As filed with the Securities and Exchange Commission on May 4, 1998
Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ORA ELECTRONICS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4607830
(State of jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9410 OWENSMOUTH AVENUE
CHATSWORTH, CALIFORNIA 91311
(818) 772-2700
(Address, Including Zip Code and Telephone Number, Including
Area Code of Registrant's Principal Executive Offices)
Gershon N. Cooper, President
9410 Owensmouth Avenue
Chatsworth, California 91311
(818) 772-2700
(Name, address including zip code and telephone
number, including area code, of agent for service)
Copies to:
Jon W. Newby, Esquire
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street
Los Angeles, California 90071
(213) 620-1780
Approximate date of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest investment plans, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Maximum Maximum
Title of Each Class Offering Aggregate Amount of
of Securities to Amount to be Price Offering Registration
be Registered Registered Per Unit (1) Price (1) Fee
- --------------------------------------------------------------------------------
Common Stock,
$.001 par value 300,000 shares $1.78125 $534,375 $202.00
================================================================================
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c).
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Exhibit Index on page 20
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Subject to Completion, Dated May 4, 1998
PROSPECTUS
ORA ELECTRONICS, INC.
300,000 Shares of Common Stock, $.001 par value
This Prospectus relates to 300,000 shares (the "Shares") of common stock,
$.001 par value per share ("Common Stock"), of ORA Electronics, Inc., a Delaware
corporation (the "Company"), which are owned by that certain selling stockholder
(the "Selling Stockholder") identified herein under "Selling Stockholder". The
Shares may be offered from time to time by the Selling Stockholder. The Company
will not receive any proceeds from the sale of Shares by the Selling
Stockholder.
The Shares offered hereby were acquired by the Selling Stockholder from
the Company in a private transaction and are "restricted securities" under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus has
been prepared for the purpose of registering the Shares under the Securities Act
to allow for future sales by the Selling Stockholder to the public without
restriction. The Selling Stockholder may be deemed to be an "underwriter" within
the meaning of the Securities Act. Any commissions received by a broker or
dealer in connection with resales of the Shares may be deemed to be underwriting
commissions or discounts under the Securities Act. See the "Plan of
Distribution."
The Common Stock of the Company is traded on the National Association of
Securities Dealers, Inc. Electronic Bulletin Board System (the "Bulletin Board
System") under the symbol ORAE. On April 27, 1998, the closing price of the
Common Stock as reported on the Bulletin Board System was $1.5625.
The Shares offered hereby involve a high degree of risk.
See "Risk Factors" beginning on page 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY 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 _________, 1998.
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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 and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: 75 Park Place, New York, New York 10007; and the Northwest Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621; and copies
of such material may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at
prescribed rates. The Commission also maintains an Internet Web site that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission at
http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, herein referred to as the
"Registration Statement") under the Securities Act with respect to the shares of
Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 000-21903)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997, as amended by the Company's Annual Report on Form
10-K/A filed with the Commission on July 29, 1997;
2. The Company's Current Report on Form 8-K filed with the Commission
on May 14, 1997;
3. The Company's Current Report on Form 8-K filed with the Commission
on June 12, 1997;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997, as filed with the Commission on August 14, 1997;
5. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, as filed with the Commission on November 14,
1997;
6. The Company's Current Report on Form 8-K filed with the Commission
on December 19, 1997;
7. The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1997, as filed with the Commission on February 17,
1998;
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8. The Company's Current Report on Form 8-K filed with the Commission
on March 3, 1998; and
9. The Company's Current Report on Form 8-K filed with the Commission
on April 17, 1998.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering contemplated hereby
shall be deemed to be incorporated by reference herein and to be a part thereof
from the date of filing thereof. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the Registration Statement of which it is a
part to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated herein modifies or
replaces such statement. Any statement so modified or superseded shall not be
deemed, in its unmodified form, to constitute a part of this Prospectus or such
Registration Statement.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING EXHIBITS
TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE INCORPORATED BY REFERENCE IN SUCH
DOCUMENTS) ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST DIRECTED
TO: ORA ELECTRONICS, INC., 9410 OWENSMOUTH AVENUE, CHATSWORTH, CALIFORNIA 91311,
ATTENTION: CHIEF FINANCIAL OFFICER, TELEPHONE: (818) 772-4433, EXTENSION 406.
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS AND THE FINANCIAL STATEMENTS,
INCLUDING THE NOTES THERETO, INCORPORATED HEREIN BY REFERENCE. FOR A DISCUSSION
OF CERTAIN FACTORS TO BE CONSIDERED IN EVALUATING AN INVESTMENT IN THE
SECURITIES OFFERED HEREBY, SEE "RISK FACTORS."
THE COMPANY
ORA Electronics, Inc. ("ORA" or the "Company") is a developer and supplier
of interface, connectivity solutions and peripheral accessories for wireless
communication devices, including cellular telephones, personal communications
systems ("PCS") and pagers, computing devices and intelligent transportation
systems ("ITS"). The Company currently carries over 2,000 products which are
sold to over 1,200 customers in the United States, and throughout North, Central
and South America.
The Company's business began as a sole proprietorship in 1974 under the
name ORA Electronics and was incorporated in California in 1979 under the name
Alliance Research Corporation ("Alliance"). The Company's products have been
primarily sold under the "ORA" trade name. In December 1996, Alliance merged
into ORA Electronics, Inc.
The Company has its principal offices located at 9410 Owensmouth Avenue,
Chatsworth, California 91311. The Company's telephone number is (818) 772-2700.
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THE OFFERING
Shares Offered Hereby............ 300,000 shares of Common Stock, $.001 par
value, held by the Selling Stockholder. See
"Selling Stockholder" and "Plan of
Distribution."
Plan of Distribution............. A maximum of 300,000 shares of Common Stock
are being offered by the Selling Stockholder.
Shares Outstanding............... 6,908,728 shares of Common Stock as of April
27, 1998.
Options Outstanding.............. Options to purchase an aggregate of 95,500
shares of Common Stock as of April 27, 1998.
Warrants Outstanding............. 478,550 Class A Warrants outstanding, 643,820
Class B Warrants outstanding, 563,118 Class C
Warrants outstanding and 730,468 Class D
Warrants outstanding as of April 27, 1998.
Risk Factors..................... Prospective investors should carefully
consider the matters discussed under the
heading "Risk Factors."
Bulletin Board System Symbol..... ORAE
RISK FACTORS
An investment in the Securities being offered hereby involves a high
degree of risk. In addition to the other information in this Prospectus,
including the documents incorporated herein by reference, the following risk
factors should be considered in evaluating the Company and its business before
purchasing the Securities offered hereby.
Recent Substantial Losses; No Assurance of Future Profitability
As recently as the fiscal years ended March 31, 1997, and March 31, 1996,
the Company incurred pro forma net losses of $2,680,942 and $1,417,855,
respectively, in each of those two fiscal years. Net sales decreased 22.4%, or
$5,392,323, in fiscal year 1997, in contrast to fiscal year 1996. Most recently,
revenues decreased 44.6%, or $2,780,085, for the third quarter of fiscal 1998,
as compared with the same period in fiscal 1997. There is no assurance that the
company's efforts and strategies will result in profitable operations in the
future.
Capital Resources
To supplement cash flow from operations, if necessary, the Company
maintains a $5,000,000 revolving credit facility to be used for general working
capital purposes. Under the credit facility, the Company is required to maintain
various covenants, including meeting certain net worth requirements, a liquidity
ratio, a debt service coverage ratio and restrictions on capital expenditures,
additional indebtedness and the payment of dividends. At December 31, 1997, the
Company was not in compliance with the net worth requirement. On February 11,
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1998, the covenant violation was waived by the lender. On March 27, 1998, the
Company negotiated a revision of all covenants at levels that the Company
believes can be successfully maintained. However, no assurances can be given as
to the Company's ability to maintain such new covenant levels.
