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As filed with the Securities and Exchange Commission on January , 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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EFFICIENT NETWORKS, INC.
(Exact name of Registrant as specified in its charter)
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<TABLE>
<S> <C>
Delaware 75-2486865
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
4849 Alpha Road
Dallas, Texas 75244
(972) 852-1000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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Bruce W. Brown
Chief Executive Officer
Efficient Networks, Inc.
4949 Alpha Road
Dallas, Texas 75244
(972) 852-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Adam R. Dolinko, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
(650) 493-9300
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum
Title of Each Class of Proposed Maximum Aggregate
Securities Amount to be Offering Price Offering Amount of
to be Registered Registered Per Security(1) Price(1) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $0.001 par
value per share........ 1,221,456 shares $9.91 $12,104,629.00 $3,030.00
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 based on a per
share price of $9.77, the average of the high and low reported sales
prices of the Registrant's common stock on the Nasdaq National Market on
January 8, 2001.
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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.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission if effective. This prospectus is not an +
+offer to sell these securites and is not soliciting an offer to buy these +
+securities in any state where the offer is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JANUARY 16, 2001
EFFICIENT NETWORKS, INC.
1,221,456 Shares
Common Stock
This prospectus relates to the offer and sale of up to 1,221,456 shares of
Efficient Networks, Inc. common stock by the selling securityholders identified
in this prospectus. We will not receive any of the proceeds from the sale of
shares of common stock by the selling securityholders.
The reported last sales price of our common stock on the Nasdaq National
Market on January 12, 2001 was $13.6875 per share. Our common stock is traded
in the Nasdaq National Market under the symbol "EFNT."
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The securities offered hereby involve a high degree of risk. See "Risk
Factors" beginning on page 5 of this prospectus for information that you should
consider before purchasing these securities.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
This prospectus is dated , 2001
<PAGE>
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information contained in or incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
TABLE OF CONTENTS
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Page
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Where You Can Find More Information........................................ 3
Summary.................................................................... 4
Risk Factors............................................................... 5
Use Of Proceeds............................................................ 14
Selling Securityholders.................................................... 15
Plan Of Distribution....................................................... 16
Legal Matters.............................................................. 17
Experts.................................................................... 17
</TABLE>
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the Commission,
in accordance with the Securities Exchange Act of 1934. You may read and copy
our reports, proxy statements and other information filed by us at the public
reference facilities of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices; 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such materials can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the Commission at 1-800-SEC-0330 for further information about the
public reference rooms. Our reports, proxy statements and other information
filed with the Commission are available to the public over the Internet at the
Commission's World Wide Web site at http://www.sec.gov.
The Commission allows us to "incorporate by reference" into this prospectus
the information we file with the Commission. This means that we can disclose
important information by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus.
Information that we file later with the Commission will automatically update
and supersede this information. We incorporate by reference the documents
listed below and any future filings made by us with the Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until this offering is
complete:
. The description of our Common Stock which is contained in our
Registration Statement on Form 8-A filed with the Commission on June 22,
1999 pursuant to Section 12 of the Exchange Act (File No. 000-26473),
and any description of any of our securities which is contained in any
registration statement filed after the date hereof under Section 12 of
the Exchange Act, including any amendment or report filed for the
purpose of updating any such description;
. Our Annual Report on Form 10-K for the fiscal year ended June 30, 2000;
. Our Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 2000;
. Our Current Report on Form 8-K as filed with the Commission on January
16, 2001; and
. Flowpoint Corporation's Financial Statements included in our
Registration Statement on Form S-1 as filed with the Commission on
January 10, 2000 (Registration No. 333-94289).
You may request a copy of these filings, at no cost, by contacting us at the
following address:
Investor Relations Department
Efficient Networks, Inc.
4849 Alpha Road
Dallas, Texas 75244
Telephone: (972) 852-1000
E-Mail: [email protected]
You should rely only on the information incorporated by reference or
provided in this prospectus or a prospectus supplement or amendment. We have
not authorized anyone else to provide you with different information. We are
not making an offer of these securities in any state where the offer is not
permitted. You should not assume the information in this prospectus is
accurate as of any date other than the date on the front of those documents.
3
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SUMMARY
This summary highlights some information from this prospectus, and it may not
contain all of the information that is important to you. It is qualified in its
entirety by the more detailed information and consolidated financial
statements, including the notes to the consolidated financial statements,
incorporated by reference in this prospectus. You should read the full text of,
and consider carefully the more specific details contained in or incorporated
by reference into this prospectus. When used in this prospectus, the terms
"Efficient," "we," "our" and "us" refer to Efficient Networks, Inc. and not to
the selling securityholders.
Efficient Networks, Inc.
Efficient Networks is a worldwide developer and supplier of high-speed
digital subscriber line customer premises equipment for the broadband access
market. Our digital subscriber line, or DSL, solutions enable
telecommunications and other network service providers to provide high-speed,
cost-effective broadband access services over the existing copper wire
telephone infrastructure to business and residential markets. We focus on
developing and producing single- and multiple-user DSL customer premises
equipment for small- to medium-size businesses, branch offices of large
corporations and consumers. Our DSL products enable applications such as high-
speed Internet access, electronic commerce, access to computer networks from
remote locations, telecommuting and extensions of corporate networks to branch
offices.
