Series A Preferred Stock for
the 263,113 shares of Hayes Series B Preferred Stock.
The Company filed a Registration Statement on Form S-4 (together with
any amendments thereto, the "S-4 Registration Statement") with the Commission
registering the issuance of such shares of the Company's Common Stock and Series
A Preferred Stock. The S-4 Registration Statement contains a prospectus covering
those shares and a proxy statement in accordance with Schedule 14A of the
Exchange Act setting forth, among other things, the terms of the Merger, for a
vote by the Company's stockholders. There can be no assurance that the S-4
Registration Statement will be declared effective.
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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. 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. 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 for 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.
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.
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 and closed the bankruptcy on October 9, 1997, it has accumulated losses
of approximately $32.7 million since April 16, 1996.
The Company and Hayes have financed their loss from operations in the
past three years (or shorter period with respect to the Company) primarily
through private sales of equity securities, borrowings under credit facilities
and sale of assets, including assets from discontinued operations. On a pro
forma combined basis the Company and Hayes had a working capital deficit of
approximately $14.1 million at September 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. The
Preferred Stock Investment Agreement provided the Company with $10.0 million of
cash on November 12, 1997. Both the Company and Hayes are relying on $35.0
million of anticipated cash from the closing of the second installment of the
Preferred Stock Investment Agreement immediately following the Effective Time to
provide working capital following the Merger. In the event that the closing of
such second installment is not consummated, cash provided by future operations
and available borrowings under the Company's and Hayes' credit facilities or
lines of credit could be insufficient to meet the Company's working capital
requirements. There can be no assurance that the closing of such second
installment will be consummated. Hayes is also pursuing the possibility of new
credit facilities, but there can be no assurance that these will be obtained.
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Due to Hayes' having not met certain covenants under its credit
facility with CIT requiring minimum levels of net worth and net income at
December 31, 1996, CIT revised the interest rate under the facility from prime
plus 1.625% to prime plus 2.125%.
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."
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.
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.
In order for such integration to be successful, the general and
administrative operations, research and development operations and sales and
marketing operations of Hayes and the Company must be combined. There can be no
assurance that Hayes and the Company will be successful in integrating such
operations. There is no assurance that the Company will not encounter unforeseen
expenses, as well as difficulties and complications in integrating expanded
operations without disruption to overall operations. In addition, the
combination may adversely affect the Company's operating results because of many
factors, including the diversion of management time and resources and required
operating adjustments. There can be no assurance that the Company will
successfully integrate or achieve the anticipated benefits of its expanded
operations.
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
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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 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. The rapid
technological change and short life span of networking and modem products
subject the Company to the risk of inventory obsolescence, customer product
returns and unfavorable manufacturing costs as a result of disruption to
manufacturing schedules.
In 1997, the modem industry introduced modems that provide a throughput
capacity of 56kbs compared to the industry standard of 33.6kbs. The industry has
not established a standard for 56kbs modems and there are two competing 56kbs
technologies. Hayes introduced 56kbs products in early 1997 and sells products
using either K56 Flex or X2 technologies. Demand for 56kbs products has been
slow to develop and a substantial portion of Hayes revenues continue to be for
33.6kbs products. Hayes' modem buyers could be adversely impacted by
obsolescence changes, channel inventory returns and unfavorable manufacturing
variances if there was a sudden change in demand for 56kbs vs 33.6kbs products.
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 503,704 shares of Common Stock.
Although the Company has registered the resale of such shares under the
Securities Act, if it fails to use its best efforts to maintain the
effectiveness of such registration statement then such technology and rights
could be lost which loss could have a material adverse effect on the Company.
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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 Corp., Multi Tech Corp., Motorola, Inc. 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 Golden Video Corporation ("GVC"), Boca
Research, Inc. ("Boca"), Zoom Telephonics, Inc. ("Zoom"), Diamond Multimedia
Systems, Inc. ("Diamond") 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 or incorporates by reference certain forward
looking statements within the meaning of Section 27A of the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended (the"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
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 a special meeting,
approved and ratified two stock option plans of the Company - the Amended and
Restated 1996 Incentive Stock Option Plan (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
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of December 4, 1997, the Company had outstanding options to purchase an
aggregate of 965,900 shares under the Incentive Plan and options to purchase an
aggregate of 120,000 shares under the Directors' Plan. As a result of the
Merger, all outstanding options granted under the Directors' Plan will become
fully vested and will terminate on the later of 90 days after the Effective Time
or seven months following the date of grant of each option. Options granted
under the Incentive Plan will not become fully vested as a result of the Merger
unless, as to each such option holder, his employment is terminated without good
cause within nine months following the Effective Time. Holders of Common Stock
could experience dilution in possible future earnings per share in the event
that a large number of options are exercised.
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 5,971,312 shares
and 1,851,569 shares of Common Stock, respectively, will be assumed by the
Company. At the Effective Time, Hayes Options to purchase 1,363,912 shares of
Company Common Stock and Hayes Warrants to purchase 1,851,569 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.