Dependence on the Consumer Electronics and Wireless Telecommunications
Industries
The market for wireless communications products is characterized by
rapidly changing technology and frequent new product introductions, often
resulting in product obsolescence or short product life cycles. The Company's
success depends in large part upon its ability to anticipate and adapt its
business to such technological changes. There can be no assurance that the
Company will be able to identify, obtain and offer the products necessary to
remain competitive or that competitors or manufacturers of wireless
communications products will not market products that have perceived advantages
over the Company's products or that render the products sold by the Company
obsolete or less marketable. The Company maintains a significant investment in
its product inventory and, therefore, is subject to the risks of inventory
obsolescence and excessive inventory levels. If a substantial amount of
inventory is rendered obsolete or if the Company's inventory levels are
significantly higher than the demand for those products, its business, financial
condition or results of operations could be materially and adversely affected.
In addition, retailers carrying the Company's products have reported cellular
telephone activations are lower as a result of reduced financial incentives
offered to them by cellular telephone carriers. The Company's traditional retail
customers may face increased competitive pressures from cellular service
providers and, consequently, orders for the Company's cellular products from
such retailers may continue to decline. While the Company is making efforts to
offset declines in retail orders through redirection of its business towards the
original equipment manufacturer sector, no assurances can be given that such
redirection will be successful.
Competition
The consumer electronics and wireless telecommunications accessory market
is highly fragmented and subject to intense competition. ORA's competitors
include (a) various companies which offer broad lines of consumer electronic
accessories, (b) other accessory companies which offer certain product lines and
(c) manufacturers of brand name consumer electronics hardware, which market
their own lines of similar accessories. Certain of the Company's existing and
potential competitors have greater financial, technical, marketing or
manufacturing resources and may develop new accessories and other products that
are superior to those of the Company. The Company competes primarily on the
basis of product variety and quality, customer service and support, product
reliability, company and brand name recognition, ability to meet customer
delivery needs, price, product features and proprietary products. The Company's
ability to remain competitive will be largely dependent on its ability to
control its costs and protect its profit margins and to anticipate and respond
to various competitive factors affecting the industry, including new products
that may be introduced, changes in consumer preferences, demographic trends,
international, national, regional and local economic conditions and discount
pricing strategies implemented by competitors. No assurance can be given that
the Company will compete successfully in the wholesale distribution or retail
market.
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Volatility of Quarterly Operating Results; Seasonality
The Company's quarterly operating results may fluctuate based on a number
of factors, including variations in the Company's distribution channels and mix
of products sold, the timing of final product approvals from any major
distributor or end user, the timing of orders from and shipments to major
customers, the timing of new product introductions by the Company or its
competitors, changes in pricing policies by the Company's suppliers, the
availability and cost of key components, the timing of personnel hirings and the
market acceptance of new and enhanced versions of the Company's products. In
addition, the Company's markets are seasonal, with sales typically higher in
the Company's third quarter due to increased demand from mass market retailers
during the year-end holiday season.
Dependence Upon Key Personnel
The Company's success depends to a significant degree upon the continued
contributions of its management team, including Gershon N. Cooper, its President
and Chief Executive Officer, the loss of whom could adversely affect the
Company, and technical, marketing and sales personnel. Although the Company has
entered into an employment agreement with Mr. Cooper, there can be no assurance
that the Company will be able to retain his services. The Company's success also
will depend on its ability to attract and retain qualified management,
marketing, technical and sales executives and personnel. The process of locating
such personnel with the combination of skills and attributes required to carry
out the Company's strategies is often lengthy. The loss of the services of key
personnel, or the inability to attract additional qualified personnel, could
have a material adverse effect on the Company's results of operations,
development efforts and ability to expand. There can be no assurance that the
Company will be successful in attracting and retaining such executives and
personnel. Any such event could have a material adverse effect on the Company.
Trademark and Patents
The Company has actively pursued a program of protecting its intellectual
property by seeking patent protection for its products whenever possible, and
the Company's ability to obtain and enforce intellectual property protection
will materially affect its ongoing success. The Company has 35 patents and 6
pending patent applications covering certain of its products in the United
States. Most of the Company's U.S. patents have a majority of their life
remaining. The Company also owns 20 trademarks registered on the Principal
Trademark Register of the United States under which it sells its goods and
offers its services. No assurance can be given that the Company's existing
patents or any future patents will not be challenged, invalidated or
circumvented, or that competitors of the Company will not independently develop
or patent technologies which are substantially equivalent or superior to the
Company's technologies.
Controlling Influence By Mr. Cooper
As of April 27, 1998, Mr. Cooper had voting power with respect to
5,000,000 shares, or 72.4%, of the Company's Common Stock, not including 95,500
employee stock options and 2,415,956 Class A, B, C and D Warrants issued and
outstanding. As a result, Mr. Cooper is able to exercise substantial influence
over all matters requiring stockholder approval, including the election of
directors and approval of significant corporate transactions.
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Shares Eligible for Future Sales, Outstanding Stock Options and Outstanding
Class A, B, C and D Warrants
As of April 27, 1998, there were 6,908,728 shares of Common Stock
outstanding, of which 5,160,556 shares are "restricted securities" as defined
under Rule 144 under the Securities Act. Sales of substantial amounts of Common
Stock in the public market could adversely affect the prevailing market price of
the Common Stock and could impair the Company's ability to raise capital through
the sale of its equity securities. In addition, as of April 27, 1998, the
Company had 2,415,956 Class A, B, C and D Warrants outstanding to purchase in
the aggregate 2,415,956 shares of Common Stock at exercise prices ranging from
$5.00 to $20.00. Under the Company's 1996 Stock Plan, the Company has an
additional 1,904,500 shares available for issuance pursuant to stock options.
The exercise of currently outstanding options and warrants in the future would
increase the number of shares of Common Stock outstanding and could have a
dilutive effect on the Common Stock and prevent the Company from raising
additional financing if required.
No Cash Dividends
The holders of Common Stock are entitled to receive dividends when, as and
if declared by the Board of Directors, out of funds legally available therefor.
To date, the Company has not paid any cash dividends. The Company's Board of
Directors does not intend to declare any cash dividends in the foreseeable
future, but instead intends to retain all earnings, if any, for use in the
Company's business operations.
Risks of Low-Priced Securities
Because the Company's Common Stock is not approved for listing on the
National Association of Securities Dealers, Inc.'s National Market System or
The Nasdaq SmallCap Market (together, the "NASDAQ System"), the Common Stock is
subject to rules under the Exchange Act which impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established clients and "accredited investors". For transactions covered by such
rules, a broker-dealer must make a special suitability determination of the
purchaser and have received the purchaser's written consent to the transaction
prior to the sale. Consequently, such rules may affect the ability of
broker-dealers to sell the Company's Common Stock and the ability of purchasers
in this offering to sell any of their respective shares acquired in this
offering in any secondary market that may develop for such Common Stock.
The Commission has enacted rules that define a "penny stock" to be any
equity security that has a price of less than $5 per share or an exercise price
of less than $5 per share, subject to certain exceptions, including securities
authorized for listing on the NASDAQ System or on designated exchanges. For
any transaction involving a penny stock, unless exempt, the rules require the
delivery, prior to any transaction in a penny stock, of a disclosure statement
prepared by the Commission relating to the penny stock market. Disclosure also
has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
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information on the limited market in penny stocks. Because the Company's shares
of Common Stock are not authorized for listing on the NASDAQ System, nor are
otherwise exempt from the provisions of the Commission's "penny stock" rules,
such rules may also affect the ability of broker-dealers to sell the Company's
securities and the ability of purchasers in this offering to sell any of their
shares acquired hereby in any secondary market that may develop.