We were incorporated in Delaware in 1993. Our principal executive offices are
located at 4849 Alpha Road, Dallas, Texas 75244 and our telephone number is
(972) 852-1000. Our Website is located at http://www.efficient.com. Information
contained on our Website does not constitute part of this prospectus.
On September 27, 2000, we completed the acquisition of Multimedia Development
Corporation, a developer of software-based network management systems and
solutions for the broadband networking industry, in exchange for 2,442,910
shares of our common stock. This registration statement covers the resale of up
to fifty percent of the shares issued in the acquisition.
4
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RISK FACTORS
Before you invest in the shares of Efficient common stock, you should be
aware of various risks, including those described below. You should carefully
consider these risk factors, together with all of the other information
included or incorporated by reference in this prospectus, before you decide
whether to purchase shares of common stock. The risks set out below are not
the only risks we face.
If any of the following risks occur, our business, financial condition and
results of operations could be materially adversely affected. In such case,
the trading price of the common stock could decline, and you may lose all or
part of your investment.
Keep these risk factors in mind when you read "forward-looking" statements
elsewhere in this prospectus and in the documents incorporated herein by
reference. These are statements that relate to our expectations for future
events and time periods. Generally, the words "anticipate," "expect," "intend"
and similar expressions identify forward-looking statements. Forward-looking
statements involve risks and uncertainties, and future events and
circumstances could differ significantly from those anticipated in the
forward-looking statements.
Risks Associated With the Digital Subscriber Line Industry
Sales of our products depend on the widespread adoption of broadband access
services and if the demand for broadband access services does not develop,
then our results of operations and financial condition would be adversely
affected.
Our business would be harmed, and our results of operations and financial
condition would be adversely affected, if the use of broadband access services
does not increase as anticipated, or if our customers' broadband access
services are not well received in the marketplace. Certain critical factors
will likely continue to affect the development of the broadband access
services market. These factors include:
. quality and reliability of service;
. availability of cost-effective, high-speed service,
. ability to integrate business applications on the Internet;
. interoperability among multiple vendors' network equipment;
. congestion in service providers' networks;
. security concerns; and
. ability to meet growing demands for increasing bandwidth.
Even if these factors are adequately addressed, the market for broadband
access services to the Internet and corporate networks may fail to develop or
may develop more slowly than anticipated. If this market fails to develop or
develops more slowly than anticipated, our business would be harmed, and our
results of operations and financial condition would be adversely affected.
Many competing technologies serve our target market. If the DSL technology
upon which our products are based does not succeed as a technological solution
for broadband access, we would not be able to sustain or grow our business.
The market for high-speed data transmission services has several competing
technologies which offer alternative solutions, and the demand for DSL
services is uncertain in light of this competition. Technologies which compete
with DSL are:
. other access solutions provided by telephone network service providers
such as dial-up analog modems, integrated services digital networks
(ISDN) and T1 services;
5
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. broadband wireless technologies; and
. broadband cable technologies.
The introduction of new products based on these or alternative technologies
or the emergence of new industry standards could render our products less
competitive or obsolete. If any of these events occur, we would be unable to
sustain or grow our business.
If these alternatives gain market share at the expense of DSL technologies,
demand for our products would be reduced, and we would be unable to sustain or
grow our business. Additionally, wireless and cable network service providers
are well funded, and cable network service providers have large existing
customer bases. As a result, competition from these companies is intense and
expected to increase.
We depend upon network service providers to deploy DSL services in a broad and
timely manner, and if they do not, we would be unable to sell our products.
We sell our products to network service providers who in turn sell them to
end users in connection with the service provider's deployment of DSL
services. If the network service providers fail to deploy DSL services, we
would be unable to sell our products as anticipated, if at all. Factors that
impact deployments include:
. a prolonged approval process, including laboratory tests, technical
trials, marketing trials, initial commercial deployment and full
commercial deployment;
. the development of a viable business model for DSL services, including
the capability to market, sell, install and maintain DSL services;
. cost constraints, such as installation costs and space and power
requirements at the network service providers' central offices;
. varying and uncertain conditions of the installed copper wire, including
size and length, electrical interference, and crossover interference
with voice and data telecommunications services;
. problems of interoperability among DSL network equipment vendors'
products;
. evolving industry standards for DSL technologies; and
. domestic and foreign government regulation.
Risks Within the DSL Industry
Competition within the DSL market is intense and includes numerous, well
established competitors. If we are unable to compete effectively, our business
would be harmed.
Competition in the DSL customer premises equipment market is intense, and we
expect competition to increase. Many of our competitors and potential
competitors have substantially greater name recognition and technical,
financial and marketing resources than we have. In addition, many of our
competitors are able to offer their customers a range of products of which
customer premises equipment is only one element. Our customers may prefer to
purchase from fewer vendors, and may therefore favor competitors with broader
product offerings. If we are unable to compete successfully, our business will
be harmed and our results of operations and financial condition would be
adversely affected. We cannot assure you that we will have the financial
resources, technical expertise or marketing, distribution and support
capabilities to compete successfully.
Competitive pressures could adversely affect us in the following ways:
. reduce demand for our products if customers shift their purchasing to
competitors; or
. cause us to reduce prices on our existing or future products and thereby
adversely affect our gross margins.
6
<PAGE>
Our failure to enhance our existing products or to develop and introduce new
products that meet changing customer requirements and emerging industry
standards would adversely impact our ability to sell our products.