Pursuant to the Preferred Stock Investment Agreement, the Company's 6%
Convertible Stock is convertible into shares of Common Stock at a conversion
price equal to the lesser of $8 per share or 85% of the average closing bid
price of Common Stock on the NASDAQ/NMS (or other market) for the five
consecutive trading days prior to the date of the notice of conversion, subject
to adjustment in certain circumstances. Accordingly, conversion of the 6%
Convertible Stock will be below the market price of the Common Stock, will be
dilutive and could individually or in the aggregate, adversely affect the market
price of the Common Stock.
REGISTRATION AND LISTING OBLIGATIONS
The Registration Rights Agreement entered into in connection with the
Preferred Stock Investment Agreement requires the Company to promptly register
and cause to be listed the common shares underlying the 6% Convertible Stock
and underlying any warrants which are issued and to maintain such registration
statement and listing. If (i) the Company fails to effect such registration and
listing within the applicable time periods or (ii) an investor's ability to
sell registered shares is suspended for various reasons, including failure of
the Company to maintain the effectiveness of such registration statement or
listing for more than a specified number of days or (iii) the Company fails to
comply with a conversion notice and such failure continues for more than a
specified number of days, then the Company is required to make payments to the
investors in an amount equal to 2% per month of the liquidation preference for
each month (or portion thereof) during which such event continues and, under
certain circumstances, the Company may be required to (i) purchase the 6%
Convertible Stock for an amount equal to the liquidation preference divided by
85%, and issue warrants and (ii) purchase shares of Common Stock issued upon
conversion of the 6% Convertible Stock and upon exercise of warrants for a
purchase price equal to the closing bid price as of the time of the issuance of
such underlying shares.
9
<PAGE> 12
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 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.
To the extent Hayes and the Company increase sales in international
markets, their exposure in countries with less protection of intellectual
property laws is increased.
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. 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. 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.
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<PAGE> 13
DIVIDENDS
The Company does not anticipate paying dividends on its Common Stock in
the foreseeable future. The holders of 6% Convertible Stock are entitled to
receive cumulative dividends at the rate of six percent per annum on the
liquidation preference, payable annually on December 31 of each year, in cash,
Common Stock or by adding the amount thereof to the liquidation preference.
Holders of Series A Preferred Stock will be 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 and the 6% Convertible 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. Hayes is subject to similar restrictions
under its credit facilities.
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, 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 Proxy Statement/Prospectus. 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.
Hayes sells its products outside the United States and procures modem
products from offshore vendors primarily in U.S. dollars and to a lesser extent,
British Sterling and Hong Kong dollars. Although Hayes has not experienced
material gains or losses from foreign currency fluctuations, if its
international business increases it
11
<PAGE> 14
could be subject to increased risk due to such fluctuations. Hayes anticipates
it will adopt hedging strategies if the risks associates with foreign currency
fluctuations materially increase.
A significant amount of Hayes' revenue is derived from its Asia region
business, particularly from China. Therefore, Hayes is subject to the risk of
political and economic instability experienced in this region. Hayes has begun
to expand its business in Latin America. Should Hayes' Latin America business
become material, Hayes would be subject to the political and economic
difficulties recently experienced in this region.
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
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.
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<PAGE> 15
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.
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 termination of the antidilution
warrant issued to Rinzai Limited ("ACMA") and 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. The Company and Hayes are in
discussions with CIT concerning its consent, and believe that CIT is predisposed
to grant its consent, although there can be no assurance that its consent will
be granted.
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
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<PAGE> 16
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, without regard to the conversion of the 6%
Convertible Stock, will control the election of a majority of directors. These
shareholders consist of Mr. Howard, ACMA, Dennis C. Hayes and Chestnut Capital
Limited Partnership, a limited partnership controlled by Dennis C. Hayes. Such
agreement will 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 $3,370,625 if all
options held by the Selling Stockholders on the date hereof 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.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES PERCENTAGE
OWNED PRIOR TO OFFERED FOR ACCOUNT OWNED AFTER
SELLING STOCKHOLDER RELATIONSHIP TO COMPANY OFFERING OF SELLING STOCKHOLDER OFFERING (1)
- ------------------- ----------------------- ---------------- ---------------------- ------------
<S> <C> <C> <C> <C>
Ronald A. Howard Mr. Howard has served as Chairman of the 1,228,603 (2) 300,000 (2) 7.2%
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 (3) 30,000 (3) 0
Barbara Perrier Dreyer Director 50,000 (3)(4) 30,000 (3) *
Arthur Samberg Director 1,955,000 (3)(5)(6) 30,000 (3) 15.3%
Paul Schaller Director 30,000 (3) 30,000 (3) 0
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES PERCENTAGE
OWNED PRIOR TO OFFERED FOR ACCOUNT OWNED AFTER
SELLING STOCKHOLDER RELATIONSHIP TO COMPANY OFFERING OF SELLING STOCKHOLDER OFFERING (1)
- ------------------- ----------------------- ---------------- ---------------------- ------------
<S> <C> <C> <C> <C>
James Gallagher Mr. Gallagher has served as Vice 75,000 (7) 75,000 (7) 0
President of 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.