FORWARD-LOOKING INFORMATION
This Prospectus contains forward-looking statements within the meaning of
that term in the Private Securities Litigation Reform Act of 1995 (Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934). Additional written or oral forward-looking statements may be made by the
Company from time to time, in filings with the Securities Exchange Commission or
otherwise. Statements contained herein that are not historical facts are
forward-looking statements made pursuant to the safe harbor provisions
referenced above. The matters discussed or incorporated by reference herein with
respect to, among other things, the anticipated growth of the cellular telephone
industry, the development of new wireless communications technologies, the
Company's ability to comply with financial covenants in loan agreements, the
Company's ability to penetrate new distribution channels and the introduction of
new products by the Company are forward-looking statements. In addition, when
used in this discussion, the words "anticipates," "expects," "intends," "plans,"
variations thereof and similar expressions are intended to identify
forward-looking statements.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified based on current
expectations. Consequently, future events and actual results could differ
materially from those set forth in, contemplated by, or underlying the
forward-looking statements contained in this Prospectus. Factors that could
contribute to or cause such differences include, but are not limited to,
unanticipated developments in any one or more of the following areas: the
receptivity of consumers to new consumer electronics technologies, the rate and
consumer acceptance of new product introductions, competition, the number and
nature of customers and their product orders, pricing, availability of capital,
foreign manufacturing, sourcing and sales (including foreign government,
regulation, trade and importation concerns and fluctuation in exchange rates),
borrowing costs, changes in taxes due to changes in the mix of U.S. and non U.S.
revenue, pending or threatened litigation, the availability of key personnel and
other risk factors which may be detailed from time to time in the Company's
Securities and Exchange Commission filings. Readers are cautioned not to place
undue reliance on any forward-looking statements contained herein, which speak
only as of the date hereof. The Company undertakes no obligation to publicly
release the result of any revisions to these forward-looking statements that may
be made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unexpected events.
USE OF PROCEEDS
All of the securities offered hereby are being offered by the Selling
Stockholder. The Company will not receive any of the proceeds from the sale of
the securities. See "Selling Stockholder" and "Plan of Distribution."
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SELLING STOCKHOLDER
The Selling Stockholder is Telular Corporation ("Telular"). Prior to the
filing of the Registration Statement, Telular owned 300,000 restricted shares of
Common Stock, which were received by Telular as part of a litigation settlement
previously disclosed by the Company in its Current Report on Form 8-K filed with
the Commission on March 3, 1998. The number of shares owned by Telular and
offered for Telular's own account is 300,000. After completion of the offering
contemplated by this Registration Statement, Telular does not anticipate owning
any shares of the Company's Common Stock.
PLAN OF DISTRIBUTION
The Common Stock covered by this Prospectus may be offered for sale from
time to time by the Selling Stockholder to or through underwriters or directly
to other purchasers or through agents in one or more market transactions, in
one or more private transactions or in a combination of such methods of sale,
at prices then prevailing, at prices related to such prices or at negotiated
prices. Such methods of distribution may include, without limitation: (a) a
block trade in which the broker-dealer so engaged will attempt to sell the
Common Stock as agent but may position and resell a portion of the block as a
principal to facilitate the transaction; (b) purchases by a broker-dealer as a
principal and resale by such broker-dealer for its own account pursuant to this
Registration Statement; (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers; and (d) face-to-face transactions between
sellers and purchasers without a broker or dealer.
Common Stock covered by this Prospectus that qualifies for sale pursuant
to Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Stockholder in amounts
to be negotiated in connection with sales pursuant thereto. Such brokers or
dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act, in connection with
such sales and any such commission, discount or concession may be deemed to be
underwriting discounts under the Securities Act.
Certain costs, expenses and fees in connection with the registration of
the Common Stock will be borne by the Company. Commissions, discounts and
transfer taxes, if any, attributable to the sales of the Common Stock will be
borne by the Selling Stockholder. The Selling Stockholder has agreed or may
agree to indemnify the Company or any underwriter, as the case may be, and any
of their respective affiliates, directors, officers and controlling persons,
against certain liabilities in connection with the offering of the Common Stock
pursuant to this Registration Statement, including liabilities arising under the
Securities Act. In addition, the Company has agreed to indemnify the Selling
Stockholder against certain liabilities in connection with the offering of the
Common Stock pursuant to this Prospectus, including liabilities arising under
the Securities Act.
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The Company will not receive any proceeds from sales of the Shares by the
Selling Stockholder.
This offering will terminate on the earlier of (i) the date on which all
Shares offered hereby have been sold or (ii) March 2, 2000.
LEGAL MATTERS
The legality of the issuance of the Shares offered hereby will be passed
upon for the Company by Sheppard, Mullin, Richter & Hampton LLP, Los Angeles,
California.
EXPERTS
The financial statements of the Company for the fiscal years ended March
31, 1997, and March 31, 1995, incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended March 31, 1997, have been audited by
Richard & Hedrick, independent accountants, as set forth in their report therein
and incorporated herein by reference in reliance upon such report given on the
authority of that firm as experts in accounting and auditing.
The financial statements of the Company for the fiscal year ended March
31, 1996, incorporated by reference to the Company's Annual Report On Form 10-K
for the year ended March 31, 1997, have been audited by Tanner, Mainstain,
Hoffer & Peyrot (formerly Tanner, Mainstain & Hoffer), independent accountants,
as set forth in their report therein and incorporated herein by reference in
reliance upon such report given on the authority of that firm as experts in
accounting and auditing.
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300,000 Shares
ORA ELECTRONICS, INC.
Common Stock
PROSPECTUS
__________, 1998
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN,
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY SECURITIES
BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO
MAKE SUCH AN OFFERING 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 OR THAT
INFORMATION CONTAINED HEREIN IS CORRECT ANY TIME SUBSEQUENT TO THE DATE THEREOF.
TABLE OF CONTENTS
-----------------
Page
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Available Information......................................................4
Incorporation of Certain Documents by Reference............................4
Prospectus Summary.........................................................5
The Company................................................................5
The Offering...............................................................6
Risk Factors...............................................................6
Forward-Looking Information...............................................10
Use of Proceeds...........................................................10
Selling Stockholder.......................................................11
Plan of Distribution......................................................11
Legal Matters.............................................................12
Experts ..................................................................12
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered hereby, other than
underwriting discount and commissions. All of the amounts shown are estimates,
except the Commission Registration Fee. None of these amounts will be paid by
the Selling Stockholder.
Securities and Exchange Commission Registration $ 202.00
Accounting Fees and Expenses $ 3,000.00
Legal Fees and Expenses $ 15,000.00
Miscellaneous Expenses $ 1,798.00
-----------
Total $ 20,000.00
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Delaware General Corporation Law provides that a company may indemnify
its directors and officers as to certain liabilities. The Company's Certificate
of Incorporation and Bylaws provide for the indemnification of its directors and
officers to the fullest extent permitted by law, and the Company has entered
into separate indemnification agreements with each of its directors and officers
which also provide for such indemnification. The effect of such provisions are
to indemnify, to the fullest extent permitted by law, the directors and officers
of the Company against all costs, expenses and liabilities incurred by them in
connection with any action, suit or proceeding in which they are involved by
reason of their affiliation with the Company. The Company has also purchased
directors and officers liability insurance.