The market for high-speed broadband access is characterized by rapidly
changing customer demands and short product life cycles. If our product
development and enhancements take longer than planned, the availability of our
products would be delayed. Any such delay could adversely impact our ability
to sell our products and our results of operations and financial condition
would be adversely affected. Our future success will depend in large part upon
our ability to:
. identify and respond to emerging technological trends in the market;
. develop and maintain competitive products that meet changing customer
demands;
. enhance our products by adding innovative features that differentiate
our products from those of our competitors;
. bring products to market on a timely basis;
. introduce products that have competitive prices; and
. respond effectively to new technological changes or new product
announcements by others.
Our current products are not interoperable with certain products offered by
suppliers to our customers and are subject to evolving industry standards. If
our products do not interoperate with our target customers' networks or an
industry standard that achieves market acceptance, customers may refuse to
purchase our products.
In some cases, network equipment vendors, such as Cisco Systems, Inc., sell
to our target customers proprietary or unique systems with which our products
will not function. In these cases, potential customers that have purchased
network equipment that does not function with our DSL customer premises
equipment will not purchase our products for those incompatible networks.
Also, the emergence of new industry standards, whether through adoption by
official standards committees or widespread use by our target customers, could
require us to redesign our products. If such standards become widespread and
our products do not meet these standards, our product sales would decrease,
and our business would be harmed. Additionally, the adoption of new standards
increases the risk that competitors could more easily develop products that
directly compete with our products, which could result in greater competition
and pricing pressure.
We may not be able to produce sufficient quantities of our DSL products
because we depend on third-party manufacturers. If these manufacturers fail to
produce our products in a timely manner, our ability to fulfill our customer
orders would be adversely impacted.
We rely upon third parties to manufacture our products and we expect this to
continue in the future. In particular, ACT Manufacturing manufactures the
majority of our products. In June, 2000 we advanced ACT Manufacturing $50
million against future production of our products. If ACT Manufacturing fails
to produce products for us we may lose all or part of the $50 million advance.
In addition, our success depends, in significant part, on our third party
manufacturers to cost effectively produce our products in sufficient
quantities to meet demand. There are a number of risks associated with relying
on third-party manufacturers, including the following:
. reduced control over delivery schedules;
. reduced control over quality and quality assurance; and
. reduced control over manufacturing yields and costs.
We have no long-term contracts or arrangements with any of our vendors that
guarantee product availability, the continuation of particular payment terms
or the extension of credit limits. The competitive dynamics of our market
require us to obtain components at favorable prices, but we may not be able to
obtain additional volume
7
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purchase or manufacturing arrangements on terms that we consider acceptable,
if at all. If we enter into a high-volume or long-term supply arrangement and
subsequently decide that we cannot use the products or services provided for
in the agreement, our business would also be harmed.
We may not be able to produce sufficient quantities of our products because we
obtain certain key components from, and depend on, certain sole-source
suppliers. If we are unable to obtain these sole-source components, we would
not be able to ship our products in a timely manner and our relationships with
our customers could be harmed.
We obtain certain parts, components and equipment used in our products from
sole sources of supply. For example, we obtain certain semiconductor chipsets
from Alcatel Microelectronics, Motorola, Inc., Analog Devices, Inc., Texas
Instruments Incorporated, and Conexant Systems, Inc. We also rely on Texas
Instruments Incorporated, Samsung Semiconductor Inc., and VLSI Technology,
Inc. to manufacture our application specific integrated circuits.
Although we have agreements with many of these component providers, these
agreements do not require the vendors to meet our supply demands. In recent
periods we have experienced difficulties in obtaining adequate supplies of
certain components, particularly chipsets from Alcatel and Motorola. In
addition, certain standard components, such as flash memory, have been in
short supply and, as a result, have been more expensive than anticipated.
Although these difficulties have not resulted in revenue shortfalls in prior
periods, they have lead to higher costs and to extended delivery times for
customer orders. In future periods, we could continue to experience component
supply difficulties which could continue to result in higher than anticipated
costs, extended delivery cycles and, if sufficiently severe, could cause our
revenues to fail to meet analyst expectations. Moreover, to the extent that we
experience component supply difficulties and our competitors do not, our
customers may elect to move their business to a competitor in order to ensure
timely delivery. Recapturing any business lost due to delayed deliveries may
be difficult or impossible. Any of these outcomes could harm our business.
We may be subject to product returns and product liability claims resulting
from defects in our products. Product returns and product liability claims
could result in the failure to attain market acceptance of our products and
harm our business.
Our products are complex and may contain undetected defects, errors or
failures. The occurrence of any defects, errors or failures could result in
delays in installation, product returns and warranty claims beyond that for
which we have established reserves. Any of these occurrences could also result
in the loss of or delay in market acceptance of our products, either of which
would harm our business and adversely affect our operating results and
financial condition.
Although we have not experienced any material product liability claims to
date, the sale and support of our products entail the risk of these claims. A
successful product liability claim brought against us could be expensive,
divert the attention of management from ordinary business activities and,
correspondingly, harm our business.
Risks That May Cause Financial Fluctuations
We have incurred net losses since our inception and expect future losses.
Accordingly, we may not be able to achieve profitability, and even if we do
become profitable, we may not be able to sustain profitability.