</TABLE>
- ----------
* Represents less than 1% of the outstanding shares of Common Stock of the
Company
(1) Based on 12,559,931 shares of Common Stock outstanding as of the date
hereof and includes, in certain instances, shares held in the name of a
Selling Stockholder's spouse or minor children, the reporting of which is
required by applicable rules of the Commission, but as to which shares
the Selling Stockholder may have disclaimed beneficial ownership.
(2) Includes 90,000 shares of Common Stock issuable upon the exercise of an
option currently exercisable and 210,000 shares of Common Stock issuable
upon the exercise of an option not currently exercisable. Does not
include additional shares of Common Stock issuable to Mr. Howard in lieu
of a $437,500 cash bonus payable upon a change in control.
(3) Includes 30,000 shares of Common Stock issuable upon the exercise of an
option, assuming that the Merger is consummated within 60 days of the
date hereof.
(4) Mrs. Perrier Dreyer and her husband, John Dreyer, have shared voting and
dispositive power with respect to these shares.
(5) 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.
(6) 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.
(7) Includes 22,500 shares of Common Stock issuable upon the exercise of an
option currently exercisable and 52,500 shares of Common Stock issuable
upon the exercise of an option not currently exercisable.
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
15
<PAGE> 18
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 Regulation M
under the Exchange Act may apply to their sales in the market 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.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon by
Morrison Cohen Singer & Weinstein, LLP, outside legal counsel to the Company.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedules incorporated in this Prospectus by reference for
the year ended July 31, 1997 and 1996 and for each of the three years in the
period ended July 31, 1997 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports, which are incorporated herein
by reference, and have been so incorporated in reliance upon the reports of
such firm given upon their authority as experts in accounting and auditing.
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
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<PAGE> 19
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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- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION.......................................................2
INCORPORATION OF DOCUMENTS
BY REFERENCE............................................................3
SPECIAL NOTE................................................................4
RISK FACTORS................................................................5
USE OF PROCEEDS............................................................14
SELLING STOCKHOLDERS.......................................................14
PLAN OF DISTRIBUTION ......................................................15
LEGAL MATTERS..............................................................16
EXPERTS....................................................................16
INDEMNIFICATION OF DIRECTORS
AND OFFICERS...........................................................16
</TABLE>
ACCESS BEYOND, INC.
495,000 SHARES OF COMMON STOCK
-----------
PROSPECTUS
-----------
DECEMBER 10, 1997
- --------------------------------------------------------------------------------
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
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;
(2) Amendment No. 1 to the Company's Annual Report on Form 10-K/A
for the fiscal year ended July 31, 1997;
(3) The Company's Current Report on Form 8-K, as filed with the
Commission on November 17, 1997;
(4) The Company's Registration Statement on Form S-4 (Registration
No. 333-37993), and any amendments thereto; and
(5) 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.
II-1
<PAGE> 22
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.
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 (filed as Exhibit 5.1 to the Company's Registration
Statement on Form S-8 (Registration No. 333-39083) filed
October 30, 1997).
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-2
<PAGE> 23
(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.
(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
II-3
<PAGE> 24
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.
II-4
<PAGE> 25
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 December 10, 1997.
ACCESS BEYOND, INC.
By: /s/ Ronald A. Howard
-------------------------------------
Ronald A. Howard
President and Chief Executive Officer
POWER OF ATTORNEY
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 December 10, 1997
- -------------------------------------
Ronald A. Howard (Principal Executive Officer) and
Chairman of the Board
/s/ Mark Fields * Controller and Acting Chief Financial December 10, 1997
- -------------------------------------
Mark Fields Officer (Principal Financial and
Accounting Officer)
/s/ Barbara Perrier Dreyer * Director December 10, 1997
- -------------------------------------
Barbara Perrier Dreyer
/s/ John Howard * Director December 10, 1997
- -------------------------------------
John Howard
/s/ Arthur Samberg * Director December 10, 1997
- -------------------------------------
Arthur Samberg
/s/ Paul Schaller * Director December 10, 1997
- -------------------------------------
Paul Schaller
* By: /s/ Ronald A. Howard
-------------------------------------
(Ronald A. Howard, as Attorney-in-Fact)
</TABLE>
<PAGE> 26
EXHIBIT INDEX
Exhibit No. Description
5.1 Opinion of Morrison Cohen Singer & Weinstein, LLP regarding
legality (filed as Exhibit 5.1 to the Company's Registration
Statement on Form S-8 (Registration No. 333-39083) filed
October 30, 1997).
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 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No.1 to Registration Statement No. 333-39083 of Access Beyond, Inc. on Form S-8
of our report dated August 29, 1997 (November 12, 1997 as to Note 11), appearing
in Amendment No. 1 to the Registration Statement on Form S-4 (Registration
Statement No. 333-37993) of Access Beyond, Inc. for the year ended July
31, 1997 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Washington, D.C.
December 9, 1997