-1-
Page 14 of 44
<PAGE>
ITEM 16. EXHIBITS
Exhibit
No. Description
- ------- -----------
2.1 Plan of Reorganization of North American Energy of Delaware, Inc. (1)
2.2 Agreement and Plan of Merger between ORA Electronics, Inc., a
Delaware corporation, and North American Energy of Delaware, Inc., a
Delaware corporation. (2)
3.1 Restated Certificate of Incorporation of ORA Electronics, Inc. (2)
3.2 Bylaws of ORA Electronics, Inc. (2)
4.1 Specimen Class A Warrant Certificate. (2)
4.2 Specimen Class B Warrant Certificate. (2)
4.3 Specimen Class C Warrant Certificate. (2)
4.4 Specimen Class D Warrant Certificate. (2)
4.6 Warrant Agreement between the Company and Continental Stock Transfer &
Trust Company (the "Warrant Agent"), dated as of December 20, 1996.(2)
4.7 Letter Agreement, dated June 10, 1997, from Sheppard, Mullin, Richter
& Hampton LLP ("SMRH") to the Warrant Agent. (3)
4.8 Letter Agreement, dated December 17, 1997, from SMRH to the Warrant
Agent.
5 Opinion Regarding Legality.
23.1 Consent of Richard & Hedrick, independent accountants.
23.2 Consent of Tanner, Mainstain, Hoffer & Peyrot (formerly Tanner,
Mainstain & Hoffer), independent accountants.
23.3 Consent of Sheppard, Mullin, Richter & Hampton LLP (included in
Exhibit 5 to this Registration Statement on Form S-3).
24 Power of Attorney (included on the signature page to this
Registration Statement on Form S-3).
99.1 Settlement Agreement and Mutual General Release, between ORA
Electronics, Inc. and Telular Corporation, dated March 2, 1998. (4)
99.2 Second Deed of Amendment, by and between ORA Electronics, Inc., and
ORA Electronics (UK) Limited ("ORA UK"), dated as of April, 1998. (5)
99.3 Distribution Agreement, by and between Alliance Research Corporation
(predecessor to ORA Electronics, Inc.) and Contactace Limited (doing
business as ORA UK), dated as of 1990. (5)
-2-
Page 15 of 44
<PAGE>
(1) Incorporated by reference from the Form 8-K/A filed on December 20, 1996,
by North American Energy of Delaware, Inc., predecessor to the Registrant.
(2) Incorporated by reference from the Registrant's Form 8-K filed on
December 20, 1996.
(3) Incorporated by reference from the Registrant's Form 10-K filed on
June 30, 1997.
(4) Incorporated by reference from the Registrant's Form 8-K filed on
March 3, 1998.
(5) Incorporated by reference from the Registrant's Form 8-K filed on April
17, 1998.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act 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 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 end 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;
(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.
-3-
Page 16 of 44
<PAGE>
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
Exchange 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.
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.
-4-
Page 17 of 44
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on May 4, 1998.
ORA ELECTRONICS, INC.
By: /s/ Gershon N. Cooper
------------------------------------
Gershon N. Cooper
President, Chief Executive Officer
and Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below appoints each of Gershon N. Cooper and John M. Burris his or her true and
lawful attorney-in-fact, with full power of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and all capacities,
to sign, execute and file with the Commission and any state securities
regulatory board or commission any documents relating to the issuance and
registration of the securities offered pursuant to this Registration Statement
on Form S-3, including any amendment or amendments relating thereto, with all
exhibits and any and all documents required to be filed with respect thereto
with any regulatory authority, granting unto each of such attorneys-in-fact full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as he or she might or could do if
personally present, hereby ratifying and confirming all that such
attorney-in-fact, or either of them, or their or his substitutes or substitute,
may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Dated: May 4, 1998 /s/ Gershon N. Cooper
----------------------------------
Gershon N. Cooper, President, Chief
Executive Officer, Chairman of the Board
Dated: May 4, 1998 /s/ John M. Burris
----------------------------------
John M. Burris,
Vice President, Chief Financial
Officer and Director
-5-
Page 18 of 44
<PAGE>
Dated: May 4, 1998 /s/ John Moore, III
----------------------------------
John Moore, III,
Chief Accounting Officer
Dated: May 4, 1998 /s/ Ruth Cooper
----------------------------------
Ruth Cooper, Director
Dated: May 4, 1998 /s/ Matthew F. Jodziewicz
----------------------------------
Matthew F. Jodziewicz,
Vice President of Technology
and Legal Affairs and Director
-6-
Page 19 of 44
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Page
- ------- ----------- ----
4.8 Letter Agreement, dated December 17, 1997, from SMRH to 21
the Warrant Agent.
5 Opinion Regarding Legality. 42
23.1 Consent of Richard & Hedrick, independent accountants. 43
23.2 Consent of Tanner, Mainstain, Hoffer & Peyrot 44
(formerly Tanner, Mainstain & Hoffer), independent
accountants.
23.3 Consent of Sheppard, Mullin, Richter & Hampton LLP
(included in Exhibit 5 to this Registration Statement
on Form S-3).
24 Power of Attorney (included on the signature page to this
Registration Statement on Form S-3).
Page 20 of 44
<PAGE>
Exhibit 4.8
-----------
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
A Limited Liability Partnership
Including Professional Corporations
Attorneys at Law
333 South Hope Street, Forty-Eighth Floor
Los Angeles, California 90071
Telephone (213) 620-1780
-----
Facsimile (213) 620-1398
-----
Writer's Direct Line Our File Number
(213) 617-4199 MXM-58890
Skeller%[email protected]
December 17, 1997
VIA FEDERAL EXPRESS
Mr. William F. Seegraber
Vice President
Continental Stock Transfer & Trust Company
2 Broadway
New York, New York 10004
Re: Amendment to Warrant Agreement with ORA Electronics, Inc.
Dear Bill:
As you and John Burris have discussed, our client, ORA Electronics,
Inc., a Delaware corporation (the "Company"), previously entered into a Warrant
Agreement, dated as of December 20, 1996 (the "Warrant Agreement"), by and
between the Company and Continental Stock Transfer & Trust Company
("Continental") as warrant agent. For your convenience, a copy of the Warrant
Agreement is attached hereto as Attachment A.
Pursuant to the terms of the Warrant Agreement, Continental serves
as warrant agent with respect to certain Class A, B, C and D warrants
(collectively, the "Warrants") which have been issued by the Company and are
currently publicly traded on the NASDAQ Bulletin Board and Pink Sheets. The
Class A Warrants have an exercise price of $5.00 per share and the Class B
Warrants have an exercise price of $10.00 per share. As you will recall, in
June, 1997, we amended the terms of the Class A Warrants such that the Class A
Warrants must be exercised on or before December 31, 1997. By their terms, the
Class B Warrants must be exercised on or before June 20, 1998. At this time the
Company seeks to extend the exercise deadlines of both the Class A and Class B
Warrants to December 31, 1998.
Page 21 of 44
<PAGE>
Mr. William F. Seegraber
December 17, 1997
Page 2
Accordingly, it is the purpose of this letter to amend Sections
2.1(a) and (b) of the Warrant Agreement, effective as of December 19, 1997, to
read in their entirety:
"(a) The purchase rights represented by each Class A Warrant
are exercisable at the exercise price of five dollars ($5.00) per share
(the "Class A Exercise Price") for the period commencing on the date
hereof and terminating at 5:00 p.m., Los Angeles time, on December 31,
1998 (the "Class A Exercise Deadline");
(b) The purchase rights represented by each Class B Warrant
are exercisable at the exercise price of ten dollars ($10.00) per share
(the "Class B Exercise Price") for the period commencing on the date
hereof and terminating at 5:00 p.m., Los Angeles time, on December 31,
1998 (the "Class B Exercise Deadline");"
It is my understanding that this letter of direction is sufficient
to accomplish this result, but the Company would be happy to provide to you
whatever additional documentation may be required.