Due to our limited operating history and our history of losses, we may never
be able to achieve profitability, and even if we do, we may not be able to
remain profitable. To achieve profitable operations on a continuing basis, we
must successfully design, develop, test, manufacture, introduce, market and
distribute our products on a broad commercial basis.
8
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In addition to the foregoing, in connection with our acquisition of
Flowpoint Corporation in December 1999, we recorded approximately $925.7
million of intangible assets which we are amortizing at the rate of
approximately $47.4 million per quarter over a five year period. In connection
with the acquisition of Network TeleSystems, Inc. in May 2000, we recorded
approximately $17.9 million of intangible assets which we are amortizing at
the rate of approximately $895,000 per quarter over a five year period. This
goodwill amortization will adversely affect operating results. Therefore, even
if we achieve positive cash flow from operations, we expect to continue to be
unprofitable for a significant additional period.
The recoverability of the recorded goodwill is dependent on significant
future cash flows from the combined operations of FlowPoint, NTS and
Efficient, especially the successful introduction of new products derived from
technologies acquired from FlowPoint and NTS. Failure to introduce these
products timely due to a variety of possible factors such as weaker than
expected market conditions, or our inability to successfully develop the
technologies acquired, could adversely impact the cash flows generated from
the acquired businesses and accordingly impair the recorded goodwill amount.
If in the future if we determine that the recorded goodwill is impaired, it
would be necessary for us to write off the impairment which will adversely
affect operating results.
Our ability to become operationally profitable will depend on a number of
factors, many of which are beyond our control. These factors include:
. the rate of market acceptance of DSL broadband access in general and the
demand for our products in particular;
. our ability to reduce the manufacturing and component costs of our
products;
. the competitive environment for DSL customer premises equipment and the
rate at which the prices that we are able to command for our products
may decline; and
. our ability to achieve manufacturing and operational efficiencies as we
grow our operations.
Due to these factors, we cannot forecast with any degree of accuracy when or
if we will become operationally profitable or, if we achieve such
profitability, that we would be able to sustain it.
We have a short operating history and, as a result, it is difficult to predict
our future results of operations.
We have a short operating history upon which to evaluate our business. We
first commenced product shipments in August 1994 and did not introduce DSL
products until March 1998. Due to our limited operating history, it is
difficult or impossible for us to predict future results of operations. You
should not expect future revenue growth to be comparable to our recent revenue
growth. In addition, we believe that comparing different periods of our
operating results is not meaningful, and you should not rely on the results
for any period as an indication of our future performance. Investors in our
common stock must consider our business and prospects in light of the risks
and difficulties typically encountered by companies in their early stages of
development, particularly those in rapidly evolving markets such as ours.
If sales forecasted for a particular period are not realized in that period
due to the lengthy sales cycle of our products, our operating results for that
period would be adversely affected.
If we fail to realize forecasted sales for a particular period, our
operating results would be adversely affected and our stock price would likely
decline and could decline significantly. The sales cycle of our products is
typically lengthy and involves:
. a significant technical evaluation;
. delays associated with network service providers' internal procedures to
commit to a particular product line offering and approve large capital
expenditures;
. time required to deploy new technologies within service providers'
networks; and
. testing and acceptance of new technologies.
9
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For these and other reasons, a sale of our products generally requires six
to twelve months to complete. Furthermore, the announcement and projected
implementation of new standards may affect sales cycles, as network service
providers may choose to delay large-scale deployment of DSL services until
compliant products are available.
Our product cycles tend to be short, and we may incur substantial non-
recoverable expenses or devote significant resources to sales that do not
occur when anticipated.
In the rapidly changing technology environment in which we operate, product
cycles tend to be short. Therefore, the resources we devote to product sales
and marketing may not generate material revenues for us, and from time to time
we may need to write off excess and obsolete inventory. If we incur
substantial sales, marketing and inventory expenses in the future that we are
not able to recover, and we are not able to compensate for such expenses, our
operating results would be adversely affected. In addition, if we sell our
products at reduced prices in anticipation of cost reductions and we still
have higher cost products in inventory, our business would be harmed, and our
results of operations and financial condition would be adversely affected.
Our operating results in one or more future periods are likely to fluctuate
significantly and may fail to meet or exceed the expectations of securities
analysts or investors, causing our stock price to decline.
Our operating results are likely to fluctuate significantly in the future on
a quarterly and an annual basis due to a number of factors, many of which are
outside our control. If our operating results do not meet the expectations of
securities analysts or investors, our stock price is likely to decline,
potentially dramatically. We cannot assure you that this will not occur
because of the numerous factors that could cause our revenues and costs to
fluctuate.
These factors include the following:
. the timing and size of sales of our products and services;
. announcements of new products and product enhancements by competitors;
. the entry of new competitors into our market, including by acquisition;
. unexpected delays in introducing new or enhanced products, including
manufacturing delays;
. the mix and average selling prices of the products we sell;
. the volume and average cost of products manufactured; and
. the effectiveness of our product cost reduction efforts.
Our customer base is concentrated, and the loss of one or more of our
customers could harm our business.
Because DSL service relies upon existing telephone lines to reach end users,
a substantial majority of potential DSL end-user accounts in the U.S. and in
other countries are controlled by a relatively small number of network service
providers. If we are not successful in maintaining relationships with these
few network service providers and the network equipment vendors that supply
them, our business will be harmed.