As you and I also discussed, under separate cover the Company has
sent 280 letters prepared by the Company, as well as 280 corresponding
envelopes, to be distributed to all holders of record of the Class A and Class B
Warrants. In addition, it is our understanding that Continental, as warrant
agent, will make the appropriate announcement(s) on the wires in order that the
market will receive this information on a uniform basis.
Page 22 of 44
<PAGE>
Mr. William F. Seegraber
December 17, 1997
Page 3
If the information set forth above meets with your approval, please
execute this letter where indicated and return the originally executed version
to me in the envelope enclosed for your convenience, retaining a copy for your
records. If you have any comments or questions, please feel free to call the
undersigned at (213) 617-4199.
Sincerely,
/s/ Sarah D. Keller
Sarah D. Keller
for SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
Acknowledged and Agreed:
Continental Stock Transfer &
Trust Company
/s/ William F. Seegraber
- ------------------------------------
William F. Seegraber, Vice President
December 19, 1997
cc: Mr. Gershon N. Cooper (via telecopier)
Mr. John M. Burris (via telecopier)
Page 23 of 44
<PAGE>
Attachment A
------------
WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of December 20, 1996 (the "Warrant
Agreement"), is by and between ORA Electronics, Inc., a Delaware corporation
(the "Company"), and Continental Stock Transfer & Trust Company, as warrant
agent (the "Warrant Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue a certain number of Class A,
Class B, Class C and Class D warrants (collectively, the "Warrants") pursuant to
the terms of (a) that certain Plan of Reorganization for North American Energy
of Delaware, Inc. ("North American"), as filed with the United States Bankruptcy
Court, Southern District of New York, on August 19, 1996 (the "Plan"), and (b)
that certain Agreement and Plan of Merger dated as of December 20, 1996, by and
between North American and the Company (the "Merger Agreement");
WHEREAS, each Warrant entitles the holder thereof to purchase one
share (collectively, the "Warrant Shares") of the Company's Common Stock (the
"Common Stock"), pursuant to the terms of the Plan, the Merger Agreement and
this Warrant Agreement;
WHEREAS, the Company and Warrant Agent agree that the Company
desires to set forth the terms upon which Warrant Agent will act as transfer and
exchange agent for the Warrants; and
WHEREAS, the Company and the Warrant Agent desire to set forth in
this Warrant Agreement, among other things, the form and provisions of each
class of Warrants as set forth in certificates representing each class of
Warrants (the "Warrant Certificates") and the terms and conditions under which
such Warrants may be issued, transferred, exchanged, replaced, redeemed and
surrendered in connection with the exercise and redemption thereof;
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements herein contained, the parties hereto agree as follows:
-1-
Page 24 of 44
<PAGE>
ARTICLE 1
WARRANT CERTIFICATES
1.1 Form of Warrant Certificates. The Warrant Certificates shall be
substantially in the form of Exhibits A, B, C and D attached hereto and, in
addition, may have such letters, numbers or other marks of identification or
designation and such legends, summaries or endorsements stamped or printed
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement or as, in any particular case, may be required, in
the opinion of counsel for the Company, to comply with any law or with any rule
or regulation of any regulatory authority or agency or to conform with customary
usage.
1.2 Execution of Warrant Certificates. The Warrant Certificates shall be
executed, either manually or by facsimile signature printed thereon, (i) on
behalf of the Company by its Chairman of the Board, Chief Executive Officer or
President or any Vice President, and by its Chief Financial Officer, Secretary
or any Assistant Secretary, and (ii) on behalf of the Warrant Agent, by a duly
authorized officer thereof.
ARTICLE 2
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
2.1 Exercise Prices and Terms. Each Warrant Certificate, when signed by
(i) the Chairman, Chief Executive Officer or President or any Vice President,
and by the Chief Financial Officer or Treasurer or any Assistant Treasurer, or
Secretary or any Assistant Secretary, of the Company and (ii) a duly authorized
officer of the Warrant Agent, shall entitle the registered holder thereof to
purchase from the Company one share of Common Stock for each Warrant evidenced
thereby, at the respective purchase prices set forth in Sections 2.1 (a), (b),
(c) and (d) hereof, or such adjusted number of shares at such adjusted purchase
price as may be established from time to time pursuant to the provisions of
Article 3 hereof, payable in full at the time of exercise of the Warrant. Except
as the context otherwise requires, the term "Exercise Price" as used in this
Warrant Agreement shall mean the purchase price of one share of Common Stock
upon the exercise of a Warrant as the context requires, reflecting all
appropriate adjustments made in accordance with the provisions of Article 3
hereof. The term "Exercise Deadline" as used in this Warrant Agreement shall
mean the latest time and date on which each respective class of Warrants may be
exercised, as set forth below.
(a) The purchase rights represented by each Class A Warrant
are exercisable at the exercise price of five dollars ($5.00) per share
-2-
Page 25 of 44
<PAGE>
(the "Class A Exercise Price") for the period commencing on the date
hereof and terminating at 5:00 p.m., Los Angeles time, on June 18, 1997
(the "Class A Exercise Deadline");
(b) The purchase rights represented by each Class B Warrant
are exercisable at the exercise price of ten dollars ($10.00) per share
(the "Class B Exercise Price") for the period commencing on the date
hereof and terminating at 5:00 p.m., Los Angeles time, on June 20, 1998
(the "Class B Exercise Deadline";
(c) The purchase rights represented by each Class C Warrant
are exercisable at the exercise price of fifteen dollars ($15.00) per
share (the "Class C Exercise Price") for the period commencing on the date
hereof and terminating at 5:00 p.m., Los Angeles time, on December 20,
1999 (the "Class C Exercise Deadline"); and
(d) The purchase rights represented by each Class D Warrant
are exercisable at the exercise price of twenty dollars ($20.00) per share
(the "Class D Exercise Price") for the period commencing on the date
hereof and terminating at 5:00 p.m., Los Angeles time, on December 20,
2001 (the "Class D Exercise Deadline").
2.2 [Reserved.]
2.3 Procedure for Exercise of Warrants. During the periods specified in
each of Sections 2.1(a), (b), (c) and (d) hereof, as applicable, the Warrants
may be exercised by surrendering the Warrant Certificates representing such
Warrants to the Warrant Agent, with the election to purchase form set forth on
the Warrant Certificate duly completed and executed, accompanied by payment in
full of the applicable Exercise Price as provided in Sections 2.1(a), (b), (c)
and (d) in effect at the time of such exercise, together with such taxes as are
specified in Section 6.1 hereof, for each share of Common Stock with respect to
which such Warrants are being exercised. Such Exercise Price and taxes shall be
paid in full by certified check or money order, payable in United States
currency, to the Company. The date on which Warrants are exercised in accordance
with this Section 2.3 is sometimes referred to herein as the Date of Exercise of
such Warrants.
2.4 Issuance of Warrant Shares. As soon as practicable after the Date of
Exercise of any Warrants, the Warrant Agent shall remit the proceeds of the
Exercise Price to the Company and, upon the Company's acknowledgment of such
remittance, issue a certificate or certificates for the number of shares of
Common Stock, rounded to the nearest whole number, to which such holder is
entitled, registered in accordance with the instructions set forth in the
election to purchase. All Warrant Shares shall be validly authorized and
-3-
Page 26 of 44
<PAGE>
issued, fully paid and nonassessable and free from all taxes, liens and charges
created by the Company in respect of the issue thereof, and shall be previously
unissued shares. Each person in whose name any such certificate for Warrant
Shares is issued shall for all purposes be deemed to have become the holder of
record of the Warrant Shares represented thereby on the Date of Exercise of the
Warrants resulting in the issuance of such shares, regardless of the date of
issuance or delivery of such certificate for the Warrant Shares.
2.5 Certificates for Unexercised Warrants. In the event that less than all
of the Warrants represented by a Warrant Certificate are exercised, the Company
shall execute and the Warrant Agent shall execute and mail, by first-class mail,
within 30 days of the Date of Exercise, to the registered holder of such Warrant
Certificate, or such other person as shall be designated in the election to
purchase, a new Warrant Certificate representing the number of full Warrants of
the same class not yet exercised. In no event shall a fraction of a Warrant be
exercised, and the Warrant Agent shall distribute no Warrant Certificates
representing fractions of Warrants under this or any other Section of this
Agreement.
2.6 Reservation of Shares. The Company shall at all times reserve and keep
available for issuance upon the exercise of Warrants a number of its authorized
but unissued shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Warrants.
ARTICLE 3
ADJUSTMENTS, TERMINATION AND NOTICE PROVISIONS
3.1 Adjustment of Exercise Price. Subject to the provisions of this
Article 3, the Exercise Price in effect from time to time shall be subject to
adjustment, as follows: in case the Company shall at any time after the date
hereof (a) declare a dividend on the outstanding Common Stock payable in shares
of its capital stock, (b) subdivide the outstanding Common Stock, (c) combine
the outstanding Common Stock into a smaller number of shares, or (d) issue any
shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price in effect, and the number of shares of Common Stock issuable upon exercise
of the Warrants outstanding, at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the holders of the Warrants after such
-4-
Page 27 of 44
<PAGE>
time shall be entitled to receive the aggregate number and kind of shares which,
if such Warrants had been exercised immediately prior to such time, such holders
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
3.2 No Adjustments to Exercise Price. No adjustment in the Exercise Price
shall be required if such adjustment is less than $.05; provided, however, that,
any adjustments which by reason of this Article 3 are not required to be made,
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Article 3 shall be made to the nearest cent or to
the nearest share, as the case may be.
3.3 Deferral of Adjustments to Exercise Price. In any case in which this
Article 3 shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Warrant Agent may elect
to defer, until the occurrence of such event, issuing to the holders of the
Warrants, if any holder has exercised a Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such exercising holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
3.4 [Reserved.]
3.5 Reorganizations. In case of any capital reorganization, other than in
the cases referred to in Section 3.1 hereof, or the consolidation or merger of
the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Common Stock or
the conversion of such outstanding shares of Common Stock into shares of other
stock or other securities or property), or in the case of any sale, lease or
conveyance to another corporation of the property and assets of any nature of
the Company as an entirety or substantially as an entirety (such actions being
hereinafter collectively referred to as "Reorganizations"), the Warrants shall
terminate and shall no longer be exercisable upon the consummation of the
Reorganization unless the Company's Board of Directors elects in its sole
discretion to provide that the Warrants, or any class or classes thereof, shall
continue to be exercisable in accordance with their terms after said
consummation, in which case there shall thereafter be deliverable upon exercise
of any Warrant so continued (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
-5-
Page 28 of 44
<PAGE>
property to which a holder of the number of shares of Common Stock which would
otherwise have been deliverable upon the exercise of such Warrant would have
been entitled upon such Reorganization if such Warrant had been exercised in
full immediately prior to such Reorganization. In case of any Reorganization
with respect to which the Board of Directors of the Company has elected to
provide for the continuance of the Warrants, or any class or classes thereof as
provided above, appropriate adjustment, as determined in good faith by the Board
of Directors of the Company, shall be made in the application of the provisions
herein set forth with respect to the rights and interests of Warrant holders so
that the provisions set forth herein shall thereafter be applicable, as nearly
as possible, in relation to any shares or other property thereafter deliverable
upon exercise of Warrants. Any such adjustment shall be made by and set forth in
a notice to the holders of the Warrant Certificates and shall for all purposes
hereof conclusively be deemed to be an appropriate adjustment. In the event of
sale, lease or conveyance or other transfer of all or substantially all of the
assets of the Company as part of a plan for liquidation of the Company with
respect to which the Board of Directors of the Company has elected to provide
for the continuance of the Warrants, or any class or classes thereof, as
provided above, all rights to exercise any Warrant so continued shall terminate
30 days after the Company gives written notice to each registered holder of a
Warrant Certificate that such sale or conveyance or other transfer has been
consummated.
3.6 Reclassifications. In case of any reclassification or change of the
shares of Common Stock issuable upon exercise of the Warrants (other than a
change in par value or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), or in case of any consolidation or merger of another corporation into
the Company in which the Company is the continuing corporation and in which
there is a reclassification or change (including a change to the right to
receive cash or other property) of the shares of Common Stock (other than a
change in par value or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), the holders of the Warrants shall have the right thereafter to receive
upon exercise of the Warrants solely the kind and amount of shares of stock and
other securities, property, cash, or any combination thereof receivable upon
such reclassification, change, consolidation or merger by a holder of the number
of shares of Common Stock for which the Warrants might have been exercised
immediately prior to such reclassification, change, consolidation or merger.
Thereafter, appropriate provision shall be made for adjustments which shall be
as nearly equivalent as practicable to the adjustments in Article 3. The
provisions of this Section 3.6 shall similarly apply to successive
reclassification and changes of shares of Common Stock.
-6-
Page 29 of 44
<PAGE>
3.7 Verification of Computations. Whenever the exercise price is adjusted
as provided in this Article 3, the Warrant Agent will promptly obtain a
certificate of the Company's Chief Financial Officer setting forth the exercise
price as so adjusted and a brief statement of the facts accounting for such
adjustment, and will make available a brief summary thereof to the holders of
the Warrant Certificates, at their addresses listed on the register maintained
for that purpose by the Warrant Agent (which summary may be included in any
notice of adjustment required by Section 3.1 hereof).
3.8 Notice of Certain Actions. In the event that the Company proposes:
(a) to pay any dividend or make any distribution relating to
shares of Common Stock in shares of Common Stock or make any other
distribution (other than regularly scheduled cash dividends which are not
in a greater amount per share than the most recent such cash dividend) to
all holders of Common Stock; or
(b) to issue any rights, warrants or other securities to all
holders of Common Stock entitling such holders of Common Stock to purchase
any additional shares of Common Stock or any other rights, warrants or
other securities; or
(c) to effect any consolidation, merger, sale, lease, or
conveyance of property, described in Section 3.5, or any reclassification
or change of outstanding shares of Common Stock described in Section 3.6;
or
(d) to effect any liquidation, dissolution or winding-up of
the Company; or
(e) to take any other action which would cause an adjustment
to the Exercise Price;
then, in each such case, the Company shall cause the Warrant Agent to give
notice of such proposed action to the holders of the Warrant Certificates. Such
notice shall specify the date on which the books of the Warrant Agent shall
close, or a record shall be taken, for determining holders of Common Stock
entitled to receive such stock dividend or other distribution or such rights or
warrants, or the date on which such reclassification, change, consolidation,
merger, sale, lease, other disposition, liquidation, dissolution, winding up or
exchange or other action shall take place or commence, as the case may be, and
the date as of which it is expected that holders of record of Common Stock shall
be entitled to receive securities or other property deliverable upon such
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<PAGE>
action, if any such date has been fixed. If applicable, such notice shall also
state if the Warrants, or any class or classes thereof, shall continue to be
exercisable or shall terminate upon the consummation of a Reorganization as
provided in Section 3.5. Such notice shall be mailed, in the case of any action
covered by Subsection 3.8(a) or 3.8(b) above, at least 15 days prior to the
record date for determining holders of the Common Stock for purposes of
receiving such payment or offer; in the case of any action covered by Subsection
3.8(c) or 3.8(d) above, at least 15 days prior to the earlier of the date upon
which such action is to take place or any record date to determine holders of
Common Stock entitled to receive such securities or other property; and in the
case of any action covered by Subsection 3.8(e) above, no more than 15 days
after such action. Notwithstanding anything to the contrary contained in this
Warrant Agreement, the failure of the Company to cause the Warrant Agent to
provide the notice(s) required by this Section 3.8 shall not serve to invalidate
the action taken.