Although deregulation and increasing competition are expanding our potential
customer base, a small number of customers has accounted for a large portion
of our revenues to date. We sell our DSL products primarily to network service
providers, network equipment vendors and telephone company-aligned
distributors. We expect to continue to be dependent upon a relatively small
number of large customers in future periods, although the specific customers
may vary from period to period. If we are not successful in maintaining
relationships with key customers, and winning new customers, our business
would be harmed.
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We derive a substantial amount of our revenues from international sources, and
difficulties associated with international operations could harm our business.
Since inception, a substantial portion of our revenues has been derived from
customers located outside of the United States, and we expect this trend to
continue. Revenues derived from customers located outside of the United States
represented 23.2%, 32.2% and 21.4% of our net revenues in fiscal 1998, 1999
and 2000, respectively, and 22.1% of our net revenues for the quarter ended
September 30, 2000. We believe that our continued growth and ability to attain
profitability will require us to continue to penetrate international markets.
If we are unable to successfully overcome the difficulties associated with
international operations and maintain and expand our international operations,
our business would be harmed. These difficulties include:
. difficulties staffing and managing foreign operations in our highly
technical industry;
. changes in regulatory requirements which are common in the
telecommunications industry;
. licenses, tariffs and other trade barriers imposed on products such as
ours;
. political and economic instability especially in Asia and the Pacific;
. potentially adverse tax consequences;
. difficulties obtaining approvals for products from foreign governmental
agencies which regulate networks;
. compliance with a wide variety of complex foreign laws and treaties
relating to telecommunications equipment; and
. delays or difficulties collecting accounts receivable from foreign
entities that are not subject to suit in the United States.
To date, our international sales and component purchases have been
denominated solely in U.S. dollar and, accordingly, we have not been exposed
to fluctuations in non-U.S. currency exchange rates. In the future, a portion
of our international sales may be denominated in currencies other than U.S.
dollars, which would expose us to gains and losses based upon exchange rate
fluctuations. Such gains and losses may contribute to fluctuations in our
operating results.
Risks That May Affect Our Ability to Execute Our Business Plans
Our business could be adversely affected if we do not adequately address the
risks associated with acquired technologies or companies.
As part of our business strategy, we expect to continue to review potential
acquisitions that could complement our current product offerings, augment our
market coverage or enhance our technical capabilities, or that may otherwise
offer growth opportunities. In December 1999, we acquired Flowpoint
Corporation, in May 2000, we acquired Network TeleSystems, Inc., and in
September 2000, we acquired Multimedia Development Corporation. In connection
with future acquisitions, we could issue equity securities that would dilute
our current stockholders' percentage ownership, incur substantial debt, or
assume contingent liabilities. Such actions by us could seriously harm our
results of operations and/or the price of our common stock. Acquisitions also
entail numerous other risks which could adversely affect our business, results
of operations and financial condition, including:
. difficulties in assimilating acquired operations, technologies or
products;
. unanticipated costs or capital expenditures associated with the
acquisition;
. acquisition-related charges and amortization of acquired technology and
other intangibles that could negatively affect our reported results of
operations;
. diversion of management's attention from our business;
. adversely affect existing business relationships with suppliers and
customers; and
. failure to successfully integrate these businesses, products,
technologies and personnel.
11
<PAGE>
We rely on indirect distribution channels and strategic relationships to sell
and manufacture our products, and if we are not able to maintain existing and
develop additional strategic relationships and indirect distribution channels,
our business would be harmed.
Our business strategy relies on our strategic relationships with network
equipment vendors, network service providers, and suppliers of DSL technology.
If our existing relationships are not successful or our competitors are better
able to develop these relationships, our business would be harmed. End users
typically purchase DSL customer premises equipment from network service
providers, and network service providers may purchase DSL customer premises
equipment from independent network equipment vendors and distributors. We
typically work closely with our potential customers and suppliers to ensure
interoperability of products with customer networks and of components with our
DSL customer premises equipment. In addition, we rely on our strategic
relationships with telephone company-aligned distributors in order to broaden
our distribution network. Also, larger vendors of DSL customer premises
equipment may be able to leverage their size and established distribution
channels to gain a significant competitive advantage over us. We cannot assure
you that we will be able to maintain or expand our existing strategic
relationships or that we will be able to establish new relationships in the
future.
We continue to rapidly and significantly expand our operations and we may
engage in future acquisitions that dilute our stockholders, cause us to incur
debt and assume contingent liabilities, and, our failure to manage growth
could harm our business and adversely affect our results of operations and
financial condition.
We have rapidly and significantly expanded our operations, including the
number of our employees, the geographic scope of our activities and our
product operations. We expect that further significant expansion will be
required to address potential growth in our customer base and market
opportunities. Any failure to manage growth effectively could harm our
business and adversely affect our operating results and financial condition.
We cannot assure you that we will be able to do any of the following, which we
believe are essential to successfully manage the anticipated growth of our
operations:
. improve our existing and implement new operational, financial and
management information controls, reporting systems and procedures;
. hire, train and manage additional qualified personnel;
. expand and upgrade our core technologies; and
. effectively manage multiple relationships with our customers, suppliers
and other third parties.