3.9 Notice of Adjustments. Whenever any adjustment is made pursuant to
this Article 3, the Company shall cause the Warrant Agent to give written notice
of such adjustment sent by registered mail, postage prepaid, to the holders of
Warrant Certificates within 15 days thereafter, such notice to include in
reasonable detail (i) the events precipitating the adjustment, (ii) the
computation of any adjustments, and (iii) the Exercise Price, and the number of
shares or the securities or other property purchasable upon exercise of each
Warrant after giving effect to such adjustment.
3.10 Warrant Certificate Amendments. Regardless of any adjustments
pursuant to this Article 3, Warrant Certificates theretofore or thereafter
issued need not be amended or replaced but certificates thereafter issued shall
bear an appropriate legend or other notice of any adjustments.
3.11 Fractional Shares. Upon the exercise of any Warrant following
adjustments in accordance with this Article 3 to the Exercise Price or number of
shares of Common Stock purchasable under each Warrant, the number of shares of
Common Stock to be so purchased shall be rounded to the nearest whole number. In
no event shall fractional shares or fractional Warrants be issued by the
Company. If more than one Warrant is exercised at one time by the same
registered holder, the number of full shares of Common Stock which shall be
deliverable shall be computed based on the number of whole shares deliverable in
exchange for the aggregate number of Warrants exercised.
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<PAGE>
ARTICLE 4
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF WARRANT CERTIFICATES
4.1 Rights of Warrant Holders. No Warrant Certificate shall entitle the
registered holder thereof to any of the rights of a shareholder of the Company,
including, without limitation, the right to vote, to receive dividends and other
distributions, or to receive any notice of, or to attend, meetings of
shareholders or any other proceedings of the Company.
4.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. If any
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
and Warrant Agent shall execute and Warrant Agent shall deliver, in exchange and
substitution for and upon cancellation of a mutilated Warrant Certificate, or in
lieu of or in substitution for a lost, stolen or destroyed Warrant Certificate,
a new Warrant Certificate for the number of Warrants represented by the Warrant
Certificate so mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Warrant Certificate, and of
the ownership thereof, and indemnity, if requested, all satisfactory to the
Company. Applicants for such substitute Warrant Certificates shall also comply
with such other reasonable regulations and pay such other reasonable charges
incidental thereto as the Company may prescribe. Any such new Warrant
Certificate shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant
Certificate shall be at any time enforceable by anyone.
ARTICLE 5
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES:
CONCERNING THE WARRANT AGENT
5.1 Split Up, Combination, Exchange and Transfer of Warrant Certificates.
Prior to the Exercise Deadline, Warrant Certificates, subject to the provisions
of Section 5.2, may be split up, combined or exchanged for other Warrant
Certificates representing a like aggregate number of Warrants or may be
transferred in whole or in part. Any holder desiring to split up, combine or
exchange a Warrant Certificate or Warrant Certificates shall make such request
in writing delivered to the Company and the Warrant Agent, and shall surrender
the Warrant Certificate or Warrant Certificates to be so split up, combined or
exchanged to the Warrant Agent. Subject to any applicable laws, rules or
regulations restricting transferability, any restriction on transferability that
may appear on a Warrant Certificate in accordance with the terms hereof, or any
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<PAGE>
"stop-transfer" instructions the Company may give to the Warrant Agent to
implement any such restrictions (which instructions the Company is expressly
authorized to give), transfer of outstanding Warrant Certificates may be
effected from time to time upon the books of the Warrant Agent, upon a surrender
of the Warrant Certificate to the Warrant Agent, with the assignment form set
forth in the Warrant Certificate duly executed. Upon any such surrender for
split up, combination, exchange or transfer, the Warrant Agent shall execute and
deliver to the person entitled thereto a Warrant Certificate or Warrant
Certificates, as the case may be, as so requested. The Company may require the
holder to pay a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any split up, combination, exchange or transfer of
Warrant Certificates prior to the issuance of any new Warrant Certificate.
5.2 Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered upon the exercise of Warrants or for split up, combination, exchange
or transfer, or purchased or otherwise acquired by the Company, shall be
canceled and shall not be reissued by the Company; and, except as provided (i)
in Section 2.5, in case of the exercise of less than all of the Warrants
evidenced by a Warrant Certificate, or (ii) in Section 5.1, in case of a split
up, combination, exchange or transfer of the Warrants evidenced by a Warrant
Certificate, or (iii) as provided for in Section 4.2, no Warrant Certificate
shall be issued hereunder in lieu of such canceled Warrant Certificate.
5.3 Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder, be deemed to make
representations as to the validity or value or authorization of the Warrant
Certificates or the Warrants represented thereby or of any securities or other
property delivered upon exercise of any Warrant or whether any stock issued upon
exercise of any Warrant is fully paid and non-assessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Exercise Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustment, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. It shall not (i) be liable for any
recital or statement of fact contained herein or for any action taken, suffered
or omitted by it in reliance on any Warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (ii) be responsible for any failure on
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<PAGE>
the part of the Company to comply with any of its covenants and obligations
contained in this Warrant Agreement or in any Warrant Certificate, or (iii) be
liable for any act or omission in connection with this Warrant Agreement except
for its own gross negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall incur no
liability or responsibility for any action reasonably taken, suffered or omitted
by it in good faith in accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction, order
or demand of the Company shall be sufficiently evidenced by an instrument signed
by the Chairman of the Board of Directors, Chief Executive Officer, President or
any Vice President (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand.
(e) The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its reasonable
expenses hereunder; the Company further agrees to indemnify the Warrant Agent
and hold it harmless against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for anything done or omitted by the
Warrant Agent in the execution of its duties and powers hereunder except losses,
expenses and liabilities arising as a result of the Warrant Agent's gross
negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be discharged from
all further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own gross negligence or willful misconduct), after
giving thirty (30) days' prior written notice to the Company. At least fifteen
(15) days prior to the date such resignation is to become effective, the Warrant
Agent shall cause a copy of such notice of resignation to be mailed to the
registered holder of each Warrant Certificate at the Company's expense. Upon
such resignation the Company shall appoint in writing a new warrant agent. If
the Company shall fail to make such appointment within a period of thirty (30)
days after it has been notified in writing of such resignation by the resigning
Warrant Agent, then the registered holder of any Warrant Certificate may apply
to any court of competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or by such a
court, shall be a stock transfer company licensed by the Securities and Exchange
Commission. After acceptance in writing of such appointment by the new warrant
agent is received by the Company, such new warrant agent shall be vested with
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<PAGE>
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the warrant agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or
expedient to execute and deliver any further assurance, conveyance, act or deed,
the same shall be done at the expense of the Company and shall be legally and
validly executed and delivered by the resigning Warrant Agent. Not later than
the effective date of any such appointment, the Company shall file notice
thereof with the resigning Warrant Agent, and shall forthwith cause a copy of
such notice to be mailed to the registered holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant
agent may be converted or merged, any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party, or any corporation succeeding to the corporate trust business of the
Warrant Agent or any new warrant agent shall be a successor warrant agent under
this Agreement without any further act, provided that such corporation is
eligible for appointment as successor to the Warrant Agent under the provisions
of the preceding paragraph. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed to the Company and
to the registered holders of each Warrant Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of
its or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effect as though it were not Warrant Agent.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Warrant Agent shall retain for a period of two (2) years
from the date of exercise any Warrant Certificate received by it upon such
exercise.
ARTICLE 6
OTHER MATTERS
6.1 Payment of Taxes and Charges. Any transfer taxes due in connection with
the issuance of Warrant Certificates or certificates for shares of Common Stock
in any name other than that of the registered holder of the Warrant Certificate
surrendered shall be paid by such registered holder; and, in such case, the
Warrant Agent shall not be required to issue or deliver any Warrant Certificate
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<PAGE>
or certificate for shares of Common Stock until such taxes shall have been paid
or it has been established to the Company's satisfaction that no tax is due.
6.2 Assignment. All covenants and provisions of this Agreement by or for the
benefit of the Company, the Warrant Agent or the Warrant holder shall bind and
inure to the benefit of their respective successors and assigns.
6.3 Notices. Any notice or demand required by this Warrant Agreement to be
given or made by the registered holder of any Warrant Certificate to or on the
Company or the Warrant Agent shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, addressed (until another
address is given in writing by the Company or the Warrant Agent to each
registered holder of a Warrant Certificate) as follows:
If to the Company: ORA Electronics, Inc.
9410 Owensmouth Ave.
Chatsworth, California 91311
Attention: Chief Financial Officer
If to the Warrant Agent: Continental Stock Transfer & Trust Company
2 Broadway
New York, New York 10004
Attention: Compliance Department
Any notice or demand required by this Warrant Agreement to be given or made by
the Company or the Warrant Agent to or on the registered holder of any Warrant
Certificate shall be sufficiently given or made, whether or not such holder
receives the notice, if sent by first-class or registered mail, postage prepaid,
addressed to such registered holder at his last address as shown on the books of
the Company or the Warrant Agent; otherwise, such notice or demand shall be
deemed given when received by the party entitled thereto.
6.4 Defects in Notice. Failure to file any certificate or notice or to mail
any notice, or any defect in any certificate or notice pursuant to this Warrant
Agreement, shall not affect in any way the rights of any registered holder of a
Warrant Certificate or the legality or validity of any adjustment made pursuant
to Article 3 hereof, or any transaction giving rise to any such adjustment, or
the legality or validity of any action taken or to be taken by the Company or
the Warrant Agent.
6.5 Governing Law. The internal laws of the State of Delaware shall govern
this Warrant Agreement and the Warrant Certificates.
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<PAGE>
6.6 Headings. The descriptive headings of the articles and sections of this
Warrant Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
6.7 Counterparts. This Warrant Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and the same instrument.
6.8 Modification of Warrant Agreement. The Warrant Agent and the Company may
by supplemental agreement make any changes or corrections in this Warrant
Agreement (a) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained, or (b) that they may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Warrant Certificates;
provided, however, that this Warrant Agreement shall not otherwise be modified,
supplemented or altered in any respect except with the consent in writing of the
registered holders of Warrant Certificates holding over fifty percent (50%) of
the Warrants then outstanding; provided, further, that no change in the number
or nature of the securities purchasable upon the exercise of any Warrant, and no
change that increases the Exercise Price of any Warrant, other than such changes
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<PAGE>
as are specifically set forth in this Warrant Agreement as originally executed,
shall be made without the consent in writing of each registered holder affected
by such change.
IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by
the parties hereto as of the day and year first above written.
"COMPANY"
ORA ELECTRONICS, INC.
By /s/ Gershon N. Cooper
---------------------------------------
Gershon N. Cooper,
President and Chief Executive Officer
--------------------------------------
[Printed Name and Title]
"WARRANT AGENT"
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
By /s/ William F. Seegraber
---------------------------------------
William F. Seegraber, Vice President
--------------------------------------
[Printed Name and Title]
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<PAGE>
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise of the Warrants
represented by this Warrant Certificate and to purchase shares of Common Stock
issuable upon the exercise of said Warrants, and requests that certificates for
such shares be issued and delivered as follows:
ISSUE AND DELIVER TO:
______________________________________________________________________
(NAME)
______________________________________________________________________
(ADDRESS)
______________________________________________________________________
(SOCIAL SECURITY OR OTHER TAX IDENTIFICATION NUMBER)
If the number of Warrants hereby exercised is less than all the
Warrants represented by this Warrant Certificate, the undersigned requests that
a new Warrant Certificate representing the number of full Warrants not exercised
be issued and delivered as set forth below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
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<PAGE>
$_______ by certified check or money order payable to the order of the Company
in United States currency.
Dated: _______________
____________________________ _________________________________
(Insert Social Security or (Signature of registered holder)
other identifying number(s)
of holder(s))
_________________________________
(Signature of registered holder, if co-owned)
NOTE: Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.
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<PAGE>
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
warrants set forth below:
Name of Assignee: _________________________________________
Address: _________________________________________
No. of Warrants: ______________
and does hereby irrevocably constitute and appoint _______________ to make such
transfer on the books of the Warrant Agent, as defined in that certain Warrant
Agreement dated as of December ___, 1996, maintained for that purpose, with full
power of substitution in the premises.
Dated: _______________
__________________________ _______________________________________
(Insert Social Security or (Signature of Assignee)
other identifying number(s)
of holder(s))
_______________________________________
(Signature of Assignee if co-owned)
NOTE: Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.
Signature(s) Guaranteed:
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<PAGE>
Exhibit 5
---------
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
ATTORNEYS AT LAW
333 SOUTH HOPE STREET, 48TH FLOOR
LOS ANGELES, CALIFORNIA 90071-1448
(213) 620-1780
(213) 620-1398 FACSIMILE
May 1, 1998
ORA Electronics, Inc.
9410 Owensmouth Avenue
Chatsworth, California 91311
Re: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
You have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (the "Registration
Statement") in connection with the registration under the Securities Act of
1933, as amended, of 300,000 shares of Common Stock (the "Securities") of ORA
Electronics, Inc., a Delaware corporation (the "Company").
In connection with the furnishing of our opinion to you
concerning this matter, we have examined such corporate records and other
documents as we have deemed relevant and necessary as a basis for the opinions
set forth herein, including, without limitation, the corporate records and other
documents relating to the original issuance of the Securities. In such
examinations, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as certified or photostatic
copies. We have also examined the Registration Statement.
On the basis of the foregoing, and in reliance thereon, and after
consideration of such matters and laws as we deem applicable and relevant, we
are of the opinion that the Securities have been legally and validly issued, and
are fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in the Registration Statement and in the Prospectus
which is a part thereof. In giving this consent we do not hereby concede that we
are in the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission thereunder.
Respectfully submitted,
/s/ SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
Page 42 of 44
<PAGE>
Exhibit 23.1
------------
RICHARD & HEDRICK
Accountancy Corporation * Certified Public Accountants
Member of AICPA * Member of CSCPA
5857 Uplander Way * Culver City, CA 90230
Phone 310-348-4188 * Fax 310-348-4189
--------------------------------------------------------------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
ORA Electronics, Inc. (the "Company") on Form S-3 of our report dated May 30,
1997, appearing in the Annual Report on Form 10-K of the Company for the year
ended March 31, 1997, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
/s/ Richard & Hedrick
- --------------------------
RICHARD & HEDRICK
Culver City, California
April 30, 1998
Page 43 of 44
<PAGE>
Exhibit 23.2
------------
Tanner, Mainstain, Hoffer & Peyrot
an accountancy corporation
10866 Wilshire Boulevard
10th Floor
Los Angeles, CA
90024-4303
TEL (310) 446-2700
FAX (310) 474-0478
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of ORA Electronics, Inc. (the "Company") on Form S-3 of our report dated
November 6, 1996, appearing in the Annual Report on Form 10-K of the Company
for the year ended March 31, 1997, and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ Tanner, Mainstain, Hoffer & Peyrot
Tanner, Mainstain, Hoffer & Peyrot
an accountancy corporation
Los Angeles, California
April 30, 1998
Page 44 of 44