In the future, we may also experience difficulties meeting the demand for
our products. The installation and use of our products require training. If we
are unable to provide training and support for our products, more time may be
necessary to complete the implementation process and customer satisfaction may
be adversely affected. In addition, our suppliers may not be able to meet
increased demand for our products. We cannot assure you that our systems,
procedures or controls will be adequate to support the anticipated growth in
our operations.
Competition for qualified personnel in the networking equipment and
telecommunications industries is intense, and if we are not successful in
attracting and retaining these personnel, our business would be harmed.
Our future success will depend on the ability of our management to operate
effectively, both individually and as a group. Therefore, the future success
of our business will also depend on our ability to attract and retain high-
caliber personnel. The loss of the services of any of our key personnel, the
inability to attract or retain qualified personnel in the future or delays in
hiring required personnel, particularly engineers, could harm our business.
12
<PAGE>
Because competition for qualified personnel in the networking equipment and
telecommunications industries is intense, we may not be successful in
attracting and retaining such personnel. We are seeking to hire a significant
number of additional personnel in the near future, including direct sales and
marketing personnel. There may be only a limited number of people with the
requisite skills to serve in those positions, and it may become increasingly
difficult to hire these people. In addition, we are actively searching for
research and development engineers, who also are in short supply. Our business
will be harmed if we encounter delays in hiring additional engineers.
Furthermore, competitors and others have in the past and may in the future
attempt to recruit our employees. We do not have employment contracts with any
of our key personnel.
The loss of the services of one or more of our executive officers or key
employees could harm our business.
Our executive officers and certain key sales, engineering and management
personnel may not remain with us in the future. Our executive officers and key
personnel and in particular Mark A. Floyd, our Chairman of the Board, Bruce W.
Brown, our Chief Executive Officer, and Patricia W. Hosek, our Executive Vice
President of Product Operations are critical to our business and its future
success. If we lost the services of one or more of our executive officers or
key employees, we would need to devote substantial resources to finding
replacements, and until replacements were found, we would be operating without
the skills or leadership of such personnel, either of which could have a
significant adverse effect on our business. None of our officers or key
employees is bound by agreements for any specific employment term or covenants
not to compete.
Our future success will depend in part on our ability to protect our
proprietary rights and the technologies used in our principal products, and if
we do not enforce and protect our intellectual property or if others bring
infringement claims against us, our business would be harmed.
We rely on a combination of patent, copyright and trademark laws, trade
secrets, confidentiality provisions and other contractual provisions to
protect our proprietary rights. However, these measures afford only limited
protection. Our failure to adequately protect our proprietary rights may
adversely affect us. Despite our efforts to protect our proprietary rights,
unauthorized parties may attempt to copy aspects of our products or to obtain
and use trade secrets or other information that we regard as proprietary.
From time to time, third parties, including our competitors, have asserted
patent, copyright and other intellectual property rights to technologies that
are important to us. For example, we have received a letter from IBM
indicating that they hold patents on certain aspects of DSL technology, and
urging us to begin negotiating a license to the patent. We are evaluating the
IBM patents, and have not yet determined whether to seek a license. Even if we
elect to pursue a license from IBM, there can be no assurances we would find
the license terms acceptable. We expect that we will increasingly be subject
to infringement claims as the number of products and competitors in the high-
speed data access market grows and the functionality of products overlaps.
Litigation of intellectual property rights can be expensive and require
significant management time and attention, even if ultimately successful.
Moreover, in the event of an adverse result in any future litigation with
third parties relating to proprietary rights, we could be required:
. to pay substantial damages, including treble damages if we are held to
have willfully infringed;
. to halt the manufacture, use and sale of infringing products;
. to expend significant resources to develop non-infringing technology; or
. to obtain licenses to the infringing technology, if available.
13
<PAGE>
Our products and those of our customers are subject to government regulations,
and changes in current or future laws or regulations that negatively impact
our products and technologies could harm our business.
The jurisdiction of the Federal Communications Commission, or the FCC,
extends to the entire communications industry including our customers and
their products and services that incorporate our products. Future FCC
regulations affecting the broadband access services industry, our customers or
our products may harm our business. For example, FCC regulatory policies that
affect the availability of data and Internet services may impede our
customers' penetration into certain markets or affect the prices that they are
able to charge. In addition, international regulatory bodies are beginning to
adopt standards for the communications industry. Delays caused by our
compliance with regulatory requirements may result in order cancellations or
postponements of product purchases by our customers, which would harm our
business and adversely affect our results of operations and financial
condition.
Additional Risks That May Affect Our Stock Price
We may engage in future acquisitions that dilute our stockholders, cause us to
incur debt and assume contingent liabilities.
As part of our business strategy, we expect to continue to review potential
acquisitions that could complement our current product offerings, augment our
market coverage or enhance our technical capabilities, or that may otherwise
offer growth opportunities. In the event of such future acquisitions, we could
issue equity securities that would dilute our current stockholders' percentage
ownership, incur substantial debt, or assume contingent liabilities. Such
actions by us could seriously harm our results of operations and/or the price
of our common stock. Acquisitions also entail numerous other risks which could
adversely affect our business, results of operations and financial condition,
including:
. difficulties in assimilating acquired operations, technologies or
products;
. unanticipated costs or capital expenditures associated with the
acquisition;
. acquisition related charges and amortization of acquired technology and
other intangibles that could negatively affect our reported results of
operations;
. diversion of management's attention from our business;
. adversely affect existing business relationships with suppliers and
customers; and
. failure to successfully integrate these businesses, products,
technologies and personnel.
Certain provisions of our charter documents may make acquiring control of our
company more difficult for a third party, which could adversely affect our
stock's market price or lessen any premium over market price that an acquirer
might otherwise pay.
Our charter documents contain provisions providing for a classified board of
directors, eliminating cumulative voting in the election of directors and
restricting our stockholders from acting without a meeting. These provisions
may make certain corporate actions more difficult and might delay or prevent a
change in control and therefore limit the price that new investors will pay
for our stock. Further, the board of directors may issue new shares of
preferred stock with certain rights, preferences, privileges and restriction,
including voting rights, without any vote by our stockholders. Our existing
stockholders may be adversely affected by the rights of this preferred stock.
New preferred stock might also be used to make acquiring control more
difficult. We have no current plans to issue shares of preferred stock. We
will also indemnify officers and directors against losses incurred in legal
proceedings to the broadest extent permitted by Delaware law.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the selling
securityholders of the common stock.
14
<PAGE>
SELLING SECURITYHOLDERS
The following table contains information as of [ ], 2000, with respect to
the selling securityholders and the common stock beneficially owned by the
selling securityholders that may be offered using this prospectus.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Number of Shares
Owned Prior to the Number of Beneficially Owned After
Offering(1) Shares That May the Offering(2)
-------------------- Be Sold in the ----------------------------
Name Number Percentage Offering Number Percentage
---- --------- ---------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Barry A. McConachie.... 1,221,455 2.1% 610,728 610,727 1.0%
Duane E. Schrodt....... 1,221,455 2.1% 610,728 610,727 1.0%
</TABLE>
--------
(1) Calculated based on Rule 13d-3(d)(i) of the Exchange Act using 59,066,242
shares of common stock outstanding as of December 31, 2000.
(2) Assumes the sale of all shares that may be sold in the offering.
15
<PAGE>
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the common stock
offered by this prospectus. The common stock may be sold from time to time to
purchasers:
. directly by the selling securityholders; or
. through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or commissions from
the selling securityholders or the purchasers of the common stock.
If the common stock is sold through underwriters or broker-dealers, the
selling securityholders will be responsible for underwriting discounts or
commissions or agent's commissions.
The common stock may be sold in one or more transactions at:
. fixed prices;
. prevailing market prices at the time of sale;
. varying prices determined at the time of sale; or
. negotiated prices.
These sales may be effected in transactions:
. on any national securities exchange or quotation service on which the
common stock may be listed or quoted at the time of the sale, including
the Nasdaq National Market;
. in the over-the-counter market;
. in transactions otherwise than on such exchanges or services or in the
over-the-counter market;
. through the writing or purchase of non-traded and exchange-traded
options;
. by pledge to secure debts and other obligations;
. in hedge transactions and in settlement of other transactions; or
. in a combination of any of the above transactions.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the common stock or otherwise, the selling
securityholders may enter into hedging transactions with broker-dealers. These
broker-dealers may in turn engage in short sales of the common stock in the
course of hedging their positions. The selling securityholders may also sell
the common stock short and deliver common stock to close out short positions,
or loan or pledge common stock to broker-dealers that in turn may sell the
common stock.
Our common stock trades on the Nasdaq National Market under the symbol
"EFNT."
16
<PAGE>
There can be no assurance that the selling securityholders will sell any or
all of the common stock pursuant to this prospectus. In addition, any shares
of common stock covered by this prospectus that qualify for sale pursuant to
Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule
144A rather than pursuant to this prospectus.
We are paying all of the expenses related to the registration of the resale
of the common stock.
LEGAL MATTERS
The validity of the issuance of Efficient's securities offered by this
prospectus will be passed upon for Efficient by Wilson Sonsini Goodrich &
Rosati, Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated balance sheets of Efficient Networks, Inc. as of June 30,
1999 and 2000, and the consolidated financial statements for each of the years
in the three-year period ended June 30, 2000 have been incorporated by
reference herein in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The financial statements of Flow Point Corporation as of March 31, 1998,
August 31, 1998 and February 28, 1999 and for the years ended March 31, 1997
and 1998, the five-month period ended August 31, 1998 and the six-month period
ended February 28, 1999 have been incorporated by reference herein in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses to be paid by the
Registrant in connection with this offering. All amounts are estimates except
for the registration fee:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................. $ 3,030
Accounting fees and expenses........................................ 10,000
Legal fees and expenses............................................. 15,000
Miscellaneous....................................................... 1,970
-------
Total............................................................. $30,000
=======
</TABLE>
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF EFFICIENT
The Registrant's certificate of incorporation limits the liability of the
Registrant's directors to the maximum extent permitted by Delaware law.
Section 145(a) of the General Corporation Law of the State of Delaware
("Delaware Corporation Law") provides, in general, that a corporation shall
have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation), by reason of the fact
that the person is or was a director or officer of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise. Such indemnity may be against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding, if
the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and if, with
respect to any criminal action or proceeding, the person did not have
reasonable cause to believe the person's conduct was unlawful.
Section 145(b) of the Delaware Corporation Law provides, in general, that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor because the person is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any expenses (including
attorneys' fees) actually and reasonably incurred by the person in connection
with the defense or settlement of such action or suit if the person acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation.
Section 145(g) of the Delaware Corporation Law provides, in general, that a
corporation shall have the power to purchase and maintain insurance on behalf
of any person who is or was a director or officer of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against such person in any such
capacity, or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against such
liability under the provisions of Section 145.
The Registrant's certificate of incorporation and bylaws provide that it
will indemnify its directors and executive officers, and that it may indemnify
its other officers and employees and other agents, to the fullest extent
permitted by law. The Registrant believes that indemnification under its
bylaws covers at least negligence and gross negligence on the part of
indemnified parties. The Registrant's bylaws also permit it to secure
insurance on behalf of any officer, director, employee or other agent for any
liability arising out of his or her
II-1
<PAGE>
actions in such capacity, regardless of whether the bylaws would permit
indemnification. The Registrant has entered into agreements to indemnify its
directors and executive officers, in addition to indemnification provided for
in its bylaws. These agreements, among other things, provide for
indemnification of the Registrant's directors and executive officers for
expenses, judgments, fines and settlement amounts incurred by any such person
in any action or proceeding arising out of such person's services as a
director or executive officer of the Registrant or at its request. The
Registrant believes that these provisions and agreements are necessary to
attract and retain qualified persons as directors and executive officers. The
Registrant also maintains directors and officers liability insurance. At
present, the Registrant is not aware of any pending litigation or proceeding
involving any director, officer, employee or agent of Registrant where
indemnification will be required or permitted. Furthermore, the Registrant is
not aware of any threatened litigation or proceeding that might result in a
claim for indemnity by these individuals.
Item 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Title
------- -------------
<C> <S>
4.1 Certificate of Incorporation (1)
4.2 Bylaws, as amended (2)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
23.1 Consent of KPMG LLP
23.2 Consent of KPMG LLP
23.3 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1)
24.1 Power of Attorney of certain directors and officers of Efficient
Networks, Inc. (see pages II-4 and II-5 of this Form S-3)
99.1 Registrant's restated consolidated balance sheets as of June 30, 2000
and 1999 and restated consolidated financial statements for each of
the three years in the three year period ended June 30, 2000 (3)
</TABLE>
--------
(1) Incorporated by reference to exhibits filed with the Registrant's
Registration Statement on Form S-1 (Registration No. 333-77795) declared
effective July 14, 1999.
(2) Incorporated by reference to exhibits filed with the Registrant's Annual
Report on Form 10-K (File No. 000-26473) for the fiscal year ended June
30, 1999.
(3) Incorporated by reference to Financial Statements and Pro Forma Financial
Information and Exhibits filed with the Registrant's Form 8-K (file No.
000-26473) as filed with the Commission on January 16, 2001.
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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act,
(b) 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,
II-2
<PAGE>
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that clauses (a) and (b) do not apply if the information
required to be included in a post-effective amendment by such clauses is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered 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
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, 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 Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities, other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding, is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on January 16, 2001.
EFFICIENT NETWORKS, INC.
/s/ Bruce W. Brown
By: _________________________________
Name: Bruce W. Brown
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Bruce W. Brown and Jill S. Manning, and
each of them acting individually, as his attorney-in-fact, each with full
power of substitution, for him in any and all capacities, to sign any and all
amendments to this Registration Statement on Form S-3, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or any substitute, may do or cause to be done
by virtue hereof.
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:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Bruce W. Brown Chief Executive Officer January 16, 2001
______________________________________ and Director (Principal
Bruce W. Brown Executive Officer)
/s/ Jill S. Manning Vice President and Chief January 16, 2001
______________________________________ Financial Officer
Jill S. Manning (Principal Financial and
Accounting Officer)
/s/ Mark A. Floyd Chairman of the Board of January 16, 2001
______________________________________ Directors
Mark A. Floyd
/s/ James P. Gauer Director January 16, 2001
______________________________________
James P. Gauer
/s/ Robert A. Hoff Director January 16, 2001
______________________________________
Robert A. Hoff
/s/ William L. Martin III Director January 16, 2001
______________________________________
William L. Martin III
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Thomas H. Peterson Director January 16, 2001
______________________________________
Thomas H. Peterson
/s/ Anthony T. Maher Director January 16, 2001
______________________________________
Anthony T. Maher
Director
______________________________________
</TABLE> Robert C. Hawk
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Title
------- -------------
<C> <S>
4.1 Certificate of Incorporation (1)
4.2 Bylaws, as amended (2)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
23.1 Consent of KPMG LLP
23.2 Consent of KPMG LLP
23.3 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1)
24.1 Power of Attorney of certain directors and officers of Efficient
Networks, Inc. (see pages II-4 and II-5 of this Form S-3)
99.1 Registrant's restated consolidated balance sheets as of June 30, 2000
and 1999 and restated consolidated financial statements for each of
the three years in the three year period ended June 30, 2000 (3)
</TABLE>
--------
(1) Incorporated by reference to exhibits filed with the Registrant's
Registration Statement on Form S-1 (Registration No. 333-77795) declared
effective July 14, 1999.
(2) Incorporated by reference to exhibits filed with the Registrant's Annual
Report on Form 10-K (File No. 000-26473) for the fiscal year ended June
30, 1999.
(3) Incorporated by reference to Financial Statements and Pro Forma Financial
Information and Exhibits filed with the Registrant's Form 8-K (file No.
000-26473) as filed with the Commission on January 16, 2001.
